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Expand Your Tech-Based Business!

Opportunities and Challenges for Innovative Palestinian Tech Companies and Startups

By Feras Nasr

Many of us have likely experienced the same dream: a spark of inspiration that ignites within us, realizing a solution that will revolutionize the world and potentially allow us to make millions. Enthusiastically, we sketch out screenshots of what our product will look like, write down features, and try to decide on a clever and catchy name for our new company. Most people quit at the idea stage because doing the work is much harder than it sounds. For the few who embark on the journey of startups and entrepreneurship, it can be a rollercoaster of a ride that most likely fails, as do 90 percent of startups globally.*1 This does not mean that it’s not worth it. Startups are born every day regardless of economic or political situations. In 2022 alone, for example, there were 3,860 startups registered on Crunchbase.*2
For those who live in Palestine, working in IT provides distinct advantages unmatched by other professions. The occupation-imposed restrictions on the movement of goods and people don’t apply to the same extent as in other industries, and travel expenses and checkpoints can be overcome from the comfort of our homes or offices. Anyone with a laptop, internet connection, and desire to succeed can compete in the global workforce and build products that can be sold around the world. Despite its negative impact, the COVID-19 pandemic has made remote work and virtual meetings more acceptable as a means of conducting business.

Reaching global markets has never been so easy. Nevertheless, most companies are deeply challenged by expanding globally – even though they possess technical skills and the desire to succeed. Following simple rules, Palestinian startups can increase their chances of overcoming the challenges of competing with companies around the world.

Although the advantages for Palestinians working in software development and technology are evident, the same benefits apply to anyone else worldwide who is thinking of exporting software products or services. Therefore, why should you care about selling your product outside of Palestine, and more importantly why should others care? How do you overcome the obstacles and objections to selling your innovative solution abroad?According to an assessment by Startup Genome of Palestine’s startup ecosystem,*3 globally connected startup ecosystems grow faster and perform better than less connected ecosystems, and startups with global connectedness grow twice as fast. Given Palestine’s small domestic market and relative isolation, startups and companies need to have a global reach. Other reasons to go global include expanding your potential customer base, diversifying customers, attracting investors, and promoting Palestine.
Expanding your potential customer base is advantageous because the market in Palestine is small. The population is slightly over 5 million, average wages are low at NIS113 daily,*4 and unemployment is high at 24 percent as of 2022.*5 Startups and tech companies benefit from expanding their total addressable market (TAM). A market of only Palestine significantly limits their growth and revenue potential. A TAM of Gulf countries, Europe, and/or North America provides greater room for revenue growth. Companies in other sectors intend to expand their markets as well, however, with the added complexities and costs associated with exporting physical products, the effort becomes infeasible.Diversifying customers has many benefits. Tech Nation in the United Kingdom is a recent example of an organization that relied primarily on funding from one source, namely the British government. A decision by the government to award funding to another organization left Tech Nation unable to fund its operations and stay afloat.*6 As a result, Tech Nation ceased operations at the end of March 2023. This is one of the many examples of organizations that rely on a large and important customer that can be greatly impacted by any action affecting that organization. Having customers abroad, preferably in multiple countries or geographies, helps limit any dire impact in cases of political, economic, or social disturbances. While this is not a guarantee, as we have recently experienced a global pandemic that impacted everyone around the world, it could help minimize the impact of such events.
Investors are attracted to companies with the potential to grow exponentially. For Palestinian startups seeking investors, a small market of Palestine (or even Palestine and Jordan) wouldn’t be enticing. Large markets equal large potential revenue equals huge returns for the investor. If investors can’t see how your company will scale and grow multiple times annually, then they will most likely look elsewhere.It is satisfying and disappointing to see the reaction of people abroad when they hear about the technical abilities and achievements of Palestinian startups and tech companies. As they are accustomed to hearing negative stories about Palestine in the media, changing the narrative of Palestine is important. Palestine should be seen as a source of talent, innovative products and solutions, and tech companies and startups that can compete on the global stage. This is not to deny or minimize the impact of an unjust occupation, but rather to note that despite this occupation and restrictions, Palestinians can overcome, build, and succeed.While there are challenges associated with going global, numerous challenges can be overcome if they are identified and necessary actions are taken. Three of the main challenges include the competition, the lack of a professional network, and the risks associated with working with a Palestinian partner.In major markets such as Silicon Valley, New York, London, Riyadh, Hong Kong, and elsewhere, fierce competition exists with well-funded and well-staffed startups. How can you prepare yourself and your company for success? First of all, know your market. Different cities can be hubs for different sectors, so whether your startup is an edtech, agritech, fintech, or cleantech should have an impact on where you decide to expand. Moreover, understand your competition. The absence of competition is a sign that something is wrong, most likely it’s a result of your analysis and assessment of the competition. There is always competition, and you need to be realistic in your assessment and know what sets you apart from them. Look at their customer reviews and understand their strengths and weaknesses. Furthermore, have a clear value proposition and offer. You should be able to clearly state: “This is what we are selling, this is how it will help you, this is what it will cost.” Finally, you should build your online brand. Your website and social media channels should have a professional look and feel. There is no need for expensive software development projects. Any of the available website builders are sufficient, if the main components are checked, such as a clear description of what the company does, a Contact Us page, a valid SSL certificate. Remember, the first thing most new contacts will do when hearing about your company for the first time is to visit your website and social media pages. Make sure to leave a great first impression.It is crucial to build relationships and professional connections in the market that you are planning to reach. LinkedIn is your friend and can help you quickly expand your reach and build your brand. There are several things you can do to quickly build your network: Ask for connections. Done with courtesy and patience, this can be a very effective method for creating a network. Many people are happy to help and provide support given that it isn’t inconvenient for them. Your chances are better when you have clearly stated who you want to connect with (someone in their network) and why you want to connect with them, and preferably have a short email written for them. Likewise, at the end of a conversation with a new person that you are introduced to, ask for suggestions of other people with whom you should speak. If they have some names, ask if they can make the introductions. If possible, attend and participate in conferences, workshops, and meetups in your sector and your market.One major challenge that sets Palestinian startups apart from others is the associated risks in working with a Palestinian entity. There are many questions and unknowns, resulting in legal, political, financial, and technological risks. One option to overcome some of these risks is to register a company in your target market. Having a legal entity in the market you are seeking is a simple way to build assurances. It is easy, quick, and inexpensive to register a company in top destinations such as Delaware or London. As long as your company is complying with regulations, such as the (European) General Data Protection Regulation (GDPR), the team can be located anywhere in the world. Moreover, it is important that you build the case. Customer education is important to ensure that they feel safe working with your company. Where possible, showcase the success stories of your company and other companies within Palestine that are working with multinational companies, and selling their products and services to customers around the world. Depending on your product or service, a discount or proof-of-concept could encourage potential customers to proceed. While it may be tempting for you to provide the service for free, this method rarely provides positive results. Instead, agree on the price of the service or product, and offer a discount if needed. Offering a free product simply means that anyone will try it, regardless of whether or not they find it valuable. What you need is someone who wants what you have to offer. Their willingness to pay is a sign that they are serious and will provide important feedback that will help you with your next customers.
It should be noted that going global does not mean going everywhere all at once. Facebook started with a few universities in Boston before it expanded to other universities in the United States, then the public across the United States, and then the rest of the world. Google started with just its search engine and later expanded its product base to include the wide range it now offers. Amazon started only selling books and now has become the e-commerce marketplace for the world.Expanding globally is key for any startup that seeks to raise investments and drive revenue and customer growth. Startups can achieve their objectives through consistency, patience, and proper communication.

