How this Pakistani built a billion-dollar startup Careem’s

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How this Pakistani built a billion-dollar startup

Careem’s Mudassir Sheikha explains why growth needs to be an obsession for any motivated founder. PHOTO: CAREEM

Mudassir Sheikha is the CEO and co-founder of ride-hailing app Careem, one of the hottest startups on the Asian continent.

In December, it raised US$350 million from superstar investors such as Rakuten and Abraaj Capital, making it the newest unicorn in the transportation space.

It’s been quite a journey for Mudassir and his Dubai-headquartered company since starting up less than five years ago. Careem is now operational in 50 cities across 11 countries. It counts 180,000 registered drivers, which it refers to as “captains,” and claims to have served over 8 million customers.

Mudassir and team have hustled their way to regional dominance, competing with Uber with a mere fraction of the resources that the San Francisco-headquartered behemoth has at its disposal.

So how exactly should entrepreneurs take their idea from zero to one? What’s the billion-dollar mindset? How do you build companies to last?

This Pakistani helped raise $350 million to slaughter Uber

Mudassir addressed these queries and more during a keynote presentation yesterday atMomentum in Karachi, Pakistan.

He identified four main factors which he believes were crucial in propelling Careem from a mere idea to where it is today.

Think big

“You have to think big from day one,” said Mudassir. “Sure you can open a retail store, but it’s going to be difficult to make it into a large business – a billion-dollar business. The first thing you have to target is a big problem and a big opportunity.”

The idea behind Careem wasn’t simply to replicate what other startups were doing in the West. He and his co-founder, Magnus Olsson, were both former management consultants for McKinsey. The duo were stationed in Dubai but frequently traveled across the Middle East and Pakistan.

As consultants, they had to constantly deal with the abhorrent public transport options in their markets. That was a huge pain – taxi drivers would frequently rip them off and they didn’t feel safe traveling in those rickety cars.

On-demand services were unheard of in the region at that time. So both Mudassir and Magnus quit their jobs, invested a lot of their own capital, and hunkered down for the long journey ahead.

“We wanted to seize the opportunity because it was an unexplored area and we felt the potential to scale was there,” said Mudassir to the audience.

Think big

The billion-dollar CEO is a firm believer in treating your startup like a baby and nurturing it the same way a loving parent would.

He explained it’s essential to instill the right values in your organization – to make sure culture seeps down from the top and everyone on the team is cognizant of the ideals they should aspire towards.

“If you teach your kids not to lie and make sure they adhere to it, then they’ll eventually learn and carry that with them forever. But if you don’t do that, and don’t have a close relationship with them, then they’ll grow up with indifferent values,” he said.

“Organizations are similar, they have values and aspirations as well. The companies that have been around for hundreds of years have these values instilled in their DNA. Our mindset, from day one, was to make something to last.”

As a corollary, the idea to start a business shouldn’t be predicated on an exit strategy. “It’s not the right mindset you should go into a startup with,” added Mudassir.

Mudassir on stage at Momentum. Photo credit: Osman Husain

If an entrepreneur is truly committed to solving problems and reducing inefficiencies then they’ll carry on with that, come what may. And to build lasting institutions, ones that will outlive them as well as their future generations, founders need to treat the early years with the utmost of care.

“There’s nothing wrong with an exit, but it shouldn’t be your overwhelming priority,” he stated.

To further explain his point about culture and setting examples, Mudassir said he frequently takes red-eye flights and inconvenient connections just to save money.

“I’m happy even if I save 200 dirhams” – that US$55 – “each time,” he laughed.

“Sure people might say Careem has the cash now but I don’t want anyone in the company to think I’m being extravagant or living a flashy lifestyle. If you won’t demonstrate and lead by example, then your teammates won’t either.”

Growth needs curation

“You can’t just expect to launch a product and expect that it’ll take off automatically,” asserted Mudassir. “It’s a lot of hard work, curation, measurement, and feedback.”

The former consultant explained that at Careem they’re obsessed with data and growth. Each city – all 50 of them – is monitored every 15 minutes. An analyst can crunch the numbers and tell you whether the growth in those 15 minutes was more or less than the previous day, or even the same time last week.

