Egypt Climate Innovation Collaborative Supporting Clean Tech Entrepreneurs in Egypt Through Partnerships and a Market Development Focus Concept / Business Plan | May 2018 1 Acknowledgements The paper was made possible through the support of the UK’s Department for International Development (DFID). This paper is a deliverable under the World Bank’s Finance Competitiveness & Innovation Global Practice developed by a team consisting of Farid Tadros, Amy Abdel-Razek, and Hazem El Wassimy. The team is thankful for key contributions from Jean-Louis Racine, Mira Azam, Marwa Kamel, Yehia Eldozdar, Hani Wassef, Danqing Zhu. The authors would like to express their appreciation for the comments received by peer reviewers Marwa Mostafa Khalil, Ahmed Faragallah, and Jonathan Coony. Abstract The following concept is the result of user-centric-design and a consultative process to develop a business plan to support clean tech startups and SMEs in Egypt. Over 24 startups and 18 ecosystem players were consulted over 231 interaction hours through workshops, focus groups, interviews, and design thinking session. A key finding and message in the business plan was that in order to effectively support clean tech startups, a dual approach would be needed where a support program focuses on i) the unique needs of clean tech entrepreneurs, but also ii) market development, which requires looking beyond accelerating entrepreneurs to include market system acceleration. 2 Contents Executive Summary……………………………………….….….…….……….……..…..5 Annex 1:Detailed Findings Overview …………………………………………………….….…………….…..….…14 Methodology……………………………………………….…………….….….……….17 Key Findings……………………………………………….………………...………….20 Market Analysis Ecosystem Analysis Concept Recommendations……………………………………………….….………30 Improving Direct Services to Entrepreneurs Market Development Role Operation Plan…...……………………………………………….……….……………47 Core Activities Results Framework Annex 2: Additional Material Case Studies …………………………………………….…………..……………..54 Prototypes Ecosystem Canvas Stakeholder Map 3 Executive Summary 4 Clean Tech Entrepreneurship is Emerging in Egypt Strong Pipeline Emerging Early Success Stories 521 APPLICATIONS ENCPC/UNEP SWITCHMED Applicants to American University in Cairo Venture Lab (VLAB) Acceleration GREEN PROGRAM 2015/2016 Program (Targets Established Operational startups) (1ST YEAR) 250 Entrepreneurs Clean Tech 200 APPLICATIONS 150 521 100 180 2 of Forbes 20 Most Promising Egyptian 160 140 Entrepreneurs are Clean Tech Startups 50 0 1 4 20 Fall 2015 Spring 2015 Fall 2016 Where are What do Who are their Who are they? they? they do? customers? 30% 90% 75% 2 63% 57% Female University site social Renewable 60% Outside Energy & Founders 7 Graduates motivation of Cairo Waste Agri. Mgmt Business Cairo Waste Management Agriculture Entrepreneurs average age (male/female): 23-33 Upper Egypt Renewable Energy Industry other Other Individuals Source: Clean Tech Arabia Survey of 100 Clean Tech Entrepreneurs - 2015 Findings Alexandria Organic Agriculture Tourism & Commercial Energy Efficiency Source: ENCPC /UNEP Source: Clean Tech Arabia Survey of 100 Clean Tech SWTICHMED Program 2015/2016 Entrepreneurs - 2015 Findings 5 However, Despite a Significant Market Opportunity… Diesel-powered pumps in Egypt consume an estimated 3.7 million Tonnes of diesel per year, and release over 10 million Tonnes of Carbon Emissions. Source: Regional Center for Renewable Energy and Energy Efficiency (RCREEE); “Diesel to Solar Transformation, Accelerating Achievement of SDG 7 on Sustainable Energy: Assessing Untapped Solar Potential in Existing Off-Grid Systems in the Arab Region� 2016. Potential PV Many hotels and resorts along the Red Sea and Mediterranean coasts Peak Capacity are not connected to the national grid and are entirely dependent on 2,097 MW diesel for all operations including water desalination. Source: Regional Center for Renewable Energy and Energy Efficiency (RCREEE); “Diesel to Solar Transformation, Accelerating Achievement of SDG 7 on Sustainable Energy: Assessing Untapped Solar Potential in Existing Off-Grid Systems in the Arab Region� 2016. Annually Egypt generates approximately 21 million tons of municipal solid waste, 30 million tons of agricultural waste, 6 million tons of industrial waste. Source: GIZ; country report on solid waste management in Egypt, 2014. Energy intensive industries in Egypt represent 1% of the number of factories in Egypt, yet consume 65% of industrial energy consumption. Source: UNIDO; Industrial Energy Efficiency in Egypt, Industrial Energy Efficiency Strategies and Policies, 2015. …. clean technology startups have not reached their potential in Egypt 6 Clean Tech Startups Face Unique Challenges Clean Tech Startups have different Clean Tech Startups are operating in markets 1 needs than other entrepreneurs 2 & value chains which are yet to be defined Longer Lead-times Customer Financing Clean Energy application startups Customers are reluctant to pay emphasized the unexpected long time upfront ‘equipment’ costs. Need (i.e. > 1 year) needed for them to be financing options to increase able to build their tech capability and startups scaling potential. network. Customer Resistance Customers are displaying resistance Gaps in Expertise to trying clean tech products. Risk Solar energy startups were not able to aversion and behavioral change find the right connections to experts prove to be significant barriers to or suitable labs to develop their growth. tech. Initial Investment Technology, Not Business Many solar components are imported Focused and costly. Initial entry barrier, higher working capital / inventory Most of the startups interviewed requirements to meet customer needs. displayed high focus on their tech and minimal focus on their business model. Offer a technology to Supplier/Distributor customer, not an integrated solution. Supplier/Distributor relationship dynamics not well established. Value Chain gaps relationships not developed and ‘mode of operation’ not defined. 7 Egypt’s Ecosystem Has Effectively Supported IT/Mobile App Startups However, clean tech startups have had mixed success. After ‘graduating’ from programs many clean tech startups still lack the know how, market access, finance, and ability to successfully launch or continue their ? business. IT / Mobile support is not fully transferable to Clean Tech. Clean tech startups often ? follow path of IT startups, but do not find the tailored support they need. ? There is lack of continuity in support programs. Clean tech startups typically use hardware based solutions which can take longer to develop. Clean Tech startups require longer support program, or a series of linked programs. 8 Egypt Needs to Proactively Build The Clean Tech Ecosystem Collaboration to Support Across Startup Life Cycle Key Elements to Building an Effective Clean Tech Ecosystem Will require a focal point / group to convene relevant players, leverage global partnerships, while fostering market development focus. Collaboration Global Access Market Focus Expand the approach to support A collaboration of programs Access to global knowledge, experts, clean tech entrepreneurs by shinning interconnected and with a uniform vision content, and networks in order to provide the the spotlight on opportunities to support clean tech entrepreneurs and Focal Point/Consortium with resources to through market data, and addressing address market / system challenges. inject in Egypt. This could be via WB Climate market and system challenges by Technology Program, Climate Innovation creating ‘space’ for collective action Center (CIC) network, and other resources. and market innovation. 