*1 Neil Patel, “90% of Startups Fail: Here’s What You Need to Know About the 10%,” Forbes, January 16, 2015, available at https://www.forbes.com/sites/neilpatel/2015/01/16/90-of-startups-will-fail-heres-what-you-need-to-know-about-the-10/?sh=228d228e6679.
*2 Startups Founded in 2022, Crunchbase, available at https://www.crunchbase.com/hub/startups-founded-in-2022.
*3 Startup Genome, “Assessment of Palestine’s Startup Ecosystem,” Innovative Private Sector Development, May 5, 2021, available at https://www.ipsd.ps/cached_uploads/download/2021/05/04/assessment-of-the-palestine-startup-ecosystem-1620120501.pdf
*4 “State of Palestine (West Bank and Gaza) Average Daily Wage,” CEIC, available at https://www.ceicdata.com/en/palestinian-territory-occupied/average-daily-wage-by-sector/average-daily-wage#:~:text=Bureau%20of%20Statistics-,State%20of%20Palestine%20(West%20Bank%20and%20Gaza)%20Average%20Daily%20Wage,of%20109.300%20ILS%20for%202016.
*5 “PCBS Presents the Main Findings of the Labour Force Survey in 2022,” PCBS, available at https://www.pcbs.gov.ps/post.aspx?lang=en&ItemID=4421#:~:text=Unemployment%20rate%20among%20labour%20force,13%25%20in%20the%20West%20Bank.
*6 Jon Robinson, “Tech Nation to Close Down After Losing £12 Million Funding to Barklays,” BusinessLive, January 31, 2023, available at https://www.business-live.co.uk/enterprise/tech-nation-close-down-after-26117894.

  • Feras Nasr, a technology professional with a diverse background, has worked in various industries in the United States, Canada, and the Middle East. With experience in IT management, system and network administration, security, software development, and more, he is passionate about startups with interests in fintech, machine learning, data engineering, and cybersecurity. Currently, he leads the UK Palestinian Tech Hub.

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