If numbers are going down then there’s someone from HQ on the phone with local teams on the ground, to figure out how to improve, and whether there’s an issue of product-market fit, weather conditions, or something else.

“You cannot improve anything that you cannot measure. That’s why growth and measurement are deep deep in our DNA,” he said.

Careem valued at $1b on Saudi Telecom deal

“And the best part about growth is that it compounds. If you give yourself a target of growing 25 percent month on month, then you’ll grow 10x each year. By the third 10x, we were sitting at a 100 million valuation. You can too,” he told the audience.

Your team is the sharpest weapon

Mudassir and Magnus didn’t have much money to throw around in the early days grinding in the insane heat of Dubai.

That was a problem – they wanted to hire savvy, technical, and qualified employees to grow quickly but the lack of cash meant that they couldn’t even match existing market salaries.

Mudassir admitted to having sleepless nights in those days.

“We placed a lot of emphasis on getting the right people. You can have an amazing idea but if you don’t have the right talent to execute then your plans are utterly useless. We were so cash-strapped early on that we could only offer half of what people were used to,” he said.

But there was a surprising benefit to this quandary. Careem’s early hires ticked all the right boxes in terms of their job capabilities, and they also bought into the vision of what Mudassir was trying to build.

“That’s why we became who we are today – you need to get capable people but they also need to enliven the culture of the workplace,” he added.

 

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From Silicon Valley to Dubai:
stories of failure and success





Mudassir Sheikha (left) and Magnus Olsson are the founding partners of Careem






Mudassir Sheikha is the founder of Careem, a high-end car booking service in Dubai that has recently acquired Moroccan start-up Taxi. He reveals what the dotcom bubble taught him about creating a product for the value of the idea, rather than the financial gains

Mudassir Sheikha has seen his fair share of triumphs and failures. The Pakistan-born former McKinsey & Co. employee learned most of what he knows about entrepreneurship today the hard way.

Sheikha graduated in 1999 in California, at a time when the dotcom bubble was at its peak. Like most of his friends at the time, he aspired to make it big fast in Silicon Valley, where internet startups mushroomed. “I remember having a discussion with my friends that by the time we were 24 we should have millions of dollars in our bank accounts. Those were the aspirations back in the day,” he said.

With this in mind, he joined a startup known as Brience that had raised a whooping $200 million in the first round of funding and was one of the hottest stories at the time. The plan was to sell shares to the public in nine months, have a $1 billion IPO and make everyone rich for the rest of their lives, said Sheikha. But after three years of burning money, Brience folded and was acquired by another company.

Careem is a smartphone app based booking service for limousine services in the UAE


“It was very financially focused and driven, which seemed alright at the time, but the unfolding of the bubble and the fact that we were purely financially driven didn’t end up in a good place,” said Sheikha. “From that first experience I learned a lot of things not to do. To build a sustainable business you need to deliver a product or service that is really going to add value to people’s lives, that is going to improve people’s lives. If it doesn’t do that in some shape or form it doesn’t make sense.”

Luckily, Sheikha emerged from that experience with valuable lessons that he would later apply to starting a venture of his own. He moved to Dubai in 2008 and joined consultancy firm McKinsey & Co., before the entrepreneurial itch came back. He teamed up with colleague Magnus Olsson and started Careem, a high-end car booking service that offered reliable and comfortable transport solutions through online booking. It started with a simple website that served corporations wishing to make future bookings.

Describing Careem’s value proposition, Sheikha said: “We would make sure the car would show up, the driver knows the pick up location, he would be prepared to take you where you needed to go without necessarily needing directions because we would’ve prepared that in advance, the quality would be fine and consistent.”

Noticing increasing demand from the consumer side, the co-founders decided to take Careem to the next level, extending the service to individuals and launching an app-based mobile service that enabled customers to make on-demand bookings instead of pre-bookings.



To build a sustainable business you need to deliver a product or service that is really going to add value to people’s lives, that is going to improve people’s lives. If it doesn’t do that in some shape or form it doesn’t make sense

Mudassir Sheikha, Founder, Careem


“The main driver for us was to build an institution in the region that would improve people’s lives. That’s really what got us excited,” said Sheikha.

