April 2023 THE QUEST FOR DISRUPTION Vigen Badalyan, co-founder of SoftConstruct, reveals the secrets behind building a Web3.0 powerhousewww.ftnft.comarabianbusiness.com 3 Contents April 2023 www.arabianbusiness.com SUBSCRIBE NOW +971 4444 3000 www.itp.com/subscription arabianbusiness#arabianbusinessarabianbusiness COVER STORY The quest for disruption Vigen Badalyan, co-founder of SoftConstruct, reveals how leaders need to focus on the future to find success now FEATURE Wellbeing is both the greatest threat and opportunity 2023 is the year organisations and employees will be making their choice, says Bobbi Hartshorne 12 FEATURE A survey of the innovation ecosystem in the UAE The UAE’s drive for the next 50 years is to become a global player across different industries 321834 LAST WORD Proptech is already streamlining real estate transactions Whether you’re in the industry or investing, proptech has excellent potential for making all our lives easier, says Amira SajwaniFIRST WORD | Matthew Amlôt, Managing Editor H ello and welcome to the April issue of Arabian Business. As we move into the second quarter of 2023, we are proud to bring you an issue that highlights some of the most inspiring and thought-provoking leaders in the Middle East. Speaking of thought-provoking, this month our cover story features Abdallah Abu-Sheikh, a tech entrepreneur who has taken an unconventional approach to leadership. In our interview with him, he discusses his belief in the power of creative toxicity and the importance of putting employees under heavy pressure. It’s a fascinating read, and one that is sure to challenge your preconceived notions of what it means to be a successful leader. The full story is well worth a read and begins on page 18. As we continue to explore the latest trends and issues in the Middle East, we are excited to bring you two impor- tant topics that are increasingly relevant in today’s world: the importance of net zero to hotels and the move towards a circular economy. In our feature on net zero, we take a closer look at the hotel industry and its role in reducing carbon emissions. We discuss the challenges that hotels face in achieving net zero, and highlight some of the innovative solutions that are being implemented across the region. As the tourism industry continues to grow, it’s essential that we work towards a more sustainable future, and we hope that this article inspires hotels to take action. Turn to page 32 for the full story. In addition, we feature an article on the circular econ- omy, which is gaining momentum as a way to reduce waste and promote sustainable practices. We explore how busi- nesses in the Middle East are embracing the circular econ- omy model, and the benefi ts it can bring to both the envi- ronment and the economy. From reducing waste to promoting innovation, we believe that the circular econ- omy has the potential to transform the way we do business in the region. We’re also thrilled to feature highlights from the Arabian Business KSA Women’s Excellence Awards, beginning on page 22, which celebrate the achievements of women who are leading the future in the kingdom. These women are breaking barriers, challenging norms, and paving the way for a more inclusive and equitable society. And fi nally, we present our list of 50 inspiring women leaders. These are women who are making a diff erence in their industries, their communities, and the world at large. They are role models for all of us, and we are proud to share their stories with you. With that I’ll let you get to reading. Until next time. Breaking barriers, challenging norms MATTHEW AMLÔT @MatthewAmlot Women in the Middle East continues to achieve and inspire a new generationPUBLISHED BY AND © 2023 ITP MEDIA GROUP FZ-LLC. NOTICE The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication, which is provided for general use and may not be appropriate for the readers’ particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review. PO Box 500024, Dubai, UAE Tel: +971 4 444 3000 Offices in KSA, UAE, UK, US, and INDIA ITP MEDIA GROUP CEOAli Akawi MANAGING DIRECTOR Alex Reeve DEPUTY MANAGING DIRECTORAnil Bhoyrul EDITORIAL EDITOR-IN-CHIEFRob Corder, rob.corder@itp.com MANAGING EDITOR Matthew Amlot, + 971 4 444 3264, matthew.amlot@itp.com SUB EDITOR Edward Liamzon, +971 4 444 3474, edward.liamzon@itp.com ARABIANBUSINESS.COM INDIA EDITOR James Mathew DESIGN SENIOR DESIGN MANAGER Geri Batara Sonny DESIGNER Mohammed Irqsosy STUDIO VIDEOGRAPHER Muhammad Kaleem PHOTOGRAPHER Marwan Elsayed VIDEO EDITOR Liju Cheruvathur PRODUCTION & DISTRIBUTION PRODUCTION MANAGER Denny Kollannoor PRODUCTION COORDINATOR Mahendra Pawar SENIOR IMAGE EDITOR Emmalyn Robles EVENTS & MARKETING DIRECTOR OF AWARDS & MARKETING Daniel Fewtrell, +971 4 444 3684, daniel fewtrell@itp.com CIRCULATION DISTRIBUTION COORDINATOR Avinash Pereira CIRCULATION EXECUTIVE Rajesh Pillai ADVERTISING GROUP COMMERCIAL DIRECTORSaraswati Agarwal, +971 4 444 3352, saraswati.agarwal@itp.com SENIOR COMMERCIAL MANAGERNeha Sikri, +971 4 444 3353, neha.sikri@itp.com SENIOR COMMERCIAL MANAGERSamir Glor, +971 4 444 3320, Samir.Glor@itp.com ITP GROUP CEO Ali Akawi CFO Toby Jay Spencer-Davies CORPORATE WEBSITEitp.com CIRCULATION CUSTOMER SERVICE +971 4 444 3000 WEB arabianbusiness.com arabianbusiness.com 5 SUBSCRIBE NOW www.itp.com/subscriptions +971 4 4443000 