Happy New Year Abu Dhabi!
2016 presented a challenging operating environment for many businesses in Abu Dhabi and the broader UAE. Three years of softening global energy markets culminated with a never ending series of significant restructurings across the public and private sectors in 2016.
Thankfully, despite these extreme challenges, we are happy to report that GlassQube Coworking is 95% occupied after only 4 months of commercial operations. Phase 2 and Phase 3 of our Sky Tower business center and coworking office space facility will launch Feb 1st and April 1st respectively which will introduce an additional 8,000 square feet of serviced office and coworking office space. Meanwhile, construction of our 100,000 square foot the Flagship Building continues. We also have a third business center and coworking office space location which we will likely announce in the coming weeks.
Launching a business center (serviced office) in Abu Dhabi in the middle of a 75% plunge in Brent prices has been a remarkable experience. As a provider of flexible office space, coworking space, meeting rooms, and trade licenses GlassQube has had a front row seat to the perils of a single commodity economy. Since launching on August 11th 2016, we have actively engaged the market to provide serviced office space to SMEs, entrepreneurs and startups and what we have observed is that despite the market turmoil, there is a robust SME ecosystem in Abu Dhabi. Concurrently, we have observed the inverse to be true for the startup ecosystem.
Said differently, the startup ecosystem in Abu Dhabi is failing miserably. It is failing for three distinct reasons.
1. An onerous and costly legal framework
2. A virtual total absence of institutional private sector support
3. A lack of depth across the local startup community
Issues around the legal framework have been discussed at length by us and many others so we won’t go into it here. What hasn’t been discussed by anyone are the latter two points and they are equally responsible for the current state of the startup community.
For this blog entry, we will delve into Reason #2.
On December 8th 2016, GlassQube hosted a financial technology (FinTech) hackathon in partnership with Google for Entrepreneurs (GFE) and sponsored by Abu Dhabi Global Markets and Temenos. Over 100 people participated across 10 teams and the caliber of the participants and their output was world class. In fact the event officially ranked as one of the top GFE hackathons ever held anywhere in the world. To summarize, in partnership with the financial regulator of Abu Dhabi we hosted a FinTech specific hackathon that ranked as one of the top GFE hackathons ever held in the history of human civilization and here’s the rub…
…not a single Abu Dhabi based financial institution officially showed up to support the event.
In fact, we invited the two biggest local banks to participate in the event, literally spoon feeding them the opportunity to identify technical and creative talent, and to support local innovation and help nurture the startup ecosystem within a sector that was specifically relevant to their industry. They both declined.
But wait, there’s more; not a single person from either bank even bothered to show up to observe the event, network or learn from it across its entire 3 days. Astounding.
And there lies the problem; the institutions, or rather the people within these institutions who should be driving innovation and supporting the startup community are too myopic and atrophied to see what’s going on in their industry in their own backyard. This is unsustainable and if it continues, the startup ecosystem in the Abu Dhabi is doomed to fail.
This lack of institutional private sector support is one of the big reasons startups from Abu Dhabi end up in Dubai…
Happy New Year and all the best for 2017!!!