Among the many lessons Sheikha learned from his California experience is ‘how to dream’. “The startup despite all its follies had a dream and an aspiration to become extremely big extremely rapidly, and that I think, if I had not spent time in the valley at the time, I probably would not have learned.”

Sheikha’s advice for young entrepreneurs is “if you have entrepreneurial ambitions and you’re on the fence then just do it” and the earlier the better. Entrepreneurs also need to have a thorough understanding of the problem they intend to solve, he says; lessons that he imparted as a speaker at the “Building your team to achieve your dream” event at In5, which Falcon and Associates ran in partnership with Young Arab Leaders on 9 March.

He doesn’t like Careem to be compared to the global car booking company Uber, saying Careem offers a local product geared towards solving local problems, as opposed to the international competitor. However, he welcomes competition.

“Overall we like competition. Since competition came to the market we have benefited not only from the market education that happened as a result of it, but we have also become stronger in our execution because you need to compete and up your game when you have a global player down your throat,” said Sheikha. “I think it has helped us, made us stronger and the results show that.”

 

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Inside a Founder’s Mind: Mudassir Sheikha Co-founder and MD of Careem





USC and Stanford alumni, involved in a startup acquired for $60M, Ex-Mckinsey, and now cofounder and Managing Director of Careem, one of the hottest companies in Middle-East region. Mudassir’s profile is nothing short of a tech A-lister’s and here I was on Skype trying to use a 30 min window during his lunch break to get in his head. One of the first things that struck me was his eloquent and genuine style of communication. I had reached Mudassir via a mutual friend but it was our first chat nonetheless. Mudassir was humble and informal yet very smart. I started the interview by asking Mudassir about his childhood.

“I haven’t been asked about my childhood in a long time but if I have to pick between hyper or geek, I was definitely a geeky child. Always wanted to be on top of the class.” Mudassir continued, “I grew up in Karachi. Did my initial schooling in Pakistan and then my undergrad at USC on a scholarship. In the 80s and 90s, when I was growing up in Pakistan, we were not very connected with rest of the world and I wasn’t exposed to Silicon Valley until I landed in California for my undergrad circa 1995. I had actually decided to study Economics but seeing so much excitement about technology I decided to study Computer Science as well.”

“I finished college in year 1999, six months earlier than schedule and right in the middle of dot com boom. I wanted to get out of college as early as possible and build something exciting.”

One of Mudassir’s jobs after grad school was at Garage Technology Ventures (GTV), a veteran Silicon Valley early stage VC fund founded by the famous Guy Kawasaki. I inquired Mudassir if landing a job at GTV was a conscious decision? “I had been part of startups and when you are working at startups you have a weird fascination with the VC world. I wanted to learn about how VCs work so I reached a friend at Garage and asked him if I could work there for three months before moving back to Pakistan. He responded saying sure why not.”

As mentioned earlier our call was scheduled during Mudassir’s lunch time and by then Mudassir had just received his lunch. As Mudassir snacked on (some really crispy looking) french fries we continued our discussion about his experience of working at GTV. “It’s a very interesting and diverse experience working at a VC fund because you are constantly looking into ideas and what’s happening in the world. You are continuously thinking of trends. So it’s a big thinking-thing versus doing-thing.”

“While I really enjoyed my time at Garage Technology Ventures and I learnt a lot, I also came to a conclusion that I liked doing things as compared to thinking.”

We continued the discussion about Mudassir’s next gig after Garage Technology Ventures, DeviceAnywhere, a premium Mobile testing platform which got acquired in 2011 by Keynote for $60 Million. “What happened was that myself and a quite a few names of current Pakistani tech ecosystem worked at Brience, a company trying to be Mobile middleware at the time mobile was just starting. Though Brience wasn’t a success itself, we had become experts in mobile data, mobile applications and how to deal with 200 types of mobile devices in the market.

DeviceAnywhere was actually started by Faraz Syed and David Marsyla, both also ex-Brience. I had moved back to Pakistan at that time to be close with my parents and had started my own technology consulting practice. During one of my San Francisco visits I met Faraz and got involved with Device Anywhere.”

