Challenges and Opportunities of the Startup Ecosystem in Iran / Dr. Melika Molk Ara

Fara Eghtesad Bein-al-Melal / Mashhad Development Charter –In Iran, The significant escalation in exchange rates at the commencement of the year 1403 (2024) has imparted a profound shock to economic actors, particularly accentuated by the accompanying volatility. The ramifications of this phenomenon are distinctly varied across different categories of industrial units—of Iran_namely small, medium, and large enterprises—as well as economic enterprises and startups. This issue is particularly pronounced for startups and nascent companies, whose exposure to risk has surged dramatically. In essence, the rising exchange rates have engendered a climate of reluctance among Iran’s investors, particularly among youth and other aspirants within the startup domain, while concurrently confronting existing startup proprietors with ambiguities, discouragement, and multifaceted challenges.
A notable challenge in Iran confronting startup owners is the inadequacy or insufficiency of governmental support mechanisms in alignment with the exigencies of 1403. Despite the presence of various institutions, organizations, and funds designated to bolster Iran’s startups, it is evident that the extant support frameworks and prevailing regulations fall short of adequately addressing the needs of prospective investors in startups, particularly within the information technology sector.

Moreover, the lack of dedicated attention to the startup ecosystem in Iran constitutes a substantial challenge. It is imperative to recognize that governmental support for startups should transcend mere provision of low-interest loans; rather, enhancing the startup ecosystem itself emerges as a paramount concern for startup managers. While numerous essential components requisite for the establishment of startups exist within the country, their disjointedness and lack of meaningful integration have precipitated myriad problems and unproductive endeavors. The absence of specialized venture capital funds tailored to startups and risk-oriented investment support mechanisms remains palpable, while legal frameworks exhibit significant deficiencies in fostering innovation, notably with respect to intellectual property rights.

Additionally, the absence of comprehensive data banks within the country exacerbates these challenges. Every economic activity necessitates the meticulous collection of data and information spanning various domains—including market conditions, social dynamics, consumer behavior, domestic and international competitors, as well as economic, political, and cultural contexts—to ensure that future activities are aligned with prevailing conditions and can be strategically planned. The deficiency of credible databases has resulted in sporadic presentations of statistics by certain private entities on social media platforms that are often unverifiable, rendering reliance on such figures perilous and inappropriate for initiating or sustaining economic endeavors.
Furthermore, the issues surrounding internet speed, cost, and the filtering of specific social networks present additional obstacles. Social networks are integral to identifying trends and analyzing consumer behavior and competitive landscapes. There exists a significant gap in interpreting and analyzing information exchanges that frequently transpire between customers and marketing units within startups. This is particularly salient given that a majority of Iranian startups operating within the information technology sector—and those interested in engaging with or investing in startups—are poised to operate within the IT domain; thus, the requisite infrastructure concerning internet connectivity is critically important. Notably, Iran’s internet speed is considerably inferior to that of other nations, especially those within the Persian Gulf region.
This challenge becomes increasingly pronounced when startup activities are IT-centric, compounded by concerns regarding network security.

In conclusion, it must be underscored that education constitutes a fundamental pillar for the growth and sustainability of startups. It is imperative for stakeholders across all sectors to invest in educational initiatives that equip entrepreneurs with the requisite skills and knowledge to navigate these complex challenges effectively. By fostering an environment conducive to learning and innovation, we can catalyze the development of a robust startup ecosystem capable of thriving amidst adversity.

Dr. Melika Molk Ara: Researcher and Economic Activist – Business Strategist and Economic Analyst