a16z Podcast - a16z Podcast: Is Entrepreneurship a Universal Language?

Episode Date: July 1, 2015

In this special international edition of the a16z Podcast, Mohsen Malayeri, co-founder of Avatech -- one of the more prominent startup accelerators in Iran among many (much like Y Combinator in the U.S.) -- talks to guest interviewer Christopher Schroeder (former entrepreneur, D.C. investor, and author of Startup Rising) about startups in Iran. What happens when you have a "mobile-first" startup ecosystem? Is this about trying to be yet another Silicon Valley (and if so, are we just substituting a form of technocracy for theocracy)? Silicon Valley isn't a religion, observes Malayeri, but entrepreneurship IS "a common language which has no border". This is the third installment in a special series on tech startups in Iran, part of a larger theme around global tech and how software -- including mobile -- is eating the world … and creating new opportunities within it.

Hi everyone, welcome to the A6 and Z podcast. I'm Sonal, and I'm here today in another special edition of the A6 and Z podcast. We have two special guests, including one internationally dialing in from Iran, Mosen Moliari, who is a co-founder of a very prominent startup accelerator in Iran called Avetek. We're here also with Christopher Schroeder, who wrote a really interesting book last year called Startup Rising and has been documenting and facilitating the phenomenon that's happening right now in the Middle East and particularly in Iraq. Iran, where there's a lot of interesting startups and a rich ecosystem being built out. Mousa, it's great to be with you. How are you?

I'm doing great. Thanks. It's a pleasure to be on the podcast. I don't think there are lots of Americans who think startup accelerator, incubator, and Tehran in the same sentence. So could you just talk a little bit, really just kind of a cook's tour from your view of what's been happening over the last couple of years in Tehran as startups are beginning to rise in such powerful ways there? There has been a huge change in the past couple of years in Iran, in the startup scene, I should say. We started like two and a half years ago when we organized the first startup, we can't even in Tehran. The reason we did that was that for doing some research, we came to know that lots of startups are failing in Iran.

And there isn't much talk about it because most of them, they don't have a clue of how to build a startup. So that's how we learned that we maybe need to do a startup weekend events and start building startup communities around it. We so much use the book of Bradfeld, which is called the sort of communities. We were reading it almost using it as a Bible on how to build one here in Tehran. And suddenly it started to flame over the country. So we started to see a lot of events happening in different cities. for example, only the last 12 month, we did like 35 startup weekend events in different cities. And it's not just a start of weekend events.

It's like the whole events that encourage the community to get involved and to grow the community. So on one part, you see the ecosystem is being built up in the country. And at the same time, in the past couple of years, we see the success of stories actually being realized, both at local and international level in Iran. Why did you even decide to do a startup weekend two years ago? And what was kind of your vision for the ecosystem? And how has it played out for you since then? I can go back in time and see that when we started doing the –

I was an entrepreneur myself. We and me and my co-founder, we had a digital advertising company, which still exists. And at that time, although we were an entrepreneur, and we were having our own startups, we were so much interested to see how we can leave an impact on our own community. So at that time, before even we started running those kind of events around the startups, we were having meetups regularly trying to engage the community of tech people.

But at that time, maybe the focus was not so much on entrepreneurship, I should say. But over time, observing what was happening and seeing a lot of those. failure stories by talented engineers who were like really genius and there were lots of them were already draining from the country outside we came to know that maybe entrepreneurship is the right solution to it and we shouldn't focus more on the startups and I and I could emphasize that at the same time the same was happening in the middle of this in the whole region perhaps so we were seeing almost similar stuff in Turkey in Arabic countries and we were we're making sure that perhaps we are on the right track.

I think that people here underestimate that if you believe, as I do, and obviously our friends at A16C believe that that software is eating the world, that means the world, that whatever there's ubiquitous access to technologies, as I said from the beginning, people just have the tools to solve problems or create their economic futures. And I am seeing this. I mean, in America, when you think Middle East, all you think of it's CNN and ISIS. and I'm seeing literally hundreds of thousands of young people using tools to step up in the same ways that you're talking about.

I want to talk a little bit about your first Avetek class, but before that, you mentioned two or three companies, which are doing some amazing things there. Could you give a little bit about Digiacala and the other two that you've talked about and how they're doing? Sure. There was this report last year coming out. It was a startup word report, which was conducted in 50 different countries. doing a survey on the startup scene. And the report result came out with three top valued companies in different countries. And in Iran, the top companies were Digiqa, Cafabazaar, and Aparat.

