Contact Links
Ayman Ashour's LinkedIn account: @Ayman S. Ashour
‍Newton International Management’s Website: http://www.newtoninternational.com/

Transcript:
Ali Zewail: My guest today is Wael Nafee, Partner at Raed Ventures. Wael is a computer engineer, a serial entrepreneur, and a YC alumnus who has co founded various startups in the Silicon Valley and Middle East. He was one of the early employees of Careem and held roles including VP of Product Management and VP of Platform Super App business unit until Uber's acquisition for 3.1 billion. Wael is a techie at heart and has built technology products used by tens of millions of users worldwide. He's currently a general partner at Raed Ventures, a VC firm investing in early stage startups in the region and is passionate about building tech capacity and fostering entrepreneurship in the MENA region. Enjoy this excellent wide ranging discussion with Wael.

Ali Zewail: Welcometo the Sarps Arabia podcast. My guest today is Wael Neffa, partner at RawAdventures. Uh, I first got introduced to Wael's name. On the very firstepisode I recorded, which was actually ended up being the second one to bepublished with Tariq Faheem, and he told me a very interesting story that Ihope to go over from the founder's point of view, uh, with Wael later on in thepodcast.And also, uh, well, as someone whose products I use a lot, aproduct that he like contributed significantly in making Kareem, I, I use andhave used a lot. And so, uh, and of course, Kareem is what it is in the startupecosystem. So in addition to his work at ride ventures, we're going to have areally interesting conversation about a lot of topics.Welcome. Well,Wael Nafie: Thank youfor having me, Ali. Great to be here.Ali Zewail: Great.Um, all right. So maybe we can just start, if you can tell me in a few minutes,uh, how you came to end up in this world of startups.Wael Nafie: Yeah. SoI, uh, I graduated, um, uh, I studied engineering and graduated, uh, as acomputer engineering, uh, you know, enthusiast from university of Waterloo. Iwent and worked in the Silicon Valley for many years. I had a dualspecialization in both, um, software engineering, as well as digital integratedhardware design.And I was working in the semiconductor industry for many yearsin the Valley. And at one point I, I got the startup itch and I kind of wentthrough a phase of various different startups that I had worked on. Some ofthem failed, some of them, uh, kind of went through a mini exit. And I endedup, uh, kind of along the way, um, kind of learning the full end to end ofbeing an entrepreneur.Uh, initially I was just an engineer building products and thenthere's other aspects of running the business that I have to be exposed to. Uh,building your growth strategy, uh, you know, go to market. Uh, your businessmodel and, and all of this I learned by fire, uh, being in the middle of it.Um, I ended up, uh, in 2014, uh, working on a startup that got admitted into,uh, Y Combinator.Uh, at that time it was the first company from the Middle Eastthat had gotten into Y Combinator. So, um, there was a lot of kind of, uh,learnings along the way. Uh, in 2015, uh, that company was, uh, you know, shutdown and, uh, I ended up joining, uh, Kareem. Kareem had probably beenoperating now for three years when I joined them, but they were still kind ofvery early on in their, in their journey.And, uh, I had product and seeing it from a relatively early,uh, but not necessarily from the very, uh, start, uh, and, and the journey toseeing it scale. To the, to the, to the point that it reached, uh, up until,uh, post acquisition as well. And, uh, that, that was really kind of myexposure into the startup ecosystem as a whole.Ali Zewail: Great.And, um, now, uh, you're at, uh, right ventures, uh, as we know, it's a Saudibased, uh, venture fund. So can you tell us a bit about, uh, right ventures,what, what the thesis is, what it invests in?Wael Nafie: RiotVentures, we, we invest in early stage startups. Um, the majority of ourinvestments are targeting seed. And exceptionally, we do pre seed andexceptionally a little bit later than that. But ours, bread and butter, entrypoint, sweet spot is, uh, seed. Uh, an early stage. Um, we, we invest acrossthe MENA region.Um, so that the top three markets, uh, being, you know, Saudi,Egypt and UAE, um, we, we don't, uh, I wouldn't say that we are, uh, we, wehave a particular sector focus where sector agnostic, but we maybe avoid, uh,you know, asset heavy, extremely asset heavy or hardware based companies. Butother than that, we're open to anything.Um, and we've been operating, um, so Raed was, was started, uh,in 2016 and we're currently, uh, in the, in the, in the, uh, third, second fundand about to launch our third fund, Inshallah.Ali Zewail: And, um,you know, I mean, you, you were on the operator side in a big. tech company,you know, when you moved to ride, uh, what was like the biggest change ofoutlook or mindset that you had to make when you moved from one side of thetable to the other?Wael Nafie: As anoperator, you're used to kind of rolling up your sleeves and getting into theweeds. Uh, on the investor side, a lot of times you're watching, you're onlygiving advice to people and they can take it or leave it. Um, it was initiallyhard for me to, to kind of anticipate how working in a VC would be like,because I was very much used to kind of jumping in and, and, and working a lot,but I think over the years, you, you, you, you trade off the trade off betweendepth and breadth.Um, and seeing a whole bunch of different startups, foundersfrom all different sectors, backgrounds, you see a lot of breadth of businessmodels. You see a lot of breadth on a lot of areas and you sacrifice, you know,that, uh, you know, your ability to work so deeply with all of the founders.Now, that being said, I think the operator angle.It's definitely something startup founders feel when they speakwith me. And I think also the rest of the right founders, most of them, all ofthem have been former operators as well. So I think, um, it's one of the thingsthat when I engage with the founders myself, um, we can actually have the deepconversations and they, they appreciate that as well.And that credibility that I've been in your shoes before, Iknow what, what it feels like. Um, when I, when, when we discuss. Um, questionsof scale or challenges that come with scale. Um, well, hopefully I'm speakingfrom a position of I've seen, um, what worked and didn't work when we wereworking on Kareem and, and I, I've been in your shoes, or at least even if Iwasn't working in that particular area, I can probably connect you with someonewho, who knows, uh, how to do that.So I think this, this is something that the foundersappreciate, and I think it. I would say it gives me a different type ofrelationship when we speak to founders, regardless of whether we end upinvesting in them or not.Ali Zewail: I'm sure.And, and do you like personally have, uh, a preference or a focus area that youlike to focus on when you're looking for investments as a partner?Wael Nafie: Um, notparticularly. I mean, if I look at some of the investments that I led, some ofthem were in fintech, some of them were B2B marketplaces, some of them were,you know, SAS company. So, so this is very different set of things that I endedup, uh, investing in. I think one of the things, uh, when you're looking atearly stage investment, you're obviously doing a lot of checks and, and, youknow, your diligence on the market and business model and whatnot, butdisproportionately, uh, you end up focusing a lot on the founder and theintrinsics of the founder.Is this a founder you're willing to back? And a lot of myeffort is also spent on getting to know the founders deeply and what movesthem, what drives them. Um, and this forms the largest part of the, of thedecision making. Um, but definitely is not the only thing.Ali Zewail:Interesting. And no geographic focus, right? For you personally.Wael Nafie: Not, notin particular. Um, I've, I mean, I, I've, because I know the Egypt market verywell, because I have a lot of my connections there, because I know theecosystem well, I generally end up being. Uh, close to that, uh, market andsector and the founders there. So I would say maybe that's, uh, uh, somethingthat, uh, that I get involved in a lot more.Um, but not exclusively. We have had, my partners have, haveworked on deals and led deals out of Egypt as well. Um, so, and then I, becauseI live in Dubai, I also know the UAE ecosystem here as well. So I guess. Those,you know, there's not a particular setup in a way that I only look at Egypt oronly look at UAE or Saudi, but it ends up because of my background and whereI'm living, that's how it naturally evolves.Ali Zewail: Got it.Another aspect, like, of this operator versus VC dichotomy is, is sitting onboards. You're now on the boards of two companies, Grinta and Tager. So whatis, like, different from being a board director who is involved in a businesssomehow more than the average, like, uh, hands off investor? And an operator.Wael Nafie: Yeah, Imean, board discussions, ideally, they're focused on a lot of strategic aspectsof the company. Uh, it's not about tactical day to day things. Um, you know,that's, that's, that's the conversation we can have at any time afterwards. Andit's not the, uh, it's, it's not the norm. So a lot of times, really, uh, thecomposition of the board, the type of preparation that's had up front, what isthe best conversation to engage with, with your board members.I think