Behind the iron veil

The independent coffeeshop I’m sitting in plays indie music, the walls lined with the abstract photography of a local artists. Bearded hipsters next to me type away on their MacBook Airs. It could be Shoreditch.

As I flip through yesterday’s photos from the family ski-trip to a nearby resort, I notice two young entrepreneurs across the room delivering an enthusiastic pitch to an angel investor. It could be SOMA.

The accelerator I visited this morning was buzzing with the energy of ambitious start-ups in the face of geopolitical uncertainty. It could be Tel Aviv.

And yet, it’s none of these places.

Fortunate circumstances have landed me with a couple of months off, and my restless nature has brought me to this coffeeshop, in a country that for so long has been out of bounds. Iran.

An emerging ecosystem

I’m here to get a flavour of the country through the eyes of those I hang out with wherever I travel: tech entrepreneurs. And what strikes me most about Teheran, is the similarities to other places I know. Despite its isolation, the roots of a system have formed in a very similar way to what I have seen in Istanbul or Vilnius. An emerging ecosystem complete with accelerators, emerging web awards, pitching competitions, and presentations on how to growth-hack your user acquisition. A nice surprise is that about half those working in tech here are women; I wish we could say the same in London!

This whole system has grown in almost complete isolation. Iran is one of a few countries in the world cut off from the international banking and telephone systems. I carry a pile of cold hard cash in a moneybelt, dusted off from my backpacking days, and my phone, shockingly, does not work at all! The political isolation is well known, and well-documented (though the extreme images we see on screen are very different from what I have seen roaming around the city). I’m reading banned books, on my Kindle, by Iranian authors describing the hair-raising experience of living in post revolutionary Iran — akin to Argentina or Chile during the dictatorship. It’s interesting how the situation has begun to improve, and the best way to see this is through reverse migration: people coming back after fleeing the regime. Although far from fully open, attitudes to social issues seem to be rapidly changing. Every time I ask “how do you…” the answer is “we find a way”.

The power of information

One important reason is the internet. Although Iran also has a Great Firewall, people I meet have access to the world through a VPN. Facebook and Twitter are popular, as are Netflix and Hulu. The economic and political isolation of the market has led to strong homegrown champions, the local Amazon, eBay, Alibaba, Expedia and Google Play, in a similar way to Russia and China. In a country of 80 million inhabitants, many of them young and highly educated, $14k GDP per capita, 135% mobile phone penetration (rapidly transitioning to 3G and smartphones), and almost 100% credit card adoption (since the government pays out benefits on cards) these companies ride on nice vectors for growth.

When speaking about entrepreneurial opportunities we often talk about how the world is flat, and being here is a perfect example. While tech can be a tool for repressive governments to exert control, the power of information has far more impact. The local entrepreneurs are very keen to hear my experiences from the countries I have worked and travelled in. I feel real hope when presenting to a group of 100 people and getting enthusiastic reactions to sharing innovative ideas from Israeli startups.

What does the future hold?

On my visit in January 2016, sanctions have been lifted for only five weeks. In many traditional industries such as oil, infrastructure and pharma, business people have already started to swarm in. The hotel I’m staying in, its walls decorated with the portraits of 80 foreign ministers who have visited in official capacity, is busy with people in suits carrying large leather sample bags. While I am there, I read that the Italians have just closed $40B in deals. There are no limitations on FDI and foreign ownership and local businesses are keen to collaborate. While things have been moving a bit more slowly in the tech sector, local teams are starting to see foreign interest.

Of course, the difficulty lies in navigating the political landscape. As in any authoritarian oil country (I used to live in Venezuela during Chavez) there is a hidden power structure that needs to be manoeuvred, though hopefully the internet economy is one step removed from it. Then there’s the uncertainty of political developments. I hope that things will keep moving in the right direction, with further openness, deeper international integration, and moderate voices gaining strength. Local startups and international contacts can only be a force for good in this. And if openness and opportunity post-embargo help bring positive change without spooking the regime into regressing, the future looks bright (as long as a certain Donald J Trump doesn’t get his finger on the button).

And, it helps that the ski slopes are only two hours away…