So DigiCol is basically the biggest online retail in Iran. It's like Amazon of Iran. The second one was Aparat, which is a clone of YouTube, because the access is blocked in the country. and also there are some services from Google which are blocked uses sanctions and not being provided to the people. So that's a service which is similar to that.

They are serving millions of users every day. And the third one is Android Apple Store plays with more than 15 million users right now. They are basically something quite similar to Google Play, which is a marketplace for applications, So the Iranian Android users can both download applications and also the developer community and the application builders can publish their applications on this platform. And this happened because Google Play effectively pulled out because of sanctions or whatever. Is that right? They filled a vacuum this company.

It's very interesting to know that Google Play used to be blocked until last year. There were some changes in treasury regulations which made it. which later on, they opened up the access. But nothing has really changed in terms of access to Google Play because by the time that the Google Play service was opened up in the country, although there hasn't been a lot of advertising around it, which I don't think Google needs. But CafeBuzzard has already created some domination in the market.

So there are still the dominant in terms of number of users and number of applications being downloaded. But I think in terms of publishing applications, still there are some sanctions, which doesn't let Iranian app builders to really publish their applications officially, I should say, on those platforms. And in fact, because they're like, this was stunning to me, but there are millions of iPhones there. You can only download iPhone free apps, right? You're not able to transact and buy paid apps.

Is that true? Well, the reason is that because of sanctions, we are not connected to the global credit, let me, Visa and MasterCard systems, which, like, turn the country to create their own. own local platform, which is like we use for online payments. But that's true. I mean, people in Iran basically, unless they kind of try to bypass somehow or they buy items, gift card, which is not very popular. So most of them are now using their free applications.

So it's interesting to me that the companies that you've mentioned have effectively been, there's a word I hate. We use in America called copycats. What I like to use, in effect, in my book, I call them improvisers because what great entrepreneurs do is don't merely make, quote, unquote, the Amazon of Iran. They are actually thinking about running consumers. They're thinking about very specific needs in the market. And so they're taking things which should work elsewhere, but they're making them there. And so there are two things.

I'm curious, your view on that. Are most of these startups really first things that have worked in the West, and how do you think about that? And then secondly, what are the ramifications if sanctions fall when the actual Western companies come into Iran? Sure. I think to answer the first question, which asks if copycats, I mean, how is the system of copycats in the country? I think it's like any other emerging market when we see the penetration of internet increases. the market opportunities that shows up very clearly are the ones which have been proven in the rest of the world. Alibaba in China, Baidu in China, Yemisapeki, which is the seamless of Turkey, Mercado Libre, which is the Amazon of Latin America.

This happens everywhere, right? Right. And I don't think like, I mean, as you mentioned, it's really not maybe proper to call them copycats because that, That's the idea and that's the market opportunity and an entrepreneur has to tap into the opportunity. So they ran to it. But seeing if there are also innovations happening in terms of being very innovative with new ideas, we have experienced it in our startup accelerator program ourselves. We believe that the whole innovation ecosystem is very nascent at this stage, but will improve over time

as there will be more access to finance. there will be more knowledge on how to lead and build those type of innovations and build companies over them. So I'm sure that it will change over time. But maybe at this stage, still we can't call it very nascent. I had a wonderful entrepreneur who built what was effectively the Yahoo of the Middle East called Mach 2, which got bought by Yahoo for almost $200 million. We had a conversation like this.

And he said to me, Chris, he said, be practical. I mean, this is new to these markets. these are markets that often don't embrace risk. These are markets that often have people seeking government jobs or big corporate engineering jobs, if they can find them at all. If some kid came home and said, Mom, Dad, I'm dropping out of college and I'm going to do Facebook, you know, they would have been laughed at. Their friends would have said it's crazy.

They wouldn't have been able to find investors. But by doing what you've just described, it seems to me, success freed success. And when investors see success and communities see success, more people will. want to do it. And then it does exactly, as you say, it opens up an entire ecosystem. Am I missing something? No, absolutely. I mean, we have seen how the interest of the young community has changed once they started to see these successes, local successes stories being realized. So we see them that instead of looking at Mark Zuckerberg and like Steve Jobs and say that, okay, maybe in this country, I can't really do it. They see that, no, maybe even successes stories can exist in the

same market. And I mean, hopefully we might be even to see that the rate of brain drains would decrease over time as the local ecosystem encourages and empowers their entrepreneurs. Which I think is an amazingly important point because I was struck that honestly, most on some of the best engineering talent that I've seen in emerging growth markets, I've met in Iran. You guys graduate something like six or 700,000. engineers across the spectrum of engineering every year. Half of them, by the way, are women. But a lot of them are trying to leave the country.

