What happens when two superstars take the stage?
The answer: Major Disruption!
In 2012, Mudassir Sheikha left McKinsey to build something impactful with his ex-colleague, Magnus Olsson. They founded Careem in 2012, and today, it is the leading technology platform in the region. Careem operates in more than 100 cities in 14 countries, with 3000+ colleagues and more than a million Captains.
Mudassir Sheikha took the stage at +92Disrupt: Khi Edition with Jehan Ara, delving into his achievements with Careem, solving today’s problems, and giving advice for early-stage startups.
Mudassir Sheikha’s Biggest Achievement with Building Careem!
According to Mudassir Sheikha, two things are of the ultimate essence when building a successful business; capital and talent.
In 2012, when Careem was just starting, no one was willing to invest in local and regional startups. People had heard success stories from Silicon Valley but no one expected such outcomes from our part of the world. The Gulf is a net exporter of capital but all of the capital was being deployed abroad.
“Now everyone wants to invest in tech startups – and I say it with a lot of humility – there’s probably not an investor deck in the region that doesn’t have Careem there in some shape or form.”
Not only did Mudassir Sheikha in building Careem, manage to unlock capital but he also unlocked a lot of talent. 10 years ago a lot of incredible people in the region wanted to work at Multinational Corporations – if all our talent is employed at foreign multinationals who’s going to build these amazing businesses from scratch?
According to Sheikha, there has been a massive turn now with a lot of people from the region working or wanting to work at startups. With the right kind of combination of capital and talent, we’ve seen that this ecosystem thrives – and Sheikha’s success with Careem became the instrument through which this happened.
Q. What has your journey from becoming a startup founder to an investor been like?
The journey is somehow what Careem gave us, and now it feels like a responsibility to give back. My methodology is to pray and pray. If someone comes in who is going after a big problem and doing it for the right reasons, I feel it is our responsibility to write a small cheque and validate that. That’s all, I don’t spend a lot of time being an investor, I spend a lot of time running Careem.
Mudassir Sheikha’s Insights from the Acquisition
Careem was the first startup to achieve unicorn status in the Middle East and North Africa region, acquired by Uber for $3.1 billion in 2019. Mudassir Sheikha discussed his learnings from the exit, sharing his thoughts on the acquisition with the audience.
Q. What have been your learnings from the acquisition? Is there anything you would do differently?
There are so many things that we would do differently, but this is part of the journey.
Mistakes will happen, just make sure you don’t make the mistakes we did. Make new mistakes – it’s part of the process! If you’re not making mistakes, you’re not taking risks, you’re not being crazy enough.
I feel that the acquisition was done for the right reasons, it was very easy for us to say we want to hang onto Careem, it’s our baby. The precedent of selling local businesses to foreign global startups has not been great. You sell something to a global startup or business and sooner or later they don’t get it right and they abandon it and the brand just disappears. Something at the back of our minds was could Careem meet the same fate?
However, ultimately, we felt that the ecosystem value is worth it. We had an investor who gave us a shakedown – if you don’t sell Careem and make this deal happen, you’re being selfish because you are not giving this ecosystem an exit that it needs to erupt. I think we did the best we could, log keh rahe the ke Careem aaj hai kal nahi ho gi. But we managed to keep Careem as an independent brand.
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Lessons from the Pandemic
Covid was a massive challenge for the ecosystem, what Mudassir Sheikha ultimately realized was that you have to move fast. That’s survival. It’s really easy to not do anything when things change, and things are changing.
Mudassir Sheikha’s biggest piece of advice is to not get into analysis paralysis. Figure out the big things that need to be done and do them very quickly. In April 2020, Careem had to let go of a third of its employees, which was extremely painful. However, had they not done so the burn they would have carried would have caught up with them. Also, making Uber question why they’re still carrying on this burn for a business that is a fraction of the size it was prior to the acquisition.
