In the shadow of Tel Aviv, Ramallah's young tech scene takes flight

A tech sector largely fueled by low-level outsourcing work is starting to see its own startups thrive. We made a stop there on CNET Road Trip.

Ben Fox Rubin Former senior reporter
Ben Fox Rubin was a senior reporter for CNET News in Manhattan, reporting on Amazon, e-commerce and mobile payments. He previously worked as a reporter for The Wall Street Journal and got his start at newspapers in New York, Connecticut and Massachusetts.
Ben Fox Rubin
6 min read

Check out all the places we've been on CNET's Road Trip 2015.

RAMALLAH, West Bank -- "The Entrance For Israeli Citizens Is Forbidden, Dangerous To Your Lives And Is Against The Israeli Law."

A series of these large, red signs -- written in English, Hebrew and Arabic -- greeted me last month at the entryway to the Qalandia checkpoint, north of Jerusalem. The area around the checkpoint, separating Israel from the Palestinian-controlled West Bank, was dusty, jammed with cars and surrounded by concrete walls, guard towers and barbed wire. The scene seemed far removed from the glittery skyline of Tel Aviv, just an hour's drive away.

"This is a first-class occupation," my guide, Nuha Musleh, a motherly, assertive woman, told me as we met at the Qalandia entrance and walked to her Volkswagen sedan.

Yet the view at the wall -- built by Israel more than a decade ago to prevent terrorist attacks from the West Bank -- belied what I was about to see down the road. There stood Ramallah, a modern, bustling city with tall buildings made of glass and pale limestone. The seat of power for the Palestinian Authority is now home to a small startup community, which is emulating Israel's internationally recognized tech scene and which offers new opportunities for young Palestinians to build up a territory still heavily dependent on outside aid.

Just past the Qalandia checkpoint, on the way to Ramallah. Ben Fox Rubin/CNET

Musleh first drove me to see Mashhour Abudaka, a former Palestinian Authority minister and the executive director for the Palestinian Information Technology Association, or PITA. The business group, with about 160 members across the West Bank and Gaza, brings together a mix of software developers, hardware resellers, and, most of all, IT outsourcing companies. These outsourcing firms, tasked with completing menial projects in a tech firm's development process, have become the backbone of the West Bank's burgeoning tech sector. The jobs aren't glamorous, but the work from Israeli and international companies is steady.

With the blinds drawn in his office to keep out the hot morning sun, Abudaka -- a bald, thick-accented Gaza native with a mechanical engineering Ph.D. -- drank Turkish coffee from a small, striped mug and described the difficulties of growing a technology industry in the Palestinian territories. The Israelis, he said, control the Palestinians' international borders, wireless frequencies, and exporting and importing.

The Israeli government says many of these restrictions are for security, though Abudaka countered that they have more to do with "political and economic domination."

"I think our IT industry can expand if it wasn't for the Israeli obstacles," he said. "I hope things will change."

'They called us crazy'

While outsourcing represents a sizable chunk of the West Bank's tech industry today, there are a handful of smaller Internet and mobile startups run by young Palestinian founders who hope to make it big by focusing on the underserved Arab world. They aim to become early entrants in that emerging market and to gain influence far beyond the West Bank by building online, where borders disappear.

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PinchPoint CEO Khaled Abu Al Kheir shows off Spermania, the company's first game. Ben Fox Rubin/CNET

One of those entrepreneurs is Khaled Abu Al Kheir, the 35-year-old co-founder and CEO of mobile gaming startup PinchPoint. His 18-person company, whose work space includes a poster declaring it "Palestine's Hottest Gaming Studio," gained a rush of media attention last year after it came out with its first title, Spermania. The cartoon-animation racing game lets users play as a sperm trying to dodge acid pools and white blood cells en route to inseminating an egg. Apple's App Store rejected the game five times, but it's available on the Google Play store for Android devices.

