Careem’s Mudassir Sheikha on Co-Founders, Establishing Culture & Balancing Family at a Rapidly Scaling Startup

Often, the strengths that differentiate an early-stage founder-CEO become liabilities as a business begins to rapidly scale. Mudassir Sheikha, co-founder and CEO of Careem, one of the first unicorns in the Middle East, discovered this the hard way.  During its first two years, to compete against Uber, Careem grew at an unprecedented rate of 30% per month. The company now operates in 100+ cities and was acquired by Uber for $3.1 billion in 2019. But the path to becoming a unicorn wasn’t straightforward or easy. In a conversation with Shikhar Ghosh, Sheikha reflects on leadership lessons he learned while rapidly scaling.

He offers tips on how to prepare for the changes in the CEO’s role by sharing how he adapted as processes broke and he struggled to balance family obligations. Despite the myriad hurdles which arose at different geographic locations, Sheikha established a company-wide culture that helped Careem thrive during the chaos of meteoric growth. Learn why Sheikha believes disseminating culture by hiring the right people is one of the most important jobs the CEO of a scale-up can do. A transcript appears after the video.

Mudassir Sheikha interviewed by Shikhar Ghosh, August 30, 2018, at Harvard Business School.

Hypergrowth at Careem

Shikhar Ghosh: What did you expect it was going to be when you first started?

Mudassir Sheikha: So the ambition initially was actually not so big. But our definition of big was different back then. So if you look at the first business plan that we presented to investors, we basically said we will be, I think it was 50 million dollars in revenue by 2017. This was a five-year business plan that was prepared in 2012. And that seemed like a big business in the Middle East back then, right? And we said we are being ambitious and we are trying to build something really, really big. And now, of course, we’re many times that size now.

Shikhar Ghosh: So in 2017, what was your revenue?

Mudassir Sheikha: It was-

Shikhar Ghosh: Like multiples of that.

Mudassir Sheikha: Yeah. Like off the record, I can say the number, but I think it was quite a bit, almost twenty exact number, right? It completely exceeded our expectations of speed and growth. So that’s really where we started our taxi, limousine booking service in the GCC, which is the six oil-rich countries. And then one thing led to another.

Expanding Vision

Mudassir Sheikha: Every year that vision sort of expanded. The next year it was why just the GCC? Why can it not be in the Middle East? Then after that, we said why just, you know, passenger transport? Once we do this, we can actually start doing a lot more than passenger transport. The movement of things as well.

Mudassir Sheikha: Then we realized that we should become the public transport system for our cities because the public transportation systems were not existent like they were in Europe and the U.S and elsewhere. And now we think we should become the internet platform of the Middle East. Every year, literally, there was an expansion of the vision based on what we were seeing in the market and some of the success and the growth that we were having.

Company Culture

Shikhar Ghosh: So, you know, all of that is driven by the external world, right? You look at it and you say, if we can do this, then we can change our view. But obviously, changing from six countries to the whole Middle East has all kinds of implications on the organization, how you need to organize, who the people are, how big it’s going to be. Did you think about that? Or do you think, like, we’ll figure that out?

Mudassir Sheikha: Yeah, for us it was we will figure it out. It didn’t seem impossible to pull off. We were a bit naive when it came to architecting how we work and the culture that we wanted. So it was very incrementally, okay, we need to open this market now. Let’s hire people that will run this country. And at some point, there were many people reporting to me and Magnus said, look, this is not sustainable. Let’s try to create some management layers that will create some sanity to it.

Mudassir Sheikha: Where things started breaking, we put processes in. Where things were fine, we didn’t bother. So it was very incremental and as it fired up, we solved it.

Shikhar Ghosh: Yeah, so it wasn’t really that you said, oh, if we’re going to be this many people, we need all these processes, let’s design the process. It was when it breaks, we’re going to fix the problem that broke.

Mudassir Sheikha: That’s right.

Shikhar Ghosh: And we’re going to fix it only enough until the next time it breaks.