9 Principles for Improved Local and Global Collaboration Upgrading from Developing ‘Greening' General Leveraging Existing existing Past/Fail to Partnership Support Programs Programs for a Placement System Frameworks and Through Global Continual and across multiple Market Vision Resources Improved Support ecosystem players Coordination of multiple Help the partner Building on existing brands partners is complex. It programs improve their Upgrade from the pass or fail and reputations requires: content through the existing system to a Leveraging networks, global partners such as placement based case by A. Market Vision to share infrastructure, systems, and the WBG climate case system, using need- understanding of market geographical reach, in technology program based criteria. challenges/ opportunities particular outside of Cairo. (CTP) knowledge, and way forward Evaluation criteria to initially materials, people, and place the entrepreneur and Continual support to B. A unified vision, metrics, networks. follow up placement once entrepreneur through and clear roles coordinated programs and Link to global technology, he/she receives startup initiatives. C. Allowing Partners to business models support or service. remain autonomous to solutions, and partners. meet their mandates. D. Frameworks, contracts, agreements 10 Principles for Improved Market Development Focus New Innovative Business Models are needed to unlock Clean Tech Markets for Startups to Scale. Developing these business models will: • Require a multi-sectoral/disciplinary approach • Benefit from matchmaking and exposing Egyptian startups with other models globally Programs should look beyond individual startups support, and consider supporting Groups of Startups and Value Chain players in Pioneers their support models, by: Investors • Catalyzing Markets Through a Facilitated Innovators Innovation Process • Using Open Innovation Challenges to Wild Card Develop Market Solutions Experts Entrepreneur “The Open Innovation approach can help green firms take market Suppliers demand as a starting point, without locking themselves into a Customers particular technology, by scouring the horizon for the right technologies and business models.� Source: Connecting Green Technology Distributors Entrepreneurs – World Bank Group infoDev Contractors Study 2016 11 ANNEX 1: DETAILED FINDINGS Overview Methodology Key Findings Concept Recommendations Operation Plan 12 Overview 13 Growth of Entrepreneurship in Egypt Steady Entrepreneur Pipeline Growth Evidence of Emerging Clean Tech Entrepreneurs Applicants to American University in Cairo Venture Lab (VLAB) Acceleration Program (Targets Established Operational startups) 250 Entrepreneurs 200 Clean Tech 150 100 180 160 140 50 0 1 4 20 Fall 2015 Spring 2015 Fall 2016 ENCPC / UNEP SWITHMED APPLICATIONS GREEN PROGRAM 2015/2016 (1ST YEAR) 521 2 of Forbes 20 Most Promising Egyptian Entrepreneurs are Clean Tech Startups 14 Egypt’s Clean Tech Startups Clean Tech Arabia Survey of 100 Clean Tech Entrepreneurs - 2015 Findings 15 Methodology 16 Problem Identification and Program Design through Human Centric Engagements Applied human centric approach with key stakeholders to design a program to support clean tech startups 24 18 74 231 Startups Support Programs Interaction Points Interactions Hours Covering a wide spectrum of Interacted with key including multiple Aggregate time spent clean tech fields including: entrepreneurship/clean tech workshops, focus groups, interacting with renewable energy (Solar), ecosystem players, interviews, one to one entrepreneurs and support waste to energy, energy including: universities, meetings, & design thinking programs over the span of a efficiency, and recycling incubators/accelerators, sessions. 6 month period. startups. NGOs, foundations. 17 A Journey of Discovery Human Centric Approach, Lead to Better Insights… Through a combination of ethnographic interviews, By combining business design frameworks business model design workshops and on site visits with design thinking techniques, our team, to watch Clean Tech startups in action, our team with the help of a local business design consultant, managed to uncover key engaged the ecosystem to better understand the insights from the clean tech startup world. needs of startups and the entrepreneurs behind them. 18 Key Findings 19 Initial Trends & Analysis Through our initial interactions and data gathering sessions with entrepreneurs and other stakeholders we mapped key observations and trends, identifying initial challenges and themes to explore further. 20 Understanding Clean Tech Challenges along the Startup Lifecycle ENCPC /UNEP SWITCHMED GREEN PROGRAM 521 APPLICATIONS Entrepreneurs / Startups 256 SELECTED (20% FEMALE) 160 TRAINED 57 BUSINESS MODELS STAGE Stage IDEATION SEMI OPERATIONAL - STARTUP - OPERATIONAL GROWTH SCALE • Building credibility (in solution provided or • Markets are still immature despite • Good (and bad) ideas die early proven product and track record supply chain being developed) seek • Some good ideas are not able to access • Customer financing and usage Certifications. support (particularly true outside Cairo). models are necessary for scalable • Without clear business model, struggle to find • No clear process to go from idea to Challenges proper Angel financing. Also find it hard to growth market (trial & error) • Securing steady input supply or communicate with Angels who do not • Minimum funding for producing early tech inventory in order to meet customer understand Clean Tech prototyping. demand. • Relationships - Building suppliers and distributor • Lack Access to Market Data or • Access to larger financing pool of structures knowledge on how to use it. value added investors to further scale • Understanding regulatory implications • Offered programs can be too general and their operations. • Customer resistance - despite product benefit do not cater to Clean tech • Competition startup is attracting and value customers remain resistance to • After entrepreneur receives Ideation positive attention and competition. change their habits Support, where do they go next? Possible M&A / Consolidation period. • Expertise - startups need more sophisticated technical support, lab access, R&D. 21 Clean Tech Entrepreneur Profiles Who are they? ‘Traits' Opportunities Inventors - Inventors, (Academics + Students) - Build on their creativity to create new Passionate for developing clean business opportunities - Pushes the boundaries of creativity tech based products, Intrigued by - Future pipeline how things work. Want to make - Notorious for creating something nobody needs their Uni project a reality. - Not in it for $ Contractors - Sense a good opportunity to make $ - Harness their energy and willingness to Individuals who are keen to use take risk - Made initial financial commitment available tech to integrate it into - Early mover and risk taker - Existing semi-operational startup, ‘low clean tech based solution. hanging fruit’ to produce impact - Engineers who want to be EPCs (growth, revenue, jobs) - Struggling with customers, feel stuck Problem Solvers Community members looking to - Interested in solving day-to-day problems - Build on their understanding of market help solve problems they see in - Deep understanding of their customers needs and opportunity for clean tech to fill a and community gap. their community. - Notional technical and business know- - Also existing semi-operational startup, ‘low how hanging fruit’ to produce impact (growth, revenue, jobs) Transformational Entrepreneurs Hard core entrepreneurs, with - Visionary - Break open the market passion and vivid drive to solve - Pioneer - Attract high value investment problems with clean tech based - Driven - Inspire and excite others (building future viable business models. pipeline) 22 IT Startups ≠ CT Startups Shorter Development Times Longer Lead Times Coding as knowledge is popular and easy to learn Development requirement is slowed by the with available MOOC and local courses, making technical expertise gap and nature of the app./web. development possible product Easier Access To Potential Customers Customers Tend to be Industry or Agribusiness It is substantially easier to share a new Accessing potential customer is a real barrier. app./web. application with friends/family to test ‘Knocking on factory doors’ is not an easy task. and give feedback. Testing Tech Prototypes is faced with several regulatory & permission hurdles. ‘Light’ On Assets Upfront Costs & Inventory Rely on tech savviness, marketing and Scale production to meet customer demand outreach to attract users. requires substantial working capital. Social Media & Mobile platforms are the Norm Undefined Value Chains & Distribution Networks Access to online platforms, makes it substantially entrepreneur is developing new ways to reach their Easier to reach customers and Scale. customers and define market structures. 