And do you think that that might change now, both because of entrepreneurship and also because of the potential if, in fact, the sanctions get lifted? I'm sure that the impact would be even higher over time. And the impact is not only to stop brain drain and it's not really stopping, but decreasing the brain drain. we have started to see some of those successful diaspora and started to coming back to the country, those who have been working in top tech, you know, engineering companies and top

startup companies, they now realize that maybe this emerging market is the right thing to do. Instead of working, for example, for Cisco or Twitter, maybe they can leverage that knowledge and come back to this emerging market and start doing in their own country. So that could be a huge impact over time, I believe. So you set up AVotech as a vehicle to help such people, as you've just described, needs that they have. Like, how do I do this? How do I begin?

What do I need? Can you talk a little bit in your vision of Avetek? What problems do you think you're solving for the ecosystem and for the entrepreneurs themselves? And how do you think this will evolve over the next couple of years? Yeah, we have a very simple vision at Ava Tech. tech, if I want to put it into one sentence, is a day where no matter which family you are coming from or if you have a reached out or a connected family, unless you are an innovative person and you can't build value, then you do not have to worry about the access to finance and access

to knowledge. So this is simply the vision that we are trying to create at AWATIC. So that's why we have been trying to help the young entrepreneurs. you know, coming from different cities, having their ideas, being so passionate, and just we take them to our program. We try to mentor them, train them, and get them ready. And by the end of the program, we try to help to connect them with the investors. Can you tell us about the program?

How long are they there? What kind of money do you arrange for them? What services do you think they need most and value most from you? I mean, we have been observing what's happening at the global level. we haven't really tried to copy the Silicon Valley model, which we believe that doesn't really work in such an emerging market. Are you talking about, like, Y Combinator and 500 startups? Hopefully we have tried to get as much as possible,

and they have been very helpful. I should say that we have been in touch with top figures in Silicon Valley trying to get on a Skype call with them, get their insight into what we should be doing here. But, yeah, I mean, we haven't tried to copy tech stars or white combinator competently here, which we believe that doesn't work in such markets. What do you mean when you say that? In terms of the amount of funding you provide, how long is the program.

For example, let's say that mentorship is a culture that has been existed in Silicon Valley for the past couple of decades. But in Iran, the whole culture of doing mentorship is new. So you can't really count so much on such mentors. Or the other one is the maturity of the investor community. It's absolutely different. Like, you don't have people, a lot of angels trying to, you know, being able to write checks easily without going into too much diligence and trying to figure out everything on the investment memorandum, let's say.

So that that's the reason that we believe that we needed to tailor-made this program into what we have here. So there are many differences. For example, the lengths of the program is not very short. It's not three and four months. It's six months, which consists of pre-acceloration and acceleration. Or the way we do graduation at Demo Day is not that we just get them in front of investors and we say good, I believe that we need to help them step by a step to close the deal. But over time, this is going to be a knowledge that these guys are going to put out

and they are going to share their experience. We need to also help them close the deals, get into negotiations with investors, try to empower them in any way. So that's how, for example, the program is different at this stage. And so talk a little, I mean, you just announced a class not too long. I don't know, do you call it a class or what do you call the? We call them Cycle 1. Talk about some of these gems that you have found in Cycle 1. Well, I should first of all say that we were absolutely inspired by what the entrepreneurs

has been able to achieve in such a short period of time, which is six months. When I go back in time, I remember that once we were calling for applications, we were having people showing up as one person or like they were not able to pitch properly to tell us what they really want to do. But I should emphasize that what we did is that we tried to believe in them. I mean, if they wanted to get in front of an investor, they would absolutely get a red card and they would say that, don't call us anymore, like we don't want to hear this again.

