Nama Ventures Founder And Managing Partner Mohammed Alzubi Is Betting On The MENA Region And Its Entrepreneurs Nama Ventures founder and Managing Partner Mohammed Alzubi explains why his firm adopts a people-focused approach when investing in MENA startups.
By Tamara Pupic
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Although Mohammed Alzubi, founder and Managing Partner of Nama Ventures, a venture capital fund focused on fostering technological innovation across the MENA region, believes that each of more than of his 80 investments has served as a good learning opportunity, some are more surprising than others."There was a startup that I had a lot of conviction in and truly felt it would be a success, especially since the indicators of success were present, and it did raise north of US$150 million in its lifetime, but it eventually failed," Alzubi recalls. "Yet, another standout investment I made was in a company that felt simply like a company that would produce good, although not significant, returns, but it turned out to become among top five global unicorn companies."
These anecdotes hint at the breadth of Alzubi's career as an engineer, entrepreneur, and investor. Having earned a bachelor's degree in electrical engineering from Brigham Young University and an MBA from London Business School, Alzubi has worked in Silicon Valley, Dubai, Kuwait, and Saudi Arabia, while also co-founding Tech Wadi in Silicon Valley, and also becoming a founding board member of Riyadh Angel Investors, among many other engagements. His investment philosophy is simple, he explains, as it revolves around betting on great teams, and trying to influence their success from an early stage.
"The first $25,000 angel investor check I wrote back in 2005 was the best money I've ever spent, because it taught me what not to do when investing," he says. "My personal philosophy has changed a lot since then, because I used to be focused on providing value by consulting in my technical domain expertise. As the years have gone on, I realized that a lot of investing and advising is about empathy, and truly making entrepreneurs understand that I know what they're going through, since I've been there myself. That's why we're focused on leading pre-seed funding at Nama Ventures, as our value-add is our experience in the entrepreneurial journey, and less so about technical domain expertise."
NAMA Ventures' approach to startup investing is people-focused, as Alzubi believes that while the problem a startup is working on solving can vary over its lifetime, the right team can tackle these changes correctly and propel the company toward success in the long run. "Take Airbnb, for example, which started out as a platform for people to rent out extra rooms in their apartments," he explains. "Since its founding, Airbnb has expanded to larger rental markets and experiences. The problem and solution kept changing, and the team was adapting to this. I think that if a startup is still focused on the same problem/solution mix after 18 months of launching, then something is wrong- they likely haven't gained enough insight to pivot or correct their solution."
To be precise, Alzubi points out that successful companies are built by teams that have the ability "to be humble and accept that their initial assumptions were not correct, including the skills to try out various solutions." Alzubi gained this insight not just from his work as an investor observing other startup founders, but as an entrepreneur too. When he was the founder of Silicon Valley-based tech solutions provider Sulaf Solutions back in 2002, Alzubi learned firsthand that initial assumptions made by entrepreneurs are often wrong. "And that's actually not a bad thing," he adds.
"It's important to launch your minimum viable product, and then find out how it stands up against what the market truly wants. When we launched Sulaf Solutions, we wanted to address the SME sector by providing 'IT in a box.' This was much before cloud services, so a tech startup or SME still needed to build and maintain their own network infrastructures, which is a costly task. By offering these services in a retainer model instead of the usual payroll model, companies could save big."
Source: Nama Ventures
With that change in their business model, Alzubi says that the Sulaf Solutions team managed to gain the likes of companies like Sun Microsystems, Embarcadero Systems, and Wilson Sonsini as customers within a year of launching. "We would have never imagined that we'd have giant customers like these, but we had the right team that asked thoughtful questions, and responded thoughtfully with a solution," Alzubi adds. "We pivoted, reacted, and built a product that people really needed."
Armed with this kind of entrepreneurial experience, Alzubi then returned to the MENA region to set up Nama Ventures, which he dubbed as "the champions of pre-seed in MENA tech startups." He explains, "I left the epicenter of technology in the world to come to the MENA to create a lasting impact in entrepreneurship. It's safe to say that you can't find a bigger fan for the region- I've bet the next 10 years of my life on the belief that the MENA will produce world class technology companies. This is the golden age of entrepreneurship in the region, and there is no better time to be a founder in MENA."
In line with this belief, the Nama Ventures website features dozens of their portfolio startups, but when talking particularly about startups from the MENA region, Alzubi mentions a quote by American actor Steve Martin who explained his success as a comedian by saying that he had followed the "be so good that they can't ignore you" advice. By the same token, Alzubi believes, MENA startups have managed to gain a reputation among international venture capital funds. "And that's why I'm so confident that the tech ecosystem in MENA will drive meaningful impact, both locally and globally."
And Alzubi is even more confident about the future, especially since he expects technology to disrupt every facet of our lives, and give rise to potential startup unicorns in literally every sector- and many of those might just be from the MENA region. "At Nama, we make it a point to be sector agnostic, since there are opportunities in every industry for technological innovation," he says. "We've made bets in fintech, entertainment tech, education tech, and beyond." MENA-based entrepreneurs, Alzubi advises, should look at the world's most successful tech companies and pivot their work in such a way that makes it relevant to this region. "Essentially, you should study a list of unicorn companies, understand what their value is, and figure out if someone is already doing that in MENA," he concludes. "If not, that's a good place to start."
MONEY MATTERS: Tips For MENA-based investors from Nama Ventures founder Mohammed Alzubi
1. One learns only by doing "The best lessons are learned with your own money, because you have to invest to learn. You will get it wrong the first time around, and because losing money hurts, the lessons will resonate."
2. Risks are part of the process "We don't have all the answers at the starting line. We gain insight in the journey, so take a leap of faith, and don't be afraid to take risks."
3. Collaboration is key "I had to learn the hard way that entrepreneurship is a team sport. Your job is to enable, not to operate, the companies you invest in. Plus, earn the trust of founders- when earned, it can last a lifetime."
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