We now live in the era of prestige television, a few years ago would have imagined actors on the level John Malkovich, Anthony Hopkins, and Jude Law grace the silver screen. Nowadays it has become common practice to see Oscar Winners, Movie Stars and acclaimed Directors participate in creating some of the most diverse, expensive, and exciting content that would be aired on TV or streamed directly through mobile phones.

HBO practically launched Prestige Television with Sopranos in 1999 following up with heavy hitters such as The Wire (touted by many critics as the best show of all time), Band of Brothers, and Curb your Enthusiasm. The Talent both on-screen and behind the camera were top-notch, the stakes were high and viewers kept watching week after week and renewing their cable TV subscription. More networks began airing high quality shows such as 24, Lost, Arrested Development, House, and the West Wing. These shows had similar ingredients: Gripping Protagonists, Death or life stakes, and an over-reliance on twists. People were hooked, some still debate what the ending of Lost means… The quality of TV series has risen and users were flocking to watch weekly.

Using Google Search Trends to Predict Initial Jobless Claims | Data Driven Investor

Then in 2007 Netflix, the DVD rental company most famously known for bankrupting Blockbuster introduced streaming. It was a new model aiming to streamline the way people consumed movies instead of the logistics of sending and receiving DVDs. The content was decent as well as the price, however, Netflix would still be a slave to other content providers in licensing movies.

In 2013 the industry was changed forever with the introduction of Netflix’s first original “House of Cards” a political drama with an A+ list of actors; other successes followed such as Orange Is the New Black and the multi-series deal with Marvel in 2013. Netflix was disrupting the industry by pouring in “Netflix Originals” and increasing its appeal. Although both Hulu and Amazon Prime Video were active since 2008 their Originals did not truly take off until Transparent for Amazon in 2014 and The Handmaid’s Tale for Hulu. The original content was hot and everyone including TV Networks, Media Giants were betting on it. Technology giants such as Apple, Google, and Facebook moved with baby steps while media giants such as Disney and Warner went all in.

Types of streaming platforms and how they monetize

There are three main types of VOD platforms each with its own monetization: SVOD (Subscription Video on Demand), AVOD (AD Based Video on Demand), and TVOD ( Transaction Video on Demand).

SVOD is the most popular model it relies on subscribers paying a monthly fee to access a platform’s full library. Several factors determine the success of a platform but the most prominent are price/content ratio. SVOD is very competitive and new entrants such as Disney+ and Apple TV+ have been very aggressive on pricing to get subscribers early and retain them with quality content.

AVOD is a model everyone experienced at some points, it covers free content monetized by ADS (either pre or post rolls or during the video). AVOD platforms have less appealing libraries and need millions of views to properly monetize. They are however very popular in regions with low purchasing power, credit card penetration, and infrastructure

TVOD is when a user purchases or rents a certain movie from a distribution platform. This is usually done for movies that were recently in Theaters or due to COVID went directly to online release. The price per transaction is higher but the perceived value is high as well. This is the internet age equivalent of buying/renting DVDs.

Hybrid models also exist, Hulu, for example, offers a basic subscription plan at $5.99 which is the cheapest on the market besides Disney+ and Apple TV who are highly subsidized. Hulu basic subscribers get access to the entire library but have to support several ADs during a viewing session.

The niche players

Some players have been entering the market with a niche proposition; Shudder has positioned itself as the horror movie platform, Crunchyroll has focused on Anime and newest entrant Quibi proposes short 7–10 minutes episodes released in daily increments. And although the platform signed some high-caliber actors (Christopher Waltz, Liam Hemsworth, Sophie Turner) the users do not seem very satisfied despite the 90-day free trial and strong traction (1.3M downloads the first week). The main deterrents were highly relative pricing (4.99$ with ads, 7.99$ unlimited) and a small library.

Another major indie player is MUBI a platform backed by French VC C4 Ventures and partially funded by the European Union. MUBI offers a new movie each day (available for 30 days) with a flair for indie Cinema. The idea was to target indie film fans and provide them with curated content and simple aesthetics. As of May 2020, MUBI added a new free library section on their website to make up for all the films users missed during their original release and increase their views. The selection is focused on Arthouse movies and includes the famous Criterion collection outside the US/UK.

The name of the game is user acquisition and Netflix is winning by a mile

The success of a VOD platform comes from the number of subscribers, views and the revenue they generate. SVOD has simple economics as it depends on the number of subscribers and subscription price; AVOD needs millions of views to generate proper revenues and TVOD has fewer transactions but with a much higher price and margin.