But we instead tried to understand what the ecosystem looks like. We tried to believe in those people. We got them into the program. We had like, in the first cycle, we had around 100 applicants only. which in the second one increased to 250 applicants. But out of those 100 applicants, we selected 20 of the teams. And we tried to help them during the program with a lot of trainings, a lot of workshops, you know, starting from how to pitch to going up to like getting traction,

doing sales and marketing, user experience and stuff like that. And at the same time, we started to create a network of mentors, which is not only local mentors who, many of them has created those successes stories which I just mentioned. We have seen a lot of interest from people, successful entrepreneurs

in different countries, sending us email, hey guys, we're inspired with what you're doing, we want to help, let us know how you do, how we can get engaged. So they have even been people who are not Iranian and they are based, for example, in Berlin or they're based in Washington and they are now helping entrepreneurs in Iran,

that, you know, they get on Skype calls. Some of them, they travel and they just stop by the accelerator and they spend hours with the teams. This has been very effective. I mean, when we see the upcoming results, which is still perhaps is not really comparable with the graduation from top accelerators around the world. But when we see the progress,

it shows that it has been a huge progress. And we believe that if we can't surround the entrepreneurs with the right environment, then they're going to start. glowing in that environment. So I'm going to ask you in a minute, again, about a couple of the specifics in Avetek in the cycle. But you're pulling on something very interesting here because I've visited accelerator programs around the world in emerging growth markets. And I mean, a little secret I think about them even in America is that maybe with the exception of wide combinator, maybe 500 startups.

A lot of them in the States have had a mixed batting average in all. And yet I think in nascent ecosystems, they're invaluable and just very, very powerful because of the reasons you've just suggested. What do you think are some of the most fundamental structural problems that your entrepreneurs are facing? And I mean this twofold. One is what do you think that literally is just a challenge for them to start a business in Iran? But secondly, and I've seen this in other markets where they're culturally just low. learning how to be an entrepreneur, the amount of hard work that has to go into. The talent in Iran is unquestionable.

But are there just sort of, in these early days, challenges that the entrepreneurs have to learn to be great entrepreneurs? Or are they really just ready to go and it's just a matter of them going? Well, I mean, there are, of course, different perspective to these questions. But I can emphasize on two different sides. So one side is the entrepreneurs themselves. I think the biggest challenge that they are faced with is leadership, is how they are empowered as entrepreneurs internally to take over and accept to go to such a challenging journey, which is challenging.

I mean, nobody has doubt that it has a lot of ups and downs. And keeping a team and building a concrete team and leading a concrete team around it, I think that's the biggest challenge at this stage. And they need to learn how to do it because the rest can be done by trainings, but mentorship. But unless they can't really solve it internally with themselves, getting ready to go to a side journey and having a purpose for it, it would be difficult for them to do it, I think. So that's why we also emphasize so much on softer skills, like leadership, communication and things like that, especially the beginning of the program, we spent so much time with the teams to help them with some. such as skills. On the other side, I think the biggest challenge that the entrepreneurs in Iran are faced with is the word belief. I think that's the biggest challenge that they are believed.

Nobody is believing them. I mean, the government sometimes they don't believe in them. The investors, they don't believe in them. And unless you don't believe in people, like you can't really make a huge change. You have to believe that these guys, because it's all based on projected future. You know, in America, when we think about the government in Iran, we think of it through the lens of, you know, frankly, Argo, and obviously rule of law, corruption. I mean, there are serious issues, as there are in many emerging markets. I was quite surprised to see 31 government accelerators with some very good technology in it. And I was very surprised to talk to ministers in the information communication technology area who talk about it. a hell of a vision to build infrastructure there, to encourage innovation in very serious ways.

Are you feeling that on the ground? We have been feeling it over the past couple of years, especially after the election, that the government is really keen to know how they can lift the barriers. I mean, like anywhere in the world, the government has to focus on infrastructure instead of like getting so much engaged with the startup communities and entrepreneurs. But I think the government has the real intention to help, and in some parts they have been able to do it. We now have initiatives which are supported by government to promote the startup scene. They believe that entrepreneurship is the right solution to most of the challenges, both economic and political and all this.

So we have seen a huge improvement in the region of the government and in their approaches. on how they can help the entrepreneurs. Tell me a little bit about some of your favorite. Well, I don't want to say there are no such things as favorites. But just tell me about a couple of the recent cycle of Avetek companies that are intriguing you. So, for example, in the first cycle, we did have different startups. We did have a startup which was basically a food delivery platform, an online food delivery platform. which was absolutely targeting a local market, trying to create a local value.

