Saudi entrepreneurs turn backs on job-for-life tradition

Taylor Luck
Potential investors read the profile of up-and-coming startups at a monthly event linking entrepreneurs with investors in Riyadh, Saudi Arabia, May 30, 2022.
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There was a time when almost every graduate in Saudi Arabia wanted to work in the oil industry, or get another stable job for life in an established company. But now a “startup generation” is breaking new ground.

Encouraged by the government, which is counting on a boom in small and medium-sized companies to power the country’s post-oil era growth, entrepreneurs are choosing risk over security.

Why We Wrote This

A story focused on

Entrepreneurship is not a Saudi tradition. But a new generation and their startups are changing society’s mind about what constitutes a respectable way to make a living.

They are helped by a reduction in the amount of red tape they have to negotiate, and by an increase in Saudi banks’ new readiness to invest in their ventures. And they are changing society’s perceptions along the way.

In the old days, families would refuse to let their daughters marry an “entrepreneur,” preferring grooms with a steady job in the government bureaucracy, oil companies, or international corporations.

Now, says Rayan Hanbazazah, whose Jeddah-based company provides e-commerce services to its clients, “if you say you run a startup, [people] look at you with a new eye.”

Majdi Al-Lulu, who recently launched a soccer talent evaluator and scouting service, recalls that four years ago “we felt we were like pioneers, going out into the unknown.”

Now, he adds, “it feels like the most normal thing in the world.”

To the soothing strum of traditional Arabian stringed instruments and lit by purple and blue mood lighting, Saudi innovators and investors sip glasses of coffee, talk market opportunities, and share business cards.

On a temporary stage erected in the hall of a high-tech research center in Riyadh, young Saudis make their three-minute pitches to an audience of 50 potential investors.

Sultan Alzohofi, who has designed an app to reduce waiting times at barber shops, walks onto the stage in search of investment funds to the sound of a buzzing hair clipper.

Why We Wrote This

A story focused on

Entrepreneurship is not a Saudi tradition. But a new generation and their startups are changing society’s mind about what constitutes a respectable way to make a living.

“This is what you will hear while waiting for your turn at the salon,” he tells his audience. Now you will be able to join the queue before arrival and reduce waiting time.”

A quiet revolution is taking hold in Saudi Arabia, where citizens have long prized secure jobs for life over innovation and risk.

Now, thanks to government encouragement, investor interest, and an overhaul of laws and regulations, Saudis are increasingly staking out their own paths to prosperity, counting on themselves rather than big firms or the government to secure their future.

They are changing society’s perceptions along the way.

“Now if you say you run a startup, [people] look at you with a new eye,” says Rayan Hanbazazah, an e-commerce specialist at a coworking space in Jeddah.

“A viable path to success”

In the oil-reliant, big-government-dominated Saudi Arabia of the past, trying to start a business was an uphill, sometimes futile, battle.

The government treated small startups and large corporations in the same way; entrepreneurs faced high costs and required dozens of permits from different agencies that sometimes never arrived.

Mr. Hanbazazah, whose company offers its clients e-commerce services, recalls facing many obstacles in his own failed attempts to launch startups in the 2000s and early 2010s: red tape, a lack of financial backing, and a societywide lack of faith in a small business.

“Entrepreneur” was a label reserved for grocers and roadside vendors. Families even refused to marry their daughters to men seen as entrepreneurs, preferring potential grooms who had stable jobs for life at government agencies, oil firms, or international corporations. 

But things have changed. “Now your family and community will support you because they believe the market has changed and that this is a viable path to success and a sustainable career,” says Mr. Hanbazazah.

Taylor Luck
Majdi Al-Lulu (right), founder of Grintafy, a talent scout and evaluator service for soccer in the Middle East region – a startup that has partnered with professional clubs like West Ham – at Grintafy's offices at the Vibes coworking space in Jeddah, Saudi Arabia, May 22, 2022.

Saudi Arabia’s energetic but controversial Crown Prince Mohammad bin Salman has made small and medium enterprises (SMEs) the pillar of his Vision 2030 plan for a post-oil economy. By the target date, such companies should be contributing 35% of national gross domestic product, up from 20% today.

