18 Luglio 2010

Saed Nashef venture capitalist in Ramallah

For those who do not have access to the Italian Edition of Wired, I have made a rough translation of the story I wrote about Saed Nashef, who is launching a venture capital fund that will fund Internet and ICT startups in Ramallah, Palestine. Our crew was joined by a TV crew from Current TV that filmed the interview with Saed. Here is a preview.

Saed Nashef. This man has a dream. Funding a new Silicon Valley, in Palestine.

In Ramallah there is a vibrant, young and talented community of developers. A venture capitalist, fourty years old, ex-develope,r has gone back home from the United States to make it fly. With an Israeli partner. Because there is no peace without economic development.

By Gianluca Dettori


A future without conflicts in Palestine, goes through the Internet and its ability to break barriers. Because investing on young developers is one of the few forms of economy that can be practiced in a country in conflict, Saed says.

“I grew up thinking there was some kind of barrier around me: a wall I would have never been able to penetrate. Whatever I would have done in my life, I knew I could not build my future with my own hands.” Saed Nashef, well trimmed beard, firm eyes, talks calm. Born fourty years ago in East Jerusalem, in a city militarly occupied right after the “six-day” war.

“It was a tough environment, entrenched with violence all around us, something we kids could not understand. But the biggest oppression I felt then, was knowing it would be impossibile to dream for a future.” Saed today is a venture capitalist: brings technology companies to birth, investing on their founders and helping them grow. The fund he’s launching – Middle East Venture Capital – aims to invest 50 million dollars in Ramallah and the West Bank. Because there can be no peace where there is no development, and there is no development where the possibility to follow our dreams is not given.

With an authorized driver and the crew, we penetrate the 700 chilometers wall that surrounds the Palestinian capital to interview him. With little sleep from a late night due to difficulties with the local photo equipment rental shop. We meet Saed in a warm early morning, in a cafè right in the Middle of Ramallah. The same location where, in March 2002, the Italian photo reporter Raffaele Ciriello was shot dead.

The Nashefs, have been in Palestine since ever, his father managed the local pension office since the occupation of Jerusalem in 1967, mother use to teach in school and watch for the house. Saed is the youngest of three: a small middle class family for the muslim standards. “For my father, education has always been crucial. We where not rich, but we all went through University. I did my elementary and junior high at St. George, one of the many schools created by Christian missionaries in Jerusalem. Most of teachers are Arabs. Religion is also part of the program: in those hours each class would divide up and everyone could follow his own cult. After high school I wanted to travel but I had no money”.

That’s how Saed starts to work in a West Jerusalem hotel, a mostly Ebrew area, where he starts interacting with whom until the day before was the ‘enemy’. It’s a moment of transition, one of those times in life dense with changes and opportunities. “I grew up with my own idea of how things are, to later understand the value of dialogue, as a mean to change things around me”. Saed started to meet with some friends: groups of dialogue with people from different cultures. Jews, Christians, Arabs, but also many foreigners in town to study, started to meet in Jerusalem to discuss their own differences. It’s 1984, the first personal computers pop up in the shops and Saed Nashef gets a book as birthday present from his brother: “Programming in BASIC for Sinclair”.

“I was blown away! I was fascinated by the idea of incorporating my knowledge into a machine and writing its commands: something I could have total control over. I didn’t have the money to buy a computer and therefore I used to write code on pieces of paper: then I would read and execute the program in my mind in order to debug it. I use to hang out the afternoons at the few computer shops in Jerusalem. One day the owner of one of them was letting customers try its machines: finally I could put my hands on a real Sinclair ZX Spectrum e I was writing real software code. The guy was shocked by my ability to make it work and asked me to come back any time I wanted and stay as long as I wanted. Which I did”.

<PHOTO. “I hope to be remembered in the future as one of the pioneers that gave his contribution to develop the technology and economy of Palestine” Saed Nashef, venture capitalist.>

Saed takes a breath and sips slowly its cup of tea. We are at the cafè Stars&Bucks, a place that mimics ironically the style of Starbucks: a place where, right after University, students meet for a coffee, palmito burger and smoke some Narghilè. While the photo crew sets the stage, Saed’s mind goes back to 1985, when the first University programs in Information Technology where started to be offered in Jerusalem. “There where just a few, with very high standards and a very selecting entrance, particularly if you were arab. I was not admitted.” In the same time the dialogue evenings had grown a large community of supporters and among them Saed meets Joyce Klein, a Jewish American, theater producer in Seattle.

The two decide to transform the community into Step,  a real theatrical group. The discussion about differences first happens on the stage and then later among the audience, with a strong simple idea: interaction is the first step towards understanding differences. It’s a success.