a lot of founders, uh, get a while for them tounderstand, you know, because You're always available to talk to the founders,so they can always call me up and say, Well, I'm thinking about this. What doyou think about it? And then that's fine. That's a lot of tactical day to daythings. But then how do you shift that conversation and have the most fruitfulconversation on a board?And I think a lot of founders underutilize the board, in myopinion. I don't know, maybe because of what they've heard happens, uh, in themarket. Maybe, maybe, uh, there, there's always a little bit of, uh, ofdisappointment of what value they can get. But I honestly think that if thefounders spend a lot of time really thinking about what are the qualityconversations that we should have, or what are the conversations that we canhave later, there's a lot of value to be extracted.And it really sets, uh, helps the company think through theangles, uh, Uh, that they haven't thought about in their business, uh, a lot oftimes just our learnings from what one portfolio company did versus another,what worked for them, what didn't, um, what are common challenges that arethere, um, you know, a lot of times founders think that they have very, veryunique challenges and definitely there are a portion of it that is very uniqueto a particular company, but more often than not, these are, um, similarproblems, but maybe reflected in a, in a slightly different flavor that theycan benefit from the wisdom of, The breadth that some of their board membershave seen or could give them advice on.Ali Zewail: And, andwhat do you think is the, like, what are the attributes of the best boarddirectors? What are they like? Because it's always a balance, isn't it?Wael Nafie: Yeah, tobe honest, I mean, I haven't had a massive experience on various differentboards, but the two boards that I'm on, I think the interactions between allthe board members are very positive. It's very constructive, but I think, Ithink a lot of times, um, a good board member is a board member that doesn'tnecessarily get panicked by anything.They, they see, because companies, especially early stage,they're going to go through. Uh, a lot of ups and downs and a lot of challengesand the most, the most, um, Challenging conversations are ones where they'rewhere people are always jumpy about, Oh, this happened. Oh my God. And there'sa, there's a, there's a disproportionately over, over, there's adisproportionate overreaction sometimes, but I think whenever, whenever theconversations are all calm and it is really about not necessarily nitpicking,but also how do you drive the conversation towards a very constructive kind ofoutcome or new realizations for the founder and really the community.Understanding the personality of the founders because founderpersonalities are different, how I convince one founder in our portfolio aboutan idea that I want them to really think about, I would go about it verydifferently from, from one to another based on how I know they are and, and,and how they're more likely to, to, to, to receive the kind of the feedback I'mgiving, or even how to engage in the conversation, regardless of they wouldconvince me or otherwise.So anyways, I, I think, um, to, to, to go back to the questionabout what, what makes a, um, Good board composition. I think that diversity ofideas is an important one. I think, um, you know, definitely, um, uh, a shiftaway from, from theory to the, to hands on advice. Uh, people have heard about,oh, you need to do a layoff, for example, now, tough decision.Okay, give me advice of how best to execute on a layoff. Let'stalk about that. Um, we need to accelerate our growth faster. Okay, obviouslythe founder has to go figure that out. But what are, what are things that weneed to think about? So the practical aspect of a lot of these types ofConversations and the more that we can get a bit more away from the theory intohands on advice or a strategy that is not something that they could have justread in a book, um, makes, makes the, makes the conversation a lot more real.Ali Zewail: Right.And I guess there's, like, the CEO has a role in getting the most out of theboard as well.Wael Nafie: It is, itis their primary role. It's not our role to figure out what the rightconversation is. We will drive towards a better conversation if we feel thatwhat is put on there is not right, but it's primarily the founders. They needto think very carefully. They know what does well have to offer to the table.What do the other board members have to offer in the table? Howcan I best engage in a set of in an agenda that gets me to to to answer thequestions that I need to answer? Uh, and how do we go about having aconversation? It is definitely the founders. Only I would say they're solelyaccountable for that and where there's still support.Ali Zewail: Yeah, Iagree. And, uh, okay. I mean, moving like away from that board, uh, directoraspect and, uh, focusing on raw adventures and how it makes decisions. Um, doyou guys, when you're making an investment decision, are you, some, somecompanies are like consensus driven, some are majority driven, some are likethe partner, each partner gets.Just decides, how do you guys go about it?Wael Nafie: So, forour front 2, it was a unanimous. It has to be a unanimous. Yes, which means youhave to have it. The bar was quite high. Um, there's obviously pros and cons ofa decision that by consensus, especially when you have many people for people,but I think overall it, it, one of the big advantages of it is it, it reallyforces, um, conversations.I, I know all of my partners. Well, I understand. Um, when Ilook at a, a company, I understand very quickly what are my top concerns that Iwant to get answered before I say yes on this company and, and what are thethings that I'm more excited about that I think are pros and I have to, anypartner who's leading a deal has to kind of understand all of the otherpartners, what are the top questions that they're going to ask in the IC, whatare the IC members going to think about?And it really forces us to have a lot of very, uh, closeconversations through that. Obviously it comes with cons because then. Yeah.Yeah. Sometimes, uh, decisions by consensus are not always the best. Sometimes,uh, you know, there has to be a balance between, uh, between the differentopinions. So, we're exploring, uh, potentially different ways of doing it forfuture funds, but as of Fund 2, it is, uh, consensus.Ali Zewail: And I'veheard like, uh, some funds that have unanimous vote that, that have a system, ajoker system where you have one, each partner has one or two times where theycan like just put their joker on the table and say, You know, uh, my vote isenough and, um, and, um, it's actually the, it really drives, uh, deep beliefin startups.It just shows that this is a startup you really believe in andit, uh, and it's a usually a non consensus bet. So if in the positive case,it's, it's usually a very good success, uh, but of course it has risks. Anyway.Wael Nafie: we don'thave that for our fund two. It has, it is always consensus, but we are for ourfuture fund, fund three, we are exploring, um, um, single trigger mechanisms aswell, but with limitations on ticket sizes and, and, and how many times andwhatnot. That's something we're exploring for sure. Um, but yeah, for so farit's been unanimous all the way.IAli Zewail: Right.Okay. Uh, and, uh, all right. So you know, there, there are many ways to getproprietary deal flow. Um, I've noticed you're not the most active person onsocial media, you know, and, and these things. So how do you get quality dealflow?Wael Nafie: mean,social media is one of the ways to get yourself out there. It's not the onlyway. I think this VC game is primarily a reputation game and the reputation,your reputation can be built through various aspects. You know, a lot of it hasto do with what founders say about you to other founders. And I would say, um,even more importantly, that some people might ignore is what do founders thatyou chose to say no to, what would they say about you to other founders thatare looking to raise money?And I think the most important thing is, you know, this, um,you know, being down to earth, being very responsive to the founders, beinggenuine, uh, whenever, you know, you're giving them the reason. One of thethings that we have at Thought Adventures, for example, is. Again, we're notperfect, but we strive that every, every, uh, inbound email that comes to us,there always is a response back, even if it's a no.And, uh, whenever there's a pass, we give them a pass reason.And it's not one of those hand wavy reasons like, oh, you're a bit too early,whatever. We try to give them what are the things that we're, we're concernedabout. And we, we say it very humbly and we, and many times, you know, we, wesay things like we very likely could be wrong.And many times founders have proved us wrong, but this is whatwe think so far, prove us wrong. And let's have the conversation again in acouple of months or whatnot. So I think humility is there, approachability,just, you know, they want to feel that they're dealing with someone who's ahuman being that they can actually.You know, have a long term relationship with because when youinvest in a company, it is very much a long term relationship until there's anexit of some sort. And then finally, um, part of it is also how well we prepareup front. Um, a lot of times our internal team and our, and our investmentteam, we work a lot on just kind of researching and