ȨǔǜȨǚǘ VIEWS #24/02 • February 2023 UAE: AED 15 KSA: SAR 15 BAHRAIN: BHD 1.500 OMAN: OMR 1.500 KUWAIT: KWD 1.200 Inclusive of VAT The unstoppable mind and machine behind a billion-dollar global restaurant empire ȨǔȱǠǗǙǣǖȨ interviews Dynasty From luxury to real estate: Inside the world of Abbas Sajwani KSA: SAR 15 BAHRAIN: BHD 1.500 OMAN: OMR 1.500 KUWAIT: KWD 1.200 Inclusive of VAT #24/01 • January 2023 INDEPTH NEWS #24/03 • March 2023 THE AMY ROKO PHENOMENON KSA: SAR 15 BAHRAIN: BHD 1.500 OMAN: OMR 1.500 KUWAIT: KWD 1.200 Inclusive of VAT6 AB LEADERS April 2023 Five things to consider for MENA founders before attending YCombinator YC can be great for a startup founder, but it’s not without its pitfalls Foundation Building a successful company requires building a team of experts to help you and your team STARTUP | D eciding whether to attend YCombinator (YC) or not is a complex decision for any founding team that is lucky enough to receive an off er. As MENA founders, we went through the YC process and were accepted last year, but ultimately decided to turn it down after weighing the pros and cons. Here’s what we learned: 1 Serial entrepreneurs vs fi rst-time founders Ycombinator has great content and mentorship on many aspects of company building but it is more geared towards fi rst-time entrepre- neurs. A lot of their structure and weekly workshops contain topics that are more relevant for you if you have not built businesses before. For founders that have some experience building business already, it may not be as much value added. However, if you are a fi rst-time founder and need help with some of the fundamentals of a startup and some technical aspects such as struc- turing a B2B sales team, or how to scale inbound marketing or fundrais- ing — then you might learn a lot from Y combinator’s mentors. 2 Signalling In fundraising, signalling is important, as is the careful construc- tion of your cap table. Ultimately, you want to bring on as many value-add investors as possible and make space for people and VC fi rms who can help you with your business. With the increased cohort size, the YC signal is weaker now and some VCs even consider attending YC a negative signal. The reason is threefold: • YC teaches you how to create hype around your company and create FOMO (smart investors do not want to overpay for ‘hype’ and a lot of the less sophisticated FOMO investors have already been burnt recently); • A lot of experienced founders are not even considering YC so there is some negative selection bias there; • The network value gets diluted as there are so many YC startups that have gone through the incubator. BY JONATHAN LAU, SERIAL ENTREPRENEUR AND CO-FOUNDER OF QASHIOarabianbusiness.com 7 Building success Ycombinator has great content and mentorship on many aspects of company building 3 MENA network and advice are key Ycombinator has an absolute world- class community globally and in the USA. Their roster includes companies like Airbnb and even some great companies in our space such as Brex and they have strong ties with Silicon Valley funds and American investors. However, their network within MENA is weak as they are just ventur- ing into this region. Building a startup in MENA is very diff erent to building in the USA – the work culture, fund- raising/hiring, legal & compliance are very unique to this region – YC’s advice may not be very pertinent and may even mislead founders. As an example, the American aggressive directness with fundrais- ing may not be very helpful when entering negotiations with local Dubai investors. Do not expect Ycombinator to help you with B2B sales in Dubai or Riyadh, or to make local investor introductions. 4 Cohort size and stage As we all know, YC had increased the cohort size and then recently decreased it to about ~250. That is still a lot of startups (~500 per year). While you still get some one-on-one time with your mentors, the overall impression that we got from the YC interview process was that it felt more like a factory churning out companies. Careful consideration of the stage and timing is also important. By the time we were accepted, we had already raised pre-seed $2.5m at a good valuation and launched our product. Had we been accepted before we raised our pre-seed, the consider- ation would have been diff erent and the YC support would have been more valuable. 5 Dilution and market conditions Going to YC is extremely dilutive ($125,000 for 7 percent + $375,000 MFN). The idea is that you make up for it with a higher valuation if you attend YC. This is no longer feasible in the current downturn as there is a lot less FOMO around YC companies now. Funding growth Consider this example if we wanted to raise a $4m seed round: We can raise $4m seed on $20m post-money. This will equal a dilution of 20 percent. If we accept YC’s $500,000 total investment, we would have to raise an additional $3.5m at $30m post-money to match the dilution of 20 percent. The diff erence between $20m and $30m post-money might not sound like a lot, but many sophisticated top-tier investors are valuation sensi- tive (rightfully so). Ultimately, you want to ensure that the valuation/dilution targets did not impede your ability to bring good investors onto your cap table. Deciding whether to attend YC or not depends on your stage, region, timing, network, and circumstance. In