Netflix and Amazon are far ahead in the race; Netflix has a globally appealing original content library while Amazon manages to boost it, subscribers, by bundling Prime Video with Amazon’s popular Prime subscription. While it is surprising to see Disney+ and Apple TV+ next as they launched in late 2019; the amount of marketing and price cuts (Disney+ starts at $5.99 and Apple TV+ is free to anyone purchasing an Apple Device in 2019 and 2020) and the hype over the Disney Library created a strong hype. Hulu (also owned by Disney) and HBO round up the lineup with a very strong selection of series and movies but they operate only in the US and license their content to other international providers. With Hulu set to expand outside the US Borders and HBO consolidating its content with everything Warner via HBO Max; expect a rise in subscribers within the next 18 months. Apple TV+ the only platform without an extensive catalog of films is also finalizing deals in order to feature older movies and series and extend its library significantly.

Original Content vs established Franchises: Who is winning the round

Had someone asked me this question a year ago I would have said Original Content. Original Content has been a great way to capture users and retain them. Cult-favorite like Casa del Papel and Narcos on Netflix has driven a lot of new subscribers to Netflix.

Original content spending has been massive as it has been the main driver to lure new customers and reduce churn. However the market now has been disrupted again by the entry of Disney+, a platform with arguably the strongest and most valuable combination of Franchises ever assembled ( Pixar, The Marvel Cinematic Universe, and The Star Wars franchises grossed a total of $43B); HBO Max which will aggregate all Warner Bros and HBO properties will also provide a lot of content and franchises. Disney and Warner Bros combine for almost 50% of the total US Box office (Disney had 33% Market share in 2019). We might see churn or a reduction in new subscribers growth for the incumbents; despite Netflix’s massive 2019 (15.8M new users vs 7.5M expected) it’s US market share and growth has been lower than other years wand most new subscribers are coming from international markets where Disney+, Hulu and other competitors have a minimal presence.

Multiple subscriptions: The new norm

A study by Deloitte showed that the average US household subscribes to 3 VOD services by months and pay ±37$ per month. This is a good value as cable and live TV subscriptions can go up to 60$ per month. In a less privileged region like ASIA, MENA and some other European countries, some people can pay for only 1 VOD platform while focusing on AVOD and Youtube to get more content. Potential subscribers will be carefully choosing their platform of choice depending on budget and personal taste. SVOD has usually high retention as switching is not very frequent. The major causes of churn are usually inactive subscriptions and credit cards being charged eternally. However, as of May 2020, Netflix will start disabling accounts that have not been active for 10 months.

New monetization techniques and opportunities:

As the lack of purchasing power is one of the biggest churn factors there have been some players with really innovative business models.

Cinemoz a Lebanese AVOD platform based in Beirut with VC Funding and high viewership created something called EVOD (Event VOD) in which they propose5 premium free movies every month, movies such as John Wick 3 , Oscar winner the Master and cult favorite Looper have been featured on the platform. Each month has new titles being released. This model proved to be successful as it is driving more traffic, higher-quality AD campaigns, and pushing users to explore the Cinemoz Library.

Cinemoz Founder Karim Saffiedine explained his rationale: Out of the 300 new titles the company used to acquire yearly; 80% never got a view. This prompted the company to decide to spend the same budget on 5 quality films per month.

Another interesting company based in the UAE is VYND.io. Vynd.io allows users to search on which platform a Series or Movie is available and optimize their subscriptions and spend. In addition, Vynd provides data analytics and AI to streamers in order to optimize their offerings and acquisition.

Kanopy is a free streaming platform in the US offering high-quality fils such as Oscar-winning Moonlight and critically acclaimed movies such as Lady Bird. All you need is a public library ID card or university ID.

Other Models that can be also provided to customers that want to watch more and pay less are the following:

1- Hybrid Models in which subscription fees are cheaper but display ads during the watching experience. Hulu does that for their basic plan.

2-Subscribing to channels or subcategories at a cheaper price; ex subscribing to Disney+ Star Wars Channel only for 3$, or Netflix originals only for 5$ this will help consumer pay less to access relevant content and might increase retention

Do we have enough time and money to keep up ?

The VOD industry has constantly been evolving for the past decade, but there is far more quality content that a person can watch over a lifetime. Add that to an increase in the quality of new content and franchises. This situation will pose an essential issue on how to keep users happy and engaged; as of now the combination of price-quality/ratio and content is working.

Entertainment is a highly competitive and fluid industry where content is king and subscribers have limited resources and high expectations. It’s not a surprise to see so many studios going the streaming route especially after how COVID impacted the Theater experience with no clear visibility for the future. COVID has been a major disrupting event for the industry and I’ll be covering its repercussions in a follow on article.

Understanding the Drivers of the Streaming War was originally published in DataDrivenInvestor on Medium, where people are continuing the conversation by highlighting and responding to this story.

What no one thought happened, happened. It had been a century since the last major pandemic, the Spanish Flu hit the world wiping around 50 Million people. It was a sickness unseen in the modern world; however, the inhabitants of the planet suffered a few small viruses: H1N1, SARS, MERS, etc… The world was different then, the world was less informed then.