23 Variations Within Clean Tech Solar Powered Applications – Challenges at both ends of the value chain Component Supply Product Sales Services End User Activities Development A. Essential A. System A. Customer A. Offer A. Customers components integration financing of Maintenance resistant to imported. FX between high initial and after behavior fluctuation and imported and equipment cost services. Need change and access. local a barrier. Need to offer value question quality B.Supplier component, and to reduce risk for added services / validity of relationships adapting to local customer. and maintain benefits of solar and exclusivity context. B.Channels to ongoing energy. C.Imports B.Access to reach customer relationship with B. To grow need to regulation slows skilled workers lack clarity, customer. reach several down import and experienced relationships and multiples of process. engineers. norms not customers established. Value Chain Findings (based on 15 business models review for solar applications): Solar power application companies are challenged on both sides of their value chain; on one side, importing essential components are problematic and increase the price of their solutions considerably. The end user is finding the solution expensive, risking, and questions validity of benefit.. 24 Variations Within Clean Tech Waste to Energy Applications – challenges at the beginning of the value chain Component Supply Manufacturing Distribution Sales End User Activities A. Securing A. Calibrating A. Rely on A. Gaining A. International steady supply product to meet existing clients trust buyers/brokers of raw material quality standards distribution as reliable represent a great such as oil, agri challenging networks supplier is sales waste is difficult B.Creating a essential for a opportunity. and has to go certified long term B. Make large sales through informal manufacturing B2B at once via networks, facility is time relationship. distributors or causing price consuming and agents. fluctuation. capital intensive. C.To grow can rely B.Logistics of C.Access to skilled on a handful of collecting the workers and key customers. waste is experienced problematic yet engineers. manageable. Value Chain Findings (based on 10 business models review for waste to energy applications): Waste to energy application companies main challenge is namely at the beginning of the value chain, requiring securing steady supply of waste in order to scale (working with the informal sectors) and meeting quality standards for their products to be used. 25 Key Findings & Insights Clean Tech Startups have different Clean Tech Startups are operating in markets 1 needs than other entrepreneurs 2 & value chains which are yet to be defined Longer Lead-times Customer Financing Clean Energy application startups Customers are reluctant to pay emphasized the unexpected long time upfront ‘equipment’ costs. Need (i.e. > 1 year) needed for them to be financing options to increase able to build their tech capability and startups scaling potential. network. Customer Resistance Customers are displaying resistance Gaps in Expertise to trying clean tech products. Risk Solar energy startups were not able to aversion and behavioral change find the right connections to experts prove to be significant barriers to or suitable labs to develop their growth. tech. Initial Investment Technology, Not Business Many solar components are imported Focused and costly. Initial entry barrier, higher working capital / inventory Most of the startups interviewed requirements to meet customer needs. displayed high focus on their tech and minimal focus on their business model. Offer a technology to Supplier/Distributor customer, not an integrated solution. Supplier/Distributor relationship dynamics not well established. Value Chain gaps relationships not developed and ‘mode of operation’ not defined. 26 Entrepreneur Support Programs are focused on IT / Mobile Apps limited sector / market depth, but solid foundation to leverage Several Good Programs Entrepreneurs face but operating in Silos several support gaps in their journey Current focus is on Outputs (i.e. startups supported, training, competitions) rather than Impact Some ‘Less traditional’ VACUUM Players are not fully integrated into the Ecosystem but have an important role to play Clean Tech Training Market & Investor Clean Tech Access Programs Entrepreneurship Clean Tech Programs (General) Institutions 27 Clean Tech Ecosystem Support Gaps ENCPC /UNEP SWITCHMED GREEN Steady Pipeline, however gaps of support to Clean Tech PROGRAM 521 APPLICATIONS Entrepreneurs / Startups 256 SELECTED (20% FEMALE) 160 TRAINED 57 BUSINESS MODELS STAGE Stage IDEATION SEMI OPERATIONAL - STARTUP - OPERATIONAL GROWTH SCALE Bootcamps / Inspiration Training Incubator / Accelerator Programs Markets / Networks / Investment Center for + Development Support General Sustainable Clean Tech Support 28 Concept Recommendations 29 Addressing Scaling Barriers Through a Dual Focus Market Scaling barriers DEVELOPMENT are not limited to MARKET Often, market the entrepreneur expansion and scaling alone. is not realized due to value chain, public good, policy, or system challenges The markets and systems which startups operate need Figure: Scaling Barriers to be supported to for Inclusive Industries unlock growth potential Source: Harvey Koh, Nidhi Hegde, Ashish Karamchandani, Beyond the Pioneer: Getting Inclusive Industries to Scale, April 2014. Deloitte Touche Tohmatsu India Private Limited 30 Why is a Dual Role Necessary? Key Challenges What’s not working Today Entrepreneurs: Go from program to program with little direction. ENTREPRENEURS Self diagnose their needs….incorrectly. Most of the existing ecosystem support programs 1) Clean Tech Startups have different do not cater to unique needs of clean tech needs than general entrepreneurs entrepreneurs. Unable to find clean tech depth in programs or access labs and research needed Fixate on money as the main solution to their problems. Do not look at market/system challenges Not clear what to do next, get stuck or plateau. Markets: Even after providing strong support to entrepreneurs MARKET market and system barriers are a key impediment to DEVELOPMENT transformational growth. 2) Clean Tech Startups are operating in markets/value chains which have not While some startups successfully develop a product yet been defined and sell to “’early adopters’ or to niche markets (i.e. environmentally conscious) growth plateaus and they are unable to make a significant market expansion due to wider system challenges. 31 Dual Role of a Climate Innovation Center / Program Key Challenges Proposed Solutions Support Services to Entrepreneurs by leveraging & 1) Clean Tech Startups have different ‘greening’ existing ecosystem programs: needs than general entrepreneurs ENTREPRENEURS ENTREPRENEURS Ensuring a steady and growing flow of new startups is key to clean tech future innovations. Tailoring services (inspiration bootcamps, challenges, training, incubation, acceleration, technical / consulting / R&D support) to entrepreneurs based on their size , needs and a larger market/ system objective. Connecting to Global players, such as Climate Business Innovation Network, Shell Foundation etc. Market Innovation & Development: Support startups and key stakeholders to form a task MARKET MARKET force to address market barriers, shape the value chain, DEVELOPMENT DEVELOPMENT solidify relationships, and unlock market potential via 2) Clean Tech Startups are operating in crowdsourced innovation, and/or through structured markets/value chains which have not yet been defined market innovation processes. Task forces would be given access to experts and innovators, to design their own market solution to be evaluated and eligible for support from WB experts and 32 resources (i.e. follow-up TA). Improving Direct Services To Entrepreneurs 33 Clean Tech Entrepreneurs are not sure where to start. Current Journey They often follow path of IT startups, or join what’s available. ? Clean Tech Entrepreneurs struggle to identify which programs can best serve their needs. Many entrepreneurs self-prescribe, or can’t find programs relevant to their needs and work alone. ? After ‘graduating’ from a program many entrepreneurs still lack the know how, market access, finance, and ability to successfully launch/continue their business, ? they lack belonging, and their idea/business either fail, stagnate, or plateau. ? Arbitrary Search Multiple Application Application Results What’s next? Getting informed about Processes Application result: No Clear Follow up helping options: word of Applying to program after A. Accepted: good match ✓ activity, whether accepted mouth, social media & big weighing options based on B. Accepted: mismatch X and finished the program events like RiseUp. their perception of what they C. Rejected X or rejected. need. KEY TAKEAWAYS: 1. Process can be arbitrary and can be frustrating and demotivating for early entrepreneurs. 