understanding domains andsectors and kind of developing our own internal theses about.Kind of different, uh, business models or sectors or whatnot,and, uh, the better prepared you are, the more homework you do, um, tounderstand, uh, what is happening in that domain, uh, the better you are ableto ask smarter questions whenever the founders are pitching to you and wheneveryou're going through the process with them and believe it or not, founders cantell, you know, there are the.You know, the, the dumb questions, the stereotypical questions,tell me this, tell me that, what about this? What about that? That, you know,you can close your eyes and almost expect every VC is going to ask them. Thereare important questions, you know, you need to ask those, but if theconversation does not go beyond these standard questions, that it doesn'tmatter if this is a company that is a SAS software versus a company that, youknow, sells, uh, you know, space equipment hardware, you're always asking thesame questions because fine.It's important questions to ask. But if the whole conversationonly revolves around those, it becomes a very shallow conversations. Founderscan tell whenever you really understand the business model, you reallyunderstand the challenges and you really understand what they're doing. Andyou're actually asking engaging questions around that.And even if the answer is no, but like, wow, this is a reallysmart investor. So to the extent we can get ourselves to be smarter aboutcertain areas before we sit down with the founders or before we end updiscussing. Um, it's one of the things that, you know, people say, well, theseare really smart guys.And then also, um, post investment for the people who nowyou've invested in, it's how available are you really to them? You know, a lotof times people talk about dumb money and smart money. We, we'd like to thinkthat we're very smart money and we will help you with a lot more than, thanjust the money, the check that we give you and how strong of an NPS score theywould give you on.Uh, how much you've helped them in the things that matter tothem, uh, and made an impact is, is, is something that will really help yourreputation. Uh, I'm not very active on social media. I consume a lot of socialmedia, but most of the founders who, who I've interacted with, I'd like tothink left with an extremely positive.Interaction experience, even if my answers to them were, sorry,we're unable to invest now and the real, the real reality of the situation is Isay more no's than yeses because we ultimately invest in 20 ish portfoliocompanies per fund, but on a per year basis, we might speak to over 1000, um,in one way of shape or form.So, um, yeah, there are definitely more no's than yeses. Ali Zewail: Yeah.And, and, you know, it's, it's a, it's a more longterm strategy maybe, but Ithink it's much more effective and, and, uh, really builds, uh, for thelongterm. And forWael Nafie: peopledon't under. Yeah. I think a lot of people underestimate. how respondingquickly is probably the biggest indicator of how your reputation is going tobe. And I don't mean responding quickly, um, in the sense that you're alwaysthere 24 seven, but Uh, with on WhatsApp, it's, it's just very simply thefounder wants to know, is this a yes or is this a no, right?Are you feeling positive about it or not? And a lot of times Ihear from founders that some VCs kind of string them along for so long beforeand they keep giving them the hope that, yeah, it's looking good, it's lookinggood and then it's looking likely and we're preparing the term sheets now or Xor Y and in the end it ends up being a no for something that they could haveYou could have asked me that question, like from day one.What? How did this question come so late? So really kind of,you know, just being very transparent with the founder, what you're thinking,processing processes at any moment in time and just giving them a timelyresponse with with that, with whatever direction you're leaning towards and,uh, is something that a lot of people underestimate.Ali Zewail: Yeah,absolutely. Uh, I couldn't agree more. And, um, you know, right. Venture is, isa company that it has a very impressive portfolio. You know, some of the realbig rounds, uh, in the region have been raised by some of, by your portfoliocompanies. I'm going to miss some of them, you know, but Unifonic, Tubby, uh,Lean, Foodics, you know, I had to write some of them down, Grinta, et cetera.So, I mean, some great companies, um, And, and you seem toreally bet big and, and like you, you're willing to take a risk, uh, on anidea, which, which, which I think is good. So how did, how do you guys, is thislike a deliberate strategy or, uh, how, how did you, uh, actually. Collect thisportfolio. And how did you, how do you make these bets?Wael Nafie: I mean,first of all, I think a big part of it is And I don't know how to explain it. Imean, how do I translate in English? Just blessings from, from God that we, we,we, we, we worked hard and we were blessed \ good results, so this isdefinitely one, but I think we do work hard and really, um, reallyunderstanding how the founders are and just kind of our persona, our descendingof the personas of the founders and which are the founders we really want tobet on.Um, whenever we have conviction on a, on a founder and abusiness model and a team. Uh, we definitely double down. We have a history ofdoubling down on what we think are very strong. And, and, you know, ourinternal team, our close follow up with the founders, uh, really understandingtheir business post investment really gives us light and sheds light into whichare the ones that are performing to what our expectations is and helps us todouble down.So it's not one thing that we do, but it's a combination ofmany things. The other thing is. You know, our proprietary deal flow, ourability to, to reach deals before, before others helps gives us the optionalityto actually choose first. And when we, when we form conviction faster on aparticular company or founder, um, because we've, we've been engaging with thatfounder for much longer and earlier, um, it gives us an edge in, in, in firstdibs, let's say.Uh, and then finally, also our ability to research a domain andsector. Um, prior and for months before, because we're generally trying to lookinto areas, um, and understand them deeply helps us make a decision faster.Whenever we do see a company in that area, in that sector that we were like,wow, we were, this was on our radar, not necessarily this company, but thissector was on our radar or this problem statement that they're, that they'resolving is one that we think is large in the region.This is what we think. Uh, is going to be the challenge in thatarea. This is what we think is going to be the opportunity. And then when wesit with the founder, we already know what questions to ask and helps us make adecision faster. So all of these things are small, silver, a combination ofmany, many lead bullets.No, there's no silver bullet there, but a lot of hard work witha lot of the partners and the team members to kind of make sure that we We endup, uh, picking what we think are going to be the winners and wrap that all inAllah's blessing and making us choose the right one.Ali Zewail: And Imean, it's, it's like when, when I go through the portfolio, it's, it's, you'veseemed to be high conviction investors, uh, like putting an 11. 6 million preseed round, uh, going into that, you know, with cylinder, for example, I mean,that's, that's a big precedes, uh, it requires someone who's a high conviction,a conviction investor.Wael Nafie: I wasjust gonna say we didn't put the full 11. 6 into, into a cylinder, but we, we were, we participated in thatwith, with many others. So yeah, we, we, we will, we, we can't put up an 11. 6million ticket in one company. We're early stage. So Ali Zewail: mean,yeah, I mean, that's an important clarification. Uh, but it is like an earlybet. That's quite big, you know, because that, that, that's a big precede, uh,uh, valuation. Uh, so you, you can't do that even if you're just participatingwithout. Conviction. And it kind of brings me to another point, which is youseem to invest as a, as a, as a fund in companies that might be, shall we say,maybe competing, maybe like intersecting in their target, uh, industry may, uh,even if they're in different geos at the moment, uh, is that something that,uh, Like is deliberate where you focus on areas that, that, you know, areworking across geos or like Sayara and cylinder, for example, or, uh, there,there were like a couple that are very, that there, that have intersections inthe FinTech area, for example, things like that.Wael Nafie: Yeah, Imean, Cyara and Sender, obviously they're, they're from two separate funds andso I, so I think, I think that makes it kind of work, but in general, we don't,we don't invest within the same fund and to exist into competing companies, wedefinitely will form conviction in one that will, that will be the winner inthat sector in terms of overlap.Obviously, there's a lot of companies that will have a lot ofemerging overlaps, uh, over time. But, you know, it's, it's hard to anticipatewhat these overlaps will be, um, who would have known that, uh, you know,Google and Apple will be competing in the, in the phone market. No, it's justkind of super hard to anticipate in the future what, what companies will do.I mean, they're in a similar sector, so I think for us, as longas the, the, some intersection of overlap of some similar, um, area is, is nottoo, too