STARTUP

Entrepreneurship Flourishes for 54 Hours in Iran

Startup Weekend, the pervasive entrepreneurship group that's held events in 100 countries, just held its first event in Iran.
Teams collaborate on their ideas at Iran's first Startup Weekend.
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Within the world of Western media, Iran rarely grabs headlines for topics outside of politics, oil sanctions, human rights violations, or the quest for nuclear energy.

Most recently, Canada severed its diplomatic relations with Iran, closed its embassy in Iran, and expelled its Iranian diplomats.

But not all is crumbling in Iran.

Over the weekend, some 120 entrepreneurs, engineers, and start-up enthusiasts linked up as part of Iran's first "Startup Weekend," a 54-hour event that's had iterations in more than 100 locations, from Michigan to Mongolia. In them, potential founders arrive on Friday with nothing more than an idea and leave on Sunday evening (usually without much sleep), having met a co-founder, built a prototype or demo, and pitched investors.

The Iran event was held at the Kherad Institute, a K-12 school in Tehran. It was coordinated by Mohsen Malayeri, the founder and CEO of Khavarzamin Company, a Tehran-based Web services firm that manages a range of e-commerce sites and social networks.

Malayeri says there have been start-up festivals in Tehran previously, but none have been very successful in building lasting companies. "There was a huge failure rate," he said.

The problem, he believes, is that Iran suffers from lacking any form of start-up ecosystem. That's why he reached out to Startup Weekend, in hopes that the group could create a centralized start-up movement within Tehran. Kristján Kristjánsson, one of Startup Weekend's global coordinators and the CEO of Reykjavík-based Innovit Entrepreneurship Center, an early stage start-up accelerator, flew to Tehran to help facilitate the event.

"There are two main problems in Iran," Malayeri says. "There are technical people, but they have no business education." Second, he says, there are investors, but no networks for them to leverage to find companies to invest in.

Malayeri believes Startup Weekend is "necessary" to foster an ongoing relationship between engineers, investors, and entrepreneurs. Within a week of launching Iran's Startup Weekend, the event sold was sold out.

However, it's an uphill battle. Iran ranks 144th on the World Bank's annual list of best (and worst) countries for starting a business, and government funding for private-sector entrepreneurs is almost non-existent within the country.

Still, a spirit of entrepreneurship among Iranian citizens--as well as Iranian immigrants to the United States--is strong. According to a 2011 study by the National Foundation for American Policy, the most common country of origin for an immigrant founder of a top-50 venture-backed company was India, followed by Israel, Canada, and then Iran.

Of course, one of the major hurdles Iran entrepreneurs face is the lack of direct investment from foreign nationals because of sanctions. 

"In Iran, because of the sanctions, the international investors cannot easily come with their real names," Malayeri says.  "They say they would love to invest but they said they don't know how they can bypass the laws. It's a huge market."

That, coupled with extreme government censorship on the Web, makes it extraordinary difficult for Iranian entrepreneurs to leverage their ideas, find investors, and bring their concepts to reality.

But the entrepreneurs at Startup Weekend did not let politics stymie their start-up ideas. Seventy ideas were pitched, which were then narrowed down to 12 concepts, around which teams were formed. As the event concluded, founders pitched their ideas, and three winners were selected.

Boice, an iPhone application, came in first, while Where To Go, a travel-recommendation site, and Klassor, an online educational search tool, came in second and third.

"There is a lot of talent, but no infrastructure," Malayeri says. "It's a huge market, it's emerging. There are lots of people interested in investing. We have just started to create the community."

Last updated: Sep 10, 2012




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