In the age of social media, insane internet bandwidth and technology for all such a pandemic hit both the health, lifestyle, and fears of human beings. It’s a natural response we cannot control; post-covid19 the world will be a different place. Hard Goodbyes will be the first step but the economic impact the virus and the strict rules put to protect us for it will be enormous. Businesses will collapse, people will unfairly lose jobs and among the sectors hit are entrepreneurs who survive on limited resources. I will try to tackle some issues that many entrepreneurs (unless those riding mythical one-horned beasts) will benefit from. The Human race is a resilient race and will survive, the cost of survival is what we don’t know.

Frugality is the name of the game:

People tend to confuse Frugality with avarice; being frugal is being economical while avarice is being greedy. Frugality is even one of Amazon’s Leadership principles and Amazon is doing great. So until the dust settles cut out any expenses that are unneeded or non-optimized. Move from your office to a co-working space, or work from home. Cancel the weekly breakfasts that nobody fully consumes and eliminate any subscription you might not need. These small expenses can accumulate and become a nice sum when things normalize.

Extend your runway (if you have money):

Your funds will last you 12 months, fine; these were based on the older assumptions. You’ll probably grow less now so look back at your business plan and eliminate the expenditures you hadn’t put yet that can range from equipment to travel, development and more… The more you last the likelier you can recover when things go to normal. Aiming at plus 50% is a smart move

Raise a bridge round (if you don’t have money):

Provided your funding was very limited and you were planning to raise your plans probably exploded. Try to go for a small $200K bridge round with a low valuation, you will find investors willing to take the risk and although the feeling of doing a down-round is awful it’s better to have 20% if $10M rather than 35% of 0$ and be last in liquidating preference.

Don’t hire and don’t fire full-time employees:

Employees are the life and blood of any startups, laying off people maybe sometimes inevitable but when times are hard and no one made a mistake firing can be terrible. Besides the emotional impact on both employee or employer it’s not a good sign to the public. Work out formulas with reduced salaries for an increase when things recover. Same thing for hiring: even if you are hiring a top-level talent that can bring so much put it on hold. Neither you will get the talent’s full capacity nor will you integrate him quickly. In need of an urgent task hire freelance talent, they are efficient, can be really good and will cost less as you forego anything related to registration, work permit, etc…

Check for help and subsidies coming from the government:

Some government is giving subsidies to their startups: The French governments are offering a guaranteed loan up to 25% of a startup’s or freelancer/artisan 2019 revenue with a flexible reimbursement and 0.5% max interest rate. (https://attestation-pge.bpifrance.fr/description). The US through its Small Business Administration (SBA) arm is also giving subsidized loans with small interest (2.75%-3%) and there have been crowdfunding campaigns to create relief funds for SMEs and Startups.

Times are tough for everyone, but taking it into a bigger picture; Human Race has survived the black plague, countless wars, and disasters and always recovered. The next few months won’t be pleasant but with some perseverance, we can still make a better future for ourselves

The Entrepreneur’s Guide to surviving the COVID Pandemic was originally published in X marks the Spot on Medium, where people are continuing the conversation by highlighting and responding to this story.

What no one thought happened, happened. It had been a century since the last major pandemic, the Spanish Flu hit the world wiping around 50 Million people. It was a sickness unseen in the modern world; however, the inhabitants of the planet suffered a few small viruses: H1N1, SARS, MERS, etc… The world was different then, the world was less informed then.

In the age of social media, insane internet bandwidth and technology for all such a pandemic hit both the health, lifestyle, and fears of human beings. It’s a natural response we cannot control; post-covid19 the world will be a different place. Hard Goodbyes will be the first step but the economic impact the virus and the strict rules put to protect us for it will be enormous. Businesses will collapse, people will unfairly lose jobs and among the sectors hit are entrepreneurs who survive on limited resources. I will try to tackle some issues that many entrepreneurs (unless those riding mythical one-horned beasts) will benefit from. The Human race is a resilient race and will survive, the cost of survival is what we don’t know.

Frugality is the name of the game:

People tend to confuse Frugality with avarice; being frugal is being economical while avarice is being greedy. Frugality is even one of Amazon’s Leadership principles and Amazon is doing great. So until the dust settles cut out any expenses that are unneeded or non-optimized. Move from your office to a co-working space, or work from home. Cancel the weekly breakfasts that nobody fully consumes and eliminate any subscription you might not need. These small expenses can accumulate and become a nice sum when things normalize.