2. Some entrepreneurs tend to try for any program that will take them, 3. Entrepreneur needs are being “self diagnosed� and not based on professional feedback, which can lead to ‘incorrect diagnosis’ of what they would benefit most from. 4. After completing a program, its not clear what to do next 34 Improving Success Rate through Lifecycle Support ENCPC /UNEP SWITCHMED GREEN PROGRAM Requires Collaboration 521 APPLICATIONS of Multiple Players Entrepreneurs / Startups 256 SELECTED (20% FEMALE) 160 TRAINED 57 BUSINESS MODELS STAGE Stage IDEATION SEMI OPERATIONAL - STARTUP - OPERATIONAL GROWTH SCALE Strong NO BUSINESS SOME KIND OF BUSINESS MODEL TRANSFORMATIVE pipeline of MODEL BUSINESS MODEL BUSINESS MODELS / SOME KIND OF FUNCTIONING PRODUCT clean tech TECH MARKET MAKERS INVENTION PROTOTYPE Entrepreneurs IDEA/INVENTION Survival rate can be improved with Clean Tech tailored support 35 Through partnerships, and shared Lifecycle Journey vision, multiple programs can support entrepreneurs through the lifecycle of their journey, share knowledge and progress of the entrepreneur, and leverage their comparative advantages and networks to provide more effective and tailored support. KEY PRINCIPLES: 1. Focal Point bringing together service providers and entrepreneur interface 2. Placement of entrepreneur in most beneficial programs 3. The journey does not end once a program is completed. Follow-up activities are recommended prior to admission into next support program placement. After completing each Program, the Partner Programs provide a Shared data and M&E to evaluate Partner Evaluates and Guides variety of services entrepreneurs and support Startup on key next actions and throughout the lifecycle of Programs to improve shares back with the collaborative the entrepreneur effectiveness of overall support. assessment of Market and needs 36 Market Development Role 37 What are the Clean Tech Market Opportunities in Egypt? Diesel-powered pumps in Egypt consume an estimated 3.7 million Tonnes of diesel per year, and release over 10 million Tonnes of Carbon Emissions. Source: Regional Center for Renewable Energy and Energy Efficiency (RCREEE); “Diesel to Solar Transformation, Accelerating Achievement of SDG 7 on Sustainable Energy: Assessing Untapped Solar Potential in Existing Off-Grid Systems in the Arab Region� 2016. Potential PV Many hotels and resorts along the Red Sea and Mediterranean coasts Peak Capacity are not connected to the national grid and are entirely dependent on 2,097 MW diesel for all operations including water desalination. Source: Regional Center for Renewable Energy and Energy Efficiency (RCREEE); “Diesel to Solar Transformation, Accelerating Achievement of SDG 7 on Sustainable Energy: Assessing Untapped Solar Potential in Existing Off-Grid Systems in the Arab Region� 2016. Annually Egypt generates approximately 21 million tons of municipal solid waste, 30 million tons of agricultural waste, 6 million tons of industrial waste. Source: GIZ; country report on solid waste management in Egypt, 2014. Energy intensive industries in Egypt represent 1% of the number of factories in Egypt, yet consume 65% of industrial energy consumption. Source: UNIDO; Industrial Energy Efficiency in Egypt, Industrial Energy Efficiency Strategies and Policies, 2015. Despite these market opportunities, clean technology startups have not yet scaled significantly in Egypt ? 38 Challenges Clean Tech Faces in Market Expansion Having a market focus is key to help bridge the technology valley of death Venture Capital and other finance enter once there is evidence of potential market expansion - VC finance has not picked up in Egypt’s Clean Tech sector because there has been limited evidence of scale potential. - Market and system barriers can prevent significant scale potential of clean tech startup Source: Grubb, Michael (2004) Technology Innovation and Climate Change policy: an Overview of Issues and Options, Keio Economic studies, as adapted and reproduced by Committee On Climate Change, Building a low-carbon economy the UK’s innovation challenge, July 2010. 39 Why is a focus on Market Development Key? M-KOPA Case Study Market Opportunity New business model Results introduced by M-KOPA • Huge Off-Grid Market • M-Kopa’s business model ‘Pay-as-you addressed key market barriers go Solar’ has become a new norm for • On average off-grid household spends $164 on Kerosene, $36 on • Innovative Financing: Rather than how these transactions occur. Charging their phone, and $72 on selling customers a Solar panel with batteries high upfront costs, M-Kopa made • Demand was always there, ‘Pay-as-you energy affordable by selling them go Solar’ shaped how the market was pay-as-you go energy, combining structured/ functioned ultimately Market Reality micro financing with mobile payment unlocking demand. • Despite a clear value proposition technology. (access to energy, potential savings • Several new companies (Mobisol, Azuri, from kerosene use, reduction in • Reduced customer perceived quality SolarNow and others), have followed pollution and danger cause by risk through a pay-per-use system: suit expanding through-out Africa with burning kerosene lanterns) demand To address risk aversion, trust variations of this business model. did not increase. issues, are reduce trial barriers. If • Solar providers could not achieve the panel did not work, limited cost • M-KOPA revolutionized financing significant uptake to customer (i.e. initial deposit, ‘pre- through a clean tech and fintech value paid time’) proposition. Market Barriers • Leveraged existing systems and • Nov 2015 M-Kopa raised $19 million • High upfront costs - limited cash channels: by using the very familiar • As of Sept 2015 Sold over 250,000 availability for BoP customers • Trust and risk aversion - Does the M-Pesa service and network to sell technology really work? Quality? Will break pay-as-you go energy. Now selling in a few years? also complementary products (i.e. • Channels / distribution networks – No radios, mobiles, EE lamps) and norms or familiar ‘ways to transact’ / looking to monetize user data going requires behavioral change. forward. 40 http://www.bloomberg.com/features/2015-mkopa-solar-in-africa/ Unlocking Markets by Catalyzing Innovation & Collaboration “The Open Innovation approach can help green firms take market demand as a starting point, without locking themselves into a particular technology, by scouring the horizon for the right technologies and business models.� Source: Connecting Green Technology Entrepreneurs – World Bank Group infoDev Study 2016 1) Using Open Innovation Challenges to Develop Market Solutions • Initiate local clean tech focused challenges to stimulate the existing pool of local talent and bring key players to develop innovative solutions tied to a clean MARKET ISSUE tech challenge with significant market potential. IDENTIFIED FINAL • This process, can be online or through a facilitated process will aim to help FIELD VISIT, SHARE SELECTION clean tech startups in finding like minded partners from both the private and OR EVENT TO OF WINING MARKET CO-CREATE IDEA TO public sectors to assist them further developing innovative market solution CHALLENGE A SOLUTION SUPPORT which will enable growth in the sector they are working in. (i.e. payment and PLATFORM TEAMS USE (PHYSICAL OR FEEDBACK TO ONLINE) TO financing solutions for small holder farmers which can benefit from smart agri, DEVELOP FINE TUNE or clean technologies. UNDERSTANDING IDEAS • Leverage existing open innovation platforms (i.e MIT Climate CoLab) • Outcome to be supported through WBG Technical Assistance Variations of “Open Innovation Model� 2) Catalyzing Markets Through a Facilitated Innovation Process Bringing together diverse startups & intermediary WBG Additionality institutions to develop a joint understanding of market The WBG will leverage its network to convene Facilitator challenges and co-create innovative solutions relevant startups, intermediaries, value chain Pioneers WB to map a clean tech subsector (i.e. off-grid) identify key players, and other stakeholders to pull together a Investors entrepreneurs, value chain players, intermediary institutions, team, share relevant market data, and provide Innovators linkages, challenges, opportunities, and data, with the aim design thinking tools to facilitate the design of an develop a joint vision and action plan to catalyze the market. action plan with the aim of catalyzing the market. Wild Card Experts Entreprene ur This process would be more facilitated and managed by the Supporting the Outcome through TA WB group and GoE with a market objective as the main If the outcome of this process requires further Suppliers Customers driver of activities. Participants can be startups, companies, technical assistance, there is the possibility of the potential suppliers, distributors government agencies, WBG providing it. Contractors Distributors innovators, other technology providers (i.e. FinTech or Payment infrastructure). 