Mudassir Sheikha: Yeah, so we would have this joke in the office that, you know, let’s only fix it for the next six months because anything beyond that would take a lot longer to fix, that we would not have the time for. And who knows what happens in six months? Maybe this thing that we’re doing will not even materialize. So we would only patch things and buy us six months. And then things would break again and we’d buy another six months and then things would break again. We’d but another six months.

Mudassir Sheikha: When we raised our CVC, we actually promised ourselves that we will get away from that mindset, that we’re not going to keep patching things because that whole debt was starting to catch up to us. Like many things that we should have done differently, whether it is in financial processes, or the technology side, they were starting to leave a lot of skeletons that we were then having to go back and fix. So after CVC, we said let’s start-

Shikhar Ghosh: Also the size of the fall is much bigger. If you’re running a business of hundreds of millions of dollars, a mistake is many millions.

Mudassir Sheikha: Of course.

Shikhar Ghosh: Right.

Mudassir Sheikha: Of course, yeah.

Hiring and Culture

Shikhar Ghosh: And at that point, investors are expecting a certain degree of formality and all of that. So, you know, in this first part of the journey, say up to CVC or so, you were hands-on on everything. You understood the business completely. You could almost do any of the jobs yourself. What were the things that surprised you that as you grew, you know, what were the things that you came in and said, well, this is sort of different from what it was, what I was thinking it might be?

Mudassir Sheikha: Yeah, it’s a good question. So we were very hands-on and there’s a culture of being hands-on at Careem. Even people that weren’t hands-on in the beginning, after six months, they’re forced to be hands-on because that’s the expectation the organization has because we started doing everything ourselves and that’s how we built this.

Mudassir Sheikha: I think that the thing that was most surprising for me was around people and culture. The task and the challenge of getting that right was not as … I was naïve on that front. We just thought get the right people in place and they will figure out what to do. And initially, it was difficult to even get the right people, right? Because as we have said multiple times, smart and very capable people, they don’t want to work at startups. They want to work at multi-nationals and get a stable career. So it was difficult to get the caliber of people that we were hoping to get.

Mudassir Sheikha: And when we even got the right people in place, you know, we got them from different backgrounds and different places, and we didn’t do enough upfront to define the culture that we wanted. We created some values and we just left it there. We didn’t really define what these values meant, what kind of behaviors we expected, took enough time at the beginning when people joined to onboard them properly on these values. And basically what that meant was every leader that came in started running their units in ways that made sense to them, based on what they had done prior. And now we had five different ways of running Careem because these five different leaders were not working in a consistent, coherent way.

Mudassir Sheikha: So that part, in hindsight was we underestimated that challenge and we didn’t invest enough in it.

Establish Your Culture at the Start

Shikhar Ghosh: So if you were starting a company again, or you’re advising somebody who’s starting a company that’s going through a similar ride in terms of the growth, what would you tell them to do?

Mudassir Sheikha: So the two things that I would do differently is one, more upfront. Define the values and the culture that you want to create. And we started that exercise. On day one, literally on day one, one of the first things that we did was we created the first version of our values. So we started that exercise, but we didn’t complete it. We didn’t take it to the extension where it should have gone. These are the behaviors that we want, this is how we add this to our recruiting process, this how we’ll add this to our performance measurement process. Those things did not happen as well as they should have.

Shikhar Ghosh: But you didn’t even have a performance management process, right? Or a formal recruiting process?

Mudassir Sheikha: But there was a process, right, where we were even testing people on values. Where we, you know, we were giving people feedback, right? We came from a culture that was giving very regular feedback in the consulting days. So we were giving people feedback. Were we giving people feedback on the values? Or were we giving just people feedback on their delivery and their performance?

Mudassir Sheikha: So if I could start all over again, I would take that exercise and complete this a bit more. These are the values that we stand for. This is the culture that we want to build. And then become a lot more involved in the hiring and the onboarding process.

Shikhar Ghosh: So, you know, in your first values, if I remember correctly, one of them was we will … I think you phrased it as we will always create wow of some kind, right? So amazing experiences. And you look at that and you say if I’m in engineering or I’m in accounting, you know, how do I translate that into do I really want a great experience in accounting? Or for that matter, engineering. Or the systems that have to run, you know, like a railway thing.