large and is not something that we even see in the, in the short tomedium term horizon, that wouldn't be an issue for us.Ali Zewail: And okay.I mean, looking on like the other side of the coin, so to speak, uh, from thegreat like portfolio companies, there are. Things we can learn from otherexperiences. So, uh, one of your portfolio companies kind of achievednotoriety, uh, after its IPO, uh, in the SPAC, which is, uh, Swivel. I'mguessing, I mean, you guys made, made an exit, but, but things didn't go asexpected post IPO.Do you have any reflections on that, uh, uh, experience?Wael Nafie: Yeah. Imean, there's a lot of reflections, I think, you know, our bet is always on thefounder. The founder, Mustafa is a great founder. Um, and, you know. You know,their IPO was unfortunate in the sense that it was at a timing of the marketwhere the market was going through a massive correction.Um, uh, and, and all stocks kind of went down and, you know,there was a lot of learnings. I think one of the learnings that are there isthat it's, it's, you know, whenever you're, you're the, the two, okay. So ifyou think about it, the two facts that happened in the region, one was swiveland the other one was, um, Yeah, I think if you ask both of those founders,I'm, I'm, I'm pretty sure they would tell you that lots of learnings for them,but the reflection is, is if you're going to IPO and you're building a product,it's, it's important to us back in a market or to go public in a market wherethe retail investor or in general, the investor base, whoever they be.Maybe understand your core product on a day to day basis, like,you know, people in people in New York or in the U. S. or others don'tunderstand that because, okay, they've never used it. They don't know anythingabout it. So well, it's very similar. Uh, they don't experience their productand it's very hard for them to build conviction on it.If there are investors in the region here. Um, it's probably abetter approach now again, we're going to talk about timing of market. What arelearnings about going public without being profitable and all of these thingsare obviously great learnings as well. But even simple things like choice ofwhere to, to, to go public is important.And that's why I think the new wave of, of, of companies, someof them in our portfolio that are looking at IPO ing and I know across other,um, VCs, portfolios who are looking to, to, to go public, a lot of them arereally considering either dual listings or, or single listing in, in the localmarkets with, with the Saudi market being, you know, an obvious place to, to,to consider an IPO.Ali Zewail: I mean,that's, that's a great best practice in it, in itself. And uh, so what have youchanged your mind the most about since moving to the venture, like to theventure capitalist side over the past three to four years? What are likebeliefs you had maybe, uh, about running companies or the best startups orsomething like that, that maybe you've changed your mind about? Or what's,what's a big like thing you learned over the past three to four years moving tothe investment side?Wael Nafie: Um, Imean, there's so many things to reflect on. Um, I think to be honest, giventhat I was an operator and I wasn't investors or founders shoes for so long, Iunderstand kind of, I've seen kind of, you know, especially with my journeywith Kareem, I've seen what the founders have done. I've seen an example of asuccessful.It's not the only way to do things and whatnot. I'm learning tosee. Okay. Other personas and approaches by founders that I think are verysuccessful, uh, as well. Um, and there's a lot of commonalities about thetraits that they share or the approaches they share, but there's definitely aunique approach, uh, to all of them based on the founder's personality, basedon the type of business they're in.But that, I think, um, gives me more templates. Available ofsuccess stories that that could be available. I think that's one of thosethings that I kind of broaden my my scope and horizon on compared to kind ofwhat I would have thought of before. Uh, joining, right? So I think that's 1changing my mind. I don't have to think about that things that I've actuallychanged my mind or reversed my decision on, but, uh, I'm sure there's, there'sa lot of learnings across the way.I mean, just take simple examples when we invest in incompanies as a fund. You're investing in 20 something companies, your fundreturners are going to come from a few of them, a handful of them only. Um, soa lot of times when we make an investment, we look back and say, what, what,what made this particular one pop?What made this particular one, uh, kind of outperform others orwhat made this one fail? And there's a lot of, and you know, when you invest ina company, you're, you're, you're going in thinking this is going to be the,this is going to be the fund returner. But it eventually turns out to be notbecause that's the nature of the business.The majority of them will will will not be the fund returners.So it requires a lot of honest introspection as to what went wrong and how muchof it could we have asked smarter questions about and what what are the thingsthat are just There's nothing you could have done, but this is the nature ofthe game.So extracting learnings, even, even if they're very, very smalland tiny and very hard to detect is, is an important part to becoming a betterand better investor, because you need this honest introspection to, to, to, tobecome better.Ali Zewail: Yeah, Iagree. Uh, an interesting, it reminds me of something, uh, an interestingpractice that, uh, there's this book called thinking in bets, uh, from a ladywho was a champion in poker, uh, not really our thing here in the region, but,uh, but one of the things she. Does is a pre mortem. So, so if somethingdoesn't work out as, as, as well, like when you're making investment, you, youwrite down what you think will go wrong.And then if it does go, if something does go wrong, if it's notas successful as you want, you can actually look back and see if these are thethings you expected or with something else. So it becomes easier to learn asyou go, uh, from these kinds of different, because after the fact, it'sprobably too late.You, you've already created. Your subconscious has alreadycreated this new image of why things didn't go well, but, but when you'vealready held yourself accountable, so to speak, by writing it down beforehand,it gives a clear learning kind of outcome, so to speak. Wael Nafie:Absolutely. I think a lot of times people compare venture investing to poker. Ithink that's become a popular thing. Uh, I think it's because, because it's, they share a couple ofthings in common, right? You have. A probabilistic, a low probabilistic outcomeof success, Ali Zewail: Mm Wael Nafie: withdisproportionately high outcomes for the ones that are successful.So it's kind of like anything that follows that kind of highlevel model. Um, you know, there's definitely some similarities there, um, forsure.Ali Zewail: And itrequires, like, making decisions with, quickly, with low, like, information,and it requires reading the, the, the other people around the table,understanding their personalities and things like that. So, yeah, it is, itWael Nafie: There's alot of uncertainty for Ali Zewail: I do, Ido recommend that book. Yeah, exactly. So, okay, let's change tacks.Um, and, uh, we'll start kind of where my, my story that, thatI first heard about you and I'm going to do it in a, like, I'm going to paintthe movie scene and I want you to go back. Uh, it's like a flashback and, andgo back in time to what led to this scene and how you felt at the moment. So,um, uh, you're the CEO of a company, uh, it's doing great.You're the first. Regional founder to be in YC, you know, youhad 80, 000 downloads in the first three days and, and, you know, each one is aone and a half dollars. So, I mean, that's good traction. Things are goinggreat. Things are growing. Uh, and then, uh, your main competitor gets.WhatsApp gets acquired by Facebook.How do you feel then? You know, h how did you get to this stageand, and, and what did you do moving forward?Wael Nafie: So, so Ithink, okay, let me to give a brief to the hover chat. Was a messagingapplication that was meant to kind of, uh, deliver kind of a multitaskingexperience. Uh, people are doing a lot of things while they chat and we weretrying to, we were the first to kind of, to pioneer this kind of floatingbubble kind of, uh, experience while you are on your mobile phone, uh, mobilephones.A lot of them are, they, they, they, um, they're supposed to bemultitasking devices, but it's really one full screen application switch toanother full screen application. You're, you're now seeing, um, you know,larger foldables phones and whatnot that can have more than one screen open atone time. But, you know, for the most part, most people experience a one, asingle full screen app, uh, switching experience from one app to another.And we were trying to kind of build a multitasking experience,which is primarily, um, uh, kind of a product innovation and a UX innovationthat we were trying to do in the way people experience chatting. And we, wereleased this and then sometime. After we released it, it wasn't too long, Ithink it was within a month, uh, Facebook, uh, didn't, it wasn't aboutacquiring WhatsApp, it, they released kind of on their Facebook Messenger, thisbubble thing as well, which was kind of.Eerily similar to what we had just released about a monthearlier. And obviously it definitely