Extend your runway (if you have money):

Your funds will last you 12 months, fine; these were based on the older assumptions. You’ll probably grow less now so look back at your business plan and eliminate the expenditures you hadn’t put yet that can range from equipment to travel, development and more… The more you last the likelier you can recover when things go to normal. Aiming at plus 50% is a smart move

Fintech Startups are disrupting the Banking Industry around the World | Data Driven Investor

Raise a bridge round (if you don’t have money):

Provided your funding was very limited and you were planning to raise your plans probably exploded. Try to go for a small $200K bridge round with a low valuation, you will find investors willing to take the risk and although the feeling of doing a down-round is awful it’s better to have 20% if $10M rather than 35% of 0$ and be last in liquidating preference.

Don’t hire and don’t fire full-time employees:

Employees are the life and blood of any startups, laying off people maybe sometimes inevitable but when times are hard and no one made a mistake firing can be terrible. Besides the emotional impact on both employee or employer it’s not a good sign to the public. Work out formulas with reduced salaries for an increase when things recover. Same thing for hiring: even if you are hiring a top-level talent that can bring so much put it on hold. Neither you will get the talent’s full capacity nor will you integrate him quickly. In need of an urgent task hire freelance talent, they are efficient, can be really good and will cost less as you forego anything related to registration, work permit, etc…

Check for help and subsidies coming from the government:

Some government is giving subsidies to their startups: The French governments are offering a guaranteed loan up to 25% of a startup’s or freelancer/artisan 2019 revenue with a flexible reimbursement and 0.5% max interest rate. (https://attestation-pge.bpifrance.fr/description). The US through its Small Business Administration (SBA) arm is also giving subsidized loans with small interest (2.75%-3%) and there have been crowdfunding campaigns to create relief funds for SMEs and Startups.

Times are tough for everyone, but taking it into a bigger picture; Human Race has survived the black plague, countless wars, and disasters and always recovered. The next few months won’t be pleasant but with some perseverance, we can still make a better future for ourselves

You searched for covid | Data Driven Investor

The Entrepreneur’s Guide to surviving the Covid Pandemic was originally published in DataDrivenInvestor on Medium, where people are continuing the conversation by highlighting and responding to this story.

Show me the Money ! aka surviving your First Venture Capital Meeting

Business model, pitch deck, networking… You have been working for the past few months on having the most exhaustive documentation and best story and finally have meetings with Venture Capital Firms (VCs). The stakes are at their highest and you don’t want to squander the opportunity; what do you need to ace this meeting and maximize your chance of getting funds?

The following article will give you an overview of what you need to catch a VC’s attention and maximize the face time you have with the investment team.

Know your audience

VCs come in different sizes and forms; each one has a unique investment mandate and different requirements; approaching each VC meeting the same way is a recipe for disaster.

Know what the VC you’re meeting looks for; check their website and any documentation on them in order to know their focus areas, see their portfolio companies and investment preferences.

Another important component of VCs is their people, identify the team’s background and decision makers. Some VCs have a collegial approach where an investment must pass with the majority of the team no matter the seniority, while others have one decision maker — the fund manager or a partner.

Be courteous and humble

The ratio of startups to VC is very high, meaning you have to tick the right boxes to get funding while considering that a VC might screen a dozen startups before making an investment. The competition is intense, and the outcome is not guaranteed.

First impression is key, and nothing turns off an investor more than arrogant founders who say they have many investors already lined up. Regardless of the legitimacy of a startup, VCs put a lot of focus on the team and the founders’ character. The transaction leads to an ultimate partnership and both VCs and startups should be able to communicate efficiently during the company’s lifecycle.

Have a good pitch and structured approach

Let’s be clear on one universal truth in the entrepreneurship ecosystem; there is no one-size-fits-all approach. Every VC will have criteria they favor, however having an organized pitch and structure increases the chance of having favorable returns.

It does not matter if you have the best-looking presentation or the longest pitch; a good structure conveys a better message.

The best and most important ideas to circulate are the following:

• What problem are you solving? Why is it relevant?
• What is the solution you are providing and does it work?
• Is there a market for your idea? Where is it and what’s it potential?
• Is your idea unique?
• If yes, can you implement it and sell it?
• If not, what gives you an edge over other copycats?
• How do you generate revenue and grow? You have to have a concrete plan on selling your product/service
• How good is your team? This is usually neglected, but VCs put a lot of focus on this.

Prepare to be challenged and defend your ground

It’s the investment team’s role to make sure they are going into a high-potential and profitable business and vet the eligible startups. As an entrepreneur, you will be questioned on every assumption you make and any decision you plan to make.

The key is not caving under pressure and defending your business plan. VCs highly appreciate founders who are convinced of their idea and can convince others.

Approach the meeting as a partnership opportunity not a financial transaction

VC funding is neither a grant nor a loan; VCs will invest in an equity stake in your company and become a shareholder on the same level as you. This is why you should think of VCs as potential partners; some investors are silent while others will participate in the growth of the company.

