On The Right Track: Reflections On One Year Of Catalyzing Saudi Arabia's Startup Space It's been a year, and we're just getting started.

This article was co-written with Tammer Qaddumi, Founding Partner of VentureSouq.

Any business can be distilled down to its two core components: capital and labor. There is always variability in the proportion of the two, how they work together, and what ultimately gets produced out of these inputs. This variability is what leads some companies to succeed, and some to fail. Basic microeconomics. We can trace successful instances of productivity, growth, and innovation in history across these two factors. And based on those cases, we can build a model to optimize those two factors to create not only a successful company, but a successful economy.

Think about what's happening in Saudi Arabia in this context. No doubt the message of the size of opportunity in KSA is out- the founder and CEO of Arabnet Omar Christidis does a great job summarizing it in this piece he penned for Entrepreneur Middle East. Indeed, we at VentureSouq -a Dubai-headquartered venture investing platform- had teamed up with the Riyadh-based Business Incubators and Accelerators Company (BIAC) to launch a new investment unit to catalyze the Saudi investment space at Arabnet Riyadh last year.

But this is more fundamental than specific opportunities defined by "project size," or other KPIs. Really, it can be viewed as a once-in-a-generation opportunity to optimize the two key inputs for a business or an economy, in a country that has ample amounts of both. We're witnessing now in KSA massive changes to these inputs:

> On the "labor" side, a huge number of individuals pursuing founder/ownership opportunities, and a general shift of mindset from "employee" to "entrepreneur."

> On the "capital" side, the introduction of significant amount of new investors and new money into the emerging sectors of the economy, either redirected from other pockets of capital, or brought in from the outside.

Related: Putting The Middle East Back In The Middle (As The World Order Shifts East)

From our vantage point, these changes are most pronounced in the sub-segment of the economy generally characterized as the "venture" space, and that's a great thing for us, because that's the space where the majority output of BIAC projects land, and where VentureSouq is focused on. However, we need to recognize and accept that developing a model for any company or economy is iterative. Optimization takes time, and effort. Despite the abundance of both factors, technology entrepreneurship in KSA is still new (and in fact, in the broader MENA region as well), investing into entrepreneurs is a new thing, and the way these two interact with each other is therefore also new.

Just skim through the Vision 2030 Roadmap. It's not hard to conclude that the government is pursuing innovation via essentially all its ministries and other extensions. As this is a domain where BIAC is very comfortable in, the labor input would be supported by the proper tools and programs, but for the capital input, the way entrepreneurs and investors communicate, a partnership between BIAC and VentureSouq was key. And that's where we started. We're not after soft activities. We're here to roll up our sleeves, and take the lead on direct deals and programs. Over the past 12 months together, we were able to:

> Vet, structure, and package eight of the highest performing early-stage companies in KSA, leading rounds totaling SAR60 million of new capital into those businesses. Those businesses are now valued in excess of SAR300 million.

> Engineer two joint ventures with more mature technology companies which both serve as backbones for the new tech-based economy: one, a technical training platform (TTRO), and the other, a deep-tech R&D business (Simera)

> Educate and facilitate investors, converting traditional investors into venture investors, guiding them on what they should expect out of startup investments, and what the entrepreneurs expect from them

> Work hand-in-hand with matching and co-investment programs like Saudi Venture Capital, volleying structures and legal terms back-and-forth to ensure that how they invested was robust and logical

> Build and executed programs on a range of subjects

These indicators help us prove that we're actually getting stuff done, and that we are on the right track. But what's more important than any of the specific achievements is what we're here to help build. A system that works seamlessly for both entrepreneurs and investors, from anywhere in the world. This is what will help KSA, and by extension the broader MENA region, optimize capital and labor.

And we're just getting started.

Related: The Whole World Is Open For Business (And We In The MENA Should Be Right In The Middle Of It)