looks like they were working on it before,but we were just wondering, um, if this was going to kill us or not. And, uh,it was kind of a scary thing, but, you know, I mean, we eventually ended updying. Let's just be clear about that.So Hoverchat did not survive, but, but in the offset, we, wedidn't notice a big, uh, dip in our, in our user base, but I think it wasbecause. There was a lot of other experience differences that mattered. I mean,I think a lot of people who really, really loved HoverChat, they loved it forkind of the unique approach, but also that we were doing it with, for, for theU S market is, is a, is a primarily SMS market.Um, and, you know, most people weren't on those OTT chatmessenger or chat apps at that time, be it WhatsApp or Messenger and whatnot,still primarily SMS market. And we kind of had built kind of, uh, an experiencearound that where. Funny enough, we also kind of, uh, built kind of like aniMessage for, for, for Android type of thing where people who were on hoverchat, it was kind of delivered over, over HTTP, uh, rather than eating up yourdata or your SMS plan.And if you were not, then it would do the both. So, so we kindof pioneered a lot of like cool things that were firsts in that sector. Um. Butunfortunately, we couldn't compete for, for various other reasons. And thecompany ended up, uh, kind of going under. I think we were very proud of thefact that there was a lot of core messaging experiences that we, we would, wewere pretty much the first to do, or the first to kind of push the edge on, uh,to, to a new level.Ali Zewail: Great.And that decision is a tough one for, for founders. Uh, a very tough one, youknow, kind of killing their baby. Um, can you tell us more about how you madethe decision? What, what, what drove you, uh, across the lineWael Nafie: Um, Ithink at the end of the day, you know, you have to be very honest as a founderwith in the state of your business. Uh, and you either choose to kind ofcontinuously make your pivots or change. Or recognize that this is not going towork out. And I think, you know, we were in the social space, social mediaspace in general, be it with messaging, whether it's a social application, um,you know, the really successful ones that are out there are ones that are kindof growing at, you know, virality level, kind of month on month growth metrics.And anything short of that ends up being, uh, fine. It'll,it'll survive. It'll be, it'll work, but it won't, it won't make a change or itwon't make a dent in the, in the market. It will never become that big. Soshort of kind of 20, 30 percent month on month growth. For, for these types ofthings, it's just not going to survive.And, and I, I think in our case, we were just recognizing that,you know, it got to a point where we weren't able to, to justify, uh, orconvince ourselves that this can be something big, um, without, um, uh, given,given the ecosystem lock ins that were there from the big players that werecompeting in that space.Ali Zewail: and. Whatwas the, I mean, YC at the time was still being managed by Paul Graham. So whatwas the YC experience? You know, what did you take out of it? What was it like?Wael Nafie: Yeah, sowinter 2014 batch was, I think, uh, the last batch that Paul Graham was stillkind of running the show there. Um, I, I still, I don't know how it's like now,but a lot of the founders I spoke to tell me very similar things about it, butsimilar to what I had experienced. So I presume it's, it's still similar andalways evolving and improving along those lines.But I think the most important thing that I got out of YC was,um. Uh, an extreme focus on growth and just making progress on your growth on aweekly basis on a daily basis. It's just a lot of times people thinking like,okay, month over month and whatnot, but in the very early stages, thegranularity of your, uh, obsession on, uh, growth and identifying productmarket fit and scaling and whatnot is, is, is, is on a much more granular basisand needs to be much more frequent.And I think that's kind of like the top thing that was justkind of hammered into our heads all the time is to think about, about that. Thesecond thing is, um, it was really, uh, when, when founders are, you know, whenthey're, when they're pitching, they're, they're used to kind of, uh, being inpitch mode and selling mode or sometimes overselling mode.Um, and, and YC was very good at getting you to cut through allof that noise and just really have a very, very honest view in your business.Is this working out? Stop all the marketing speak, stop all the pitch modespeak. What is actually happening in your business? Are you really convincedthat this is a good thing?And what indications do you have and what KPIs do you have toindicate that? So, the extreme honesty that it kind of, uh, forces you to kindof have as a discipline in evaluating your business, um, was also a very, uh,very important thing that I got out of it. And, and sometimes, you know,founders take, uh, negative feedback, um, about their performance or thecompany, because it's your baby, they take it very sensitively and they justkind of very quickly teach you to, to kind of, uh, kind of remove all of theemotions out of it and really honestly evaluate, uh, what has been theperformance.Uh, so far and what's the state of the business. So I thinkthese two would probably be the most important two, uh, things that I neverthought I would get out of it. I thought I would get other things out of it,which I've heard were great about Y Combinator, but I think these two were theunique things that I don't think I've heard of any other kind of acceleratorprogram deliver it in, in, in, in such a good way as, as they have.So it's, it's just amazing.Ali Zewail: Yeah.That's why they're so iconic. Um,Wael Nafie: so. Yeah.Ali Zewail: yeah. Um,so I, I, I'd like to shift gears and talk a bit about Kareem. Uh, there's somuch we can like learn from your experience there, but, uh, you know, first,how did you make the move to Kareem? Because you ended up. as director ofproducts first when you joined. Uh, so can you tell us more about that?Wael Nafie: Yeah. So the funny thing is I, I, um, how Icame across Kareem, I was in Egypt at that time and I was meeting, uh, I, Ilived in Alexandria. I was heading to Cairo on the train and I was supposed tomeet a friend and I didn't know, I don't know, I didn't know, uh, places inCairo very well. So I, I called him up and said, okay, I'm going to get a taxiand get them to, uh, uh, to your place.What, what, what do Itell him? I don't know how to describe to get to your place. So I said, Oh,don't, don't do that. I'll just send you a Google pin location and just kind ofput it on, download this app called Kareem and, and put it on there. And theguy will know where, how to take you. He'll just follow the map.I was like, what is thisKareem thing? He's like, just download it. It's like Uber, but it's better. I'mlike, okay, sure. So I was on the train, I downloaded the app. And at thattime, um, this was late 2014. And, um, and I had, um, I downloaded the app andthen I was suddenly like, you know, taken aback by the user experience at thetime I was like, wow, I am going to be putting in my credit card or debit cardon this app.They didn't have cash atthat time, so you could only pay with with a debit card or credit card. And notonly that, but the sign up process required you to put in a credit card inorder to sign up. You couldn't just add the credit card later. Um, so the applook, uh, user experience looks so poor that I was afraid to put it in my, mycredit card because it was, I was, you know, I was living in the U.S. between the U. S. andEgypt at the time, and I only had a U. S. credit card. I'm like, I'm notputting in my U. S. credit card on, on this because they don't even send you anSMS when someone, uh, when, when the card is used. So I could get robbed for,for a month and I'll discover it only at the end of the month.So I just didn't havethe confidence. So I called them back. I was like, I'm not sure about this app.Let me just, uh. I'll hand over the phone to the taxi driver. Whenever I get inone, you'll describe to him how to get to your place. And to be honest, itwasn't a very pleasant experience because the driver took a super long path andwe ended up having to haggle on the price.But anyways, a couple ofmonths, a couple of months later. I heard that Kareem had, had closed a 10million app, and I was like, wow, this company, the one that I, the app looksso, so bad and, and, and what was all about, what was this all about? So I wasactually kind of, um, I was actually kind of taken aback by, they must be doingsomething right.At that time, Iredownloaded back the app again and being the, the, the hacker that I was, Ijust kind of basically, I decompiled their mobile app and started noticing thatthere was a couple of like open APIs that they hadn't closed. So I startedsniffing APIs and I ended up kind of, uh, figuring out how many users they had.Let's just call it that.And I was like, wow, this is a lot of users. They had a lot of trips and, and,and, and so on. I was like, okay, so I'm, I'm sitting on a lot of informationthat I now know about the company. They don't think they didn't know about atthe time and I just reached out to the founders. I just kind of got theiremails and sent an email out to them and said, Hey guys, I, uh, I saw yourcompany, you know, Brooklyn, your fundraise.I really want to talkabout this. I think I can help you guys with building the product and we'lldiscuss