"Everyone we talked to about the game, they laughed," Kheir said in his small office, while a group of youthful employees seated nearby at two long wooden tables toiled away on PinchPoint's next titles. "Of course, they called us crazy."

The company started with worldwide ambitions but quickly realized that competition on that stage was staggering. Kheir thought it better to create games that speak to an Arab audience but still have some bite to them. A newer title is Al Mamlaka, which offers Middle Eastern card games that include virtual gambling -- a taboo subject among Muslims.

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At PinchPoint's offices, artist Yasmin Eid is hard at work making games. Ben Fox Rubin/CNET

After releasing four games, PinchPoint is still waiting for its big hit. However, Kheir said that despite the limitations of being in the West Bank, including tight travel restrictions and some potential partners being scared off by the security protocols and checkpoints, he's happy to be a big fish in a small pond. Funding is relatively easy to come by since there isn't a lot of competition for it, and that money tends to last longer since Palestinian wages and rent are low.

"I always say that if we did it in a different place, I don't know if we could've reached this far, even with less obstacles," he said.

Musleh then took me back to her store, an art gallery on the outskirts of the central district. From their second-floor kitchen, Musleh, her husband and I ate salad mixed with mint, along with plump orbs of pumpkin and zucchini stuffed with rice and meat, and doused in a goat milk-based sauce. Musleh invited her 19-year-old son, Abdel Naser, to join us for the rest of the day so he could absorb some of the entrepreneurial spirit and ideas of the West Bank's up-and-coming tech leaders.

'We're just hungrier'

The next stop was at startup Yamsafer, where CEO and co-founder Faris Zaher has built a 55-person company that offers hotel bookings in the Arab world. The brightly lit 11th-floor office overlooks the rest of Ramallah, and the interior was built to look like an outdoor promenade, complete with a bicycle, benches and street lamps. There was a buzz of activity at the marketing and hotel departments. Behind glass doors, a handful of workers wearing headsets chatted with customers in the 24-hour call center.

The irony is that Yamsafer is a travel-booking site with most employees restricted by Israel from freely traveling abroad.

Yamsafer CEO Faris Zaher hopes to encourage other Palestinian startups to grow in the West Bank. Ben Fox Rubin/CNET

Early on, the 4-year-old company faced about five competitors from Jordan and Dubai, but Yamsafer outlasted them all. The firm is now the second-largest room-night provider in the Gulf Region, Zaher said, after Priceline's Booking.com.

"At the end of the day, we're hungrier," said Zaher, a UK- and Hong Kong-educated 28-year-old with a short-cropped beard and big smile. Referencing Palestinians' tougher lives when compared with some Arab neighbors, he added: "I think that just makes people fight much harder."

Yet even as his startup has grown quickly, Zaher said it has faced problems from its own government, which for years has been dogged by corruption. Yamsafer ended up in a payment dispute with one partner hotel, he said. In an attempt to intimidate Yamsafer's leaders, the hotel's owners got a government agency to raid his business.

The Palestinian Authority's Ministry of Information didn't respond to a request for comment about the incident.

A look at Ramallah and its young tech scene (pictures)

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Despite such problems, Zaher said the West Bank was the best place to create his business. "The reason we think we're going to win," he said, "is because we're here and our customers are here."

As my day in Ramallah was ending, Abdel Naser asked if I wanted the see the real face of the city, considering that I'd been bouncing around office spaces all day. He drove me to the central market, a noisy area filled with jewelry and clothing storefronts, small fruit stands, and men darting through traffic in bright-red costumes selling sweet drinks out of long, brass flasks they hoisted on their backs.

We returned to Musleh's shop, where we drank tea. Musleh gave me a hug and asked me to return soon. Abdel Naser drove me back across the checkpoint, where two men with large guns on the Israeli side asked us a few questions and waved us through.

By then, the sun was setting and I was on my way back to the bright lights of Tel Aviv.

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