Video: Meet The Startups Innovating With (And Within) The Dubai Government

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What do we do, when the last barrel of oil is shipped from our shores? When the last drop of oil is sucked out of our sands? These are questions all of the Middle East’s oil-rich governments are asking themselves. Questions whose answers cannot be found in short-term economic moves and the templated solutions offered by consulting companies. And questions that Dubai, an emirate of the United Arab Emirates, has long grappled with, not being rich in oil itself by any means.

To their credit, having been at it for a while, the Dubai leadership is a minority among the Gulf governments in that they realize that the future of their economy lies beyond building the next skyscraper or shipping the next tank full of oil. And that it lies with investing in human capital, the bedrock of innovation.

To this end, the Dubai leadership has spearheaded a program designed to build the future of the city (and the country) beyond its impressive skyline, steeling it against an oil shock that could be far worse than Brexit and Trump as a threat to regional stability.

The program, Dubai Future Accelerators (DFA), can easily be called one of the most ambitious government-led innovation projects of all time in that its impact, if successful, goes beyond a startup or sector. It affects nine million people directly, and the world indirectly.

“It is a starting point, and only the first step on this journey,” says Paul Smith, managing director at DFA, the man heading the program.

Smith has worked with accelerators for the last six years as CEO and co-founder of Ignite, one of Europe’s leading accelerator programs. He joined the DFA four weeks into the program.

“The Dubai Future Accelerators is not a typical accelerator,” Smith tells us.

With a conventional accelerator you’d work with very early-stage companies to validate ideas, to provide companies with initial investment, to help them figure out how to go to market, or even what the product is, he explains. “That’s not what this program set out to do. This is very much a program set up by the PMO [Prime Minister’s Office] to bring together fascinating and transformative technology companies, and see if we can collaborate on interesting, transformative technology projects.”

By connecting these forward-thinking innovators from around the world with government funding, resources, data, and infrastructure, the program is aimed at creating something greater than the sum of those, Smith says.

Change the world?

Dubai Future Accelerators was ordered by royal decree from H.H. Sheikh Mohammed bin Rashid Al Maktoum, ruler of Dubai, and the vice -president and prime minister of the UAE, in October 2016. They launched their first cycle with a Dhs1 billion ($270 million) fund to solve the problems of humanity’s future.

The first cycle paired seven government departments such as Dubai Police and Dubai Municipality with 30 innovative companies, chosen for their ability to make services cheaper, faster, more lucrative and inspiring.

“The nine-week timeline started with meetings and discussions with the entity,” explains Sean Dennis, co-founder at blockchain startup Loyyal.

“After two weeks, you come up with a pilot idea or how you want to work together,” he says. “Towards the end of the nine weeks, there’s a decision. You’re learning about what their pain points are, what they need, how you can help, and then the real work will start when the decision is made.”

The 35-year-old British expat, who was part of the first cycle, says that the program helped his blockchain company expand aggressively into the regional and international domain and get unprecedented access to government officials.

It was, he says, like a golden ticket to the commanding heights of Middle East enterprises, a fast-track route to the movers and shakers of the evolving Gulf markets.

The location of the office itself is enough to recommend it, Dennis says, talking of the DFA offices on the ground floor of the gleaming Emirates Office Tower, just 55 floors below the office of H.H. Sheikh Mohammed.

“It really does give you access to people that you could never normally get to.
It means that the government entities have been given the mandate to work with these startups.”

“It does give you access to people that you could never normally get to. It means that the government entities have been given the mandate to work with these startups.”

Apart from perks like free accommodation and travel, which do make focusing on the projects a lot easier, Dennis says that the biggest benefit is getting all the “introductions you could ever want.”

According to him, DFA offices regularly host members of the royal family, high-profile officials, investors and VCs seeking a stake in projects on the frontlines of innovation.

Even Jeff Bezos, e-commerce giant Amazon’s founder and CEO, stopped by.

“All the companies here have been invited in specifically to deal with future-proofing or bringing the government of Dubai into the future for the desired areas,” he says.

“Governments are notoriously careful with public-private partnerships, and this is their platform to experiment a bit,” he explains, adding that as an entrepreneur, you also have the comfort that “you’re not just working for them either.”