To that end, the government agency Monshaat has been busy since 2017 developing and advocating for startups and SMEs, assessing the likely impact of laws and regulations, certifying viable startups, and launching incubators for potential and existing entrepreneurs across the kingdom.

“In the past, it was really hard. I would need to do a lot of procedures in order to be listed and get the necessary licenses and then search for an opportunity,” says Saud Alsabhan, Monshaat’s vice governor for entrepreneurialism.

Now potential Saudi entrepreneurs have a one-stop online shop to get licenses in minutes; another portal allows them to apply for financing from 27 different banks and institutions in one go.

The number of registered Saudi SMEs has grown by 65% since 2017, and stands now at 892,000.

 “The government gave support and made it easier to start a business, and [local entrepreneurs] saw an opportunity. It became much easier and much faster to start a business in Saudi Arabia, and the market really responded to that,” says Mr. Alsabhan.

“A huge mindset change”

Saudi banks that long liked to play it safe with real estate or stocks are increasingly eyeing the room for growth and profit margins of SMEs. Encouraged by government guarantees, they have boosted SME investments from 2% to 8% of their portfolios in the last two years.

At a Monshaat business incubator in Riyadh, Fahad Al Hassan, who co-founded Soum, a startup that links buyers and sellers of electronic goods, recalls the rapid change.  

“When I was in college 12 years ago, the coolest thing was to be a petroleum engineer. Working for Aramco was the dream,” says Mr. Al Hassan, who himself studied petrochemical engineering.

But then a regional ride-hailing app, Careem, was bought out by Uber, the royal family made its support for entrepreneurship clear, and Saudi newspapers began putting innovators on their front pages. That changed the tone of young Saudis’ conversations and career plans.

“Now you hear college seniors talk about fintech or wanting to work for startups … to be able to do something big in the future,” says Mr. Al Hassan. “That is a huge mindset change. That’s awesome.”

At Vibes, a coworking space in Jeddah where swings, beanbag chairs, and foosball tables sit between interconnected office spaces, young entrepreneurs and employees of different startups mingle and chat excitedly about potential investors over specialty coffee from the office cafe.

Standing in one corner is Majdi Al-Lulu, who four years ago was renting a desk at Vibes as he hashed out an idea for a Middle East soccer talent evaluator and scouting service.

His company, Grintafy, now has a staff of 20 and a partnership with West Ham club in the United Kingdom.

“At the time in 2018, we felt like we were pioneers going out into the unknown,” says Mr. Al-Lulu of the handful of Saudis who belonged to the first wave of entrepreneurs.

“Now it feels like the most normal thing in the world. And what Saudis are learning is that since we are from the community, unlike international companies, locals understand us and we understand them.”

Taylor Luck
Noura Al-Mallouh, artist and founder of Kham Space, stands in the coworking space’s workshop that Jeddah creatives use to create installations and projects increasingly in demand from both the government and private sector as public events in the kingdom mushroom, in Jeddah, Saudi Arabia, May 24, 2022.

Artists as entrepreneurs

The shift is also leading to an increasing desire among Saudis to work as freelancers – something unheard of in the kingdom a decade ago.

As Saudi Arabia hosts a growing number of high-profile sporting events, tourism festivals, and business conferences, there is high demand for statement art installations with a distinctive local identity.

With commissions flooding in, more Saudi creatives are giving up their day jobs to pursue careers as artists full time.

One place for the creative community is Kham Space, a creative coworking space in Jeddah founded by Noura Al-Mallouh in 2018 as a community and workplace for the growing number of Jeddah creatives.

Here on the sprawling second floor of a repurposed, palm-shaded Jeddah villa, two dozen writers, illustrators, artists, interior designers, photographers, and graphic designers use studios and private rooms amid upcycled furniture and sculptures.

Some paint; others do audio work or saw, weld, and hammer in Kham Space’s workshop.

“People are following their own passion,” Ms. Al-Mallouh says, “and when everyone is looking for local creatives … there are opportunities for you. You are not just an artist, you are practicing a profession.”

The word of mouth is spreading.

“What is getting Saudis to take this leap of faith is not just funding or support, but hearing true stories, the good and the bad, from those who have set off on their own,” says Mr. Al Hassan, the entrepreneur.

“Hearing each other’s experiences is giving many people the nudge they need to jump and work outside an established company,” he adds. “The status quo has been upended.”

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