The Palestine Information and Communications Technology Incubator - PICTI

Business Incubation Experience in West Bank

Laith Kassis, General Manager5th MENAinc Workshop Bahrain 21-24 October, 2007

Governance and Partners

The MissionPICTI supports the development of entrepreneurial ICT

ventures with a comprehensive suite of world-class business services allowing the

commercialization of ideas and

establishing new dynamic enterprises•Economic Development - establishing new start-up

Companies

•Revitalizing entrepreneurship culture

•Creating Job Opportunities

•Capacity Building

From Idea to Business - You Can

PICTI Successes (USAID and infoDev Grant)

Web Based PoSWeb Based PoS: Initially a Telco

web based point of sales information system by a private

sector IT company that is now selling in Dubai for Grand

Stores and others

MobISMobIS: Four-students’ graduation project from

Birziet University in mobile information services

•70 new professional jobs in IT sector•Awareness with more than 5000 IT students & professors •IT Workshop Program 500 attendees (capacity building)•Student Internship Program•Establishing a pipeline of ideas•Salaries and Professional Services for Clients in the amount of US$154,412•Client Capital raised US$300,000 upon graduation•Policy Papers on technology based start-up companies and IPR issues

YooyalandYooyaland: “edutainment” portal for 3-9

year old Arab children by a female entrepreneur that has been linked with another investor

PICTI Successes (infoDev Grant)

Entrants have participated at the Arab Science and Technology Foundation regional Business Plan Contest

In Support of Human CapitalDevelopment Channels

Road shows, IT Companies, Universities, Community

Enabling NetworkInvestment Promotion, Business

Angels, Investors, Venture Capital, Markets

PICTI

IndependentCredibleSustainableScalableReplicableIntegrated with IT Initiatives

Ideas, Innovation

Entrepreneurs

Knowledge

Finance

INPUT

MarketedProducts

ValuedCompanies

More Ideas

Profit

OUTPUT

ROIReturn On Investment

“Neither technology nor money can bring prosperity, only man can”Mohammed Bin Rashid Al Maktoum

SERVICES INTERVENTIONS

•Marketing Assistance•Technology Development

and Transfer•Business Linkages

Promotion•Linkages to Finance and

Financial Services•Capacity Building

•Mentoring / Coaching

Knowledge and skills

needed for successful

entrepreneurSuccessful

Entrepreneur

Ability to make visions and strategic plans

Managing Different Areas of making Business (knowledge and skills)Marketing and sales, R&D, finance, legal affairs, managing projects …, understanding of whole business entity, how to integrate different parts to a whole

Starting your own BusinessCritical evaluation of ideas for new businesses, making business plan, ability to manage the starting process

Identification of OpportunitiesCreativity, understanding of clients´needs, recognizing emerging areas for new businesses

EthicsEthically high level behavior, honesty, sense of responsibility, fulfilling contracts

Entrepreneurship as a career of lifeAttitudes towards life, do you like or dislike being an entrepreneur, to understand good and bad sides being entrepreneur, positivism, sincerity, strong and realistic self-confidence, ability to make decisions

Skills of Human RelationshipsDeveloping a team, team management, how to sell the vision to the team, leadership, how to integrate my and team´s know how, respect for other team members, make no difference between people

Risk Management and Syndicating©Juhani Ylikerälä

Key Steps in Supporting Innovation

IDEA

CONCEPT

PLAN

PROTOTYPE

PRODUCT

Start-up

COMPANY

Business PlanProduct DevelopmentBusiness DevelopmentHuman ResourcesMarketing and AlliancesInfrastructureLegal ServicesFunding

VALUE ADDED SERVICESSEED FUNDING

•Confirm innovation•IPR Strategy•Identify potential •Commercial applications

•Develop proof-of- concept / prototype•Build embryo business plan•Preliminary marketing