Mudassir Sheikha: Yeah. And that’s the gap, right? This was not translated to what it means for the different functions because I think if you sit down and think of it, you can do the translation, right? You can say, okay, wow for someone in finance means your customers are not just the external customers, which is you have a limit of external interaction as well, but a lot of your customers are internal, right?

Mudassir Sheikha: You are serving people in different teams in different locations. You need to wow them every time. Because if you wow them, then they will wow your customers, right? If you don’t deliver them the right experience, and they get a certain quality of experience from within Careem, how can we expect them to deliver an outstanding experience outside of Careem, right?

Shikhar Ghosh: So you’ve got to take each of these values that you had, in some ways, which is sort of this is the way I want people to feel in many ways, right? And then you say, so what does that translate to what people have to do? And make that real.

Shikhar Ghosh: But at the same time, you know, you’ve got 24 hours in the day. You’ve got sort of 18 working hours in a day and you have to do the practical things. You know, hiring people, putting them out there, designing the part. How do you balance these two things?

Mudassir Sheikha: It’s an investment for sure, right? It will slow you down in the very, very beginning because it requires some thinking. It requires some implementation. But my view in looking back at this is it would have saved us a lot more fires. It would have saved us a lot more bad hiring decisions. It would have made us, you know, correct a lot of the hiring decisions. That would have saved us a lot more time and effort down the road. So this is something that we didn’t pay enough attention to at the beginning, that in hindsight we would pay more attention to.

Shikhar Ghosh: And this would have been your job. Not, you know, head of HR or not people person.

Mudassir Sheikha: So this was the other mistake, per se, right? And I think Abdulla earlier this year sat down with me and said, look, you cannot outsource values and Careem operating system to someone else. This is something that you as the CEO need to own. This has to have your signature on it.

Mudassir Sheikha: This is not going to happen without you owning it and driving it. So we tried that. But my thing was, look, I enjoy problem solving. I enjoy driving commercial strategy. Let me just be out there and make sure that we are hitting our growth numbers and we are competing and we are doing the right things. And please figure out the HR side of it, right?

Mudassir Sheikha: And that did not happen at the quality and the rigor that should have happened. And, you know … And it’s not something that is easy to do as well, right? Because there are a lot of things that are in your head that you believe in and it’s not even easy to articulate them and give them to someone. Okay, this is what I want, now do it. Right?

Shikhar Ghosh: Because the context is so important, right? The particular context that somebody’s in. So you want them to behave differently if it’s a critical problem versus it’s not a critical problem, and so on.

Mudassir Sheikha: So look at the Netflix deck, right, which most people respect. This deck probably took a long time to build and I’m sure it gets iterated every now and then. You go through that deck, you know, I think in literally half an hour, you get a very good sense of what this organization stands for. What’s their culture, what’s their DNA. But to sort of get it in that shape probably took a lot of time and a lot of thinking and a lot of iteration, right?

Mudassir Sheikha: So this is not something that can be done right away or that can be outsourced. You have to be involved in the process, you have to steer the process, you have to ride the process. So that’s something that we’ve done in the last-

Shikhar Ghosh: And then you have to live the process.

Mudassir Sheikha: Then you have to live the process. Exactly. Then you have to sort of make sure that it gets embedded in every aspect of the organization.

Shikhar Ghosh: Right. And when you make the hard choice, you know, I can get more revenue by doing this, you know, here’s this person who is our best salesperson, but he’s a jerk to all the employees. Then, do I get rid of this person? That’s when people really look and see.

Mudassir Sheikha: When you start thinking of this a bit more, the more you think of these things and the more that you discuss these things, you start building more conviction behind them as well. So we’ve all been saying values are important. Everyone says value is important. You know, one of our first things was driven by our mission and values. When we did the OS, we have these seven principles now.

Mudassir Sheikha: The first principle is driven by mission and values. Now, when we put that down we of course debated a lot internally. What does it mean? Is it right? Is it wrong? And then you started looking at examples of things that happened before and then you start building conviction, right? Like, okay, yes, if we had done something differently back then, then this would have actually saved us a lot more time.