41 Example* of a recent IFC project which is piloting the facilitated innovation process as a result of this business plan Green Eagle Cleantech Sparks Dandara World Bank MoTI - Outgreens El-Khodeiry Tech Renewable NGO Arabia Group - IFC ENCPC Biogas World Bank Group - IFC Farm Owner Napata IRSC Portable Pumps Paymob Chemonics Aman Farm Owner Egypt World Bank Group - IFC Farmers Agri-tech Organizational Team Solar Energy Startups Fintech Agriwaste / Bio Gas Startups NGO Farmers Catalyzing Markets Through a Facilitated Innovation Process The clean tech entrepreneurship & market creation project (#601695) further piloted this innovation process by looking deeper at the off-grid solar sector in agriculture markets in Egypt which was cited as having significant potential.** The project used sector analysis and stakeholder mapping to identify key players in the market (those directly connected to the market as well as those who could have a innovation role). One key findings was that mobile payments and financing were a key barrier to clean-technology uptake in agriculture, accordingly, a team of Solar, Agriwaste, and FinTech (financial technology) startups were brought together to visit three farms in Aswan, with the objective of: i) developing a share experience and understanding of the challenges and practices in the agri sector, Diesel pump efficiency lower than expected ii) to expose these startups to each others’ knowledge (i.e. fintech & cleantech, Cairo & Upper Egypt, solar & agri), iii) convene relevant intermediaries who can help support the innovation process; Ministry of Trade’s Cleaner Production Center (ENCPC), Clean Tech Arabia an acceleration program, and Dandara an Upper Egypt NGO with strong links to farmers and local institutions. iv) Develop a shared vision, objectives, milestones, and follow-up for support. Renting and sharing equipment is common Wide access to mobile technology Farmers pay ‘transport fees’ for diesel * This slide was added after the research was finalized for this study, to provide an example of how the facilitated innovation process could be launched. ** Sakr, Dalia Abdelhamid Mahmoud; Huenteler, Joern Torsten; Matsuo, Tyeler Marissa; Khanna, Ashish. 2017. Scaling up distributed solar in emerging markets : the case of the Arab Republic of Egypt (English). Policy Research working paper; no. WPS 8103. Washington, D.C. : World Bank Group 42 What ingredients are needed to bring this all together? 43 How Can We Make This Happen? Collaboration Convening a set of relevant programs, interconnected and with a uniform vision to support clean tech entrepreneurs and address market / system challenges. Global Access Access to global knowledge, experts, content, and networks in order to provide the Focal Point/Consortium with resources to inject in Egypt. This could be via WB Climate Technology Program, CIC A Magnet for the Clean Tech network, and other resources. Ecosystem Programs, . Stakeholders, and Entrepreneurs Market Focus Expand the approach to support clean tech entrepreneurs by shinning the spotlight on opportunities through market data, and addressing market and system challenges by creating ‘space’ for collective action and market innovation. 44 An Ecosystem approach with a focal node is needed strengthen the Clean Tech support ecosystem? Upgrading from Developing ‘Greening' General Leveraging Existing existing Past/Fail to Partnership Support Programs Programs for a Placement System Frameworks and Through Global Continual and across multiple Market Vision Resources Improved Support ecosystem players Coordination of multiple Help the partner Building on existing brands partners is complex. It programs improve their Upgrade from the pass or fail and reputations requires: content through the existing system to a Leveraging networks, global partners such as placement based case by A. Market Vision to share infrastructure, systems, and the WBG climate case system, using need- understanding of market geographical reach, in technology program based criteria. challenges/ opportunities particular outside of Cairo. (CTP) knowledge, and way forward Evaluation criteria to initially materials, people, and place the entrepreneur and Continual support to B. A unified vision, metrics, networks. follow up placement once entrepreneur through and clear roles coordinated programs and Link to global technology, he/she receives startup initiatives. C. Allowing Partners to business models support or service. remain autonomous to solutions, and partners. meet their mandates. D. Frameworks, contracts, agreements 45 OPERATIONAL PLAN 46 What Core Support Activities Should the Consortium Offer? Goal: To develop from an idea to a Goal: To help startups develop both a viable business model, while maintaining a business model & feasible technology. healthy pipeline. Approach: Approach: General Business incubation program Semi- annual BootCamp (1 week) Ideation Technical training (1-2 week) Tech support & consultancy via Operational reputable local entities. Stage Stage Corporate Challenges (1-2) 01 Target: To reach a momentum of Target: To reach a momentum of 20 to 02 50 to 60 startups supported per 30 startups new applicants per year. year. ENABLED THROUGH ECOSYSTEM Goal: To involve startups in shaping their Goal: To help startups develop strong PARTNERSHIPS markets through a diligent, design based, network of market leads, CleanTech stakeholder inclusive, innovation process, to experts, dedicated mentors in their field of tackle local market creation challenges. 03 expertise. To assist ready startups to 04 scale. Approach: To offer startups and other key Growth stakeholders the opportunity to solve a Market Market Stage Approach: Providing access to Challenge using variations of Open Innovation Scale Models supported by WB experts, innovators, Local networks (Experts, Markets, Investors) peers and others to design their own solution and Global WB + CIC country network. action plan with the aim of ultimately catalyzing the market. Target: To reach a momentum of 5 Target: 1 – 2 market development ‘innovation processes’ to 7 startups per year. and endorsed / supported actions plans per year. 47 Goal: To develop from an idea Approach: Target: To reach a to a business model, while momentum of 50 to 60 Semi- annual BootCamp (1 week) maintaining a healthy pipeline. startups supported per year. Series of CT events Technical training (1-2 week) Ideation Stage 01 Corporate Challenges (1-2) How To Make This Operational? Corporate Challenges Training Placement Bootcamp Placement How? How? How? - Enable 2-4 challenges (i.e Pepsi’s litter of - Leverage existing Training Programs - Leverage existing Bootcamps light) - Help them improve content - Help them cater some content to - Develop more partnerships with other - Make sure they have a place to go clean tech corporates - Make sure they have a place to go Why? Why? Why? - excitement and inspiration - basic technical skills - Move the idea to reality - validation - Avoid feeling of rejection, want to - Identify those ready for business - relationship between corporates keep those ‘ideation’ stage model support and startups entrepreneurs in the system - identify potential stars Example Partners & Affiliates 48 Goal: To help startups Approach: Target: To reach a develop both a viable business General Business momentum of 10 to 20 model & feasible technology. incubation program startups new applicants per year. Tech support & Operational Stage consultancy via reputable local entities. 