How will the current economic crisis affect Arab online startups?

| Feb 22, 2009 | comment 6 Comments

A new poll has gone live on StartUpArabia, you can find it on the first sidebar on the right or vote straight from this post.

Ever since the current economic crisis began, opinions have been divided on what kind of effect it will have on online startups in the Arab world; from some arguing it will be positive as the crisis should drive online advertising, to others thinking it will take them down like it’s doing to many other types of businesses, and then there are the ones who think it will have no effect whatsoever.

And so this poll is simple and straightforward; asking the following question:

How will the current economic crisis affect Arab online startups?

So what do you think? In what way will it affect them?

Feel free to further expand on your response in the comments section of this post.

  • http://www.almsaodi.com Amad

    It’s hard to say that there will be no effect at all. So, it’s either going to be negative or positive.

    I voted positive.

    I think that “startups” refers to companies that just launched and are still in their initial growth phase. I doubt that startups generate lots of money from the get go, because if they do, then this down turn is bad news for them (companies WILL cut down their spending during).

    However, I think that startups need attention and investing in their early stage. The current market is perfect to get funding and setup platforms that are ready to generate income when the market rebounds. Local investors are now sober after being addicted to real estate investments and fancy western financial instruments.

  • http://www.almsaodi.com Amad

    It’s hard to say that there will be no effect at all. So, it’s either going to be negative or positive.

    I voted positive.

    I think that “startups” refers to companies that just launched and are still in their initial growth phase. I doubt that startups generate lots of money from the get go, because if they do, then this down turn is bad news for them (companies WILL cut down their spending during).

    However, I think that startups need attention and investing in their early stage. The current market is perfect to get funding and setup platforms that are ready to generate income when the market rebounds. Local investors are now sober after being addicted to real estate investments and fancy western financial instruments.

  • http://blogjihad.com Jihad

    I’d say it’s going to have mixed effects.

    - Companies that have a clue will spend more money on online advertisement.
    - Global companies might give the region more attention to reach unsaturated markets that have purchasing power, especially the Arab countries that weren’t hit as hard by the crisis. This could mean more competition but also a bigger market.
    - Raising capital of course is gonna be harder.
    - The shortage in capital might force startups to be more realistic about their goals and operation costs. Some existing companies might have to shrink in size to cut costs.
    - It’s also possible that people will do more web startups because of the low barrier of entry and starting costs (as opposed to other ventures that require land, buildings, or inventory…etc).

  • http://blogjihad.com Jihad

    I’d say it’s going to have mixed effects.

    - Companies that have a clue will spend more money on online advertisement.
    - Global companies might give the region more attention to reach unsaturated markets that have purchasing power, especially the Arab countries that weren’t hit as hard by the crisis. This could mean more competition but also a bigger market.
    - Raising capital of course is gonna be harder.
    - The shortage in capital might force startups to be more realistic about their goals and operation costs. Some existing companies might have to shrink in size to cut costs.
    - It’s also possible that people will do more web startups because of the low barrier of entry and starting costs (as opposed to other ventures that require land, buildings, or inventory…etc).

  • http://www.triple.mp TripleM

    I guess it affect them positively.
    As for many entrepreneurs and professionals, start ups might provide them with extra income by targeting certain customers whom willing to have certain products or services for less money.
    And I think the economic crisis might be the alternative for the right environment where start ups can grow and for other company to re-brand before it decline.

  • http://www.triple.mp TripleM

    I guess it affect them positively.
    As for many entrepreneurs and professionals, start ups might provide them with extra income by targeting certain customers whom willing to have certain products or services for less money.
    And I think the economic crisis might be the alternative for the right environment where start ups can grow and for other company to re-brand before it decline.

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