VCs can help in many different ways other than with money: they can brainstorm and provide insight when needed, open doors to other partners or VCs and sometimes provide hands-on expertise. A good relationship with your shareholder will always unlock new opportunities and growth.

VC Funding: there is no one-size-fits-all

In the end, the most important point to remember is that like any company, a VC is run by individuals and individuals have different visions, risk assessments and priorities. Investing in a startup has a very subjective component; if there were a one-size-fits-all approach, then all VCs would invest in the same startups and bidding wars would ensue.

The tips discussed above will increase the probability of a positive outcome, but nothing guarantees funding. Resilience is key and if a door closes always move on and knock on other doors.

PS: This article has been also published on the Berytech Website http://berytech.org/acing-your-vc-funding-meeting/ ; you can also find other insights regarding Entrepreneurship

Show me the Money ! aka surviving your First Venture Capital Meeting was originally published in DataDrivenInvestor on Medium, where people are continuing the conversation by highlighting and responding to this story.

Online Dating: Breaking the Taboo in Conservative Cultures

Tinder, Badoo, Okcupid, Meetic, Happn… You’ve heard about them and you’ve probably used them a couple of times or more.

The promise of finding someone a few clicks away in an age where everyone is connected is too good to pass on.

Online dating has been growing exponentially over the past few years. The Industry generates around $4 Billion yearly growing at a steady 5% annual pace. However, did you know that the origin of ‘online dating’ predates the internet era?

Online dating is much older than you would think

The origin of online dating started in 1959 when two Stanford University students used a questionnaire and an IBM terminal to match 49 men and women.

The experiment relied on matching couples according to their responses. This new use of nascent computing powers led to several dating-related initiatives being launched for matchmaking including “Operation Match”, which led to millions filling a $3 questionnaire in the 1960s.

The 1980s also experienced another step forward to what modern dating is; innovations such as the Minitel in France where pink chat rooms were set up (Messageries Rose); while at the same time in the US, bulletin boards for dating were set up. Matchmaker Electronic Pen-Pal Network, the system was a precursor to the internet with users exchanging data through terminals with a mechanism similar to mail or instant messaging.

In 1995 with the advent of the World Wide Web, Match.com was launched riding on the promise of online classified ads; the first iteration was a failure, and the domain name was acquired by media conglomerate IAC spinning off into the Match.com Group which owns several dating services such as Okcupid, Match.com, Meetic, Twoo and Tinder.

The general audience’s mainstream introduction to online dating comes probably from the Meg Ryan/Tom Hanks movie “You’ve Got Mail”; the movie helped break the taboos and the negative connotation of dating through new technologies.

The first real online dating website — e-harmony, launched in 2000, was designed to be a matchmaking service with a focus on building long-term relationships and used a set of 450 questions to be filled (since then reduced to 150).

The Rise of Mobile Dating

Online dating has grown with the rise of technology. Indeed, what was a lengthy process using clunky e-mails changed gradually using modern technology.

Video conferencing, fast mobile connections and the convergence towards the app economy have led to an exponential increase in dating websites and apps across the world.

Two trends have emerged: traditional dating sites with a generalist and wide population and niche dating sites geared towards more atypical and specific audiences. Here are some of the more interesting picks:

Although there is no shortage of options when it comes to online dating the market is mainly dominated by the big players, but market size does not necessarily equate with favorite as these studies from statista.com show:

Match group owns the lion’s share of online dating, but the group’s strength resides mainly in the US and other Anglo-Saxon countries. However, there is potential in other regions, including the Middle East.

Online Dating in the Middle East

It may be surprising, but many dating apps and websites operate in the Middle East; however traditional audiences in the region distrust Western dating apps with the perception that these sites are for superficial hookups rather than for serious relationships.

Luckily, there are companies in the Middle East tackling the issue: one of the pioneers and most successful conservative dating websites in the MENA is the Lebanese startup Et3arraf founded in 2012 by Cedric Maalouf and Rakan Nimr.

Funded in 2015 by Berytech Fund 2, Et3arraf has been tackling the stigma of online dating by proposing products that fit with the region’s culture.

Image from et3arraf.com

Et3arraf’s first product “Al Khottaba” (the matchmaker in Arabic) has been very successful in tackling the Saudi Arabian market.

Al Khottaba digitizes with high accuracy and understanding the function that khottabas in KSA perform notably arranging marriages. The experience allows matching couples based on in-depth profiling with AI features.

Once matching is done, the conversation moves to the duo to potentially move further. Et3arraf also launched “Farah” (happiness or marriage in Arabic) in Egypt. Although many features are common to both apps, Farah uses a cross between AI and gamification to match potential couples.

In order to reach a point where audiences felt comfortable using these apps, the Et3arraf team focused on getting users’ feedback and perspectives even when harsh and negative.

