Why Internet Censorship in Jordan is Bad for Business

Last week I read the sad news about how an existing Jordanian law related to anti-defamation got applied to Internet websites. As I understand the details of the law is that it links defamation with Jordan's press and publications laws, making the publisher liable to ensure all content is within the requirements of anti-defamation (See Eyas's excellent article to get the background). When a website is treated like a publisher, then site owners become responsible to make sure that all content adheres to the law. This means that if I am based in Jordan, I need to ensure the comments on my blog are good. If I create a website that has user generated content, I need to make sure everything is in compliance.

There is a lot of discussion (here, here and here) about how this is bad from the perspective of human rights and freedoms, but I want to look at this issue from the perspective of business impact.  These kinds of laws are just plain bad for business. Let's look at things from multiple perspectives:

Entrepreneurs

As an entrepreneur, I need to make a decision about where to incorporate and how to ensure my company is in compliance with local laws. Based on this law I need to hire staff to monitor all content on the web site. This costs money. Also, I would need to change my terms of service and privacy policies to meet the requirements of the law. This also costs money. I will need to build controls in my software to moderate and monitor content. This costs money. Surely I can pay for all this, but if I were smart, I would just incorporate elsewhere. What a headache! So, all employment, taxes, and IP benefits will get exported. Not good for Jordan!

Investors

As an investor, I am always looking for ways to maximize my investment and reduce risk. Having such laws introduces more risk to any investment, because the startup has to do additional work and needs to allocate a legal budget to deal with any issues not in the control of the startup. To make matters worse, for Internet startups investors make their money though an exit to a larger company. Would a large company want to buy a liability that would suddenly poison their assets? It is hard enough to get acquired. The law makes things harder. Further, an acquirer will probably relocate the business to a location that is more friendly. Bad news for Jordan!

Large Corporations

Think about it, would a large company setup shop in Jordan if there were other options that did not come with the baggage of censorship? Given the risks, most large companies would just setup shop in a nearby location to avoid these issues. The Jordanian market is small, but is an ideal location and has an amazing talent pool that would serve the entire region. However, when weighing the options, especially around complying with censorship laws, it just does not make sense. Bad news for Jordan!

Creativity

Anyone who has worked with creative people knows they are generally eclectic and do not always conform to the norms. Any successful Internet business is based on its in house expertise and creativity. Having censorship rules, just makes it difficult to innovate because artificial walls are put up. Creativity and innovation is one of the keys to building a successful business. How do we expect people to be creative and push the envelope when they are surrounded by virtual walls. Lack of innovation makes a business less competitive and less likely to succeed. Bad news for Jordan!

Access to Information

I worry that such laws will introduce new kinds of controls for the access of information into the country. Imagine a world of firewalls, and censors scanning the web for inappropriate content. The occurrence of such things may trigger the blocking of information. Access to information is critical to our success. Surely there is bad content out there, but there is far more good and useful content. The Internet has changed how we learn. You can not only search for content, but today you can engage with experts to learn more. For example, a non-profit I co-founded has created a Q&A platform (http://answers.yallastartup.org/) for people to learn and engage with one another.  Let's not take that away.

My view is that anti-defamation laws just need to be separated from the medium that delivered it. Mediums will come and go, and we should not impose restrictions on the innovations that will create the next knowledge economy in the region. I love Jordan. I believe in Jordan. I want it to be great! Let's change these laws. Our future depends on it!

Thoughts from my trip to Abu Dhabi and Amman

I had a great time in Abu Dhabi and Amman for both the MIT Pan Arab Conference and Amman Global Entrepreneurship Week. It was really an educational trip since I have not been connected with the entrepreneurial scene in the MENA. I saw two different approaches with regards to entrepreneurship in both Abu Dhabi and Amman. In general things are very positive, with innovation and creativity being at the forefront.

In Abu Dhabi, there is a lot of money floating around. People use billions more than they use millions. The scale of projects in play are a totally different level. Some of the key businesses emerge around relocating large industries to the UAE through government intervention. The bulk of the opportunity for startups lies in the ripple effects of these government led macro events.

In Amman, I saw a more of a bottoms up approach to entrepreneurship that is less tied to riding government led initiatives. You could feel the energy and excitement around starting new businesses and in particular I saw a large focus on solving problems using the the internet and mobile.

This might have been a function of who I met in both places.

However during my trip I saw a few common themes emerging from the many discussions I had with all the great people I met. Some of this might not be new, but I wanted to capture my reactions and recommendations for how to make things better.

1. Talk to each other people! - during my visit I met a lot of entrepreneurs. What surprised me was that I was sometimes introducing people in the same country to each other. People have a genuine fear that their ideas might get copied. That is crazy! If your idea will get easily replicated then you are not solving a hard problem and thus do not have a competitive advantage. A big part of my success resulting from socializing my ideas with others and this helping me think through the problem. Also, sharing ideas/needs/issues can help you solve things faster and even connect you with the people you desperately need to support you to make the business successful. One thing I learned from a good friend is that people like to do business with people they like. The only way to break these barriers is to build relationships. Have more ways to connect with one another!

2. When thinking about risk, think of the upside not downside - Joi Ito wrote a wonderful blog post about this topic that you should read. His view clarifies why early stage funding (hundreds of thousands to a few million dollar investments) needs a different way of thinking about risk. Investors please read this before talking to 2 guys working out of their homes.

3. Think open - I was a little surprised to hear that most of the technical work in the MENA startup world was .NET. What?! Not to diss .NET, but in the US startup world .NET is far from the norm. In my talk, I emphasized that at Zingku and Google we made a heavy investment in leveraging open source software. A lot of great innovations happen as open source and it is FREE! You should seriously consider open source as a technology choice and even a model for your business ideas. Keep an open mind.

4. Fail Fast - This is sometimes counter intuitive, but your odds for success improve the quicker you fail. In the MENA culture, failure is the kiss of death. That really needs to change. If you read the research about this, the odds for success improve with failure. When starting a business, you are solving a problem. First, is the problem real? Is your solution the right one? Knowing the answers to these questions quickly helps you tune things quickly so that you can figure out the right formula. Failing fast and iterating is a key step when innovating.

5. Talk to the Diaspora - There is a lot of folks outside the MENA that genuinely want to give back and share their expertise. They just need a mechanism to do so. Be bold and talk to them. Give them ways to get involved with what you are doing. It could be as simple as asking a question. Things that might not be obvious to you might just be an obvious best practice elsewhere.

6. Focus - A few entrepreneurs were describing what they were doing and described several ideas they are working on simultaneously. My view is that when you start you need to find your focus. Your biggest cost early on is opportunity cost since you do everything. When I was doing my startup we always said that we needed to keep focusing until we found the niche that loved what we are doing and then grow from there. If you are not thinking in this way it is hard to find who cares about your solution and thus not able to really nail the problem and solution. This does not mean your focus will not change over time, but a quest to focus will help you find the problem and solution at hand.

7. Get your hands dirty - Folks see personal career growth as getting away from the technical aspects, such as coding. Stay versatile and do not think that any job function is below your pay grade. Till this day I still code. It keeps me connected to the realities of what my team is doing. It also helps me make important triage/product/feature decisions since I have visibility to all the other aspects of the business, and more importantly exposes me to new things that get my creative juices flowing.

Finally, I wanted to close with some stats about the MENA:

• 60M Internet users (17% of population)
• >2000% user growth (2000-2008)
• ~90 cellular subscriptions per 100 inhabitants
• 5% of the world population are native Arabic speakers, but only 1% of internet content is in Arabic

Wow! YallaStartup!