•Build founding team•Create spinout

•Marketing evaluation and validation•Marketing/contracting

Validate Innovation

Develop Business

Application

Structure Business Project

The Challenge of Enterprise Financing

R&D Start-up Earlygrowth

Acceleratinggrowth

Sustaininggrowth

Maturitygrowth

Proof ofConceptFunding

Seed FirstRound

SecondRound

DevelopmentCapital

ReplacementCapital

MBO / MBIDevelopment

Capital

3 Fs

Public Sector

Business Angels

Venture Capital Funds

Corporate Venturing

Public Listing / IPO

Source ofFunding

Type ofFunding

Stage inCycle

Funding Gaps

What does it mean for Incubator Start-up Clients

Seed 1st

StageStart-

up4th

Stage3rd

Stage2nd

Stage

Start-up Phase Funding Growth Phase Funding

Loss-Making

Profit-makingIncubator Focus

Idea Pre-Seed

Proof of Concept

Seed Funding

3 Fs Angels

Angel Groups

Seed Funds

VC Funds

Institutional Equity

Loans & Bonds

Valley of Death!

Mountain Top

Grants: Gov, Donors, CSR

Bootstrapping

Source ofFunding

Stage inCycle

Deal Flow Sourcing

Opportunityevaluation

Due Diligence

Structuring/Negotiation

InvestmentManagement ExitInvestment

approval

FinancingProduct DevelopmentBusiness DevelopmentDeveloping Business Plan & StrategiesRecruiting Human Resources & Key StaffSourcing Customers and Strategic AlliancesOptimizing OperationsProviding InfrastructureStructuring Legal and Financial TransactionSolving Problems and Mitigating Risks

VALUE ADDED SERVICESEVALUATION CRITERIAMarket Growth and CapabilityEntrepreneurial Management TeamProprietary Concept or Product or ServiceCompelling Business ModelSound Financial ModelAttractive for Other Stages VC or National InitiativesStrong potential to benefit from our experiences

Pre-Investment Post-Investment

(Local, Regional)

Trade Sale Further rounds ofInvestment

STRATEGIES

Incubation Services

Outreach Screening Pre-Incubation

EnterpriseDevelopment

Graduation& Post

Intertwined RolesFund Execution

Responsive to market needMission drivenCritical mass of pipelineSelective client intake - quality

Value to clients and stakeholdersSound management and leadershipSeed Funding for ClientsIntegration with national and development initiatives

Exit Quantifiable Outcomes

HSITCE

FKITCE

SKITCE

Intel

BIRZEITBIRZEIT

PICTI

KPITIE

ICP

Intel

PICTI

HSITCE

KPITIE

SKITCE

ICP

FKITCE

Championing the Palestinian Network for Innovation

BZUCCE

Innovation

Markets

Entrepreneurs

Assisting in Developing Pre-Incubation Programs at Universities in the West Bank

creating networksSource: Usine-project

Beneficiaries: Poor Families: 56% of Palestinian Population live in Poverty

Extreme Poverty Line: ~US$ 138 Extreme Poverty Line: ~US$ 138 -- 460 / month Layer460 / month LayerPoverty Line: ~US$ 173 Poverty Line: ~US$ 173 –– 575 / month Layer 575 / month Layer

Job Creation in ICT for the Poor –a UNDP Funded Program

Step 1:Application

form: Poverty Score Card

Step 2:Livelihood

Assessment

Step 3:

Field Visits

Potential 60-70 PoorNewspaper Ads

Referrals

InnovationNetwork

Opportunity

Expotech

Exiting from PovertyMicro-Enterprise

• 2-5 Individuals e.a.• Mentoring• Grants – $3K up to $5K• Equipment

Business Linkages and Outsourcing w/ Markets and Businesses:

1. Broadband and VOIP2. Content development, 3. Network Installation and

Support4. Software Solutions5. etc

Topics of Interest

Finance: (Proof of Concept, Seed)

Technology: (Awards, Centers, Incubator)Human Capital Dev:

(Entrepreneurship, Innovation, Capacity Building)

Where We Want To Be

Partners PICTI

PalestinianHuman Capital

Thank You!

• Q&A• Contact details

Al Sheikh Commercial Tower, 4th floor, Al-Quds Street, Al-Bireh, Palestine, PO Box 54807, Jerusalem

Tel: +970 2 240 9290 Fax: +970 2 240 9294

www.picti.ps ceo@picti.ps

Some dialing areas are still using the old (+972) country code