From promoting entrepreneurship to creating entrepreneurs: A case study of #SWRiyadh

By Tatjana de Kerros

An entrepreneurial leap-of-faith in 54 hours?

Riyadh Startup Weekend has completed with a bang: 40 teams, 16 finalists and one winner over the course of an intense and highly active weekend for nascent entrepreneurs in the Kingdom. Powering the footsteps of the Kauffman Foundation’s original Startup Weekend concept of “No Talk, All Action: Launch a start-up in 54 hours”, this program has now been diffused in 100 countries with over 400 events organized across 200 cities.

Budding entrepreneurs are given a crash course in ideation, pitching, attracting talent and teamwork, building a viable business model, designing, market validation- and of course- the winning business ideas and teams are rewarded with both the exposure and support from expert mentors and judges. The infamous #SWRiyadh tag, implemented by Badir Technology Incubators (KACST) in partnership with Microsoft, Qualcomm and Zain, included judges from Wa’ed (Saudi Aramco), KAUST, Microsoft and Endeavour, as well as a host of both local and international mentors from corporate, venture capitalist and entrepreneurship support programs.

There is little doubt that Start-up Weekends globally, and specifically in Saudi Arabia, is in itself a tried and tested tool to build the motivational and strategic capabilities of nascent entrepreneurs. Within a 54-hour timeframe, participants are given the opportunity to simulate the pre-startup and early-stage activities of a new entrepreneurial venture, from having to identify a client base through to acquiring investments. The event becomes a hybrid cross-breed between a whirlwind start-up accelerator program, and intense entrepreneurial training. Indeed, Riyadh would-be entrepreneurs benefitted from a weekend very similar to that they would experience if they were to take part in a start-up accelerator programme. From being able to gain hands-on practical experience, through to benefiting from a context which promotes safe experimentation within a highly controlled environment, the #SWRiyadh context, unlike entrepreneurial training, focuses on teams rather than individuals, and whilst open, remains highly competitive and selective.

What Startup Weekend achieves for would-be entrepreneurs, is emulating the leap from entrepreneurship, through to co-founding, venturing, funding, scaling and growing. The focus on small teams, building trust and engaging with mentors and potential investors becomes a mini-replication of an entrepreneurial ecosystem, and thus, survival of the fittest. Whilst it generally remains unproven whether budding entrepreneurs can truly launch and conceptualize a business within 54 hours, Startup Weekend certainly impacts on the entrepreneurial motivation of its participants, with 75 percent of participants globally indicating they would continue to work on their ‘startup’ after the event. By 2011, out of over 4,500 startup teams globally, 43 new ventures were launched, leading to 130 full-time and 90 part-time jobs, with all new ventures based in the United States and Europe.

However, if these figures are crunched with the sole goal of measuring new venture creation and start-up based employment, these figures are relatively low and demonstrate little impact on the actual rates of entrepreneurial activity within a given local economy. However, only 26 percent of participants actually plan to use Startup Weekend to launch a new venture, with the vast majority highlighting that their expectations were focused on benefiting from mentoring, networking and team-work.

Beyond promoting entrepreneurship to creating entrepreneurs

Whilst most reports originating from the outcomes of a Startup Weekend have focused on the perceived benefits to the nascent entrepreneur, little attention has been paid to that of the facilitator.  “Why attend?” supersedes “Why organize?”, and due to the statistically insignificant firm creation rate, and most importantly, firm survival that can be measured as an outcome indicator, it becomes difficult for the organizers of a Startup Weekend to size the true impact of the event. Hence, this puts into question whether Startup Weekend is just a bona fide awareness-raising activity and marketing stunt aimed simply at developing the elusive local entrepreneurial spirit. Then again, how does a facilitating organization measure whether entrepreneurial spirit has indeed been increased?

