Entrepreneurship in Postconflict Zones creates a future, even for investors.
While sipping my tea I was talking to some of the participants of the Re:coded program. They were coming from places like Kirkuk, Baghdad, Mosoel and Irbil. I was quite impressed as you normally meet those places on tv and they are symbols of war, devastation, sadness. All of them have a story that sticks with you but at the same time, it is not about compassion but about finding a way out to lead a life of prosperity and happiness. My trip to Irbil, Irak was surely going to be the most impactful until now in the region. After Sanliurfa (south of Turkiye), Zanjan and Tehran in Iran and Khartoum in Sudan I start to have a better understanding of what it means to build a better future. I gave workshops on startups and entrepreneurship in all these cities to young people with the same goal. What I have the most difficulty with to get enthusiast about is the startup definition. It sounds so opportunistic. Scalable and repeatable but never about impact and sustainability. Of course, when you make profit it is sustainable, but it doesn’t matter what you do as the investor is only after maximum return. So I focus on entrepreneurship with a positive impact and sustainability. I am less keen on framing it immediately to social impact entrepreneurship as the market has needs and desires and that last one is not always about social impact.
Discovering Re:coded surely had quite a big impact on me, and working together with Stage-Co Masters was eye-opening. Marcello and Ali are kind of in the same setting as us. They are a couple like us and foreigners. Whereas my wife is Turkish but definitely with an international outlook. The baseline of Re:coded is very well formulated: “Training conflict-affected youth to become the tech leaders of tomorrow”. The bootcamps vary from 6 to 10 months and the aim is that the participants learn to code for the Android platform, English and soft skills. Re:coded is today active in 3 places; Istanbul and Sanliurfa in Turkiye and Erbil in Iraq. I am very happy we could already help in the 3 places and continue the collaboration in the future. What is great in my opinion is that Re:coded teaches skills and not providing the typical aid we see, where you make the local people depending on you. Congratulations on this great initiative.
Going back to the entrepreneurship workshops and why this is so important. Wherever unemployment is very high, especially among young people, the creation of jobs is very important. We always see big headlines when a big company starts in a country, but we forget that in total employment they are not the biggest driver. The SME’s are the real engines and therefore it is important to stimulate entrepreneurship. Countries where the mentality was working for a government institution as a default ambition suffer from entrepreneurship activity. This was very clear in the Balkan countries after the cold war. I even still see this in Turkiye hence all the “girişimcilik” aka entrepreneurship initiatives even followed by the demand for digital transformation hand in hand with intrapreneurship by corporations. Securing your job forever in the past and agile will also apply for your career or as an entrepreneur. The whole startup scene is part of this new economic reality but as such still way smaller than the volume of SMEs that are started every day with less leverage but also with much less risk and indeed less sexy. The importance of SMEs is also underlined in the developed countries. In a recent European study, it shows the importance of job creation. One of the conclusions was that Large Enterprises create a higher proportion of value added in the ‘high and medium/low tech manufacturing’ sector, while SMEs create a higher proportion of value added in the services sector. See the complete report here. This means that programs like Re:coded and what we are doing with Stage-Co Masters makes a lot of sense as we concentrate on services, not on creating manufacturing plants.
After each workshop, I have done until now comes the most asked question, where to find starting money. My first answer is an obvious one, like create a prototype and find your first customers before going to investors. For many young people that is enough to give up. What I personally would like to offer is to continue the trainings, but more business oriented. One of the problems I saw again in Irbil is that there is no entrepreneurship community where young people with ideas can go too, I am not talking about startup ecosystems here, as too early. Lack of continuous training, especially management, and programs where they can be embedded and grow. Not the classic incubation, it showed already that in our region it does not work but acceleration programs without the 3 months stress. For most, 3 months is too short to really get ready and 1 program of 10 teams per 6 months is not productive. Next to the programs, you need the investors and there I look at the established investors. Today they are happy with a failure rate of 9 on 10 although they always think that their investments are always that 1 success. The leverage might be lower if they invested in these post conflicted regions but I am convinced that the success rate will be higher. Why not reserve 10 to 20% of their to invest capital in this kind of participations? That is why I refer in the title to “simply better”. It is better for their portfolio, you are less focused on opportunity thinking, and you help young generations building their own future. We really do not need another e-commerce startup doing the same thing. What we need are impact and sustainability. For post-conflict regions, it also means less risk for conflict in the future and that is in the interest of all of us. Doesn’t it?