Reviving the Syrian startup scene
The next steps for Syria's tech scene.
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Biography:
Ahmad Sufian Bayram is the general partner at Blackbox, a Silicon Valley-based founder-focused platform.
Ahmad is Syrian and organized some of the Syrian ecosystem’s earliest startup events, over a decade ago. He has been living in Germany since he fled Syria in 2014. He worked at Techstars for 8 years.
Ahmad has written multiple books on the experience of entrepreneurship in exile. He returned to Syria this year following the fall of Bashar al-Assad’s regime, with the intention of reviving the country’s startup scene.
This interview coincides with the publishing of Ahmad’s report on Syria’s startup scene, which you can read here.
What did the Syrian ecosystem look like under the Assad regime?
The difficulty with operating in a dictatorship is that if your company succeeds, the regime takes a slice of it. People from Assad’s network were influential shareholders in most of the country’s large companies. This decreases founders’ motivation: succeeding means helping the regime, since it’ll eventually own a chunk of your company.
Businesses solving people’s problems attract governmental attention. If you’re solving a problem for people, you’re presumably doing it without the government and they don’t like that. They want to be involved, take a cut, watch you.
I know two founders who tried building a payment gateway to ease money transfers in and out of Syria. They ended up in prison (Syrian prison being one of the worst places one could be). I know of another company that was building a blockchain database recording home ownership. The government wasn’t happy about that, since they repossessed the vacant homes of people who fled.
Syrian founders faced a flurry of other issues: the government mandated the data to be hosted in Syria (a pain), charged unrealistic taxes, made founders personally liable for anything that went wrong with the company, made it a nightmare to register the company…
Despite those challenges, some startups still sprouted: Jumlatech does B2B e-commerce for FMCG products, TajirStore is building a Shopify for Syria, Beeorder does food-delivery…
Under Assad, many Syrian founders moved to and incorporated their company in Dubai while remotely working with a tech team in Syria.
The Syrian diaspora is buzzing with excitement and wants to boost the startup scene. What mistakes do you anticipate?
There are concerns that returning diaspora founders, armed with network and capital, will unfairly compete with local, resource-deprived founders. There’s a risk of diaspora founders trying to reinvent the wheel, neglecting the grassroot progress painfully stitched together over a decade of conflict.
Returning diaspora founders might underestimate the time it’ll take to make things work. They could get frustrated with bureaucracy, lack of infrastructure, sanctions… Some might pack their bags when they realize it’s too hard. If diaspora founders want to come back, they need to commit for a long period of time.
Lastly, diaspora founders could simplistically impose external solutions on a market that isn’t adapted to them. What works in Germany doesn’t necessarily work in Syria. Relying on the existing ecosystem instead of adopting a top-down approach is key.
Your report highlights growing rates of female entrepreneurship. Why did that happen and how can the ecosystem maintain that trend?
It’s common for women’s labor force participation to increase during conflicts, because men are either at war or fleeing the war. As a result, women become their households’ chief earners. Since there are barely any jobs in Syria, many Syrian women turned to entrepreneurship (mostly micro-entrepreneurship, not tech startups per se).
The ecosystem has to sustain that trend. There’s never been a better time to do it. Women founders and investors might also have a business advantage: they are less likely to have directly participated in the war, so people trust them more. Specific pockets of funding should be allocated to women and relevant policy (ie: hiring quotas) could be put in place.
RO insights: how the war impacted the Ukrainian ecosystem’s gender makeup
The war in Ukraine has similarly increased the role women play in the ecosystem, both locally and internationally. That doesn’t solve everything.
Here’s how Elena Mazhuha, a Ukrainian VC, explains it:
“Less men in the ecosystem has led to more women in higher positions, both as founders and executives. As the law bans men from leaving the country, the ecosystem’s foreign representation (at conferences, etc…) has mostly been led by women.
I wouldn’t say it’s changed much on the VC side, though. Sifted reported on the exodus of women from VC, and the same factors apply to Ukraine as well. The sector has been muted for a couple of years, as M&As and IPOs remain scarce. It’s hard to have a baby while traveling to conferences half of the year. Even harder if there’s no significant financial reward at the end of the tunnel.
VC sometimes still suffers from sexism. For women in VC, a career at Google looks more and more attractive. In VC, the glass ceiling seems thicker.
How do we solve this? While unpopular, I think quotas aren’t a bad idea. I don’t like them, but we need to force the sector’s hand. We need more women in middle-leadership positions: these are often filled by partners’ networks which, invariably, are overwhelmingly male.”
Excerpt from “Ukraine’s startup ecosystem, today”, originally published in The Realistic Optimist
Aid money will inevitably flow into Syria’s startup scene. What could go wrong?