“You look at DFA as a launchpad or platform. And the name that DFA has with local partners and operators is useful.”

Transformative More

One of the most transformative projects to develop at the first round was helmed by Hyperloop One, which wants to establish a super-fast Hyperloop connection between Dubai to Abu Dhabi that could cut travel time between the two emirates to 12 minutes. The firm has already signed a partnership with RTA for a feasibility study.

Disperse, a company from London, were moving forward with their work with Dubai Municipality on A.I.-powered platforms to help the city’s civic body to manage the city and its urban areas.

UK-based company Sure Chill also signed a MoU with city utility DEWA to install vaccine refrigerators in the city.

Their patented cooling technology, used around Africa, uses the physics of water to store energy to provide continuous cooling without electricity or battery power.

And Estonian-origin startup Guaana created the world’s first scientific research fund that distributes funds to scientists and researchers globally.

Estonian entrepreneur Marko Russiver, who pioneered the potentially game-changing fund, says that companies at DFA were there to “think big.”

The DFA asked us the best and scariest questions you could ever ask a startup, Russiver tells us. “You are working with one of the most innovative governments in the world. How do you want to change the world?”

“You are working with one of the most innovative governments in the world. How do
you want to change
the world?”

“Usually governments fund their own research. But knowledge has no borders,” he says, explaining his business. “This model has not changed since the World War II era. The world’s most innovative people, the smartest people in the world are [somewhat] working in the stone age. We changed that.”

Guaana pitched their pilot to the Dubai Future Foundation (DFF), the organization behind DFA, and won a pilot project to raise a first round of funding for researchers around the world.

“They’re putting up the first fund, which we’re going to announce soon…it will be distributed to researchers globally,” says Russiver. “This is the first time that a country has opened up like this to global researchers and is ready to fund them.”

In all, a total of 19 companies out of the 30 have received pilot projects or commercial deals with Dubai’s government agencies.

“The 11 that didn’t, not all of them walked away with nothing,” DFA’s Smith says. “A lot of them also received investment, or they did deals with the other government entities that weren’t on the program through the network we gave to them.

“Out of the 19, a majority of them have moved to contracts,” he explains. “A couple of companies weren’t very happy, and I think it would be wrong to say we got everything right. We absolutely didn’t. Ultimately, while we’re very clear about what we wanted to achieve, we’re still working with government, and that will have challenges, as things don’t move as fast as people would like it to.”

Not Perfect

One of those companies was software startup Pixelbug, that failed to receive any funds or contracts from the program.

The founder of the company, Canadian-Lebanese entrepreneur, Dany El Eid argues that by definition, the accelerator program wasn’t an accelerator at all.

“They call it an accelerator because it’s the new buzzword,” he says, adding that even folks at the DFA would admit that this was not an accelerator in the real sense.

His company was partnered with the Knowledge and Human Development Authority (KHDA) on an augmented reality software app called ‘Clutterbug,’ which brings textbook animations to life to make learning more engaging and fun.

In the same way that Microsoft’s Hololens goggles morphs the user into a mixed reality, the phone app is held over pictures on a page, using an inbuilt camera to react to the images and create 3D models that jump around the screen and interactive with the user.

“As a startup, getting monetary rewards was crucial for us to stay afloat…It was just difficult to get something tangible and substantial out of that from a monetary perspective.”

El Eid’s company struggled to get any investment from the KHDA, who they soon discovered was a regulatory authority, and so were unable to fund a pilot or enter into commercial agreements with anyone.

“It was the first attempt, so there were certain disappointments,” he says. “They had a lot of teething issues that from a financial perspective turned out to be more us investing in the program than them investing in us.”

There were things to gain regarding networks, relationships and understandings, El Eid says, but “as a startup or a company,  getting monetary rewards is crucial for us to stay afloat.”

The program’s one major drawback, El Eid says, was that the DFA and DFF are too engaged in building their own brand right now, than actually helping the companies or driving innovation. “It was just difficult to get something tangible and substantial out of that from a monetary perspective.”

Moving Upwards

Conversely, blockchain startup Loyyal enjoyed the first cycle so much, they enrolled for the second. Dennis has already partnered with Dubai Holding to reinvent their customer loyalty schemes with blockchain technology.