Joyce goes back to America and after six months calls Saed: she convinced a producer to finance a US tour. A few weeks later, Step takes off and lands in JFK for a tour that will cover New York, Boston, Chicago, Seattle and Vancouver: it’s like landing on Mars. At the end of the trip Saed decides not to loose what will probably be his only chance in life: he moves to Huntington Beach, California. To pay for college he used to work at a gas station, owned by Sam, a Libanese friend. One day his boss is looking to buy some software for 4.000 dollars, eight times Saed’s monthly salary. He offers to develop it himself. Promoted on the field: Saed he’s in the back office, some macro programming for Lotus 123 and in ten days the application works fine. Six months later Sam gives him an envelope with 1.000 dollars.”You saved me 4.000 dollars”, Sam told me, “these are yours. But I also wanted to ask you one thing: why in hell do you work at gas stations instead of doing software, Saed?”. Suddenly I realized for the very first time the unthinkable: I could make software and earn money for it! I really never r
ealized before, that my passion could become my job. It might seem absurd but when you grow up without being able to dream, you don’t see the opportunities, even when they are in front of you”.

Saed changes gear and things start to happen. From community college moves to Cal State University Long Beach among palms and surfers: degree in software engineering. The plan is to study one semester and work the other to pay for school. “One summer a company from Las Vegas that was in the slot machine software business offered me a job. I was packing my bags when I received a call from a guy who read an old post on Compuserve. It was an ironic geeky resume written with a friend a year before. The guy claimed to be a Microsoft recruiter and I was about to hang up, since I thought it was a joke.”

It was not. The next day he’s on a flight to Seattle and one month later joins the Visual Basic team. He has talent and moves to Office, Excel and Works in order to finally land in the marketing group, his job is to convince developers migrating to Microsoft technology. On his card “Technical Evangelist”, ironic destiny for a muslim.

“I could not believe it: the biggest software company in the world hired me. I never had my own computer until then and still had not finished my University. In those years at Microsoft I had the opportunity to go through an incredibile experience and grow, the future was now full of opportunities”. In 2000 its time to change and Saed joins Checkspace, a startup in the online payment business, founded by two friends, at the time the only competitor of Paypal. The team is convincing and raises 12 million dollars in venture capital. Four years later the company and its 32 employees is sold to a larger group. Just a few weeks of sabbathical and Saed is already on the move. This time to found his new startup, Equiom. The idea is to be consultants in the field of innovation. Equiom wins Microsoft as first customer and in a few years the company grows from two founders to 75 people. “Things were going well. I decided it was time to go back home.”

Eighteen years passed since Saed left Jerusalem. In the mean time, while moving from one job to the other he married Bushra, a Palestinian girls met in America. “My wife and I wanted our kids to get to know the rest of their family and their heritage. I had promised her I would not have worked for a while. But after a few months I was already ‘cheating’, hanging around the technology seen in the West Bank and discovering how vital and interesting it was. We decided to open a base for Equiom in Hebron. The first job was a software application for a startup: we displaced five Indian developers with three of our guys. They finished the job faster and with a much better quality at competitive cost.”

There is a vibrant community of some thousand engineers in Palestine, thanks to 13 education institutions of great quality. In the information economy, the developing countries have a competitive advantage: they can produce highly motivated young professionals that cost a fraction of their Western peers. The sector generates today in Palestine 9 million dollars in exports and according to market research will reach 500 million dollars in a few years. Thousands of jobs and precious cash riserve for a difficult land, in which any form of physical commerce is practically not feasible.

In the Arab countries the Internet market is expanding fast, with growing opportunities from all sides: content, online advertising and mobile. In August 2009 Yahoo! acquired Maktoob, a Giordanian startup. A 100 million dollar deal. Clearly the attitude of investors toward Palestine, perceived as war zone, is very low.

Things change when Saed meets Yadin Kauffman, Israeli veteran venture capitalist, co-founder of Veritas Venture Partners in the nineties. Israel is today one of the most preminent technology hub worldwide.

“I started as associate in the first venture capital fund of Israel, Athena: 29 million dollars invested in high-tech in 1987. We did around twenty deals,  bringing several startups from idea to Nasdaq”, tells me Yadin, Harvard graduate in Middle East studies. A guy who has given birth to companies now public with market capitalizations above one billion.

“I met several people and immediately realized that the quality level of the Palestinian scene was high. People of great value: the key ingredient of venture capital. With Saed there was immediately great chemistry and sharing of scopes: to create a fund that would invest in the West Bank and Ramallah. Providing capital, network and knowledge and helping startups to access the global market while creating an industry. It happened in Israel in the past 15 years, why shouldn’t it be possible in Palestine?”

Saed is targeting to open before the summer a fund for Palestine, that would invest 50 million dollars. With that kind of money, you can fund dozens of startups. He already has gained official support from Salam Fayad, Prime Minister of the Palestinian National Authority and the European Investment Bank. He’s back and forth with the US, where President Obama has invited him officially to represent Palestine in an entrepreneurship summit. He knows also that upon the success of his iniziative can depend the future of the Palestinian economy.

“Empowering the intellectual resources of our young developers is one of the few forms of economy that can be practised in Ramallah”, tells me Saed: “I realized that I was in the position to impact greatly the local economy by launching a focused venture capital iniziative”. And if from Palestine a new Google will be born, that will be greatly because of him.


Techno-buzz in Ramallah

- 58,3% of people have an email account

- 50,9% use a computer

- 49,9% of computer users goes online

- 50,8% own a fixed line

- 81% a mobile phone

- 32,8% own a computer

- 15,9% has Internet access


Palestinian startups

150 active companies

4.500 workers