When the app was still called “et3arraf” a more conservative audience felt the name was haram, prompting the change to the “Al Khottaba” model. The move was well received as arranged marriages through matchmakers are very common in the Saudi culture.

Other applications such as Hayat, Lovehabibi and Hayati (launched by Lebanese Entrepreneurs) emerged, however, success was limited mainly due to either the perception of being very unregulated or unsafe or because they focused on a very small community (Hayati exclusively targeted Lebanon, one of the smallest MENA countries).

The imbalance in genders, proper moderation and how technology can solve problems

One of the most common problems in online dating is the imbalance between men and women (i.e., 5 to 1 ratio users on Et3arraf) and the perception that women do not have the upper hand.

However, a lot has been done to make online dating a better experience for women.

Bumble, one of the major new players worldwide has women initiating the conversation while Et3arraf uses a mix of gamification and AI in which a lady starts with more than one match then filters through them by having male counterparts answer a quick quiz to increase chemistry.

And although problems such as abuse, fake accounts and harassment still exist, Machine Learning and Artificial Intelligence can help filter and moderate conversations.

A major component of any successful and respected dating site is customer support and moderation. Moderators must act fast to assess and solve issues and stop any escalation to avoid bad experiences.

There is so much a human mind can process, but the application of AI will help solve a higher number of tickets and reduce cost. Human intervention will always be needed, especially when judging sensitive issues that delve into the emotional and psychological spectrum.

The Future of Online Dating

Online dating is a highly imperfect industry. Finding your match based on predetermined factors is not enough, there are other factors in play such as psychological issues, first impressions and fake information. However, with technology getting more advanced and entrepreneurs becoming more mindful of diversity and creating meaningful relationships, the future looks promising for people looking for meaningful relationships.

Online dating is an industry which will keep getting disrupted by new technological trends. AI is already becoming more prominent especially in crafting and processing stronger matching algorithms and data processing.

Virtual reality is probably the next big trend as the technology becomes more available. Your next first date might be on the top of the Eiffel Tower while you are comfortably sitting at home miles away.

Online Dating History, Future and Breaking The Taboo in Conservative Countries was originally published in DataDrivenInvestor on Medium, where people are continuing the conversation by highlighting and responding to this story.

Pivot, Change, Adapt. Buzzwords vary, but the concept remains the same.

People who used to manage or implement that within corporations were called agents of change. Those who made it their trademark through scale and scope were called disruptors. Many claimed that title, egotistically.

But as always, often repeated mantras hide a lot of exaggeration. But also a lot of truth. Perhaps the most important human trait of all is our capacity for adaptation. Whenever we discuss anything pertaining to human history, adaptation, flexibility, problem solving appear like recurring themes.

Business is no exception. Despite the millions of pages of previous experiences, laws, regulations, best practices, tax codes, despite MBAs, mentors, friends, and shrinks, despite all that and more, management remains to this day an essential human activity. We cannot yet -if ever- delegate it to machines and provide them with simple instructions such as: do as best practice dictates, or maximize profit. A myriad of decisions needs to be taken every day, adjustments made, nudges, threats, rewards, camaraderie.

But the most fundamental role of management is to adapt to unforeseen circumstances. In highly oiled highly standardized organizations, such as banks and the like, managers are still needed every day for a judgment call here, an experience-induced wise decision there. Managers are then judged, at least in part, on their ability to adapt and react to new problems.

It is therefore an established fact that adaptability is a key essential part of management, even in standardized environments; what then to think of fluid, mobile environments where all the parts are moving, and all the moving parts are constantly in flux? And what might such an environment look like?

The most challenging environments, therefore, from a stability perspective, are those of start-ups. And within start-ups, the most challenging among those are within companies operating at the bleeding edge of innovation, for there is no precedent to rely upon in that case. This is why successful entrepreneurs balance their organizations with experienced hands, and reinforce their skills by seeking out consultants, mentors, confidants.

Most household names we admire have business models that are sometimes quite far from the initial business plan. Remember Google? It wanted to become a B2B provider of services, and here it is, one of the two or three largest ad agencies in the world. Facebook? From an exclusive ivy league student redoubt to a capture all data and sell ads outfit. Airbnb? From welcoming a guest on an airbed and cooking them breakfast, to renting empty apartments. The list goes on and on.

In each case, the ability to adapt is key.

Basically, no matter how smart and prepared the founder, no matter how well drawn out the business plan, change will happen. This is the only certainty: uncertainty will show up.

In the words of Helmuth von Moltke the Elder, “No Plan Survives Contact with the Enemy”. So the need to capture fluid information, which is further complicated by the uncertainty and the lack of precision, is key. Then this imperfect information has to be analyzed, and acted upon. And decisions need to be made in this uncertain environment. Then re-assessed. If it works, great, but if it does not, then things need to be revisited again. Tweaked. Optimized. Changed. Transformed. And pivoted, if all else fails.

