At the beginning of 2011, four friends in Cairo hatched a startup idea that seemed as fresh and sweet as the product they were rolling out: Egypt’s first frozen yogurt chain. Having honed a recipe from tasting trips in Asia and Europe, they rented a storefront in the city’s upscale Zamalek neighborhood and began a roaring trade selling $3 cups—a modest enough price to reflect the business’s name, Maybe Two, which aimed to persuade customers to buy two servings.
The popular revolt against former dictator Hosni Mubarak exploded two weeks after they opened, driving out tourists and hitting their business hard. Even so, the friends believed their concept would be a sure hit, once the country calmed down. By the time Bloomberg Businessweek profiled them in the fall of 2011, they were putting the final touches on two additional stores in Cairo, and they were dreaming big. “In five years’ time we want to be an international franchise,” one of the four partners, Mohamed Ashour, then 28, told me excitedly over cappuccinos in Cairo. “A lot of young people want to start businesses, especially after the revolution.”
For months after our visit in 2011, the four friends—Ashour, Mohamed Farrag, Mustafa el-Sherif, and Yomna Bakry, Mustafa’s wife— vowed to stick to the promises they made among themselves when they began their business: Pay no bribes and stay independent. They had pooled savings of about $168,000 to start, and they were determined to make it last. When electricity workers demanded payoffs, they rigged up the wires themselves. When the city demanded payment to allow them to put out sidewalk tables, they folded them up and took them home. “Heroes,” is how Hisham Fahmy, chief executive of the American Chamber of Commerce in Cairo, described them at the time.
That was then. As good as the frozen yogurt was, it proved no match for the tumult that has plagued Egypt for the last two years. The payoffs and bribes, endemic during the Mubarak years, didn’t vanish with the revolution; instead they increased as some feared they would soon lose their jobs or wondered if their earnings would plummet once the Muslim Brotherhood, which took power last spring, made good on its promise to wipe out corruption. “People freaked out that they would not find the amount of money they used to get from bribes, so it became bigger and bigger,” says el-Sherif. Farrag, 32, says the demands grew overwhelming. “The guy who used to come to take $5 from me before was now coming to get $500,” he tells me. “Corruption was skyrocketing.”
Meanwhile, credit dried up. With the country lurching from crisis to crisis, Egyptians sought cash as a hedge against upheaval. “We were undergoing terrible pressure,” el-Sherif says. “Suppliers who used to give us 90 days’ grace period wanted payment after two days.”
The friends tried to hold on to what they could. They closed one store in April and went looking for financing for the other two outlets. They still believed their idea could work—if only Egypt would stabilize. Maybe Two’s business improved with the arrival last year of Pinkberry, the California-based chain whose splashy ad campaign turned many Egyptians on to frozen yogurt for the first time. Investors showed interest in Maybe Two, but when the country’s political violence deepened earlier this summer, those possibilities dried up. “I had promises from businessmen to invest money in the company,” says el-Sherif. “But with what was happening day by day, they lost interest not only in our business, but in Egypt as a whole.”
On June 1, the four friends finally shut the doors on Maybe Two’s remaining two outlets, including the gleaming white storefront in Zamalek, where I first encountered the group in 2011. Worn out from the challenges, they say they felt that they’d been swimming against a strong current. Ashour broke the news to me of Maybe Two’s demise in an e-mail, saying, “We couldn’t survive any more :(.”
Three of the four friends have left Egypt. Only Ashour remains in Cairo, where he heads real estate operations for Egypt’s Orascom Hotels & Development (ODHN:SW). Farrag, the banker, has settled in Kuwait and started Koutway, a fast-food outlet serving chicken and rice that he hopes to expand in the Gulf state. In August—a month in which more than 1,000 people were killed in street riots in Cairo—el-Sherif and Bakry moved to London with their three-year-old son Hussain. El-Sherif says they are looking for regular jobs while they plot what business to invest in. “Egypt is not in a shape for us to raise a child there,” he said on Sept 5, the day assailants bombed the motorcade of the Egyptian Interior Minister in downtown Cairo, nearly killing him. “We need somewhere where our child can play and not to be in this aggressive atmosphere,” el-Sherif says.
That doesn’t mean the group has abandoned Egypt altogether. All say they are determined to return when the country seems more amenable to growing a business—which they still dream of doing, despite the struggles since Bloomberg Businessweek first featured their startup. Farrag says all his work in Kuwait is in preparation for “when Egypt is better to go back to.” El-Sherif, 35, and Bakry, 30, who had joined the uprising to oust Mubarak, say they are banking on the military government, which seized power in July, to “put us on the right track” and finally pave the way for their return.
Egypt’s budget deficit has languished at about $3.2 billion a month since January. Tourism, which accounts for about one in 10 Egyptian jobs, is still way down from before the 2011 revolution. Farrag says they have kept the company name, planning for the day when they can restart their enterprise, perhaps next time as a supplier to hotels and businesses, rather than running retail food outlets. Whoever wins Egypt’s next elections had better hope Farrag, el-Sherif, and Bakry head home soon. The country could sorely use young go-getters like them.