02 How To Make This Operational? General Business Incubation Tech Support & Consultancy How? How? - Leverage existing Incubation/Acceleration - Identify and classify pool of relevant experts through Programs (very structured of 2 to 4 month period) partners - Help them cater some content to clean tech - Hire experts and consultants to support entrepreneurs - Make sure startups have a place to go for follow- addressing technical challenges over a 4-6 month period. up support - Flexible structure based on needs of entrepreneurs and through contractual agreement. Why? - To assist inventors/tech focused entrepreneurs to Why? commercialize their product - To help entrepreneurs overcome technical barriers. - To provide entrepreneurs with very specific support to Example Partners & Affiliates their specific needs. Center for + Development Sustainable 49 Goal: To help startups Approach: Providing access to Target: To reach a develop strong network of momentum of 5 to 7 Local networks (Experts, Markets, market leads, CleanTech startups per year. Investors) experts, dedicated mentors in their field of expertise. To Global WB + CIC country network. Growth Stage assist ready startups to scale. 03 How To Make This Operational? Access to Funding Access to Markets Access to Networks How? How? How? - Exposure to international clean tech investors - Plug the entrepreneurs into the CIC global network. - through partnerships, agreements and - Educating local investors on the potential of clean - Plug the entrepreneurs into other global networks, commitments tech as an investment for example, endeavour, International CleanTech - based on entrepreneur needs Why? Network. - well informed investors are key to the Why? development of any industry. Why? - To assist entrepreneurs with their scaling - Clean Tech startups requires savvy - To help entrepreneurs with viable efforts to reach a wider target market, funding. business model scale. increase production capabilities, etc… - Limited, to no, networks outside of Egypt. - Lack of understanding to deal in a foreign market. Example Partners & Affiliates 50 Goal: To involve startups Goal: in help startups To offer startups and diverse set of stakeholder, ToApproach: develop strong shaping their markets through expertsnetwork of and innovators the chance to design their own a diligent, design based, market leads, CleanTech solution to a market challenge. The ‘Market Innovation Lab’ stakeholder inclusive, experts, dedicated mentors could leverage virtual open innovation models where ideas Market Scaling in their field of expertise. To innovation process, to tackle local market creation challenges. are crowdsourced, or through a managed / facilitated model assist ready startups to scale. which brings key people together and provides them tools to develop a solution. 04 How To Make This Operational? CHALLENGE IDENTIFIED Inducing Market Innovation EXPERTS FINAL SELECTION CALLS FOR SHORT LIST How? IDEAS PROMISING OF WINING IDEA TO - Through an annual innovation process for parties, that demonstrate MULTI- IDEAS SUPPORT TEAMS USE DISCIPLINAR commitment, to design and tackle a sector specific market Y TEAMS FEEDBACK TO FINE TUNE challenge. SUBMIT IDEAS IDEAS 1. Co-create innovative solutions to address market challenges, using variations of ‘open innovation’ models. And/Or, 2. Innovation through a ‘managed’ / facilitated process which has high barriers to entry in order to ensure Facilitator seriousness and ability to commit, supported with innovation/design thinking tools, sector experts, pioneers, Pioneers value chain members and untraditional players. Investors - Solutions would be eligible for follow-up support from World Bank Innovators experts, technical assistance (TA) and other resources. Wild Card Why? Experts - Clean tech markets are not defined, or are ‘displacing’ well established incumbent Entrepreneur products. Suppliers - Market barriers are multi-faceted encompassing social, financial, behavioral, Customers structural, and regulatory dimension Distributors - Market barriers are affecting even successful startup ability to scale significantly. Contractors 51 M&E Results Framework Results Chain Performance Indicators Targets IMPACT 25,000 Access to clean, safe, reliable and sustainable energy, water Number of entities with access to new/improved products/services (used a proxy of the diesel pump and other natural resources for poor communities in market – 10%) developing countries 1m Tons (used proxy of the diesel CO2 emissions avoided (metric tons) pump market – 10% of emissions) Number of businesses who registered their prototype/final product with Intellectual 135 (half those coming out of 2nd and Property (IP) office 3rd phases) 33 (25% of those registering a Number of businesses who raised follow up finance prototype) 25,000 (used a proxy of the diesel Number of units sold of new/improved products/services pump market – 10%) OUTCOME Number of new laws/legislations/amendments/codes/government policies/ministerial 5 (identified and addressed through the Climate-compatible technologies are deployed in developing decrees drafted, or contributed to the drafting market innovation lab) countries by local sustainable high growth climate businesses that are creating jobs and influencing policy Number of new laws/legislations/amendments/codes/government 3 change policies/ministerial decrees enacted or government policies adopted Number of procedures/practices/norms related to clean tech markets recommended for 5 change Number of procedures/practices/norms changed 3 Number of partnerships with non-financial services providers 10 Number of businesses served by CIC 850 30 (boot camps, and follow intake Number of workshops, training events, seminars, conferences, etc. innovation labs and other) 3,400 (assume on average 2 members Number of participants in workshops, training events, seminars, conferences, etc. per startup) Number of participants providing feedback on satisfaction 2,550 (75% of participants) Number of participants reporting satisfied or very satisfied with workshops, training 1,912 (75%) OUTPUT events, seminars, conferences, etc. CIC capacity to deliver responsive and quality financial and Number of businesses/entrepreneurs having access to technical facilities 30 (6/year) non-financial services to climate technology entrepreneurs (academics) 135 (half those coming out of 2nd and Number of businesses applying for grants/ technical service 3rd phase) Number of businesses receiving grants/technical service 35 (25% of applicants) Number of media appearances 15 Number of knowledge sharing events 5 Number of clean tech curricula pieces/case studies developed 10 52 ANNEX: ADDITIONAL MATERIAL Example Cases Prototypes Ecosystem Canvas Stakeholder Map 53 Startups Spectrum: Semi-Operational CASE STUDY 1 Ahmed Abd-El Hamid CEO & Co-Founder SUNUTIONS Established in 2014 www.sunutions.com SunUtions is a start-up company that works on the production and development of solar systems to provide green energy solutions using the sun. The University graduates of electrical and mechanical engineering worked on their graduation project together and wanted to turn it into a real business. They are currently developing a lighting solution: the “DayLight Collector�. It is a fundamental system that uses a rooftop collector to gather sunlight and with the help of fiber optic cable bundle and unique mirrored bulbs, it carries sun light into the building. 54 Benefited From Corporate Challenges & Mentorship Won first prize Completion of Project & Founders first Practical in INJAZ Registered Scaling with Daylight Experience in scaling a company the company. collector final prototype. product Inspired by their competition Won first place in Sunution benefit graduation project the elevator pitch from Pepsico Sunutions starts working event in RiseUp Pepsico Liter of Expertise on DayLight collector Summit 2013 & Light project (Procurement) prototype. awarded mentorship “Challenge� by Pepsico. and Access (Brand) 2013 EARLY MID LATE JAN.2 MID LATE 2016 2017 2013 2013 2013 014 2014 2015 PHASE 1 PHASE 2 PHASE 3 Sunutions team focus on prototyping Sunutions registers as a company to With Pepsico increasing the scale of their initial idea. Competing in INJAZ begin its journey with Pepsico’s Liter of the Liter of Light Project, Sunutions and RISEUP summit allowed the Light project, their first major serious secures a profitable engagement with availability of both mentorship engagement with the market. The strong effects on their Daylight (Pepsico and Mobinil), seed funding project represented also a great learning Collector future scaling efforts. (award prizes) and exposure. experience with great influence on the technical and business learning curve of the team. https://www.youtube.com/watch?v=bNi https://www.youtube.com/watch?v RJzt1DcI&index=2&list=PLkoete0tjoZG =H1L1r5Oip_Y&list=PLkoete0tjoZ bQzbt5zqGskpDv8ElD2tE&spfreload=1 GbQzbt5zqGskpDv8ElD2tE 55 0 Startups Spectrum: Operational CASE STUDY 2 Nour El-Assal CEO TAGADDOD Established in 2013 www.tagaddod.com Tagaddod (Arabic for ‘renewal’) is a pioneering renewable Energy and Waste Management Egyptian company, established in 2013 in Cairo, Egypt. Tagaddod operates an ISCC certified production facility, that produces Biodiesel from used cooking oil (UCOME). Biodiesel is a green fuel that is used in conventional diesel engines, which can directly substitute for or extend supplies of traditional petroleum diesel. 