So what does it take to be able to handle that? A great team. Combining drive, intelligence, lucidity, analytics. Knowing how to listen, and when to stop listening and get down to doing things, acting.

A team that is sufficiently stubborn and driven to keep doing what needs to be done and not give up. But also sufficiently flexible to understand when things need to change.

Not easy? Guess what: money — and success — is not lying on the sidewalk.

Why Founding Teams should be top notch: A viewpoint by a Fund Manager was originally published in DataDrivenInvestor on Medium, where people are continuing the conversation by highlighting and responding to this story.

I have heard them all, but these are the main ones I wanted to clarify.

Photo by rawpixel on Unsplash

1. All VC Funds are the same-Fiction: Entrepreneurs often think their ideas are equally appealing to all investors and if one VC fund states an opinion about the investment then all VCs should follow suite. Each VC fund has different parameters ranging from investment stage, industries preferred, ticket size and overall strategy. An investment that may be attractive to a certain VC might not be to another. To maximize chances to get invested, startups should map the VCs they have access to and see which one(s) meet their investment criteria. Although this does not guarantee a 100% investment, the chances will increase significantly thanks to the better fit.
2. VC Funding is a competition-Fiction: This goes to both the VC and startups; VC funds always look for the best investments that align with their strategy and most exciting startups, if more than one startup qualifies, it is very probable that a VC will invest in them. As such, startups should not consider raising VC funds as a competition; a startup getting VC funding will not affect the chances of another startup being funded. A startup getting VC funding should not think about fundraising as a race; good startups will always attract the attention of investors.
3. VC Funds are sworn enemies-Faction: Although in rare cases VC funds might start a bidding war on a certain company; it is more likely however that they collaborate on many cases and co-invest. Co-investment has been a rising trend particularly in the MENA region, as it allows for VCs to pool a bigger overall round for the founders, get validation from multiple independent sources, mitigate risk and also most importantly give startups access to bigger network.
4. VC Funds look out for their interest only-Fiction: Let’s be clear on this one, VC firms are for-profit companies and are looking for the best return on investment from their portfolio. This is often wrongly considered self-interest. The reality is much simpler; VCs and entrepreneurs are shareholders in the same company making them defacto partners; the success of a startup becomes the success of all shareholders; making the interests of investors and VC funds aligned.
5. VC Funds contribute only with their money-Faction: The main role of a VC fund is to provide growth capital for a startup; no ambiguity in this. However, many VCs also act as advisors and mentors to their startups. While the level of involvement and depth given by a VC depends on the startups’ needs, some startups get in-depth support in certain areas such as strategy, marketing, HR, etc. VC team members or advisors will often commit significant time helping a portfolio company. Other kinds of support may include introductions and links to other investors or even service providers.
6. You cannot reapply to a VC Fund-Fiction: Many startups don’t apply for VC funding fearing they will be rejected and lose the opportunity; and often postpone scheduling meetings with VCs. Most VCs will meet again with startups they had originally rejected specially if the first impression or business model had been good; this possibly leads to the same VC investing in that formerly-rejected startup. However, for this to happen a startup must have either made a huge leap in terms of traction, KPIs, product or might have changed/adjusted its business model becoming more attractive for an investment. A startup having understood the reasons for its first rejection and fixed them should have no problem in scheduling follow up meetings with previously contacted VCs.
7. VCs only care about strong teams-Fiction: The strength of a team is a major factor for a VC investing in a startup, a good team can execute its strategy, grow the company and most importantly adjust and pivot when the market assumptions change. However, no matter the team’s strength, a strong business plan and/or strong/innovative products are just as important.
8. The closest analogy of the relationship between a VC and a startup is dating-Fact: This might sound funny but when you think about it: you start with the players getting to know each other and checking for attraction, then follows the investment which is close to getting married, while an exit is akin to a separation. And like any relationship, ups and downs happen but if the partnership is strong, it remains and grows.
9. VCs will only give you the amount you need or request- Faction: One of the biggest misconceptions of fundraising is that the less you ask from VCs the higher the likelihood of receiving funding. While some VCs will stick to the amount asked others might propose a slightly bigger ticket (ie to cover 24 months instead of the 18 Months budgeted). This is a deliberate proposal to account for probable delays in execution and market factors and will give entrepreneurs more time to focus on the business component rather than on a perpetual fund raising cycle every 6 months.

Fact or Fiction: The Biggest Misconceptions about VC Funds was originally published in DataDrivenInvestor on Medium, where people are continuing the conversation by highlighting and responding to this story.