more. And during the interview, they, you know, I actually told them,by the way, I decompiled your app and. Here are all the open, uh, security thingsthat you have at that time. And I could see how many users you have and so on.And we had a laugh aboutit later, but one of the things that I, I had to kind of work on in thebeginning was just kind of discussing kind of how to close all these loopholes,but, um, since then, you know, one of my first kind of tasks at Kareem was tokind of do a full UI UX revamp, and I think I joined in the summer of 2015 andthe first version of their new mobile app.Uh, went live, uh, in,uh, beginning of 2016. So about six months after I joined and it was a bigproject. And, and, uh, yeah, that's kind of how it started.Ali Zewail: It's agreat story. Um, and a lot of hustle. Um, can you paint a picture for me ofKareem when he first joined? I mean, how many people were there on the team?Um, and you know, what the product organization was like and things like that,just to Imagine what it was like at the beginning.Wael Nafie: Yeah. Imean, Kareem in 2015, I don't know exactly how many people were there, uh, youknow, during 2015, but, uh, in product, uh, in product, we had about fourpeople, uh, in product, I think at that time. Um. And we, the way we wereorganized, we, we had, um, you know, we, we reorged the product team multipletimes since, but, um, the, the markets, so we had the, the, the core, we hadthe kind of the, the, the, the mountain peaks are all of the markets that areoperating.So Saudi was a market, it was a mountain peak, Egypt was amarket peak, Pakistan was a market mountain peak, and then you had Basecamp. Sowe kind of had this. Basecamp versus Mountain Peak, kind of, uh, Basecampbeing, uh, serving the Mountain Peaks because they're, they're on the frontlines, kind of, uh, conquering the market, so to speak, and, and, and gettingour users and we're out there in the, in the back, making sure that they haveall what they need to, to, to conquer.Um. Over the years, kind of Kareem switched into a morebusiness unit type structure, where as we expanded, um, from ride hailing beinga single vertical company, we started having ride hailing and food, grocery,there was payments and so on. So we, we, we shifted into a business unitstructure where. Um, the instead of having a functional org for engineering orproduct or others, they were somewhat embedded into the business units.I'm just going to call it the business unit structure. Um,there were a few teams, obviously, that were kind of. Still horizontal, likeHR, legal and others, but for the most part, the organization kind of ended uphaving their different, uh, org structures. And there was a managing directorfor each of the business units over time.So the structure changed over time.Ali Zewail: And likewhen you have a product like that, you have so many moving parts. You havelike, uh, the driver acquisition and you have the right hailing and thefinancial, of course, parts in the account management. And, you know, there areso many things, so many moving parts so how do you align all these things sothat they're serving your goals as an organization?So I can imagine a situation where you give the driveracquisition team an objective to add drivers at a certain rate, but thiseventually results in Bad user experience for, you know, and affects retention.So they're, they're achieving their objectives, but, uh, in achieving them,maybe the driver, uh, quality is decreasing.And so the company overalls objectives, even though it seemedlike it would be achieved this way, wasn't. So how do you like align such ahuge organization around, uh, the, the organization's overall goals,Wael Nafie: Yeah. So,I mean, obviously this wasn't the, the, the, the, the sole responsibility ofproduct to do that, but it had a lot of teams to kind of really coordinatetogether to get it done. But one of the things that, that the product and datateams ended up, um, Kind of publishing internally at Kareem was. We publishedsomething called the RTB framework and RTB stood for running the business, RTB.And effectively what it was is really helping understand, um,if you're running a two sided marketplace, you're always balancing betweensupply and demand. And in this case, supply is your captains and, uh, yourdemand is your, is your customers, right? People who ride. Um, and if you, ifyou have, um, uh, your, your, your demand team onboarding and signing up a lotof customers, then you get a surge of demand.And, you know, your captains are going to be happy becausethey're always being utilized and they're always, uh, you know, they're alwaysin rides because there's a lot of demand, but then over time, the customerexperience suffers because there's a shortage of drivers. There's a perceivedshortage of drivers, the ETA is for how long it takes for the car to come arelonger.And then, and then suddenly you end up turning these customersand then if you do vice versa, you onboard a lot of captains on the platform.Uh, suddenly, you know, your ETAs are low, cars are always available. Youamazing customer experience, but then, you know, the utilization rate and thebillable utilization rate of, of your, of your, of your captains is low, andthen they're like, why would I work on this platform?I'm unable to earn a decent living. So it's this constant swingof a pendulum. And, and, and what really needs to happen is you need to kind ofhave a, uh, uh, uh, planning process between the supply teams and the demandteams. Um, as well as trying to automate this as much as you can, that you havea well balanced machine that can grow in tandem supply and demand and give theright incentives and disincentives at the right time to make sure that they'regrowing at the same time.And, you know, one of the teams that we had was called themarketplace team and the marketplace team was building all of those balancingtools in real time to help you manage between how do you distribute your. Uh,your captains across the city in the right time, uh, you know, uh, peak, peak,uh, peak factors or surge as it's called, you know, balancing, you know,you're, you're trying to inhibit, uh, demand if it gets too hot so that you cankind of, um, um, make sure you can manage the demand supply situation.Uh, also understanding if you are going to disappoint a userand not getting a car, there's, there's, there's. Uh, there's a, a good way anda bad way to do it. The worst way to do it is to get the user to commit and,you know, they're waiting for you, the car, and then it ends up not showing upbecause it's taking forever or captain cancels.That's the worst way to do it. The best way to do it, if you'regoing to disappoint anyways, is to let them say, I don't want this. Becauseyou're trying to increase your, you know, your peak factor, your search,because you want to get more captains to jump on the platform, because see,there's a lot of money you're going to make now, because you're going to make1.5 X of your earnings and whatnot as a, as a way to incentivizeyour supply to come online. And at the same time, potentially disincentivizesome of your demand, uh, to, to, to, to book so that they end up reachingequilibrium again. So there's a lot of things that need to happen in real time,uh, in order for this to happen.And that kind of made it a very challenging. Uh, planningprocess really, uh, either on a monthly or quarterly planning between all ofthe finance teams and the mountain peaks to understand what is their growthstrategy. If they invest too much on one side versus another, you end upgetting at this, uh, a mismanaged marketplace.And then also the tech teams and the product teams, what areyou building to kind of help automate the balancing in real time on a granularbasis, which is also very difficult to do and, uh, requires a lot of investmentin, in, in product and engineering to, to, to make that happen. Uh, Ali Zewail: Yeah, Ican imagine and to, and to get everyone running, rowing in the same directionas well.Wael Nafie: Correct. Ali Zewail: so yousaid this when you were telling your story about how you joined Kareem, youmentioned how you had to pay by credit card. And I think one of the biggest,like, unlocks and differentiators for Kareem at the beginning while they werecompeting with Uber was that for a while, Kareem actually accepted cash, uh,while Uber didn't, and, and that, that drove a lot of, like, uh, growth versusthe competition.Can you tell us about, you know, where the insight came fromand how you guys made the decision to, to allow cash payments?Wael Nafie: Yeah. Imean, the insight came from just reality. The reality is in, in 20, in 2013 and2014 and 2015, even, uh, you know, credit card penetration and, and, you know,still remains to be very, very low in the region. Um, and in Egypt, especiallyin places like Egypt at that time, Saudi, the least in Pakistan, for sure, andmany other markets cash was king.Um, and at that time it was considered insane. To think aboutdoing, uh, cash, because, you know, if you have a trip and let's just make themath easy, if this was a 100 EGP, uh, trip, um, you know, the cap, thecaptain's, uh, cut is 80, roughly, and we will get 20, let's just call them,uh, math easy, we take 20%. Um, you know, if you, if you do 10 of these trips,then suddenly you have.200 E. G. P. That is Karim's money that is sitting with 10different captains and they're in different parts of the city. Now multiplythat by thousands and thousands of rides a day, not just in Egypt, but in Saudiand in UAE and in Pakistan, you