Node #5 - The Co-Founder Gap in Oman.

Hello friends,

A founder recently replied to one of my newsletter issues with a challenge that I have been thinking about since.

They wrote about one of the recurring problems they see across startups in Oman: retaining key employees.

Not junior hires. Not people who are still figuring out whether they want to work in a startup.

But the people who are truly critical to the survival of the company: the CTO, the COO, the product lead, the person who is expected to stay through the messy middle, solve problems without a playbook, and keep building when the business is still fragile.

This founder’s point was simple:

High salaries do not always work.
Flexible hours do not always work.
ESOPs do not always work.

I think this may be because, in many cases, we are trying to solve an ownership question with an employment answer.

Because in early-stage startups, some roles are not just jobs. They are foundational to the company’s ability to survive and grow.

If the entire business depends on technology, then the foundation of the business should not rest on a standard employee relationship. The same applies to operations, product, regional expansion, or any other capability that is too central for the company to lose.

These are not just hiring decisions. They are co-founder-level questions

And maybe part of what we need to discuss more openly in Oman is this:

Are some startups trying to build companies with employees when what they really need are complementary co-founders? If someone is expected to build like a founder, sacrifice like a founder, and stay through uncertainty like a founder, are they actually being treated like a founder?

This question is especially important in a market like Oman.

Oman has strong founders with deep local knowledge, strong relationships, sector insight, and a clear understanding of where the market is shifting.

But many startups are building in sectors that require capabilities that are still relatively scarce in the local ecosystem: deep technical leadership, product management, growth, commercialization, venture-scale operations, and regional expansion experience.

This does not mean Omani founders are not capable. Far from it. It means that startups are increasingly complex, and the founding team may need to reflect that complexity.

So for example, a founder may understand the local market deeply but need a co-founder who can lead technology. Or another founder may have strong relationships with customers but need a co-founder who has built scalable operations before. A founder may know the problem intimately but need someone who can help turn the solution into a product that can travel beyond Oman.

It’s important to realize that in a small market, this complementary capability may not always come from the same country.

It may come from someone who wants to live in Oman, build from Oman, and commit to a company in a way that an employee may not.

There is research behind this idea. I wanted to understand how diversity of a founding team impacts results.

The strongest evidence I could find points to something specific: founding teams tend to benefit when their differences create real complementarity.

In other words, diversity matters most when it expands what the team can access, understand, or execute.

One recent study on mixed immigrant-native founding teams found that these teams tend to outperform immigrant-only and native-only teams on several important measures. They were larger by employment after three years, more likely to receive external funding, raise more capital, attract stronger investors, and reach successful exits.

The important point is not only that the teams were demographically different.

It is that they combined different networks, market knowledge, talent access, and investor pathways.

That is the distinction that matters. Diversity on its own is not magic, complementarity is where the value is. A non-Omani co-founder does not automatically make a startup stronger. An Omani-only founding team is not automatically weaker.

The question is much more practical:

What does this person unlock for the company that the founding team does not already have? We need to consider what they bring to the table, whether it’s technical depth, regional market access, investor credibility, product experience, or a different level of access to customers or talent that would otherwise be hard to reach?

That is where founder diversity becomes strategic.

This point came up clearly in a recent Startup Grind Muscat conversation I had with Vinnie Lauria, Founding Partner at Golden Gate Ventures.

When asked what makes a startup feel like it has potential beyond its home market, he pointed to the importance of international or mixed-background teams.

The example he shared was Carro, the used car marketplace that started in Singapore and became one of Southeast Asia’s major startup success stories.

Carro’s founding team brought together founders from different Southeast Asian countries. As Vinnie described it, this mattered because the company was not simply building for one city or one market. It had to understand how the used car market worked differently across countries.

In Singapore, people were more comfortable buying a used car online. But when Carro entered Indonesia, the same model did not translate directly. Trust, customer behavior, and the way people bought cars were different.

Because one of the co-founders understood the Indonesian market deeply, the company was able to adapt. Instead of forcing the Singapore model into Indonesia, they adjusted the product and worked more closely through dealerships.

That is the important lesson. The mixed founding team was not valuable because it looked diverse on paper. It was valuable because it helped the company see the market differently, challenge its own assumptions, and adapt the business model before it was too late.

This is the kind of founder diversity that matters; diversity as operating advantage.

We can already see versions of this in Oman.

Bima is a useful example. The company is rooted in a very local and regulated sector: insurance. To build in that space, local knowledge and trust matter deeply. But the product itself is digital, and the strength of the company also depends on strong technology execution. Having a senior technology leader is relevant because it reflects the kind of local-international capability mix that many digital startups need.

And then there are companies like 44.01, which show a slightly different version of the same principle. 44.01 is deeply rooted in Oman’s natural advantage and local context, but the company’s growth has depended on world-class scientific, technical, commercial, and investor-facing capability.

The lesson is not that there is only one founder formula. It is not local founder plus international co-founder equals success. The lesson is that serious startups need a serious mix of capabilities.

Sometimes that mix is found within an all-Omani founding team. Sometimes it is built through international co-founders. Sometimes it comes through senior leaders, advisors, board members, or regional operating teams.

But the underlying question is the same:

Does the company have the capability and commitment it needs at the core?

At the heart of this is incentive alignment.

Startups ask a lot from their early teams: patience, ambiguity, speed, problem-solving, emotional resilience, and belief in an outcome that is still uncertain. But not everyone is motivated by the same thing.

For one person, they may be looking for equity and long-term upside. For another, it may be autonomy, learning, status, mission, flexibility, or the chance to build something meaningful from the ground up.

Founders need to understand what their key people are really optimizing for, because alignment is not only about what the company offers. It is about whether that offer matches what the person values.

That does not always mean making someone a formal co-founder. But it does mean being intentional about how responsibility, authority, equity, upside, decision-making, and personal motivators are designed.

The goal is not just to retain people for longer. The goal is to build a structure where the people carrying the most important parts of the company are genuinely invested in the company’s success, because that success is also connected to what matters to them.

Perhaps the better question is not: How do I retain this key employee?

But: Is this actually an employee role, or does this capability need founder-level ownership?

For founders, this means asking: What capabilities are too critical to outsource, too expensive to hire casually, and too important to leave unowned?

For the ecosystem, it means asking: Are we making it easy enough for startups in Oman to bring in the co-founders, senior talent, and ownership-level partners they need?

Not every startup needs an international co-founder. But for the startups that do, the current regulatory environment can still make that path difficult.

Until it becomes easier to structure international co-founder relationships, offer meaningful ownership, and bring committed talent into the company from abroad, this gap will remain.

And if we want more startups in Oman to survive the early battles and scale beyond a small market, we need to make it easier for them to build the teams that can do that.

Warmly,

Walaa

Node — Building Fundable Founders

P.S. If this brought up other questions for you, feel free to reply directly to this email. I read every response, and many of the next Node issues will come from the questions founders are actually asking.

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