Increasing entrepreneurial activity rates and raising awareness to the potential socio-economic and individual rewards of pursuing an entrepreneurial career has become a steadfast pillar of nearly all industry domains in Saudi Arabia. To date, over 60 entrepreneurship support and training programs[1] exist in the Kingdom, not including collaborative partnerships among multinational corporations and corporate venturing programs. Most of these cater to entrepreneurs located in the Kingdom’s “urban corridor”, and whist most have distinct support targets, all have the de facto responsibility of creating new entrepreneurs. Borrowing a term from a recent NESTA report, such programs have become startup factories, based on the unequivocal logic that entrepreneurs need not be born, but can be made. Unlike the tumultuous proceedings of a Startup Weekend, the services offered to selected entrepreneurs within these programs range from training, through advisory services, business development, incubation, funding, and prototyping, spread across a rather more lengthy and selective timeframe. Entrepreneurs who can benefit from these resources, in general, have to meet stringent selection criteria, deliver within an agreed upon timeframe (typically 54 weeks being more feasible than 54 hours) and have to fulfil a number of training and education programmes that have been designed to meet the specific requirements of an industry sub-group. Each service provided by the entrepreneurship support program is designed to have an exact, measureable impact; supported by a given number of project milestones enabling to measure the performance of the beneficiary, and assess how the allocation of resources has resulted in the subsequent performance and growth of the new venture. For example, Badir Technology Incubators measures its performance through the number of clients incubated under the programme, amounts of funds secured by incubates, number of jobs created, and revenue generated- all of which enable to measure the direct impact of its support on clients, as well as wider added-value generated in the innovation and entrepreneurship ecosystem.

On the other hand, it is much more difficult to evaluate the impact, and return on investment, of an awareness-raising or entrepreneurship promotion event, despite it being one of the most commonly used tools in any entrepreneurship support program globally. From UNIDO through to Endeavour, awareness-raising components are actively delivered to nascent entrepreneurs, typically through the form of seminars, workshops, conferences and other types of engagement activities, as part of a wider set of services provided by the entity. In its most basic form, the output of an awareness-raising event is threefold:

• Generate awareness and knowledge relating to the activities and services provided by the entrepreneurial support organization;
• Identify, and tap into a potential entrepreneurial pool who can benefit from the above activities and services
• Engage the participation of stakeholders active within the local entrepreneurial ecosystem, and provide networking opportunities.

In the case of Startup Weekend activities, the Kauffman Foundation tracks the success and impact of its events through a number of organizational indicators:

• Revenues from ticket sales, global sponsors, affiliates etc.
• # of events
• # of attendees
• # of new Cities
• # of repeat attendees
• Satisfaction metrics (<95%)

This enables to quantitatively measure the success of an event and its subsequent repeat diffusion, but provides little insight into how these results are achieved, and essentially, how new entrepreneurs are created[2]. Exploring the process, despite being prevalent in all other forms of entrepreneurship support, distinctively lacks when it comes to awareness-raising. Rather, much like corporate social responsibility, it becomes equivalent to cause-based marketing. The formula for creating new entrepreneurs becomes a result of numbers and mass participation (the rather unpredictable “there must be at least one entrepreneur for every hundred participants, and we have three times as many attendees!”), and a rather go-lucky potential multiplier effect for every subsequent event. Therefore, despite significant resources being invested to host awareness-raising events, it is apparent that the formula on how entrepreneurs are created is markedly absent, therefore diminishing the return for the facilitator and participating stakeholders.

The host organizations and facilitators of events such as #SWRiyadh have to tread carefully in implementing events that draw much public attention, but also raise expectations from nascent entrepreneurs, and the entrepreneurial community at large. Would-be entrepreneurs participating in such activities expect to leave equipped with enhanced skills, new networks, and a potentially valid business idea that will translate into the launch of a new growth-venture. Hence, it is a pre-requisite for success that the facilitator has to elaborate a process which enables the absorption of these capabilities by the nascent entrepreneur, enabling to measure the impact of awareness-raising beyond that of the number of attendees, their general satisfaction, and potential inclination to pursue an entrepreneurial project. In other words, the facilitator must have a formula to transform a potential entrepreneurial inclination into a new venture.

To this affect, a host organization must understand that awareness-raising goes beyond marketing. A good communications campaign may instigate a ‘spur of the moment purchase’, but will not necessarily translate into creating a strong customer base, retention, and ultimately profit-making activities. Frequently, such events in the region have failed due to this very factor- they have been successful in promoting entrepreneurship, but have failed in the process of creatingentrepreneurs. Rather, the outcome has resulted in successfully creating a new breed of ‘conference-hoppers’, whose entrepreneurial intention is limited to being motivated by the idea of becoming an entrepreneur, rather than being entrepreneurial.

Process-mapping awareness raising activities

In fact, for awareness-raising activities to be effective, they have to follow a similar structure to entrepreneurship education. An entrepreneurship awareness-raising activity has to target entrepreneurial intentions, attitudes and behaviours, creating a step-change in the nascent entrepreneur, thus having a domino effect on the wider ecosystem. A common misconception is that an awareness-raising activity must provide the entrepreneur with the tools and capabilities toexploit an opportunity. In reality, it is quite the opposite- it must provide the entrepreneur with the capabilities to identify and recognize entrepreneurial opportunities.

