Ever since we started TechRasa, we’ve been receiving quite a lot of emails from our fellow Iranians living abroad asking us questions about the business opportunities here and the circumstances in the country. If you’ve read a couple of our articles on TechRasa, you may have noticed the positive vibe that we try to display towards the tech scene in Iran. But of course, it’s not always rainbows and butterflies. Entrepreneurs in Iran face many obstacles here that sound pretty odd to people in other countries.
I personally know many entrepreneurs who had lived abroad for most of their lives, but they’ve decided to come back here and start their own business or even in some cases, invest their own money. Many of them have built Iran’s top startups in different sectors, and some —as we’ve witnessed in the past years— left the country again after getting frustrated and losing hope. If you want to move back to Iran you should consider all aspects of this life-changing decision. Before anything, I’d suggest you spend a couple of months studying the game, talking to entrepreneurs and expats who are currently working here and the ones who left again. The best way to do so is to come here yourself and see the startup scene, if you don’t want to get caught in a loop of confusion.
Entrepreneurs in Iran face many obstacles here that sound pretty odd to people in other countries.
Here are the experiences of two Iranian expats on Iran’s startup ecosystem:
When talking to these “potential-returnees” I’ve noticed four major assumptions and concerns by them about coming back to Iran.
Assumption #1: My business could get blocked by the government in a snap
It has happened, and no one can deny it. From blog services to video-sharing platforms and recently two of the country’s recruitment platforms have been blocked. What’s surprising is that many of these services were blocked (filtered) due to disputes and complaints by a government body. Aparat, known as Iran’s YouTube has been blocked several times due to complaints by IRIB which is owned by the government and has the monopoly of domestic radio and television services in Iran. Aparat is currently back on track and is considered one of the most successful startups in Iran, but its founders sure had to fight their way since what they started was a new concept in Iran.
Jobinja and 3SootJobs, two Iranian recruitment platforms for professionals were also recently blocked due to a complaint by a government body. A few days later the young Iranian ICT Minister, Mohammad Javad Azari Jahromi got involved in this dispute and stated that these websites will be unblocked and from now on these kinds of conflicts should be resolved as soon as possible by the Legal Assistant of the Presidency before the judiciary. Now, this is a new phenomenon in Iran’s startup scene that such a conflict has been resolved in less than a week with the minister’s personal involvement. A few years ago no one would have imagined seeing such quick reactions by the government towards supporting the startups.
Note that registering your website on Samandehi.ir and receiving the e-Namad certificate for e-commerce platforms is a must if you don’t want to see your website blocked. Samandehi.ir will inform you via email or text message if your platform could potentially get blocked if you don’t resolve the issue they’ve asked for.
Assumption #2: The infrastructure is not good enough
Let me rephrase that. The infrastructure is not perfect, but from what we’ve seen in the past couple of years it’s improving rapidly.
Iran still lacks sufficient and high-standard local data centers, which is a must for tech companies. In 2016, Afranet launched the country’s first private cloud data center which faced downtime and paused the activities of many local tech companies.
However, by looking at other aspects you can see the massive growth in the country’s infrastructure. The latest statistics until September 2017 shows that there are over 47 million mobile internet users and 10.49 million fixed-line internet users in Iran. Also, the current penetration rate for the active mobile subscribers in Iran is 106.43 percent, which ten years ago, in 2007, this number was only 39.5 percent.
In 2009, Iran’s Internet bandwidth was 31.8 gigabits per second while in 2017 it reached to 6,800 gigabits per second. International Internet bandwidth in 2007 was 6.05 gigabits per second while in September 2017, this number reached to 1,114 gigabits per second.
We have lived these changes in the past decade. We may not have always been on the right path, however the current government is determined to make the infrastructure substantially better for tech companies. See ITU’s ICT Development Index (IDI) report for more information regarding the improvements of the infrastructure in Iran.
Assumption #3: The startup ecosystem in Iran is immature
Don’t expect anything similar to the ecosystems in Berlin or London. However, comparing it to other startup ecosystems in the region such as Turkey, you’ll notice its fast progress. The startup ecosystem in Iran is young, kind of isolated, and naive! You don’t see much innovation in it, and due to the absence of international players, we see many copycats, which I don’t consider a problem at this stage. But being immature is not always bad!
There are many traditional businesses in Iran which could get disrupted, but you have to prepare yourself to pound the pavement. Snapp and Tap30, the two major privately owned ride-hailing apps in Iran along with other players have faced (and still are facing) pressure from many organizations including the Taxi Union, IT Union of Iran, the Iranian ICT Guild and Tehran’s Municipality. Tehran is currently the largest ride-hailing market outside of Chinese megacities, and Snapp is dominating the market with nearly 30 million rides per month only in the capital of Iran.
Being a leader in a market is sure not an easy job, but anyone who paves the way sets the policies for the newcomers.
Assumption #4: It’s not easy to attract foreign investment with the U.S. sanctions still in place
It may not be easy, but it’s happening. Almost all the major players in Iran’s startup scene have attracted foreign investment despite the sanctions. Germany, Sweden, Netherlands and South Africa have had some of the largest investments in this sector, some directly and some through JVs and VCs.
The rise of smartphones, use of mobile applications by ordinary people, growth rate of cryptocurrencies and the popularity of startups such as Digikala (Iran’s Amazon) and Snapp has also brought the attention of local traditional investors to this sector. There’s enough money flowing inside the country, so it’s just a matter of attracting them to the startup scene.
Maybe (read probably) choosing Iran for business with all its day-to-day problems is staggering and an unorthodox choice. But one thing’s for sure, if you play your cards right in this untapped market, the outcome is certainly prolific.