We did have startups which are not clones of successful models. For example, we did have a startup trying to do something in sharing economy so people can lend their stuff together to each other. But we did have an application trying to help people choose their favorite music in public locations, for example, which was coffee tunes, which many of them are published on the website of AWATIC. So I can tell that there were a diverse set of startups in the first cycle. I just came back after being in town to Istanbul.

Turkey, of course, is a remarkable market. The food service there, the seamless of Turkey, is a company called Yemasepeki, which just got acquired for over $650 million. dollars. And there have been several multi-hundred million dollar exits there. One of the limits on Turkish startups, and I wonder if this has a limit in all with Iran going forward, is that not that many people outside of Turkey speak Turkish. So, you know, do you find that Persian is obviously a language of Iran, but do you find that folks are thinking now with the global economy coming that they're trying to think about things in English or are they thinking

about how to reach other emerging growth markets. Is there any limitation on the language as a unique thing for Iran? How do you think about that going forward? Sure. Language is absolutely a barrier, but I don't find it as the biggest barrier. I think the biggest barriers is the local challenges that building a business has in this market, from understanding the dynamics of the market, the perspective of the customer, how you want to do the operation, which is absolutely.

Every emerging market has its own, you know, dynamics in their own market. So this, I think, is the biggest barrier to understand how the local economy looks like. Going back to a question, I think we didn't really talk about it, is that what would happen in Iran once the sanctions are lifted and then the international companies will start moving again. At one level, you've articulated almost a strange benefit that startups have have by sanctions, meaning they've been able to build things without a lot of global competition and build. some very strong enterprises doing it. If sanctions come down, obviously the big global players will be in very, very quickly. We see Google, Twitter, Facebook, LinkedIn all over the world right now. I had someone say something very interesting me about India, though. They said to me that if you're very locally focused, the big players have had trouble. So, you know,

Facebook, Twitter, LinkedIn, they tend to be saying in a country like India, they tend to be the LinkedIn Facebook and Twitters of India. But there's a really, reason why Flipcar is doing so well there, which is you really need to understand locality to be able to succeed. You can't just jump in overnight. And I'm wondering, if the sanctions come down, how do you look at the Western companies and Asian companies coming in? And what do you think are going to be areas that Iranian companies not only will hold very strongly within Iran, but we'll be able to enter the global market more? I do have my very personal perspective on this. I believe that even if you're a lot of the global market more. I

believe that if a country has specific competitive advantages in specific sectors, the wealth and the value has to be created by the local community. And for example, if Iran doesn't have, for example, it's just an example. If we don't have real competitive advantage in producing cars, for example, Volkswagen entering to the market is an absolutely great opportunity. If there isn't any competitive advantage. But the challenge for entrepreneurs, for local entrepreneurs here, would be creating absolute barrier to entry by creating domination. So that's what happened to Filippaqar, I think, because Filippaart was not only solving the local challenges perfectly,

but also over time, before Amazon steps in, they have been able to get some market share, and over time they have been able to change it to market domination. So I think local entrepreneurs, the biggest challenge for them, is that until the sanctions are lifted, which I should even emphasize that not all companies waited until sanctions be lifted completely. Some of them has already started moving in the country,

but they have to work hard, and they have to try to create barriers to entry for them if they believe that they have the competitive advantage of doing it much better in the local market. So you mentioned something parenthetically that to me was one of the maybe two or three biggest takeaways I had. there, which is, you know, Americans tend to think, like, sanctions is about America, and America will decide this, and America needs to be there. And frankly, historically, there's been truth

to that. To make it in technology globally in the last 20 years has meant to make it in America, if not in the West, right? I mean, even hardware providers like Sony or Samsung, you know, you had to make it in America because that was the market for it. But all of a sudden, we're seeing, We saw it with Alibaba, and we're seeing it more and more, that companies and other countries are becoming very aggressive. And you mentioned, and I saw this everywhere when I was in Tehran a couple of weeks ago, the rest of the world is showing up. I saw Chinese everywhere. I saw Germans everywhere. I saw Scandinavians everywhere.

I saw Indians everywhere. And you touched on that. I mean, talk about what other countries are doing and what they're exploring in the Iranian ecosystem now. There is a well-known company Rocket Internet, which has already started operating in the country, a German company, which is basically cloning the successful models in emerging market, where the ecosystem is not really bright that local entrepreneurs be able to create it. But they haven't really officially talked about it. But they have been operating here and trying to build startups. Some of them, which is already existed by local entrepreneurs. Some of them haven't been started yet.