Mudassir Sheikha: So by going through that exercise of putting these down, you started building conviction. So next time you interview someone that is amazing in what needs to be done but is not a culture fit, you’re more comfortable making that call that this person is not the right fit for Careem. And we’ve had these cases now where we have actually internally debated some of these principles and when we go and interview someone and we find someone that is amazing and very tempting to get that person on board, but not the right values fit, then we have the courage to make the call and say, look, we’re happy to keep on looking until we someone that’s a values fit.

Shikhar Ghosh: And then you’ve got to have some process or approach by which you can even judge whether the person is a values fit or not.

Mudassir Sheikha: Yes, of course. There’s questions that you ask and then, you know, based on the responses that you get, you can get a feel for it, right? You’re not going to get it exactly right every time, but you’re going to get … If you ask the question every time, then you can start calibrating as well.

Shikhar Ghosh: But the question is how do you transfer that skill? So you’ve done it a hundred times, right? So slowly your matrix has sort of been built out and you can judge very quickly whether somebody’s in the range or not. But then you’re not going to be doing all the hiring. So I come in, I’ve only been there three months. How do you transfer that knowledge?

Mudassir Sheikha: Well, so you have to institutionalize it, right? You have to make sure that the questions you’re asking are the questions that get asked by the person that is testing for that value fit. And one of the things that we’re discussing is should we have anyone do this culture test, right? Ideally, you’d designate some people that you believe are super-aligned with the values and these are the people that do this for … It could be a few of them that do it for everyone so that there’s some consistency that’s applied to that process.

Shikhar Ghosh: So you want to do the values in a particular way. But you’re across multiple countries, and these countries have very different cultures. So the way a manager behaves in Egypt or Pakistan might be completely different. You know, just the norms. Even a manager who follows the basic good principles that you have, these behave differently because that’s the way organizations are. So how do you deal with that?

Mudassir Sheikha: You know, we haven’t tracked it fully yet, right? I think some of these things are tested locally as well. So the local adaptation probably gets factored in in some of these things. But some of these values are universal too, right? Like ambition. You know, you can be ambitious in Pakistan and you can be ambitious in Egypt and you can be ambitious in Saudi, right?

Shikhar Ghosh: But the way it manifests might be different in each of those cases.

Mudassir Sheikha: Yeah, so a lot of the interviews are done, if there’s a very local candidate, the results are done by the local person, right, that’s going to be the manager for that person. So that person is living in that context, right? So that person can translate and say look, he’s ambitious.

Shikhar Ghosh: But for example, if you have something that says that people who work for us should have opportunity. And there are cultures in which, say women, don’t have positions of authority or it’s harder for them to exert authority. You know, now is that something that you defer to the local, or is it something that you say, no, as a Careem, we have certain values that supersede anything that’s local?

Mudassir Sheikha: Yeah, I think it’s a good question. So we have these three value pillars and there are 12 values.

Shikhar Ghosh: So the three pillars are?

Mudassir Sheikha: The three pillars are shoot for the moon and beyond. Be super, super ambitious. Nothing is impossible. You can do it. Keep improving and stay humble. Second is be of service which is the whole serve our customers, serve our captains. Give feedback to our colleagues to keep growing them, and to drive progress in our communities. So to the moon and beyond, be of service. And the last is take ownership of Careem. Which is speak up, take initiative, see things through impact, be frugal, and make sure to be collaborative with each other.

Mudassir Sheikha: So the three pillars are to the moon and beyond, be of service, and take ownership. So these values, they’re somewhat universal, right? You can test people on them. There will be some cultural nuances. And these values we protect, even if the culture says otherwise, we’ll protect these values and we’ll push these values down on culture. Anything outside of it, we want it to be as local as possible.

Shikhar Ghosh: So, you know, you started up the company. It grew pretty rapidly, even initially, and then at some point it became clear that your hands are not big enough to do all the things that you have to do. You and the founders. So you have to work through other people. What are the things that surprised you about that transition from when you go to knowing everything that’s happening and acting on each of the things that are blowing up, to knowing that I’m not going to know a lot that’s happening? And I just have to trust that the person on the scene is going to do that?