Last Week, I had the pleasure to be invited to speak at the 2018 Middle East Investment Summit held in Dubai . As someone who has been in Venture Capital in Lebanon for the past 3 years, I was very curious about the MENA VC funds’ outlook and how the entrepreneurship eco-system in countries with high spending potential (Saudi Arabia and United Arab Emirates) compared to Lebanon’s and what were the views of MENA traditonal investors in VC funding.

Venture Capital in Lebanon

Venture Capital has boomed in Lebanon since the announcement of the Central Bank’s Circular 331 which enabled VC funding through commercial banks. The circular resulted in around $600 Million unblocked for investing in Lebanese based start-ups. This resulted in the inception of 8 funds with an estimated $350 Million allocated and the funding of 50 startups with amounts ranging from $100K to $5M.

The initiative has been a great success invigorating the entrepreneurship eco-system in Lebanon and resulting in other initiatives such as accelerators, bootcamps and competitions. This initiative also provided a great learning experience as it pushed all parties involved towards understanding the ins and outs of VC funding and assessing financial returns, success rates and exits.

VC in MENA vs VC in Lebanon: Different sources of funds, similar challenges

During the conference I attended all the panels related to Venture Capital; I wanted to understand how VC funding in powerful economies worked and if the investment processes followed the same underlying assumptions. The panels had very prominent investors such Angus Patterson from STC Ventures, Mishal Kanoo Chairman of the Kanoo group and others. The major difference between VCs in MENA and Lebanese VCs was the source of funds and disbursement flexibility. MENA VCs have traditionally private investors such as family offices and high net individuals and can deploy money with less restrictions than Government funded schemes such as the circular 331. The lessons learned from Venture Capital are very similar.

• High return potential, high risk: VC investing is known to yield high returns than with exits ranging from an average 3X to 10X the amount invested. However failure rates on average for startups is around 70% as per entrepreneur.com. The region being more risk averse, potential investors tend to turn to safer asset classes such as real-estate, bonds and private equity. However as per Magnitt’s research, VC Funding has grown from $168M in 2014 to $560M in 2017 with an exceptional peak in 2016 ($874M because of investments in Careem and Souq).
• Invest in innovative models or copycats: Most VC firms face the same dilemma while putting their investment strategies: Look for innovative startups with high risk/returns or focus on copycats: startups with proven concepts being localized for the region. The trend in MENA is currently leanings towards copycats (Anghami,Careel, Souq etc…). The verticals were highly debated between panelists with some arguing that the most successful investments would come from enterprise software while others reaffirmed their belief for consumer oriented business models to capitalize on the size and potential of the MENA region. Everyone however agreed on not investing in hardware investments due to the process of building and commercializing a product. It’s worth noting however that at Berytech Fund 2 we invested in 5 hardware startups including Instabeat a swimming goggle wearable and Band Industries a music tech company that manufactures automatic tuners for music instruments. Although the time to market is usually long for these startups the returns and innovation are usually high.
• Invest in versatile teams: Investment criteria differ between funds: Stage, industry, innovation, size and type of business are all viable factors. Panelists unanimously agreed that one of the most important investment factor is the team. In an era where everything can shift rapidly having a team that can adapt to adverse market conditions, pivot their business and listen to feedback is a major success factor. Great teams build great companies.
• Act as a partner not a silent investor: Investing in a company and leaving it to run itself works more often than not, but investors can and should contribute more than just money. Acting as mentors, interim CXOs and the startups biggest advocates leads to even greater value created. VC firms should also be comfortable with putting follow-on funding if needed; business plans and forecasts do not always go as planned and follow-ons besides their financial upside are signs of investors believing in their founders.
• Wait for the perfect exit: There has been a handful of exits in MENA ranging from small ones such as Shahiya (acquired by Japanese Cookpad), trailblazers such as Maktoob (acquired by Yahoo) and quasi-unicorns with the acquisition of Souq by Amazon (The first expansion acquisition ever made by Amazon). However exits have not been very common; the absence of structures that allow IPOs and the relatively short period since the boom of VC funding are the major bottlenecks. Most investors in the MENA are anticipating a horizon of 8–9 years from investment to exit while the Lebanese Central Bank Circular 331 gives funds a 7 year investment mandate.The long exit cycles has been a huge deterrent for wealthy individuals, family offices and other investors looking for more liquid investments. VC Fund Managers are aware of the exits and believe that they will come sooner than what is expected. Acquisition of regional startups by multinational powerhouses desiring to tap into the MENA region is the likeliest exit path validated by the Souq/Amazon deal. Another exit potential comes from larger, future funding rounds giving the opportunity to early investors to sell their shares to new investors with a significant return.

VC investing in MENA has been booming during since the last few years but is still nascent compared to the US and Europe. MENA VC firms are aware of the return/risk ratio and are committed to their investment policy. The next couple of years will be crucial; a couple of acquisitions or major funding round can quickly catalyze the MENA VC eco-system and into even more growth.