Reprinted: Life and Tech #6: Dubai and emerging markets set to roar
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Dubai is just like many other cities in the world: its government wants to make it a startup hub and is investing tons into making that happen (it is building several entrepreneurial cities, one aimed at Internet, another at healthcare). But there’s a bit of difference between Dubai and, say, Shanghai or Singapore: it has the tallest building in the world, the busiest airport, the nicest hotel, an indoor skiing resort, and an entrepreneurial set of leaders who have a “why not” attitude. Plus the 2020 World Fair will be here.
While there to speak at Terrapin’s Cards & Payments confab I met with many business leaders. Restauranteurs, a guy who is building skateparks and designing events for RedBull, another who builds very expensive Swiss watches, some tech geeks, startup leaders, people who are running another huge conference. and even visited one MIT fellow’s home where he showed me his extensive art collection.
Immediately you pick up on how new this ecosystem is. Dubai residents point to pride the fact that almost the entire city has been built in the past 15 years. Yes, we talked about the fact that much of it was built with slave, at worst, or indentured servants, at best, labor. But those that focus on the negatives will miss that this city is the Las Vegas of the Middle East now. Do we care that the mob built Las Vegas? No. And neither will the world concern itself too much with human rights, although one woman executive I met who works in an ad agency told me it’s much tougher to be a female executive there than in other places in the world. “Why do you stay?” I asked. She said she loved the entrepreneurial attitude, the easier way of life, and the place Dubai is going to take on the world’s stage. All as she looked lovingly at the stunning skyline (she took me to an opening of a new posh restaurant on the 49th floor of one of the newer buildings). This is a place that is undergoing stunning change and she told me she is “leaning in” and actively working to change the culture and she sees a huge opportunity here (she sees Sheryl Sandberg as a huge role model for her and other new business executives in the Middle East). Leaders aren’t made in easy conditions and Dubai is forging new leaders in not just tough cultural conditions but explosive growth and markets.
One thing I picked up on is how few really innovative startups there are. But everyone wants them. I met with a venture capitalist and he listed the kinds of things he’s looking to invest in. Most will be great businesses but I didn’t hear anything really forward thinking like, say, a media company for Oculus Rift, or robots, or 3D printers, or any number of bleeding-edge IoT startups that you will see at Web Summit in Dublin. The “coolest” startup is one that does augmented reality from children’s books, and in the comments under the video I did of him https://www.facebook.com/RobertScoble/videos/10153277316249655/
you’ll see that the concept is similar to others who came before him. Which is what I hear from many here: the ecosystem isn’t ready to take real innovation risk. That will be built over the next decade. Investors here want to see entrepreneurs copy tried-and-true concepts from the West and maybe China and bring them to the Middle East.
Uber is available here, but so is a local copy, https://www.careem.com
, which is finding a nice market in conservative Saudi Arabia, where women aren’t allowed to drive. They outfitted cars with baby seats and are winning business from Uber because they more quickly adopt to local tastes and needs. That said, Uber isn’t your normal startup. While I was in Dubai it announced it was starting to take cash in India, which shows it, too, can change to serve local needs (many both in India and in the Middle East don’t use credit cards, I’ve learned, which makes using services like Uber difficult). Uber’s announcement: https://www.facebook.com/RobertScoble/posts/10153274787549655:0
How does Dubai get to the place where it can really innovate? It has a lack of programming talent. Some of that could be lured here with the wonderful lifestyle and the economic riches of the nearby oil riches. Dubai, itself, doesn’t have much of an oil wealth, but does benefit from having major wealth nearby in Saudi Arabia and other cities. That is one reason why Dubai is more liberal (ex pats here say they get away with much of the same behavior that you would in Western cities, while that wouldn’t be true in nearby Saudi Arabia. Women here are often dressed like they do in San Francisco or San Antonio. Yes, you do see the more conservative ones, but Dubai has built an oasis that’s open for business to the rest of the world.
Which brings me to Obi’s founder, Neeraj Chauhan, https://www.facebook.com/Neerajchauhan01
. I met with him in Dubai as he traveled back from Africa. Obi is one of a bunch of new mobile companies (the most famous of which is Xaomi, run by former Google exec Hugo Barra) that are going after the developing market.
This is where the new mobile wars are being fought. Let’s be honest. Apple already has the market share in the United States it’s going to get and the profits, too. But in places where Nokia once ruled the markets are wide open for disruption. He told me that in India alone a million smart phones are sold every day. Get one percent of that market and you have a nice business.
He told me the role of Dubai, with its airport that is reachable from the rest of the world. You can take a non-stop here from San Francisco, thanks to Emirates airlines. He says that Dubai is the place you go to do business and that things like its 100,000 attendee GITEX tech show, in October, are the reasons why (he was here for a health tech conference last week).
He says the markets are getting richer, which means they are looking for more upscale mobile phones. He’s about to introduce a $200 phone that is being designed in San Francisco. He’s making a big deal about that “designed in San Francisco, priced for the rest of the world.” Most people in the emerging markets he serves can’t yet afford the $1,000 iPhone 6+ I am holding.
Anyway, where I’m going is the smart money in Silicon Valley travels to emerging markets. Look at the moves Zuckerberg has made at Facebook. Nearly everyone in this region uses WhatsApp. Look for more, many more, to follow his lead. Can’t think of a better place to start than Dubai. It’s ready to roar.
Oh, and when will we see a global brand come not from Silicon Valley or China, but from the emerging markets themselves. Payments provider Mpeso https://mpeso.net/
is dominant in places like Africa. It is the one I keep hearing about, so wonder if it will escape to the richer countries? Probably thanks to immigrants who are sending money back home.