Mudassir Sheikha: So there was definitely a transition from doing everything to then having people who were doing things. And in the very beginning, even the people that were doing different things were sitting very close to us, so we knew everything that was happening. When [inaudible] was picking up a call and speaking to a customer, I could overhear [inaudible] because he was sitting next to me. And sort of it was within range, right? So not much changed. We just had bigger hands and we were still able to manage.

Mudassir Sheikha: I think the big turning point was when we started going to new markets, which is when we started having people that were running different cities that were away from us. And in the beginning, you know, I was spending a lot of time in these different markets, just making sure that I educate the people that are starting on how to run this business. How do we recruit people? How to work with our systems. And over time, I think just by bandwidth limitations, I had to sort of step back and let people drive a lot of the local business.

Mudassir Sheikha: And then we would have some weekly check ins, sometimes even daily check ins. And when KPIs would not be right or would be going up or going down too much, then we would get involved more and start fixing things. But for the most part, the thing that changed is instead of managing and doing things directly, we started becoming a lot more KPI- focused and when there were big deviations on the KPIs, then we got super, super involved.

Shikhar Ghosh: And the KPIs were mostly output-oriented?

Mudassir Sheikha: They’re output oriented. So growth was a big, you know, weekly growth rate. We were obsessed with weekly growth rate. Every 15 minutes we know where a city is vis a vis last week the same time. So I can tell you that Karachi has grown five point three percent from last week. Cairo has grown seven percent from last week.

Shikhar Ghosh: So why every 15 minutes? That’s a very unusual thing. Even weekly is unusual, right? I’ve got a company that I’m working with that does annual. And that’s pretty much it. So they say there’s seasonality and there’s this and that, so I can’t do monthly, even.

Mudassir Sheikha: I think 15 minutes or 30 minutes is within the same range. You know, we feel it’s okay to ping our databases every 15 minutes, that’s fine. But the question is why minutes and not hours or days, right?

Shikhar Ghosh: Or weeks.

Mudassir Sheikha: Or weeks. And then what you realize is one, this business is 24/7. You know, if you miss growth in one hour, then it’s going to be difficult to recover in the rest of the day. And if you miss one day of growth, then it’s going to be difficult to grow at 30, 40% monthly, which is sort of the targets that we had initially. So if you miss one or two days of growth, that’s going to be very, very difficult to hit those growth rates because you’re not going to be able to make up for that.

Mudassir Sheikha: So this real-time nature of the real time transparency allowed us to catch any issues a lot faster and then react to them. So let’s say some city needs to grow 30% a month, which means seven percent week on week and they’re only growing three percent week on week when I look at the screen, then there’s clearly an issue, right?

Mudassir Sheikha: So when we get a phone call and say hey, what’s going in? Do you have a demand issue, do you have a supply issue? Can we help you with anything? So it’s just the real time nature of the business and the realizing that we have to hit high growth rates and reacting faster if something’s not right.

Shikhar Ghosh: So quick question, why do you have to hit such high growth rates?

Mudassir Sheikha: So, I think there is some … That’s a great question. Why such high growth rates? I get this question all the time from people-

Shikhar Ghosh: You know, why not 10% a month? Those are also very respectable growth rates.

Mudassir Sheikha: Yeah. So I think the answer is in the competitive nature of this industry. So if you believe that your competitor is targeting these type of growth rates, then you cannot be targeting less than your main competitor. And that’s the main driver of high growth rates. You could drive growth differently and probably the healthier way if you target lesser, lower growth rates because then you can focus on the right things, which might take a little bit longer to put in place, but they’ll bring healthy growth.

Mudassir Sheikha: But we unfortunately are in an industry that is-

Shikhar Ghosh: So this particular thing is driven a lot by the industry that you’re in? And if you were in a different industry, you might think about growth differently?

Mudassir Sheikha: Yes, absolutely.