Bottom line is, you move fast but you still invest. In Sheikha’s own words, if you don’t invest in the right places you won’t have anything to show for it. Careem started investing in parts of their business they felt were more relevant at that time and made sure those investments continued to happen.
Now, is there going to be some collateral damage? It’s inevitable that when big shifts happen there will be collateral damage. If you don’t get comfortable with collateral then you won’t survive.
“The people that survive are the ones that move the fastest, not the biggest.”
Talent in Pakistan
As per Mudassir Sheikha, Pakistan can build anything if we set our minds to it, but we have to give it our 200%. Sheikha was optimistic, positing that we can make a big shot at having an Amazon or Google emerge from this region because we have the potential.
Potential does of course need to be developed. Our population is talented and hardworking, we have the skills and the opportunity but we lack the middleware. With companies such as Careem that are producing more talent and training their resources, startups can benefit from the offshoot of the talent or the ‘Careem Mafia’ – as it has been dubbed – learning from them.
Remote work is also a blessing as it allows greater access to global talent. There are several people from the region based out of Pakistan that have scaled in big ways, which are now more easily accessible.
“Talent to hai, masla ye hai ke ambition chahiye, aur sacrifice deni hai.”
Solving a Problem Today
Pakistan is a country with a large market and several problems that need to be solved, leaving room for businesses to be created based on solving such pertinent issues. Most of our problems are quite basic. Mudassir Sheikha’s advice when posed a question regarding what problems in Pakistan are viable to solve was to find a basic problem that requires fixing.
However, timing is also important. One has to play the long game in order to make a bigger impact. Take Starbucks for example, they were around for a decade before entering the Indian market, many people wondered why they were not tapping into that earlier. However, they waited for the right time to enter an important market and now they’ve become one of the top players in the country. So, as per Sheikha, focus on profitability with a singular product and a few markets and don’t rush the process!
Advice for Early-Stage Startups
In Mudassir’s experience, the last 10-12 years have been an anomaly for Pakistani markets. The normal cycle is to start a business, and the profits earned from that business are then invested in new businesses or new markets. However, over the past decade even before one’s first business is profitable, money is invested into other businesses, which is further incentivized and enabled by capital markets. As a result of this cycle, there is a lot of loss. One should instead focus on making a singular business or a few markets profitable before moving on to the next thing. Additionally, be focused on your burn, making sure there is enough capital to sustain your business for the next 2-3 years.
Q. How do you market an innovative product?
While there’s no prescriptive answer, I firmly believe that a good product doesn’t need marketing. If you have a product that is solving a problem, then the people who are facing that problem will seek you out if you delight them.
“Build a great product, make sure that it wows people and people will do the rest for you.”
Delighting the user is something that you should always aim to do with your product. If it is a good experience the users become your marketers – generating positive word of mouth, this happens in the way that you delivered the solution to them. This organic marketing will give you the first leg of growth needed to go out and raise money to grow further. The mistake that a lot of people made in the last year or two when capital was cheap is that we didn’t build a great product that was wowing people, we built a product that was okay – it was filling a problem but it wasn’t delivered in a way that created organic growth.
Creating Something Meaningful
People often overlook purpose. According to Mudassir Sheikha, Silicon Valley, today has morphed into a rat race, creating transactional relationships among colleagues, employees, customers, and stakeholders alike.
Q. How can we find purpose in what we build?
With Careem, our goal was not to create a ride-hailing business from the onset, it was to do something big. My Co-Founder, Magnus Olsson had a fatal hemorrhage in his brain, he said if I survive I want to build something meaningful – that was the big idea. This narrowed down our purpose into creating something to simplify daily life and build something inspiring.
Purpose is what keeps people going. If you can figure out why you’re doing something, articulate it, and keep reminding yourself and others of the bigger purpose behind it, it will create passion and energy. People are going to sacrifice everything they have and more to make this thing successful.
For more of our insights on Pakistan’s startup ecosystem in 2022 click here!
