Lebanon’s Web-based businesses hit fast track

Safieddine’s online video platform, Cinemoz, debuted at the Dubai International Film Festival.

BEIRUT: It’s often said that the Lebanese young person must pursue one of two paths: travel abroad in search of economic opportunity, or settle for a lackluster career punctuated by episodes of war and civil strife. Not so much anymore, say a small but mighty few making inroads into the new economic frontier of Web-based business.

“The only way to go is to go Web. It’s the only way to tap into a borderless market of 60 million Arabs,” Cinemoz CEO Karim Safieddine, 27, tells The Daily Star from his workstation on Hamra Street.

Cinemoz is an online video platform for the Arab world which made its debut at the Dubai International Film Festival last year. It’s been dubbed the Middle East’s Hulu, a hugely successful U.S. Internet television service with an estimated value of $3 billion.

These days, Safieddine is laboring away on the newest Beta version of his website. The hardest part, he says, is that Cinemoz has built up large expectations from an audience that is eager to receive the service.

“Once we were faced with the reality of creating a quality product, it became a matter of meeting expectations. If you don’t deliver the best you will lose a lot,” says Safieddine.

Asked whether financial risks associated with starting a company from scratch have been a cause of concern, Safieddine is dismissive.

“We just can’t afford to think about money right now,” he says.

On the surface, it may seem that Safieddine’s career has taken a turn for the worse. He frequently works over-night and relies on sandwiches and Pepsi for nourishment. Prior to moving to Lebanon where he began his project, he made a comfortable living at Miramax Films in New York City.

Faced with an impending long-term contract, Safieddine packed his bags and returned to his native Lebanon, intent on making shock waves.

“We do it for the glory,” says Samer Karam, CEO of Seeqnce, a startup accelerator group of which Cinemoz is a resident.

He believes that more Lebanese will follow suit, starting entrepreneurial ventures and taking them online in spite of the relative financial instability.

“People are feeling more relaxed about developing [businesses] online. Before, the cost of setting up an online shop was very high. Now, with $100 you can do whatever you want,” Karam says.

He was referring to a game-changing Internet law passed by the Telecommunications Ministry last October which unleashed a torrent of new bandwidth and placed caps on service charges. The effects of the law culminated in an 80 percent drop in bandwidth costs and a four to eight fold increase in speeds.

Ticklemybrain CEO Tara Nehme, 25, is typing up a storm at the quaint Dar Bistro cafe where she has just met with two employees.

Only six months ago, Nehme could have been found doing almost the same thing, but in a cubicle at Price Waterhouse Cooper’s Dubai headquarters.

“I knew there was going to be some formula for change,” says Nehme as she recalls the days before she jump-started a new life in Beirut.

It was after months of fixing resumes and creating cover letters for friends that it dawned on her that she could make a business out of it. Not only that, she was going to find a way to end the perplexity associated with an Arab job market riddled with misinformation.

So an inspired Nehme developed ticklemybrain.com, a Web platform for her fee-based services and for information about more than 60 industries. Gearing her information toward a target market of fresh graduates and young professionals, the writing is furnished by colorful illustrations and delves into the personal and human aspects of an otherwise dry field.

“Ticklemybrain is all about eliminating the anxiety associated with starting off in the working world,” says Nehme.

“I believe my company should be the go-to place for fresh graduates from universities all over the Middle East,” she adds.

She admits that Dubai, often considered the most vibrant economy in the Arab World, would have been a more appropriate base for ticklemybrain. But the reduced costs of living with family in her hometown of Beirut virtually made the decision to move a no-brainer.

She also came to enjoy the boundless mobility that comes with Web-based business. Equipped with a team of skilled programmers, Nehme created a complex and sophisticated website, with a client base that extends from New York City to Abu Dhabi.

“For an economy like Lebanon, where there’s a big divide between big conglomerates and small entrepreneurs, Web-business is an excellent platform,” says Telecommunications Ministry advisor and technology consultant Mahmoud Haidar.

Web-based business greatly reduces barriers to market entry, according to Haidar, for two main reasons.

Firstly, the costs of starting a business on the Web are decidedly lower than their brick-and-mortar counterparts – $10,000 to $20,000 compared to around $100,000 – making access to entrepreneurial ventures accessible to people from a wider number of walks of life.

Secondly, Web-based businesses have borderless markets at their fingertips, slashing the risks of operating in conflict-ridden Lebanon.

Can a growing Web industry reverse the sizeable flow of migration from Lebanon? Absolutely, says Haidar.

“I can see that people have an appetite for embracing Web-based business ... they are beginning to see the Internet not only as a place for entertainment but as a marketplace.”

Not everyone is quite so optimistic, however, about the industry’s potential for growth.

Tania Saba, director of Lebanon’s largest business incubator, Berytech, reckons that, with the lack of research and development facilities in the country, Web-based business still has a long way to go.

Only 2-3 percent of the entrepreneurs that Berytech supports are based on the Web, she reports.

“There’s a gap between what’s happening in the world and the technical level acquired by graduates,” says the Berytech director.

“We’re adapting technology and not inventing it ... there needs to be a holistic approach to the issue in order to give it the boost it needs.”

A version of this article appeared in the print edition of The Daily Star on February 15, 2012, on page 5.




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