56 Certifications & Value Added Investors Were Key Tagaddod team Tagaddod receives Turning point when incubated at its first serious secure financing flat 6 labs. funding through from Investor with Company local Angel Factory Industry links Research Registration. investor network. Operational. Factory Complete Tagaddod team partnership via Tagaddod establishes a Certification of graduation project workshop & receives German R&D Plans for their quality & releases their first quality certification labs for their final product. first factory. sustainability. working prototype. Tagaddod Exporting to Agents in Europe 2013 2013 LATE LATE MID MID EARLY MID 2014 2016 2016 2013 2014 2014 2015 PHASE 1 PHASE 2 PHASE 3 Tagaddod Team develops its first With a strong display of know how Tagaddod management team working prototype. Receives seed and management capabilities, engages in serious expansion of funding and incubation by flat 6 labs. Tagaddod receives its first serious sales activities with focus on export to Turns a graduation project into a financing and plans to establish its international biodiesel brokers & registered company. First workshop first factory, increasing its scale of traders, gradually exporting higher operations enhances final product production. With its factory capacities. quality output. operational, commercial activities takes place in parallel with continuous production efficiency efforts. http://edition.cnn.com/videos/world/20 https://www.youtube.com/watch?v=pZ 16/03/30/african-start-up-tagaddod- QLjZL0ZXA 57 spc.cnn Startups Spectrum: Market Shaper CASE STUDY 3 AHMED ZAHRAN CEO Karm Solar Established in 2011 www.karmsolar.com A solar technology and integration company that delivers innovative solar solutions to the agricultural, industrial, tourism and business sectors. KarmSolar is Egypt’s largest private off-grid solar energy integrator. 58 Developed Customer Centric Solutions through Partnerships & Financial Products Innovations to Catalyze the Market KarmSolar secured $ Karm Solar team First implementation 1 million financing develop first of solar water pumping solution on from SFD to finance prototype of solar a large commercial Expansion in 23 solar stations. water pumping farm. Achieving number of (SFD’s 1st renewable breakeven. energy financing) solution. projects. Karl Solar wins HTC- KarmSolar sign Wharton Innovation Karm Build & contract to Award in 2012 for its construct $2.5m Company Karm Power solar water pumping solar station (2MW) established. solution. Established. MID 2011 2011 MID 2012 2013 2014 2015 2016 2016 2011 PHASE 1 PHASE 2 PHASE 3 Smart Money: All capital they raised Product innovation: Replacing need Product expansion: Offer Energy was from investors who understand for batteries with water storage Management Solutions. the sector and want to invest in it. systems. Customer financing: Partnership with Put all investors on board of Benefited from network of Egyptian Leasing Plus. directors. Diaspora. 59 Sources: https://www.youtube.com/watch?v=EQt35Z4iyBI https://www.youtube.com/watch?v=h8SNOGpfNh8 https://www.youtube.com/watch?v=t6FkMiydrWc Prototype 1 60 Prototype 2 61 Prototype 3 Direct Services to Entrepreneurs - Connecting local and global ecosystem providers - Market Transformation - Innovation Lab - ACCESS To EXPERTS ACCESS To MARKETS ACCESS To CLEAN - Based on feasibility analysis (i.e. & KNOWLEDGE TECH INVESTORS 1.Sector/tech viability of diesel to solar market) & Access to technical and Market Makers & Mobilizing financing specific market proven potential business experts: Enablers: through: challenges & key - Detailed value chain map to - Mentors (Global & - High-Profile - Angels & VCs players identified understand sector and identify key Local) Individuals (patient capital via (and untraditional) stakeholders - Consultants (Global - Networks, local/ global links) & Local) associations - Diaspora 2. Co-created - Innovation lab would facilitate a ‘co- - Peer to peer learning - Market Data - Crowdfunding solution and Task created’ solution where stakeholders networks Corporate Partnerships: - Valley of Death’ force to transform are supported by CIC & innovation - University students - Corporate ‘green’ Fund market tools to design own solution as startup challenges - Stakeholders would form a Task Force employees/interns Capacity Building: - Corporate /tech - To potential CT 3. Task force to implement solution sponsors investors and banks supported by Partnerships to facilitate - CSR/ Shared Value - To entrepreneurs to funding & WBG TA - Innovative (and realistic) solutions access to: - Corporate R&D - R&D access CT finance to implement with clear milestones and task force financing to Univ. solution - Labs commitment would be funded and supported by WBG TA . Catalyze CT Demand: - Crowdsourcing On an semi-annual basis, the Innovation lab would run a CIC facilitated innovation process innovative financing where market stakeholders are encouraged to form and collaborate in order to design and (innovation lab) implement market transformation solutions. The formed task force will then be supported by financing & WBG TA to implement their solution. Direct Services to Entrepreneurs would be for multiple technology / Why is an innovation lab needed? Why a sector / tech sectors and for companies at multiple stages (startup – growth stage). - Clean tech markets are new / being created focus? These services aim to ensure there is a steady pipeline of - Challenges go beyond regulatory / economic - Brings together those entrepreneurs entering into Clean tech space, while providing - Consumer behavior changes are needed who have a stake in it targeted services for proven ‘Gazelles’ at the tipping point of - Leveraging existing networks, distributors, - Creates buy-in and substantial growth. tech services (i.e. mobile payment) is improves opportunity promising. to collaborate 62 A Placement Prototype 4 Approach STARTUP/ MARKET IDEATION PROTOTYPE GROWTH SHAPERS GOAL: To help GOAL: To help GOAL: To help GOAL: To enable startups develop from startups develop both a startups develop strong startups to shape their an idea to a desirable viable business model network of market markets through a business model. & feasible technology. leads, CleanTech diligent, design based, experts, dedicated stakeholder inclusive, APPROACH: mentors in their field of innovation process, to APPROACH: - General Acceleration experts to assist them tackle local market - Bootcamps: To Program: 3 months to scale. creation challenges. offer startups the (twice a year) opportunity to attend - Tech support & APPROACH: To APPROACH: To offer (twice a year) consultancy leverage existing local startups the opportunity - Training Events: Program: flexible 4-6 players network + the to participate in the For ideation stage months can run in international CIC and market shaping startup needing parallel or in sequence technical exposure. WB network. innovation process to acceleration (once a year), with key program. stakeholders in their TARGET: To reach a TARGET: To reach a TARGET: To reach a respective markets to momentum of 20 to 60 momentum of 10 to 20 momentum of 5 to 7 develop, tackle and startups new applicants startups new applicants startups new applicants reach an action plan to per year. per year. per year. shape their market. A series of year round clean tech events, to inform, educate and develop the conception of clean tech in the local market, involving stakeholders, including investors, regulators, entrepreneurs, and any other related local entity with global key players and subsequently creating an evolving market. 