Lebanese healthcare entrepreneurs lack resources and skills

The challenges faced by the healthcare start-ups in Lebanon are some common to the global healthcare start-ups market while others are unique to the local scenario. It brings with it its own set of benefits and challenges.

Lebanese healthcare, start-ups
Funding is a major obstacle among the Lebanese healthcare start-ups. © All rights reserved

Lebanese healthcare quality does top the list when it comes to the Arab world, as Lebanon is into “testing new medical technologies”. Given the current scenario, the country could explore the entrepreneurial ventures through “healthcare start-ups”.

In fact, the field of entrepreneurs in Lebanese healthcare sector was approached by the Executive to look into the challenges faced by them which still needs to be addresses for creating a successful start-up healthcare industry. The healthcares start-ups report of 2016 by Wamda Capital informs that “MENA is growing its first generation of health entrepreneurs”. It means that the region is going through “first business and economic wave” in the said industry which has the scope of expanding into a “vast range” of “entrepreneurial opportunities”.

Simultaneously, the “worldwide information technology solutions” on the healthcare front is beginning to enter the “third wave”. In fact, McKinsey & Company, a consulting firm, pointed out that the third digitization wave s likely to generate “incomparably greater implications” which will introduce “robotic surgery and remote diagnosis to mobile healthcare via digital apps”.

Looking at the healthcare sector’s full digitization and its implications on the society as well as the economy, the aim of an “entrepreneurial ecosystem” should to nurture the start-ups initiatives in the healthcare sectors. And the same is applicable to Lebanon as much as in anywhere in the world. However, the local entrepreneurs who interacted with Executive reported experiencing common “frustrations” in the Lebanese ecosystem like “the difficulty of attracting funding and the lack of local talent”.

Weglo is a local “diabetes digital monitor” start-up still stuck in its initial developmental stage, while Spike, a “software application” for helping diabetes patients in their daily treatments, and TrakMd, an “online platform” which connects the patients to search, book and review doctors around the country, have begun to operate in a “commercial form”.

Furthermore, Executive informed that Lebanese healthcare entrepreneurs informed about “similar difficulties” which exists in the “emerging healthcare startups worldwide” besides highlighting issues that are local to “Lebanese market”. The Lebanese healthcare start-ups initially experience “scarcity and high cost of raw materials” accompanied by the lack of local talent and the funding crunch.

Moreover, the Founder of Spike, Ziad Alame points out that the Lebanese workforce has a dearth of motivation which is turning out to be one of the constraining factors. In his words: “There’s a mentality in Lebanon where people don’t really want to work, they just want to have a job where they go sit behind the desk and wait for the day to end.” “[Employees] are selling their time without putting in the effort, which is one of the reasons why we are not seeing startups coming out of Lebanon that are really good.”

As mentioned earlier, funding is another major obstacle among the Lebanese healthcare start-ups, which most of them attribute mainly to the low risk appetite of the investors. The Co-Founder of Weglo, Abed el-Rahman el-Kaderi recounted: “I started self-funding, first using my money to pay for people and acquiring parts for prototyping”.

Next up the list of hurdles which comes once a start-up has crossed the stage of funding sources and development issues is the “legal status within the wider healthcare sector”, the target client pool and the “user privacy”. Speed’s Business Support Manager, Kevin Shoucair said: “Legal credibility is a big challenge for startups since formal institutions are set within the traditional healthcare infrastructure. Health startups also have a great cost coming from establishing security systems, which will ensure the user’s privacy and access”.

However, given the “large portion of the population” living in poverty makes it difficult for the start-ups to “target clients”. Talking about the positive side of Lebanese healthcare start-ups sector, Kaderi added: “The only advantage we have in Lebanon is that it is easier for us to get recognized in the sector, as there are not a lot of competitors”.

Most of the entrepreneurs at the Lebanese healthcare sector agree that the approach to address the challenges faced by them will determine their success especially in the volatile economic scenario of Lebanon. One has to go beyond funding and marketing to ensure success, wherein ethics take them far. Nonetheless, mistakes will be a luxury that cannot be afforded by these entrepreneurs if they were to survive in the market.

Therefore, accuracy of the researches done on the “emerging healthcare start-ups” is of paramount importance.

On the other hand, the investors were also approached by the Executive for learning their perspective on the Lebanese healthcare ecosystem. Likewise, it was seen that most Venture Capital firms of Lebanon prefer investing in “software-based start-ups”, whereby making it difficult for the “hardware-based” start-ups’ growth especially for the “R&D investment”. “B&Y venture partners” is one such VC funds in the MENA region which invests in start-up technologies, while a partner of the firm, Fadi Bizri said: “There is a low to zero R&D environment, so there’s little homegrown innovation taking place which can be spun off into start-ups”.

However, a Managing Partner of MEVP, Walid Mansour also reminded: “With current infrastructure adopting new innovative technological trends, healthcare startups will see greater adoption in Lebanon. [These technologies] will also be more accepted by the government, regulatory bodies, and eventually the country’s biggest hospitals”.