Reflecting on initial days of DeviceAnywhere Mudassir recalled various challenges. “I joined DeviceAnywhere as a co-founder and built the whole Pakistan setup. It was a painful experience. We did not have any funding initially for two years so we were not getting any salaries. But the good thing was business was growing and we kept on finding customers who saw value in our product. Funding was hard to find because it was 2003, probably the worst time to start a company in the Valley. Eventually, after two years we were able to raise funding. We scaled our setup in Pakistan to 100 people including development, marketing, and financial processes. Some of the developers even moved to Bay Area from Pakistan. I really enjoyed the time and for the first time, I felt I had made a meaningful contribution to Pakistan.

What was your most expensive lesson at DeviceAnywhere? “Connecting back the dots of my time with DeviceAnywhere, I realized one thing that it’s important to target a big market for my next venture i.e. find something broken in a super big industry. A lesson we applied when starting Careem which solves a huge transportation problem.”

Post DeviceAnywhere, Mudassir joined McKinsey in 2008. The goal was to be close to his parents in Pakistan and Dubai was a closer choice as compared to Bay Area. I inquired Mudassir why he chose McKinsey. “I have a Masters in Computer Science and before McKinsey when I worked with startups I had to make various business decisions. I did not feel confident making those decisions. So I wanted to learn and made a pick between working with McKinsey or going to business school. I actually had to take a step back in my career since everyone at McKinsey starts from entry level. It is really a great place to learn. You get exposed to so many different problems at a high level and you are taught to break the big problem into small pieces. You find the overall solution by putting together solutions to all the small pieces.”

I teased Mudassir: “Would you hire a McKinsey for Careem? Mudassir smiled. “They are quite expensive, but why not.”

We carried the discussion forward and discussed Mudassir’s current gig Careem, which is creating a lot of buzz in Pakistan as well. Careem is a text book startup story. Created out of transportation pains in Dubai, Mudassir and Magnus felt first hand, it targets a big market and is growing at a rapid pace of 30% every month. The first version of Careem was launched in an amazingly short period of 6 weeks. “We wanted to start with the Minimal Viable Product and to be out in the market as soon as possible. We gave ourselves six weeks to launch which is a really short time to build technology. We could not build all features on our list but stuck with our decision and launched. It’s been over three years and we-we still have not built some of the features in original list as it turned out the market never needed them.”

Careem now has over 80,000 Captains (Careem’s name for drivers) and over a 4 million registered users. Careem has an internal portal where ride booking stats are updated every 15 minutes. I asked Mudassir if such updates motivate or overwhelm people? “The reason we do this is transparency and that combined with good numbers is definitely motivating. We are now in 10 countries, 30 cities and with such a distributed team we need to communicate a lot. We do a company all hands every 2 weeks as well.”

Our parting discussion was about the future. Mudassir had a clear roadmap in mind. “We want to build an institution that inspires, the likes of GE and Google but from this region. In 2011 McKinsey was considering opening an office in Pakistan and as part of market due diligence, we searched for multi-billion dollar companies in Pakistan. I was taken aback to find out that we had only one billion dollar company, Engro, outside oil and gas industry. Pakistan has 200 Million people who are smart and hardworking still we have only one billion dollar company. So the goal is to build an institution from the region that we can be proud of. It should be big, delivers great products and created a positive impact on the majority of people in the region. I look forward to spending the next 10 years of my life building such an institution we can be proud of.”

In my last interview, I was in conversation with the co-founder and CTO of CareMerge, Fahad Aziz. You can read it here.

With some individuals, you can talk for hours and still do not learn anything interesting. With Mudassir a mere 30 min chat was schooling. I actually had to cut a lot of pieces from the interview just to avoid writing a chapter instead of an article. Entrepreneur’s grace is the hard times he opts to live in pursuit of big dreams, and his glamour is his nature of never settling with small successes. Mudassir has been graceful and glamorous with everything he has done so far and I look forward to seeing the next big thing he pulls off.

“Life is like a boat with two oars. One oar is hard work and other is blessings. You need both to work together in order to achieve success. Otherwise, you go around in circles.”