have millions of dollars. Of your own revenuethat's sitting in, you know, thousands and thousands of captain's hands.So cash collection process becomes a nightmare, right? And itwas considered insane at that time. How are you going to figure this out? Andinitially we were like, okay, we'll just launch it and see, is there a demandfor it? And we very quickly saw that there was a lot of demand for this and itwas just an unlock.Now, obviously no brainer. We removed, even if you wanted toadd a credit card, we didn't put it in the sign up process. You can add itlater just before you have a right for markets that they didn't have. Uh, cashactivated, but, but simple things like opening up cash, um, just really justwas, was such a no brainer product market fit issue.And we spent most of our effort now figuring out how to do thecash collection, how do we manage, manage, uh, cash balances owed by, uh,captains to us and so on, and we have to kind of figure out. Uh, collectionstrategies, either with cash collection points across the city or integrationswith, uh, with, um, kind of, um, the likes of Faudi and others across differentparts of the city that we can, um, get the captain to kind of go to the nearestgrocery store and hand over the money.And, you know, we, we do the transfer with Faudi and so on. Sothere's a, there's a whole bunch of things that we then invested to solve, uh,invested in, in your product to solve the experience. Of making cash seamless,uh, and, and, um, and, and, and we rode the wave for so long until kind of therest of the market, um, including not just Uber in the region, but Ola in Indiaand Grab in Southeast Asia and others started accepting cash because. They sawthat we, it's somehow possible, it's very difficult, but it's Ali Zewail: Right. Wael Nafie: sure.Ali Zewail: Yeah. Um,and it's incredible that you made, they made the effort, you kind of paved theway for everyone and,and it's, Wael Nafie: to,launch cache.Ali Zewail: yeah, andit's always like complicated 'cause there are like unintended consequences. Sofor example, like sometimes drivers now they, they want cash of course, youknow, in their hand.And they're a bit, uh, and it, it affects the customerexperience where they're kind of annoyed with customers that pay by creditbecause they're not going to get the money sooner. And, uh, even thoughprobably on balance, they are from their cash transactions, getting money, uh,from the credit. But anyway, yeah, I mean, it is like an interesting, uh, lookinto how the hard things.sometimes are worth doing, even if they're hard because theyprovide the real unlock and the real competitive advantage, which is often the case, I guess. Wael Nafie:Absolutely. Yeah. Ali Zewail: yeah. Sogoing like to your, in the later stages, uh, maybe that was around theacquisition. You became the VP of the super app. platform, uh, for Kareem.Uh, can you tell us, I mean, what was your mission at the time?Was the super app already like started or did you start this project and how,you know, what was your mission from Mudassir?Wael Nafie: Yeah. SoI think, I think over time, you know, Kareem, you know, when, when Kareem wasembarking on the super app kind of transformation, um, Kareem had already been.A multivertical business, we were in ride hailing food, groceries, uh, paymentsand others, and all of them were at different phases of, of their maturity. Butit was, the question started becoming, you know, um, how can we leverage, howcan we leverage, um, you know, two things we had, the largest user base was inride hailing, which was obviously where we started. How can we leveragesynergies between them and how do we get more people to discover. Our otherservices that we're offering in a very seamless way, right?So it was a, it was kind of that problem statement. Number oneproblem statement. Number two is how do you scale from there? There are goingto be probably tens of use cases of daily services that you could use, um, thatare probably not going to be built by Kareem probably built by other amazingcompanies.So how do you provide a platform for them to access all of theKareem infrastructure and all of the Kareem user base and offer them a greatservice, even if it's not a service that is operated by Kareem. And that's kindof how the idea of the super app was kind of born and the strategy for it waskind of pushed from there. And I think one of the first missions that I hadwhen I, when I, when I led that, that, that domain. Was basically how would theuser experience of the super app look like in a way that is seamless? And itwas just kind of the starting point for further things to be built upon it AndI think one of the things that we were trying to solve was discovery A lot ofpeople we noticed that a lot of our users were users of ride hailing But had notknown necessarily about our food services app even though food was growing veryquickly But still we had millions of users In ride hailing, and we had way lessin food and many of them had not, and then we started looking at veryinteresting other metrics.Like, you know, we started coming up with our own terminology,but like multi service users, a multi service user is a person who used morethan one service. And we started noticing that the retention rates were a lothigher. Their stickiness was a lot higher. And, and we noticed that, you know,when we do have a proper compelling Transcribed Uh, ecosystem, uh, kind ofsynergies and discovery between them, people kind of remain within thatecosystem and they end up giving you more share of their wallet and otherservices they're using because all of your, um, your, your, your assets are inone place and the key assets are your payment methods.You're, you don't have to add your addresses every single time.You just kind of have a unified kind of expectation of quality, uh, quality ofservice, like you're going to get from any complaints that you get because it'sunified. There's a whole bunch of things that if unified properly and you'redoing them well, users are going to just say, you know what, I don't want to resign up again and again, that was kind of the core thesis.And they know that as time progresses, they're going to be moreand more useful everyday services that I can, I can consume. And we startedfrom there and, um, you know, we, we launched, uh, the first version of it and,you know, since I left the, you know, Kareem have been iterating on that, uh,continuously. And, you know, there's a lot more services available on Kareemtoday, especially in a market like UAE.Um, compared to when I, uh, when I, uh, was there,Ali Zewail: Yeah.And, and of course, recently they, they made the spin out of the super app withE and, uh, becoming a majority shareholder with, with Uber. And, uh, it'd beinteresting to see because it's kind of like the Holy grail that, that everyoneis trying to, to reach the super app, uh, like the WeChat of the region.Uh, and it will be interesting to see how it plays out, uh, andhopefully to take part in it.Wael Nafie: yeah,absolutely. I'm cheering for Kareem on the, on the side, always once a Kareem,or always a Kareem, right? Yes,Ali Zewail: I mean,and the Kareem mafia, as they call it, you know, is doing a, you know, a greatimpact on the ecosystem in general. All the Kareem like alumni.Um, yeah. So maybe the last thing about Kareem, I mean, whenyou're hiring product managers, Uh, what do you look for? Because especially atthe outset, there weren't, I mean, it wasn't as, uh, common job.Um, so what do you look for in product managers? What do youthink are the most important traits they have?Wael Nafie: Yeah. Ithink, you know, the most important thing. So, so there are two types of kindof product managers you can get there. So if you're looking at, um, if you'relooking at product managers in sectors that are very well understood, like ecommerce and whatnot, these are people who've honed in those skills for solong.And, and, and, you know, there's, there's a kind of a playbookof. What does a good product manager look like for the e commerce space, right?When you're doing something like ride hailing, uh, and whatnot, at that time,it was still very early. And there was a lot of problems that we're stilltrying to discover.And to a great extent, I was, uh, I was, uh, hiring people thatI felt had very core, uh, problem solving skills intrinsically. So I was hiringfor intrinsics. Um, if you showed me that you were able to, uh, problem solve.Something from a first principles point of view, um, showed me a huge amount ofuser empathy on understanding what the user would want, even if it's ahypothesis that this sounds plausible, how would you go about figuring thisout, really understanding how this ride hailing industry works, come up withgood hypotheses about the, about that, about the, uh, managing of yourmarketplace and whatnot.So all of these core kind of intrinsics, um, I think this iskind of how I decided to hire people. Um, and, and I, I, I focused a lot lesson them necessarily knowing anything about the domain of ride hailing becausethere wasn't many companies out there. It was just Uber, Lyft, us and a fewothers in every market and still, all of us were still figuring out what, howthis industry really, really worked.Um, so, so that's kind of how I was, uh, kind of, uh,prioritizing my hiring, really people who exhibited these, uh, these qualities.Ali Zewail: Got it.Okay. So moving on to a different. Tack from the, your Kareemlife. I mean, you're someone who's, studied in Canada. You worked in SiliconValley. Uh, you worked