But that's just an example. They have been operating since the last couple of months, and they are now spending a lot of money to be able to create market. to get the market share on those specific markets that they have targeted. Samsung phones are everywhere. HTC phones are everywhere. I hear ShowMe is coming in. So that's in the internet, the startups.

But we see, yes, we see that Samsung, LG, Sony, all these companies are hugely working here. They are having huge market shares in the country of 80 million population. So it's a, this cuts across the economy. This isn't just about startups, most in, as you know, So people that I've met with in Toronto, both trips that I've done and around the country are not shy to use the word corruption and a lot of the issues that are true, of course, in many emerging markets. China has been wrestling corruption at a magnitude that's almost hard to conceive of.

And so it's not that this is unfamiliar territory, but I can tell you when Western investors anyhow look at new markets to enter, rule of law is essential, the ability for people to move themselves, goods and services is essential. The ability to repatriate capital is essential. The ability not to deal with corruption is very hard and important. Can you just talk a little bit about how you think we should be thinking about Iran now and knowing full well that the next couple of years could change? And it could change badly as well as positively. How would you have us think a little bit about the kind of ability of functioning and rule of law there. Sure. So there are a few issues. Unfortunately, Iran doesn't have a good rank in doing business

at this moment. But as you just said, it's like any other emerging market, which doesn't have a top rank, but it's having a positive progress. What we have seen here is that, for example, the low and the regulations has created a lot of barriers for entrepreneurs, both in the market perspective and also the operation. So talking about examples, for example, creating a company is still not something that you can do very quickly. So that's been one of the challenges we have been facing with at Ava Tech. For example, creating a company has taken up to four to five months. sometimes like going back and forth with the documents,

which is not good. But government is having the specific campaigns. And it's also not only government. There are lots of NGOs trying to advocate on specific issues, which they believe that are barriers to private sector and trying to change that environment into a better one for the private sector. But didn't get your question specifically like, is it how we think that this would change over time?

Yeah. I don't think I have the real expertise to answer that question, but from what I observe is that having the government is very keen to solve them, of course, much more agile than the previous government. I think the progress would be there and it would get absolutely better. There is lots of lacks. Still, IP is a big issue here. But there are different initiatives and different advocacy campaign to address. them. You know, also one of the great advantages that are built in the United States, particularly over the last maybe five or seven years, there's just so many platforms where entrepreneurs can build businesses very lightly. I mean, our access to cloud computing has had an enormous ramification for startups overall. Sharing economy platforms have been profound. As we've alluded to before, you can make or break a business by accessing APIs and things like Facebook and Twitter. That's still pretty nascent there. How do you think about that as a benefit or challenge for the startups in your backyard?

I think considering those existing platforms and as required infrastructure for entrepreneurs, I think we are pretty at a very low level with this. But there are platforms being made. For example, going back in time, if you are an app developer and you want to serve an application in local market, there wasn't such platform of like coffee buzzer, which we just talked about it. But now there is a platform where 15 million, more than 15 million, users are already using it and 5 million people are using it every day, like daily users.

So those platforms are being made. Still access to Twitter to advertise, Facebook to advertise, Google to advertise doesn't exist in the country, but there are, for example, a platform of local display ads network, which is serving more than 60 million banners every day. But these local platforms are being made. On the other side, we see that the cloud is becoming very important. and the private sector has serious plan. The government is trying to subsidize

to create different data centers and cloud services in different regions of their country. So the infrastructure is improving. The penetration of the internet has changed. We have now one of the highest rate of internet penetration and smartphone penetration. I've just heard it from the CEO of a mobile operator here, the leading mobile operator,

that every month there is one million smartphones being added to the network of the country. So this is a huge growth. I mean, in terms of payment, although there are lots of services to be improved that doesn't exist. For example, the economic of subscription doesn't really exist here. But there are initiatives to solve those issues and adjust those issues. But comparing it with the rest of the region, Iran has one of the highest online payments

rates. For example, now the top websites are now exploring. 20% cash on delivery and 80% online payments, which is huge. I mean, comparing it with Arab countries and even Turkey, it's a huge rate. Yeah, so those infrastructures are really changing rapidly in the country and hopefully over time, when the sanctions are lifted, there will be more existing platforms that we can use in global level. And then that's where the entrepreneurs would get a kickstart to build a startup and create a value.