• Within this framework, the transfer of tacit knowledge is key. A nascent entrepreneur participating in an awareness-raising activity does not participate to be provided with information on why he should be pursuing an entrepreneurial career. The entrepreneur seeks to be provided with knowledge which is generally unavailable and difficult to access, and which will considerable reduce information asymmetries and uncertainties associated, enabling him to better identify opportunities, mobilize resources and the capability to seize and transform an economic opportunity. To this effect, awareness-raising events should target niche entrepreneurial populations, rather than seek to create widespread movements, as this leads to more effective knowledge and network diffusions, and supports the creation of communities of practice- supporting horizontal linkages among relevant actors within the ecosystem.

• One of the most significant challenges when seeking to create entrepreneurs is the gap between the nascent ‘entrepreneur’ and the potential ‘project’, -which in reality are rarely linked- and causes a bridge between entrepreneurial intention and the entrepreneurial act. Programs such as #SWRiyadh are effective as they provide a practical and highly experiential event for participants, whereby nascent entrepreneurs are propelled within a context where they are forced to bridge this gap beyond ideationand into the experimentation phase, thereby participating in the active dissemination of knowledge and know-how, and becoming knowledge co-creators, rather than passive participants.

• What is the objective of awareness-raising? What should facilitators expect? Despite the increased popularity of focusing on entrepreneurial teams rather than individuals,individuals do matter. By linking elements of traditional entrepreneurship education to practice, a host organization should be able to identify from the outset whether a step-change has been created in entrepreneurial intentions. After the nascent entrepreneur has developed his capability to identify an opportunity, he must be given the tools for self-diagnosis and individual maturation. This means, the nascent entrepreneur must partake in a self-diagnosis process in which he is able to identify whether he has the required capabilities, competencies and resources to pursue an entrepreneurial project. This not only enables entrepreneurial support organizations to identify growth-oriented entrepreneurial potential, but simultaneously renders visible its other support activities it may provide. An entrepreneur who has been able to acquire the know-how for individual maturation and self-diagnosis will in most cases refer to the agency which has enabled him to experience this process, and validate his entrepreneurial project.

• Too often, entrepreneurial support entities mirror that awareness-raising is about theiractivities, their achievements, their partners and their entrepreneurs. This lack of cohesion and collaboration is one of the biggest recurring themes in the region, and results in significant strains in mobilizing resources and attracting new talent-pools. Collaborative networks and diversity is an essential ingredient too often overlooked, specifically, as actors being involved in such a process can enhance their own capacity-building. Awareness-raising events are not solely geared towards nascent entrepreneurs, but those actors that form part of the ecosystem. Without seeking to build the capacities of participating actors, the absorptive capacities of an ecosystem do not evolve, leading to a limitation in the scope of entrepreneurial endeavours and its wider impacts.

• Finally, facilitators of awareness-raising events should not dispel the importance of feedback. Akin to feedback loops within an innovation system, feedback is the one measure that will enable the facilitator to better identify its entrepreneurial targets, shape its services offering, mobilize resources and scale its impact. The result will enhance the diffusion of innovations, but equally important being those of process innovations among all participating actors, entrepreneurs included. Feedback acquired enhances the know-how of the facilitator, enabling it to better partake in the process of creating entrepreneurs, and subsequently, the only measure to evaluate the effect and impact of its activities.

Therefore, clear process mapping is necessary for awareness-raising facilitators to devise a strategy on how these activities will create new entrepreneurs, and enables to create reliable measures to evaluate the return on investment. Identifying the process in which nascent entrepreneurs are thrust, and the effect of experiential practice and the subsequent development of knowledge and know-how within a controlled timeframe and environment provides a replicable formula on how to create an entrepreneur, not just promoting entrepreneurship. Whilst firm creation and entrepreneurial rates as a direct impact of an event such as #SWRiyadh can realistically only be measured in the medium term, returns on investment can be measured not only through satisfaction metrics and number of attendees, but through distinct variables such as :

• Degree of knowledge absorption
• Intention to enterprise
• Development of capability to enterprise
• Self-diagnosis and project maturation
• Mobilization of new resources and actors

Not all participants will result in the creation of a new breed of entrepreneurs- realistically, only a minority will generate they type of growth-oriented ventures that is so actively sought in the Kingdom. However, following such a process ensures that those who do make the cut are better equipped to survive, and that support organizations enhance their capacities in managing resources effectively to this goal.

© Tatjana de Kerros, 2013