What is occurring in the region now is that there are a large number of projects with high costs, zero profitability and non-existent returns.
No names here, but if you want a list, email me
The main objective of most “start-ups” in the region is to get funding to pay salaries, not to finance expansion or move to the next phase.
We now have projects in the region pumping millions of dollars per month for high salaries, huge marketing budgets, crazy advertising, premium office costs …. etc. Few people in the region have the goal to build a profitable, sustainable business. Everyone is spend like crazy to build THE platform that will attract a buyer/investor from the West who will rescue their finances and somehow magically start turning their business into a profitable one.
This way of thinking and action can succeed by luck several times, but it is impossible for some of these “cool” or flashy projects to continue to exist. Looking at some of these marketing budgets I think the Middle East is ready for our own Pets.com. And it will not be just one!!
And this will happen soon and will be disastrous for many people. But it would be useful to correct the industry and get all the crazy dreamers out. Keep entrepreneurs who aim to build successful, REAL projects in.