63 Ecosystem Canvas Resources: Aspiring CT entrepreneurs have good access to general Stakeholders: Capital providers are very interested in CT, are concerned they lack familiarity and entrepreneurship support services at the prototype and start-up phase (mentoring, know-how. General support organizations are interested to support CT are concerned they lack know-how business training, co-working spaces), but are limited in their options in the early and resources. CT support organization are few and need funding to expand and to develop their brand growth and late growth stage and lack significantly later stage support. CT specific recognition in the market. Also need a way to better cooperate with existing players. Global players need access to business opportunities in emerging markets, are concerned they lack local know-how and resources are limited to ICE Cairo, CTA, and SEDA who are new to the ecosystem, networks, and need a bridge. Academia Goal is be published in academic journals and receive tenure. and do not provide later stage support. Due to the size/resources of these Concerned that pursuing commercially viable R&D will not be rewarded by Uni. Need incentives to programs, they lack reach and recognition. Capital is limited to 1 substantial angel commercialize R&D. Business Association Goal is to unlock CT opportunities for its members. Concerned group which lack CT expertise but is interested. 2-3 early stage VCs focused on IT. about existing policies, need functioning mechanism for their policy recommendations to be implemented. There is huge competition for this limited local capital. Global capital has not Banks goal is to expand credit, concerned they lack know-how on CT, alternate financing mechanism. entered into CT market. There are many engineering graduates but not focused on Government goals is to address energy challenge, and create jobs, concerned that CT is only a small piece CT, and those who are lack practical skills. Innovation has been limited, many early of the puzzle, need to see early success. players are only importing equipment, however there are successes in the application of solar tech for pumping use, and innovation of existing business model to meet local needs. Academia has not been a source for innovation. Limited Activities: General entrepreneur support services are available, however they tend to mostly focus on resources to support ecosystem player, only ad hoc donor funding for specific IT and F&B entrepreneurs. Ecosystems are very much interested in collaboration, and there is a positive activities. culture of collaboration, however they admit that they have not figured out how to make it work and effective. Participation in the community has been successful through mentorship programs, as well as key events. Engagement: Stakeholders interact socially, the ecosystem players refer to RiseUP Summit, training, and pitch events create the biggest buzz. Training events have flourished, but participants are now expecting more depth to them (i.e. not general business skills, but very specific and each other as friends. They typically interact through the referral process, word of detailed valuation training). RiseUp Summit has been a major success due to its theme of being mouth, and participation in joint events. The ecosystem is very much confined to organized/outsourced to all ecosystem players. Startup Weekend and MIT Competition are also key events. Cairo. Stakeholders indicated they lack an online platform, while facebook pages Need to communicate the “sum is greater than its parts�, and the value we bring to entrepreneurs is are used for event organization, they view that a more sophisticated platform could be of value to them, investors, and entrepreneurs. Lines of communication are word through the collaboration between ecosystem players locally and globally. of mouth and referrals. Community members collaborate through joint events (RiseUp Summit) as through referrals. Global partner engagement is limited to RiseUp and Endeavor. RiseUp by connecting entrepreneurs to Accelerator programs and bringing speakers to events. Endeavor by providing access to Frameworks: Current Feed-in-Tariff is favorable to large companies, rather than SMEs. Bankruptcy markets and mentors within their network. Some global partners based outside of law is very severe, general operating licenses are hard to acquire, access to government contracts is limited, Egypt (i.e. TechWadi), seek to engage in Egypt but have had limited success due to duty reduction on important capital goods are not being implemented and there are severed delays at the lack of local partner and ability to fund initiatives. Young people get involved by border. NGO laws in Egypt are strict and the government is very concerned to understand what the money participating in events and volunteering in events. Start up weekend, MIT will be used for and who it will go to. Social norms are shifting in city centers to encourage entrepreneurship, competition, and Rise Up are key events which are successful because they are not but remains a risk-adverse family unit which encourages ‘safe’ public or corporate jobs. in the traditional ‘conference’ setting, rather they are co-organized and ‘fluid’ which breaks down hierarchies. Implementing Partners + SMEs: Role Models: There lack CT role models, Culture: People are excited about clean tech entrepreneurship mainly due to the Reputation (VLAB, Flat6, Endeavor) Resources however a few role models in the making include: idea of building a green economy which will solve many of Egypt’s problems, but KarmSolar, Solarize Egypt, Future Energy (VLAB, Flat) Commitment ( Clean Tech Arabia, Ice more are starting to see the financial potential in the sector. ‘Clean tech is a lifestyle’ Corporation and others. Failure can be expressed Cairo). Local SMEs are focused on IT apps, and lots of energy. Will create a sense of urgency, by communicating that this is an up by a first mover in online food delivery “otlob� with F&B, SMEs start small and tend to stay small. Clean and coming sector, we are at a once in a lifetime turning point, and its is a closing huge potential that did not manage to capitalize on Tech Entrepreneurs are a combination of Ex-Oil & window of opportunity to be a leader in this sector. Egypt has a large environmental it’s position, and exited at a much lower multiple that Gas or electrical engineers, environmentalists, but movement, in particular there was a strong anti-coal campaign which gathered quick it could have. This can be attributed to the local limited business backgrounds. Also CT support and media attention. As well there are strong youth entrepreneurship social angels/VCs which only added $ to the company and entrepreneurs more recently are simply solar panel networks developing. People are risk-averse, and have not had a good track record limited value added services/insights. Regions with importer/distributors. Most lack innovation in their on dealing with risk through planning/mitigation. Failure is a major social stigma, not similar attributes could include, Kenya, Morocco, business models, and in many cases are stuck. By acceptable, even punished legally. Unfortunately people do not seek perfection, nor Singapore, Germany, Finland, and California. strengthening existing CT ecosystem providers iteration. Sometimes rely on privilege access, first mover advantage, and networks Partners with shared vision: RiseUp and Endeavor, (CTA, ICE, VLAB) they can become the new leaders for the success of their business. TechWadi, AUC Vlabs, Nahdet etl Mahrousa, and champions especially by bridging them to global CleanTechArabia, and ICE Cairo. players (Techwadi, LACI, MIT, Endeavor, etc). 64 Egypt’s Clean Tech Entrepreneurship Ecosystem Stakeholder Map International Local Support Academia/R&D Organizations Organizations Climate/Green General AUC TTO + SD Support AAST + A2K4D Organizations Clean Tech AUC YouThinkGreen*** Flat6labs Arabia *** Venture Lab Cairo Univ (ERC) Heliopolis TechWadi WAMDA Heliopolis U Entrp Nahdet el Energy Research Council University RiBh ** Mahrousa * Innoventures Program ** TU Berlin E-JUST Diaspora El Gouna VentureWell ENCPC *** Injaz* GESR * networks RISE (Boston) ITTU Assiut NileU Networks Gov’t Labs (NREA, GOIEC, EOS) WAMDA Mix Endeavor RiseUp Donors n’Mentor Training UNEP / UNIDO ** Associations SEDA*** SwtichMed *** Financing iAREEE*** RCREEE GIZ ICE Cairo *** Family & Friends WAMDA Capital SEDA*** ENCC ENCPC*** DANIDA USAID SEED* Regional Bus TU Berlin EJB ITC & IMC Cairo Angels Algebra Ventures Associations El Gouna SFD A15 Government Legend: Crowdfunding Sawari Ventures ***100% Climate/Green Focus MoTI MIIC EEAA MoF ** 50% Climate/Green Focus CBE 5% program Bedaya * < 25% Climate/Green Focus NREA*** EgyptERA ENCPC *** Ideavelopers