While we are talking about mobile phones, did you miss how Samsung and other vendors are getting squeezed? http://www.ft.com/cms/s/0/0bd63166-971d-11e4-9636-00144feabdc0.html#axzz3a5h5yRkn
Apple is moving in on their turf on high end (which is where most of the profits are) and companies like Xiomi, Meizu, Obi are commoditizing nice phones on low end. Meizu is announcing a new phone in India here: http://techpp.com/2015/05/14/chinese-smartphone-manufacturer-meizu-to-debut-in-india-on-may-18-likely-to-launch-meizu-m1-note/
Android is dominant in these emerging markets. But Samsung’s profits will likely continued to get squeezed. Why? On high end iPhones still have the best developer support and rich people around the world tell me that is why they are on iPhones (90% of the 200,000 customers of Coachella, world’s most influential music festival, are on iPhones). Even in Dubai, a market where most people have Android-based devices, the few developers I met were carrying iPhones. Why? They are hoping to get to the rich markets first.
I sure am glad I don’t work at Samsung. I don’t see how it escapes this squeeze anytime soon. Better hardware isn’t going to change the market dynamic in a big way.
In Dubai I had quite a few fun experiences in between meeting tons of entrepreneurs and speaking at two conferences. Some of the people I met (I list them here so you can build relationships with some of the leaders in Dubai and the Middle East).
Microsoft evangelist Mohamed El Shaekh, who took me around the world’s most luxurious hotel: https://www.facebook.com/sheakh/posts/10152764805756555?pnref=story
Ritesh Tilani, who is a startup founder, working on a system to make airports more efficient with Bluetooth Smart Low Energy Beacons. He joined us on a trip around the waterfront in a yacht: https://www.facebook.com/ritesh.tilani/posts/10101792545176897?pnref=story
Met with journalist Farrukh Naeem Qadri and we talked about the startup ecosystem. Thanks for his help with this newsletter’s content. https://www.facebook.com/photo.php?fbid=10155550474435500&set=a.10150330017380500.566621.612240499&type=1&theater
Rintu Mathew who is helping plan the 100,000 attendee tech conference GITEX. https://www.facebook.com/rin2.matt/posts/10155554745805191?pnref=story
The details on the conference are at http://www.gitex.com/
Dany D-fine showed me the coolest app I saw come out of the region: Colorbug, which augments reality and helps kids do something other than just stare at their iPad’s screen: https://www.facebook.com/RobertScoble/videos/10153277316249655/
Akos Balogh traveled to Dubai to show me his new iPhone frame, Moscase, (looks like a case, but is packed with sensors and with a replaceable plate). Proves innovation isn’t done yet in the case market. https://www.facebook.com/photo.php?fbid=10204088331192788&set=a.1493778468664.227679.1360131908&type=1
Futurist David Passiak introduced me to tons of people and took me “dune bashing.” https://www.facebook.com/photo.php?fbid=10152871602903807&set=a.10150206961913807.313673.636253806&type=1
(Think rollercoaster on sand dunes, tons of fun).
Tina Yd came along. She runs a startup incubator in Dubai. https://www.facebook.com/tinadot
Brad Kr came to promote skateboard events years ago and never left. Now he designs skateparks for the royalty here and does marketing work for RedBull and others. https://www.facebook.com/photo.php?fbid=10153272180264655&set=a.18390289654.24496.501319654&type=1
He was joined with Raj Kotecha, who has started several businesses, is a DJ in town, and took me to the exclusive 360 club that’s hard to get into. (Get it, I do 360 video, so had to go to the 360 club? Thought not. Heh. ).
Former NextWeb CEO Zee Kane was one of the group that joined us on Sunday for a spectacular lunch. https://www.facebook.com/RobertScoble/posts/10153271282214655
This shows why Dubai is attracting tourists from all over the world. The food is stunning and continued to be stunning during my entire trip. Others that joined? Obi’s Managing Director Amit Rupchandani, https://www.facebook.com/amit.rupchandani.1
and Ahmed Sabti, who is trying to build a new social network. I gave him some ideas about how he could possibly have some success in that crowded space. https://www.facebook.com/ahmed.alsabti
Visited Sultan Al Qassemi. He’s a fellow at MIT Media Lab and has a spectacular modern art collection. I wish I had more time with him, definitely the most interesting person I met and quite outspoken, too. I hear he was first person to be verified by Twitter in the Middle East, too. https://twitter.com/SultanAlQassemi
Dominik Mazur, CEO of Camfind, showed me his visual search engine. https://www.facebook.com/Mazur.Dominik
I used it on Maximilian Buser’s wrist. He makes art watches in Switzerland that cost $95,000 and up. https://www.facebook.com/photo.php?fbid=10153274438549655&set=a.18390289654.24496.501319654&type=1&theater
We talked about Apple Watch and he says it’s having zero effect on his business, but that he expects that Swiss manufacturers in the $300 to $1,500 price range will be hit hard by Apple.
Whew, what a lot of meetings and fun to fit into four days. Thanks everyone who came out and taught me about the region.
I love traveling with my ScottEVest pants. It’s funny, but I note here https://www.facebook.com/photo.php?fbid=10153274339734655&set=a.18390289654.24496.501319654&type=1
that I like the pants better than the vest that gave ScottEVest its name. The pockets, which are extra long, keep my passport, wallet, and iPhone 6+ safe. I can’t imagine traveling without them anymore.
A new thing the Apple Watch does? Keeps you from being embarrassed on stage. I was being interviewed by Plamen Russev when my phone rang. Yeah, I know, I should have had it in airplane mode but I forgot. The watch let me reject the call in less than a second which means the phone didn’t even have a chance to ring. https://www.facebook.com/RobertScoble/posts/10153274337539655
Plamen does the quite successful WEBIT series of conferences. Based on the quality of the audience he had here in Dubai I will try to visit his bigger events around the world.
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