It takes a mentor

For promising entrepreneurs, a good mentor can mean the difference between startup success and failure, says Tony Bury, founder of Mowgli Foundation

Mazin Khalil was 25 and a newly qualified doctor when his career took an unexpected swerve. Perturbed by the paucity of information around medical care in Sudan, he saw a simple fix to plug the gap. The result was SudaMed, an online medical directory listing hospitals, clinics and other facilities, along with their location and hours of operation. Khalil also offered users a $30 discount card for cut-price treatments at listed clinics, if they paid in cash – helping doctors to sidestep the slow payouts of insurance firms. The idea was robust; but would it scale?

In 2013, two years after SudaMed’s launch, Khalil was one of a handful of entrepreneurs to net a spot on a mentoring scheme in Jordan. Over the next 12 months he created or retained 568 jobs, took first prize in the 2014 MIT Enterprise Forum Arab Startup Competition, and was tipped as the ‘African company to watch’ by Forbes magazine. Today, SudaMed bills itself as the Middle East and Africa’s leading online patient records system, and pours upwards of 50 per cent of its profits into funding initiatives in the healthcare and education sectors.

“I attribute 100 per cent of my achievements during this year to my mentoring relationship,” says Khalil. “What I got from it was priceless.”

“Human capital is everything. Entrepreneurs stand on the shoulders of their mentors”Around the world, there is growing evidence that for many entrepreneurs, it is good mentoring that makes the difference between failure and success. Yet in the MENA region, it is still too often seen as a fringe benefit – nice, but less vital than tackling the scant finance, red tape and sky-high overheads that smother many startups.

“This is an error,” says Tony Bury, a serial entrepreneur and philanthropist. “Human capital is everything, not financial capital. If you don’t invest in the former, you will lose your money. Entrepreneurs stand on the shoulders of their mentors.”

Tony is founder and chairman of Mowgli Foundation, a UK-based nonprofit that runs mentoring programmes for entrepreneurs across the Arab world. Launched in 2008, it hinges on the idea that SMEs are key to revving up GDP growth, helping curb the region’s creeping jobs crisis and reversing a dismal youth unemployment rate of nearly 30 per cent. It counts Khalil and SudaMed among its success stories. 

“Entrepreneurs create wealth outside oil, economic regeneration and jobs,” says Tony. “They give back – huge amounts of philanthropy worldwide stems from entrepreneurs – and they believe in social democracy. That makes them worth the investment.”

Startups have long been touted as the answer to the Arab world’s economic woes, but too few manage to succeed and scale. Banks don’t give loans. Until recently, venture capital investment was patchy. Flaws in insolvency laws give SMEs little room to breath, and – in some states – put entrepreneurs at risk of jail if they default on debt. Small firms must also battle large, family-owned business for market space.

“They are given a very poor foundation,” says Tony, who argues that it is up to 10 times more difficult for Arab startups to become profitable than those in the US or Europe. “Entrepreneurs are not born, they are made, so the nurturing process is very important. Without it, you’re never going to have the capability to take on the challenges of business. We are in effect setting them up for failure.”

Mowgli’s answer is long-term, one-on-one mentoring. Its method begins with a three-day workshop to pair up 12 mentors and entrepreneurs, before spinning this out into a year-long relationship. Enrollees range from fresh startups, to entrepreneurs grappling with growth, to social ventures. All get the benefit of experience – from veterans who know well the perks and pitfalls of business – and a vastly better shot at shaping a profitable company. Little wonder Mowgli typically receives double the number of applicants it has space for.

“If we don’t support entrepreneurs in terms of their core spirit, you can chuck money, training and more at them, but they’re still not going to make it work,” says Kat Bury, CEO of Mowgli. “If you aren’t supported, it’s very difficult to step out of your comfort zone, take risks and make it out the other side.”

There is a wider opportunity cost from failed startups, she notes. “Entrepreneurs are innovators. It’s not just about job creation; it’s also about disruption, and driving economic change.”

In eight years, Mowgli has matched more than 780 entrepreneurs with trained mentors in 14 countries, stretching from Algeria, to Yemen to Saudi Arabia. By Mowgli’s own data, its graduates have created or retained more than 3,470 jobs and generated some $18m in staff salaries alone. In a region where joblessness is frequently cited as the biggest threat to stability and economic growth, these are significant wins.

“Return on investment is critical to me,” says Tony, who puts the cost of mentoring each entrepreneur at between £2,000 and £2,500 ($2,690-$3,362). “I only invest where I can see that strategically there will be a wider impact.”

“The key is: what can we do today, to make an impact tomorrow?”There are reasons for optimism. The startup scene in the Arab world has changed beyond recognition since Mowgli’s launch in 2008. A sharp uptick in entrepreneurial activity has been matched by a rise in incubation hubs, which offer advice, access to finance and office space to promising ventures - though largely stop short of mentoring. A handful have even completed multimillion-dollar fundraising rounds. In February, UAE-based Souq.com secured $275m from investors in the largest-ever fundraising in the region’s e-commerce space.

Still, more effort is needed to foster innovation in the education system and help young Arabs see entrepreneurship as a viable career, says Kat. “If we can shape curriculums and raise awareness of the potential of entrepreneurship, we can develop a pipeline of talent that can withstand the entrepreneurial journey and be successful,” she says.

With a proven method, Mowgli’s aim now is to leverage its 1,770-strong network of mentors and entrepreneurs to help them create self-funded, sustainable mentoring schemes in their own countries. The foundation is in early talks with its graduates in Algeria, Morocco and Jordan and in recent months, has tied up with new partners in Bahrain and Saudi Arabia to support local entrepreneurs. Africa and wider Asia are next on the list.

“The key is: what can we do today, to make an impact tomorrow?” asks Tony. “If we want to drive job creation over the next 10 years, if we want to accelerate economic regeneration, our focus has to be human capital development.

“Mentoring is a critical part of that puzzle,” he concludes. “We need more investment to be made in it.”