Loyyal’s blockchain acts as a virtual filing cabinet, which stores information on partners on the company’s loyalty scheme, such as retailers and restaurants, in blocks on a chain so that it can be exchanged cheaply and easily.

“Being a blockchain company and the mandate from Sheikh Mohammed for the government to be on blockchain puts us in the real driver’s seat,” he says.

“We were working in the first cycle with Dubai Holding, we did a pilot with them, and that was fantastic, and hopefully we’ll have a long and continuing relationship with them.”

Since being in DFA, they’ve had ten international investors coming in. They are now in talks with UAE banks such as NBAD for a loyalty scheme based on blockchain.

“It’s frictionless, fast, cost efficient, so it reduces the cost drastically of operating a loyalty program. Because you earn your points with say Skywards Miles and then go and spend them at Spinneys,” Dennis explains, giving an example of the airline and the hypermarket, respectively.

“Spinneys and Emirates don’t trust each other, so there’s an enormous cost in allowing for the consumer to go and redeem them at Spinneys because you then have to talk to Spinneys and find out if they spent them. So instead of having 20 redemption partners like they do now, you can expand your redemption network ten-fold and grow it into a massive economy.”

3D printing is another new-age technology that Dubai has gone all in on after the PMO declared last year the government’s intention to make the emirate an international destination for 3D printing.

Even the DFF has joined hands with American software firm Autodesk to set up a $100 million investment fund that will offer finance for entrepreneurs and startups in the 3D printing space. The DFF office is also inside what is being called the world’s first 3D-printed office. 

Sudanese-born Mohamed Elawad was one of the entrepreneurs to benefit from this push.

He was enrolled in the first cycle to bring technology from what he claims is the region’s first medical 3D printing startup, Medativ, to Dubai Health Authority’s 3D printing needs.

“It added a lot of value, which I couldn’t have bought with any money. And that’s why I appreciated the program, and
I believe in the program.”

Medativ produces 3D replicas of human organs to increase the accuracy of surgical operations and cut costs for surgical training at healthcare providers.

“What we wanted out of this was business with the DHA,” he says. Since then, they have clinched a contract with the DHA to consult them in establishing a 3D printing lab to serve their facilities and the rest of the region, which will be live-and-kicking later this year.

Would he take part in the program again? “Yes I would, and I didn’t realize this until the very last day, when I had people call me from around the world, asking what we do, asking for our services. It added a lot of value, which I couldn’t have bought with any money. And that’s why I appreciated the program, and I believe in the program.”

After graduating from the first cycle, he was also enlisted by the DFA as a part-time Entrepreneur-in-Residence.

He now mentors new recruits and helps them adjust to their new environment at DFA.

Writing the Handbook

On the concerns raised by the likes of Pixelbug’s El Eid, DFA’s Smith implies that such concerns are valid when you look at the scope of the project. “I think it’s incredibly ambitious, and I think you have to accept that when you try do something that is [this] ambitious, ultimately, it will take time to do.”

“It’s not about coming here and selling a product; it’s about coming here with a technology that’s world changing and seeing if we can make it better and help contribute to an even bigger idea” Smith adds. “If companies were just coming here to sell something then ultimately they had a very frustrating time because that’s not what the program was about.”

El Eid of Pixelbug argues that perhaps one of the reasons behind DFA not being completely successful was that it is also “a startup as much as the companies it was trying to support.”

“A couple of companies weren’t very happy and I think it would be wrong to say we got everything right.

We absolutely didn’t.”

“The DFA itself is a startup, and Dubai itself is a startup,” he argues. “The [lesson] was not to put my expectations too high.”

Aside from the differing success stories, the first cycle started the process of understanding how governments should engage with the tech firms of the future, Smith points out.

“The aim of the first program was to try something different and to try to do something that other governments haven’t tried,” he says. “And in that sense, it absolutely delivered.”

The first cycle’s success, however incomplete or not as per one’s point of view, has led DFA to launch its second cycle in January, with 11 new challenges to improve the efficiency of health, education, energy, transportation, infrastructure etc.

“It allowed us to understand the framework that’s needed for this sort of engagement between technology companies and  government,” he argues. “And in time, I think we will be in a position to write a playbook to help other governments around the world understand how that engagement should work.”