in Egypt. Uh, Egyptian Canadian, you lived in the UAE,you, uh, you work in a Saudi fund that invests all over the region. So, I mean,you've kind of experienced a lot of different, uh, aspects of the globalecosystem. How do you think? Our region is different. I mean, how do you see itdifferently from, say, the Silicon Valley region?what's different.Wael Nafie: I mean,we're, we're at a very different stage in the life cycle region here. Stillvery early. I remember when I was trying to raise money for my first startup in2010, it was very, very hard to raise money. Uh, raising tens of thousands ofdollars was a feat, especially in Egypt. Um, I think we're just at a verydifferent stage of the ecosystem.The ecosystem didn't have a lot of local VCs. Now,Alhamdulillah, there's a lot more. We're, we have tens of VCs in the region.Um, even the, the mentality of how the VCs operated was evolving. The founders'maturity levels were, are evolving. We're seeing very, very mature founderstoday than, than what was there in the early two, like in 2010 or 2005.So, you know, I think we're just at a different stage. Youknow, the, the, the Silicon Valley. Startup ecosystem, uh, has, has a, about a50 to 60 here headstart, uh, to the one in the region, which is fine. Uh, but Ithink the region is accelerating at a pace that's much faster because of. Um, Ithink the Internet's kind of accelerated learnings, you know, lots ofavailability of media and, and, and, and, uh, learning material, um, cross, youknow, cross pollination of experiences from people.Um, a lot of very strong intervention, positive interventionby, uh, governments and regulators in the region that are really trying tocatch up and push forward the local ecosystem, be it in UAE, Egypt or Saudi.There's a lot of, there's a lot of positive changes that are, I think,accelerating much faster.And, you know, we're closing the gap, but we're still, youknow, far away. But the, the, the trajectory for the region is, is really,really, uh, positive and, , uh, keeping me optimistic.Ali Zewail: Great. Iwanted to ask you, I mean, what do you think from the founder point of view,what should they be looking for? In a venture capitalist that invests in theircompany.Wael Nafie: that canactually be there, uh, you know, be there with you and, and, uh, through,through the, the, the good times and the bad times. A lot of times, wheneverfounders go through a bad time, I hear from a lot of them that they're, they'rethe investors that they invested in, they just basically, uh, don't reach outas much and whatnot, because maybe in their minds, they've written them off orthey're starting to get doubtful.But I think just being available throughout. Is, is important.You are definitely going to go through tough times and, and therefore you wantsomeone who's, who's actually willing to, to, to come in and help. You're alsolooking for people who are able to do a lot of more introductions to you, toeither, uh, key players in your industry that are, um, uh, that, that areimportant for you to kind of get connected to, or connect you with the righttalent.A lot of times founders are looking to hire a critical talentin the very beginning, especially in the seed stage and helping them with that.So there's a whole bunch of things that. Uh, that, you know, good VCs can dothat make a difference with founders. But I think the key thing is, I wouldsay, just being available, um, whenever the founder needs it, and sometimesit's as simple as the founders ridiculously stressed and just like, you know,maybe a little bit, uh, you know, burnt out and you need to be able to just,just have a heart to heart human conversation with them.Uh, and that, you know, you empathize and you've gone throughit as well. So you kind of know what they're feeling. I think it makes a hugedifference with the founders as well.Ali Zewail: I agree.Sometimes you just need a shoulder to cry on.Wael Nafie:Absolutely.Ali Zewail: So, uh,and what do you think are like the most promising industries or markets, uh,like, uh, to be targeted by, by founders in the region? What do you thinkpeople should be looking at?Wael Nafie: I thinkFinTech is, is a big one. Um, I think there's, there's a lot of, um, B2BFinTech or infrastructure FinTech that is yet to be. Uh, built for the regionand has a lot of potential, especially with the new behavior of the newgenerations of the youngsters out there. Um, the, the, you know, so I thinkthere's definitely that's a big sector, I think, um, uh, in general, we're moreexcited.We're, we're excited to see, uh, SAS companies come out of theregion, especially SAS companies that are building global SAS. Products for theworld, um, out of the region. There's, there's only very few, um, that, that dothat here, but, um, we think that there's sufficiently good tech talent in theregion that can build world class products, and I think they just need to kindof, uh, uh, we need to see more of them being funded because, because I thinkthis is exciting.Obviously there could be SaaS products that are targeting localmarkets, which we're also very excited about, but I think. Um, we're excited tosee kind of the region graduating to the next phase where they're buildingglobal products, launching from the region or from the headquarters here, andmaybe even hiring talent globally.Ali Zewail:Absolutely. Uh, more for that. And, uh, maybe we can now switch, you know, thisis a good point to stop and, and go into the quickfire round where I ask youquick questions and you just give me quick replies and wrap up the interview.All right. So, um, What book do you like to recommend to others?Wael Nafie: what bookdo I have to recommend others? Um, I think, uh, thinking fast and slow,although that was a very slow thing from my side, but thinking fast and slow.Ali Zewail: Well,that's, that's okay. You know, uh, you, you also need to think slow, right? Forsome things as, as he says in the book.Wael Nafie: yeah.Ali Zewail: Uh, allright. So what's the latest invested investment you've made and why are youexcited to do it?Wael Nafie: Socoincidentally, just yesterday, one of our, we had a fund, uh, an announcementby a company called zeal pay. Um, this is an Egyptian founder, Omar Abed,working on, uh, uh, an analytics, uh, data solution for, uh, POS terminals. Uh,and it's a SAS company, uh, by Egyptian team going for a global, uh, play,right, which is amazing. They're working with you as we were justsaying, you know, um, we're very excited about them, they're, uh, they're,they're phenomenal team and, uh, they really have built something here from theregion and, and really in the process of Signing up and closing kind of globalplayers in the, uh, payment acquisition space, which is, which is amazing toseeAli Zewail: nice. Allright. So, uh, who do you think we should have as a guest on the podcast?Wael Nafie: I thinkyou should, uh, get, uh, If you can,Ali Zewail: Okay. Oh,I'd love to get. That's it. We will have a talk about that later. Okay. So, uh,what question should I have asked you that I, that I didn't,Wael Nafie: these arenot quick fire questions. This is a deep question.Ali Zewail: you don'thave Wael Nafie: to dig deep into my insecurities and see what question you shouldhave asked me. Um, I'm not sure. Uh, I think maybe there's a question that youcould have asked about what I'm most scared about for the region and what arethe things that worry me that worried me the most, Ali Zewail: Okay. Wael Nafie: youyou've, uh, you Ali Zewail: Allright. That's for our next episode. All right. So I like to close on a note ofgratitude well, uh, and, uh, ask you this question of what is a gift someonehas given you that has made a positive impact on your life.Wael Nafie: a gift. Ali Zewail: Yeah. It Wael Nafie: Um, Ali Zewail: amaterial gift, butWael Nafie: Yeah, Ithink, uh, I think, uh, I'm, I'm, I'm very, um, it touches me when I see peoplegenuinely trying to help others. Uh, and, uh, I've, I've come across people inmy life that I felt that whenever I needed something, they were always willingto give and always, uh, generous with their, with their advice and their time,and they were very genuinely honest.I think the biggest gift that someone has given me was just theability to kind of give me honest advice and do it with with care and empathy.Um, uh, and I think, uh, that's probably the most valuable because I felt thatit has the most impact in my ability to grow as a person and to think aboutthings that I, uh, should have changed my opinions on or need to look at it ina different way.Ali Zewail:interesting. It's interesting because, uh, this is the second episode in a rowwhere someone gives this type of a gift and it is a gift to, to get realfeedback with empathy. Thank you very much for the gift of your time, uh, well,and, uh, hope to have you on soon so I can ask you about what scares you themost about the region.Wael Nafie:Definitely. Thank you for having me. Ali Zewail: Thankyou.Thank you for listening to this episode of startups Arabiapodcast. If there was something you really liked about what the guests saidtoday, reach out to them on social media and tell them what you liked. And ofcourse, if you haven't subscribed yet, what are you waiting for? You don'twanna miss any of our great upcoming episodes.Also, please rate us and give us comments on our social mediaaccounts so that we know how to improve. And also tell us what you like. Wedon't mind hearing that either. Until next time, this was your host Addie'swhale.

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