Monday, November 24, 2008

37signals, the myth

I have been planning to write on this for a long time. Actually this subject is the everlasting debate between me and my friend Mohammed Ali, whom is our CTO at the same time.

So 37signals managed to make lots, and lots of money just from the simple advice, "Put a price tag" . They have been attacking investment models, and they always looked at money spent in investments for ad based projects a loss of money. Although I can not totally disagree with them on the second point, I surely don't see how putting a price tag could be the magical solution for all problems, or else there would have seen much more companies joining the success track of 37signals.
Sure there is a missing ingredient which DHH is keep in the closet. From my humble point of view, It is called marketing.

Know your market, and attack it. Even though 37signals did this unconsciously, they played in their market "Developers Market". Armed with the reputation of makers of Rails, they offered project management utilities. Sure anyone would at least try the tools used by the Rails makers.. I did :). You will gain money as much as you know your market dynamics, don't think of the world as a market, choose a slice of, but make sure to choose the slice that you know most.

At the end 37signals were able to put their price, simply because they were well marketed. No matter if you are a service provider or an ad based portal, you need to know your market well. No matter how big or small this market is, if you were able to push yourself in it, and know what it needs, you will get your money.

Thursday, November 6, 2008

Startups in Egypt

In my opinion, there are many challenges that entrepreneurs here in Egypt face, but the two most important factors are the entrepreneurs themselves and the investors. I remember at the beginning of our work, when eSpace was established, the culture of Angel investments and VCs were not yet mature, and at the same time, we were not educated enough to handle the experience of creating a startup. Right now, I can see many VCs and Angel investments starting to put an eye on Egypt, but regretfully, there has not yet been any proper introduction between these investors and the entrepreneurs. On the other hand, the culture of entrepreneurship is still far immature, and I believe that investors will face major problems in finding startups to invest in, let alone good ones.

This culture needs to be seeded in our youth. We should start by educating them on how to build their own successful startup rather than leaving them to learn by trial and error, or even worse, eventually abandoning their dreams for a more "secure" job. The next step would be establishing a basis of contact between these entrepreneurs and the investors whom will help them realize their dreams. I truly believe that the government should play a key role in this, as currently is the case in Jordan, and ITIDA especially should start to act more actively in these two directions. Lastly, I also believe that we need more privately owned incubators and consultancy companies that could play a role in building this healthy ecosystem.