In some respects, the biggest surprise I had year over year was that while broadband penetration and mobile connectivity was as high, if not higher than any emerging market I went to, things like 3G, 4G were still very, very low. And folks told me a year ago that they were going to row out aggressively 3G, 4G, but other business people said, nah, they'll take their time. It's risky. I don't think they'll do it. I'm there a year later, and there are 20 million plus now subscribers to 3G and 4G out of a country of 80 million. and I think they'll get to everyone, you know, in very short order. I think when people are walking around with supercomputers in their pockets, it changes everything. Can you talk a little bit more about how mobile is changing the dynamics in Iran generally

and for the startup ecosystem that's going to be very much a mobile-first ecosystem? I'm sure that over time it's going to be mobile first. Seriously, we have seen a huge growth in mobile adoption. I mean, Iranian people are very tech-savit. They really use technology products. The reason that it has exploded now is that Iranian mobile users and the mobile penetration in Iran is more than 120%. It means that everybody has more than one phone. There are people who have more than one phone.

But the access to Internet over mobile was kind of limited to some regulations that it was only provided to a third operator, which hasn't really used that privilege very well, in expanding. the 3G connection in the country. But last year we had this finished. So you can't imagine that in a country with 80 million population where you have 120% 10020%

mobile penetration, suddenly everything changes to a smartphone. Talking of an example, in the first cycle of Awatik, we had a startup which was serving females at home, helping them to and empowering them to create handicrafts.

Seeing a huge massive traffic by females at home, by women at home, coming from mobile. And that's the reason these guys started building a mobile application instead of rushing into a website. Because talking to customers, they said that I'm using my tablet and I'm using my mobile and I don't want to use my sounds desktop, for example. One of those frequent questions I've gotten as I've traveled around the world with this is I think it's actually a silly meme, but you hear it all the time.

people will say, you know, what's the Silicon Valley of X? And while great cities matter and network effects of talent, the more people who are good, the more people who are good to want to be there is not irrelevant. I actually have sort of become convinced it's the wrong question that when you have a mobile empowered anywhere, that that's an opportunity for innovation, that's an opportunity for people to solve problems, that's an opportunity for people to take control of their economic futures. How do you think about that question when you look at Iran? Is Tehran, in fact, to be a Silicon Valley or is it really a broader different kind of approach, a new way to think about economic development, job creation and innovation and actualization in

your country? Bradfield was just doing blog post on it. If what Silicon Valley is, he was calling it as a religion, a state of mind, as whatever it is it is. But I think, I think talking of Silicon Valley as an environment where innovation really boosts and can create wealth in a region, I think over the past, and seeing the progress of the past few years, I believe that Silicon Valley is being created in Iran, Plata. And we have observed, we have been starting observing it. I'm not saying that it is becoming Silicon Valley. Maybe even the vision is not there. but we see that more innovation is happening and we see that more businesses are being built which are to some extent even disruptive to traditional industries and we are we have already started observing it and it's very interesting to see it and I think 2015 is the tipping point for for Iranian entrepreneurs I don't use this word lightly but as I've gone to meet you and

a lot of your colleagues but you know hundreds of them in my brief trips over there I think you guys are heroes and the women are heroes because I think that you're not only creating a new narrative of because you've got access to this technology and are integrating in the world almost regardless of what governments do and top-down institutions do, but you're unleashing amazing talent bottom up, which if we had this conversation five years ago, 10 years ago, I think it would have been near impossible in many parts of the world, not just Iran. And I think that this is a very exciting narrative that most of us in America don't get a chance to see, but when we hear it and understand it, and particularly those of us who have

built startups and we've used technology, we know what can happen with it, I think most people are going to listen to you today and think, of course, why wouldn't it be this way? As opposed to before this conversation, people have this one view of so many parts of the world in Iran in particular. So it's just been a joy to spend more time with you. And I wish you the best of luck in all that you're doing. Yeah, thank you. It was really a pleasure to talk to again. As you emphasize, I believe that entrepreneurship is a common language, which has no border, absolutely. And we see a lot of similarities between entrepreneurs based in Silicon Valley and the one based in Tehran. And we believe that by leveraging and synergizing those type of characteristics, we can all get a better world.