our case, the costs outweigh the benefi ts. Building a successful company requires building a village of experts to help you and your founding team - and you should carefully consider whether YC is the right fi t for your cap table. There are no shortcuts to success. You should carefully consider whether YC is the right fi t for your cap table. There are no shortcuts to success | STARTUP $103M The capital raised by startups in the MENA region in January 2023 across 22 deals Mentorship Lau says Ycombinator has an absolute world-class community globally8 AB LEADERS April 2023 Mega-sports events will help drive Saudi Arabia’s tourism agenda The impressive impact of hosting huge sporting events extends far beyond enhanced tourism fi gures Racing ahead Sports tourism presents a huge opportunity to further enhance Saudi Arabia’s tourism proposition TOURISM | T he global sports tourism market size was valued at $323.4bn in 2020, and is projected to reach $1.8 trillion by 2030. Mega sporting events such as the World Cup, the Olympics and Formula One can play a crucial role in destination branding and bolstering a nation’s tourism proposition. Such events enable host cities or countries to demonstrate their progress on the world stage and welcome thousands of new visitors to their shores. However, the impressive impact of these mega events extends far beyond enhanced tourism fi gures. Infrastruc- ture development, increased direct foreign investment and societal BY KHALED TASH, GROUP CHIEF MARKETING OFFICER, SAUDIAarabianbusiness.com 9 Transformation KSA is able to demonstrate the remarkable progress it has made over ther years $3.3BN The estimated value of Saudi Arabia’s sports event industry by 2024, according to Ernst and Young (EY) advancement are just a few of the many benefi ts that arise from sports tourism. The Saudi Government has long acknowledged the important role of sports in achieving the kingdom’s tourism vision to attract 100 million visits a year by 2030. Sports and enter- tainment will play a crucial role in the realisation of the nation’s Vision 2030 and economic diversifi cation eff orts. And, with the global sports events industry projected to grow from $285bn in 2019 to over $300bn by 2024, it’s easy to see why. Economic benefi ts Saudi Arabia has already made consid- erable progress in welcoming mega sports events to date. In August 2022, “The Rage on the Red Sea” tourna- ment saw boxing heavyweight world champion Oleksandr Usyk face Great Britain’s Anthony Joshua. In 2021, Jeddah hosted its fi rst ever Formula One Grand Prix and Dakar Rally. Other major events in recent years include the Saudi Cup – the richest horse race in the history of the sport, WrestleMania and the tennis champi- onships. The direct economic impact of hosting such events is obvious. From f&b and accommodation to ticketing revenue. However, there are other notable advantages – sponsor- ship being one. Sports sponsorships enable brands to reach people far beyond their own borders. The brand becomes intrinsi- cally aligned with the values of a team and its fan base and the power of this bond to inspire and unite should not be underestimated. Breaking down borders and bringing people together is at the heart of sport, and this is also an important responsibility of those hosting major sporting events. By welcoming new visitors to its shores, Saudi Arabia is able to demon- strate to the world the remarkable progress it has made in transforming into a thriving, cosmopolitan nation with a rich social and entertainment scene.By attending sports events, spectators will have the opportunity to explore a new travel destination that may not have been on their radar visitor numbers which further supports economic diversification eff orts and job creation. A further advantage to hosting mega sport events is the positive effect that they have on locals and future generations at a grassroots level. Encouraging mass participa- tion in sports is an important contributor to a healthy and produc- tive population.Moreover, it enables nationals to compete on the interna- tional stage, which introduces the nation, its athletes and its culture to even more people. Sports tourism presents a huge opportunity to further enhance Saudi Arabia’s tourism proposition. However, it is vital that all stakeholders involved understand that with this opportunity comes great responsibil- ity, especially around delivering excep- tional fan experiences.Strategic spon- sorships that align values between brands to drive innovation are key. Digitisation and superior infrastruc- ture that enables a seamless experi- ence between the physical and digital worlds are also incredibly important. Sport has a unique ability to break down borders. Saudi Arabia is well poised to combine its proven ability to host world-class sporting events with its tourism proposition to provide unforgettable experiences – on and off the track. | TOURISM previously and learn more about the kingdom’s rich history and heritage. In this sense, mega events act as an important gateway – introducing foreign nationals to Saudi Arabia and its impressive tourism potential. Industries such as hospitality, trans- portation, aviation and retail will also experience the benefi ts of increased Tourism prospects Sport has a unique ability to break down borders, says TashNext >