“Iranians are just like the Israelis, very entrepreneurial”, says Parsha Ghaffari CEO and founder of an Artificial Intelligence startup, Aylien. Parsha Ghaffari, an Iranian youth who launched his startup venture in Ireland represents the youth of contemporary Iran. Back home in Iran an army of young, mostly foreign-educated, and ambitious Iranians have built astonishingly successful startups in light of International sanctions, govt’s web filtering and surveillance measures. These youths are giving a different identity to Iran. One that stretches beyond the shadow of its globally renowned Islamic Revolution.
Sanctions fuelled Startups
Iran’s 30 years’ isolation and disconnect from the global economy created opportunities for deep-pocketed Iranian youth. One cannot find Amazon, Google Play, or Youtube in Iran. However, Iran has indigenous versions of each of the US tech heavyweights. Digikala, an Amazon-like company is valued at $150 million by The Economist Magazine. On the other hand, Cafe Bazaar, a Google Play look alike and Aparat, Iran’s YouTube are valued at $20 million and $30 million, respectively by The Economist. Digikala with 700 employees and over 5,50,000 daily unique visitors has been a resounding success story of Iranian startup scene. It’s very clear that absence of global giants has offered an open ground to foreign educated and globally exposed Iranian youth.
Euphoria vs Myth
There is something strikingly similar about the Iranian President Hassan Rouhani and Iran’s start up scene, they both promise a lot but may deliver little. First, let’s focus on the euphoria. Around 70% of Iran’s 80 million population is under the age bracket of 34. The mobile penetration rate is a whopping 120%! Even more interesting is the figure of 45 million internet users in Iran! This number equals 50% of the internet user in the whole of the Middle East. The Western media particularly has been euphorically vocal about the promise of Iranian startups. Unfortunately, it largely reflects their lack of understanding of the country and its governance framework.
Last year, President Hassan Rouhani approved the use of 3G and 4G services to the public by the telecom service providers. While, this may have improved the internet speed the costs to access the internet hasn’t come down. This means out of the 45 million internet users only a minimal number of users access internet on a daily basis.
In addition to this, the current regulatory framework discourages import or purchase of foreign software/hardware items. As the govt is vary of spying related risks associated with certain software’s reform of such archaic policies may take a while to materialize. On the other hand, the notorious filtering of web content and surveillance is conducted under the auspices of the Supreme leader Ayatollah Ali Khamenei. The biggest drawback of this filtering and surveillance is the authorities could blank out any website without prior notice to the business owners. Any content that’s deemed unIslamic or against the ideals of the state can be taken off the web. This may expose the businesses and the investors to huge financial risks.
Moreover, Iran’s disconnect from the global banking and payments system SWIFT, lack of bank funding to startups, high internet costs, and cultural discomfort to share debit/credit card details online are some of the other factors that are hurting Iran’s startup scene.
Iranian Diaspora holds the key
So far it’s only the Western media that is excited about Iran’s start up verve. A complete silence, on the other hand, in the local Iranian media talks a lot about govt’s willingness and urge to develop the same. The fact that most Iranian startups were started or funded by Iranian either studied or lived overseas also says a lot about the sector. Iranian diaspora needs to play an important role in helping the Iranian regime trust the West and its technology corporations. While Iran has indeed made remarkable advancements in Science despite the sanctions.
Improvements in technology without the Western money and cooperation may be difficult to achieve. The Iranian diaspora could play the role of an honest broker between the global technology giants and the govt. The fact is Iranian startups need a lot more than just the internet users, youth dynamism, and risk taking to succeed.
Snehal Manjrekar with an MBA Finance degree from Karnataka University has over six years of diversified experience in Fixed Income Indexing, Corporate Finance, Market Data, and Competitor Intelligence. ...
