Ecosystem Reflections 2024: Where Are We Heading?
At the end of very year, I take a moment to reflect on a year of observations and interactions in the Egyptian ecosystem. It has become a habit to understand and appreciate our ecosystem on a deeper level. I aim to make sense of what is to come as a consequence of what is taking place now.
The Paradox of Support Programs
According to the recently published ecosystem stakeholder map, Egypt now boasts more than 500 support programs. From what I’ve witnessed, however, most of these programs are struggling to find startups—though not funding. This is an interesting paradox. The number of startup support programs is growing (nearly doubling in the past couple of years), yet these same programs struggle to find startups. The support programs are better funded than the startups themselves.
It begs the question: Why is there a gap between the abundance of resources and the lack of startup participation? One reason may be that many of these programs are designed with external metrics in mind—focused more on securing international funds, partner recognition, and launching glamorous initiatives than on actual startup development.
The Dream vs. Reality
There have been over 30 Egyptian startups that managed to raise substantial funds this year. But here’s the catch—very few of them were the direct result of ecosystem programs. This brings me to a critical point: The ecosystem is selling the dream but not materializing it.
The reality is that while money is flowing into support programs, the tangible impact on startups themselves is not. Startups are either not benefiting from these programs, or they are finding ways to succeed outside of them. The narrative of "startups are the future" is popular, but the system that’s supposed to nurture these startups often feels more like a show than a genuine engine for growth.
Bright Spots from Upper Egypt
There is, however, a region worth celebrating—Upper Egypt. I’ve been increasingly impressed with the performance of startups from this region and the support programs dedicated to them. In particular, Athar Accelerator stands out for its efforts to expand the evidence-based entrepreneurship approach. Their commitment to supporting real innovation, backed by sound research and grounded in the realities of the market, is admirable. The hard work of the team is bearing fruit, and it’s clear that Upper Egypt could be a rising star in the national ecosystem.
Entrepreneurship: A Changing Narrative?
One of the more troubling trends I’ve noticed this year is how entrepreneurship is losing its luster with the younger generation. For many, starting a business isn’t driven by passion or a groundbreaking idea but out of necessity. They embark on the startup journey because they feel they have to, whether due to economic pressure, lack of job opportunities, or the appeal of recognition.
But this shift is leading to a deeper issue. Most new founders I’ve met see entrepreneurship as a job, not a personality trait or a calling. They refer to themselves as "founders," yet they lack the business-building mindset. Conversations center around funding rather than strategy, and risk rather than vision. It seems as though the end goal for many is not to build a sustainable, impactful business but simply to get funded.
This poses a long-term problem. Entrepreneurship is not just about securing rounds of investment. It’s about solving real problems, creating value, and pushing through even when capital isn’t guaranteed. If we reduce the entrepreneurial journey to merely being a "fundraiser," we miss the point of building a business entirely.
The way Forward?
1. Greater Focus on Regional Ecosystems
Regions outside of Cairo, like Upper Egypt, are showing significant potential, driven by local accelerators such as Athar. With Cairo programs oversaturated and struggling to attract startups, attention may increasingly shift to emerging regional ecosystems. These areas often have more pressing problems to solve and passionate entrepreneurs who may be underserved by mainstream programs.
Prediction: In the coming years, we may see more targeted support programs in regional hubs that focus on localized problems. These programs could be more impactful as they tailor their efforts to the unique needs and challenges of their communities.
2. A Market Correction for Support Programs
With over 500 support programs but fewer startups actively participating, the ecosystem may experience a "market correction." Many of these programs might face pressure to either pivot or shut down if they can’t demonstrate real impact. Funding alone won't sustain programs if they don't deliver results, especially as investors and international donors seek clearer ROI.
Prediction: We may see a consolidation of support programs, with fewer but more specialized initiatives focused on building deep, meaningful relationships with startups. The focus will shift from sheer quantity to quality.
3. Entrepreneurship as a Skill Rather Than a Vision
The mindset observed among younger entrepreneurs—seeing entrepreneurship as a job rather than a passion—might lead to a more transactional approach to startups. Instead of visionaries building companies to solve problems or change industries, we might see more founders viewing startups as stepping stones to personal success (i.e., focusing on funding, recognition, or short-term wins).
Prediction: There’s a risk that the ecosystem becomes more short-sighted, with more startups designed to attract funding rather than create value. To counter this, programs that emphasize long-term thinking, vision, and resilience may rise to prominence, helping entrepreneurs think beyond just the next funding round.
4. The Rise of Evidence-Based Entrepreneurship
As pointed out with Athar Accelerator’s efforts, evidence-based entrepreneurship is gaining ground. This trend could become more widespread as startups realize that data-driven approaches lead to more sustainable and scalable businesses. Ecosystem players might start to prioritize founders who focus on learning and iterating based on real market feedback rather than hype or external validation.
Prediction: In the next few years, we might see a push toward more accountability for both startups and support programs. Founders who rely on evidence-based strategies will likely gain more attention and resources, and programs may be required to show real outcomes rather than just presenting numbers.
5. Potential for International Partnerships
As local programs struggle, we may see an influx of international programs and investors who can fill the gaps. These external players might bring in expertise, capital, and a more global perspective to help the ecosystem mature. However, this could also risk overshadowing local efforts if the focus shifts too much toward international goals rather than local needs.
Prediction: Expect more cross-border collaborations and international accelerators entering the Egyptian market. The challenge will be balancing global influence with maintaining a uniquely Egyptian entrepreneurial identity.
Conclusion: Navigating the Crossroads
As we look ahead, the Egyptian startup ecosystem finds itself at a critical crossroads. The abundance of support programs, though well-intentioned, is creating a disconnect between resources and real entrepreneurial impact. Startups are raising funds, but often outside the very systems designed to support them. Meanwhile, regions like Upper Egypt are quietly gaining momentum, showing that with the right focus, there is potential for growth beyond the traditional hubs.
The mindset shift among younger founders—viewing entrepreneurship as a job rather than a calling—presents both challenges and opportunities. If we want to cultivate a future of entrepreneurs who build sustainable, vision-driven companies, we must realign our focus. Programs that emphasize evidence-based entrepreneurship, regional support, and long-term value creation will be key to making that happen.
The ecosystem is evolving, and whether it progresses into something that truly nurtures innovation or simply becomes a cycle of funding and unfulfilled dreams depends on the steps we take now. It’s time to reimagine what it means to support startups—beyond just providing money, and into building a culture of resilience, vision, and value.
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