From The Investor Desk: KBW Ventures’ Ekta Tolani On What MENA Founders Should Prioritize Amid Market Shifts

Moments of instability often bring sharper scrutiny to how startups are built and managed. And in such situations, entrepreneurs would be wise to refocus on the fundamentals of their businesses.

That’s the crux of the perspective that Ekta Tolani, Chief Investment Officer at the Dubai-headquartered KBW Ventures, shares in this edition of From The Investor Desk, where she outlines three priorities that entrepreneurs in the MENA region should keep front of mind as they navigate shifting market conditions. Here’s how she breaks it down:

1. Prioritizing revenue and runway above all is a good rule of thumb.

“While the venture capital market is growing, 80 percent of startups still fail within their first two years often due things that can be addressed like insufficient market research, weak business models, ineffective marketing, and financial mismanagement. Given the current scenario in the region, extending runway through revenue is not just fundraising; it is a survival imperative.

It is always somewhat of a cautionary tale when you hear about startups that manage to raise big rounds, and seemingly have resources to spare, and so, they are splurging. You hear about luxury lunches, plush high-end perks, and more, and the co-founders might even have generous pay packages. Then suddenly, one year later, these same startups can find themselves cash-strapped, because they spent from too comfortable of a place, and now cannot raise, because the sector they are in isn’t as hot or in demand as it was 18 months ago.

It is always a good idea to conserve your resources, and think about worst case scenarios in terms of funding and market downturns. Investors ask about burn and runway, and it really is a telling metric. This isn’t only true for GCC-based startups, it is true for all startups regardless of geography. You never know what pressures you might be facing in the market—supply chain, staff, weather. Anything, really, can upset your plans; so, it is very important to be financially prepared for eventualities.”

2. Double down on your customers.

“A strong business focuses on elevating customer service—it is important to retain clients, no matter the scale, to help you in good and bad markets. A solid customer base can help your business weather uncertain market conditions.

The better your client relations segment is, whether you have a product or a service, the more likely you are to have word-of-mouth referrals when people consider who to go with in a tough market. Your investors will be interested to hear of your ever-increasing customer base, and your retention tactics in a somewhat uncertain market.

Prove your model locally, align with national priorities, and architect for regional scale. The GCC is one of the few markets where government, capital, and demand can all move together, but only founders who build with discipline and cultural intelligence will fully capture that advantage.”

3. Ensure a solid communications schema is in place.

“In times of uncertainty, make sure that key instructions and protocols are cascaded to all relevant team members to ensure that operations continue to run smoothly.

Put in place guidelines on who to contact for help, and who the sign-off authorities are for changes in operations that might be needed in uncertain conditions.”