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In the rush to create the next big success in the MENA’s online industry, our nascent community can draw key lessons from the successes (and failures) of founders and investors in developed markets and other more advanced emerging markets such as Latin America and Central and Eastern Europe.

Below are the top 5 key factors that could determine the success or failure of online businesses in MENA. While some apply to businesses everywhere (founders’ characteristics, business model scalability, challenges that must be addressed), others are specific to emerging markets.

1. Founders should be young… or young at heart

It is a common myth that founders of online businesses are youth fresh out of college. On the contrary, studies show that the average age of a successful founder is approximately forty years old. In the MENA however, founders in this age group are hard to find, as they typically have a family to support and several personal loans to finance. This makes it difficult for them to enter the long cycle of securing funds from investors, and the even longer period it takes to put a business together.

See related: 12 Things Investors Wish Entrepreneurs Knew

2. The best online business models are characterized by their scalability

Google illustrates this perfectly:  The creators built a search engine once and allowed it to be used countless times. This allowed them to generate revenues that outweighed the growing costs of running the business. Online classifieds businesses operate based on a similar model, allowing users of these platforms to scale to hundreds of thousands of listings, and earning the corresponding revenue.

By comparison, with a business model such as fulfillment e-commerce for selling electronics or fashion items, selling more units online requires adding more offline resources. This often results in very low margins that do not justify the size of the investment.

3. Barriers to entry are a double-edged blade

Choosing local or global business models is a very tricky question that investors and founders often oversee, despite its critical importance. MENA-based businesses that do not have strong barriers to entry are often unable to survive or compete against similar global companies (better funded) that scale into the region. For instance, generic travel websites don’t possess any barrier to entry but are helpless in the face of similar global websites. Even fulfillment e-commerce electronics or fashion websites may not be able to survive in the face of global competition; all it takes for a global player to offset local companies' competitive advantage is to open a logistics and fulfillment center in the MENA.

On the other hand, business models such as online restaurant or taxi booking services require building up a local network, which creates a very strong barrier to entry. In this scenario, global players are powerless unless they make a sizable investment to compete and replace local companies by taking over their networks. It almost always turns out more cost-efficient for global players to acquire local ones, thus preserving the value created by the founders and investors of those business models.

4. Location, location, location

Establishing operation headquarters in a market where it is easy to conduct business, attract talent and be investor-friendly can be a tipping point. In that sense, the UAE shines as the best location for online business but then the largest markets often turn out to be Saudi Arabia, Egypt and even Morocco. The cost of expansion and the time it requires constitute a huge burden that businesses are not always able to address.

5. Show me the money

The ability to secure ongoing funding on a short notice is critical to successful founders, as it allows them to focus on running their business. The high level of friction between MENA investors and founders is simply due to the market’s maturity. The number of good businesses unable to survive due to insufficient funds currently exceeds the number of those that are failing because of their founders, business models, or market choices.

On the investment end, the venture capital (VC) business model may appear attractive and it will be, but not at this stage of the MENA market's development. The operating platform business model, not VC, was the first model that allowed investors and founders to achieve success in emerging online markets.  This is what our team is setting out to build at iMENA. We are trying to address all the deficiencies and challenges in the successful build-up of online businesses in the region by providing mature founders with a high-certainty environment that enables them to rapidly build their businesses, scale and receive on-demand funding as they grow.

No doubt we will see success in the VC model as well, but this could take 5 to 7 years, in which time many of the key business models will be won. Timing is everything in the online industry.

See related: Dave McClure Gives Arab Startups 7 Tips to Success

*Khaldoon Tabaza is the Founder & Managing Director of iMENA Group, an operator of online businesses in the Middle East & North Africa region.