Shikhar Ghosh: And is it that growth itself, you know, so people like I think it was eBay, originally, that would change its system every day, every night and they would say, you know, so if Amazon is doing Amazon auctions, they would say Amazon works on a monthly cycle, which they think is great. We work on a daily cycle, so we improve 30 times as much, you know, within that same period of time. But for you, it feels like it’s more that this is what you have to do to be competitive, but from a pure sort of market share and all of that perspective.

Mudassir Sheikha: Yeah, because one thing you have to realize is there are some net worth effects in this business. So if your competition is a lot bigger than you, then you’re not even providing a competitive service to the customer or the captain. So scale is important. You have to be at a certain scale to be competitive.

Shikhar Ghosh: A certain relative scale.

Mudassir Sheikha: A certain relative scale to be competitive in the offering that you’re providing, not in anything else.

Shikhar Ghosh: So, you know, this sort of working on these very short time schedules and intervening when things go off, so you’ve got dozens of markets. Initially, 10 markets. There’s always something that’s going right and wrong with different markets. That puts a huge tax on you, individually, right? Because you have to be looking at things and deciding when to intervene. How do you balance the tax that you place on yourself and therefore on your family, therefore on other choices that you’re making. You know, all of that. How do you think about that?

Mudassir Sheikha: If you are constantly looking at these numbers and chasing people when numbers are low, then after a certain point, people start looking at these numbers proactively. So then you don’t have to look at these numbers because everyone’s looking at these numbers. The entire company is looking at these numbers. So then you don’t have to be as proactively pushing for it because now I know that people are looking at these numbers, right? So that, you just trained the organization to be on it.

Mudassir Sheikha: where I think the burden becomes higher is sort of to reinvent yourself. Personally as well, but also reinvent the way that you’re doing things. Because a lot of times what happens is some strategies or things that work for us today and give us growth today will not be the things that’ll give us growth six months from now because we’ve sort of played those things out. You don’t know when those plays run out, right? I mean, now we’re not getting growth because that thing is no longer working. We already captured that segment. And then you have to come up the next play, right?

Mudassir Sheikha: And that’s where those transition points were the ones that made the thing taxing, right? And this is not just in growth, but this is in everything. Processes were working fine three months ago but they’re not working now. And in the beginning, we were not able to hire a lot of senior people that would proactively see that things would not work and reinvent proactively. So that’s when Magnus and I would have to be a lot more involved in the business. Not just on the day to day side, but then to make sure that these transitions were caught early enough or late, not too late, and then fixed.

Mudassir Sheikha: So this is reinventing yourself and reinventing the way that you do things, every few weeks, every few months. That’s what creates a lot of stress. And you’re always doing things in a hacked up way to buy yourself another few months, right? And family does suffer.

Shikhar Ghosh: So at what point, you know, we hear many companies go through two years of growth, right? And then it sort of, things are in place, you’ve got product market fit. Now you’ve got a sales force, they’re doing their thing. And so the pressure on the top comes down a little bit. In your case, it’s been constant.

Shikhar Ghosh: You know, this mountain, then the next mountain, the next mountain at the same pace, almost because your growth rate has continued at very high rates. So at what point did you and Magnus sort of say, we’ve got to have some discussion with our families, think we should balance this out in some ways? Did you have it or did your wives have it?

Mudassir Sheikha: No, it was forced on us. But before that, Shikhar Ghosh, you know, product market fit is a relative thing as well. So basically what happens is let’s say, you have this great product that customers love. And you have the features that they want, the payment methods that they want, the interfaces that they want. But guess what happens? Six months later, competition does the same thing. And they give that thing for 20% less than what you’re giving. What will happen?

Mudassir Sheikha: So product market fit is a constantly evolving thing because you have to be continuously better than someone else that has deeper pockets, that is able to give the same thing that you have, with some delay, at a cheaper price. So you always have to, so this is what we keep telling ourselves, we have to always be better than competition. It’s not a static thing that we reach and we-

Shikhar Ghosh: And the competition’s telling themselves the same thing, so it’s this constant movement.

Mudassir Sheikha: Yeah, and you know, since we are closer to the cities and closer to the markets that we operate in than competition, we are in most cases able to find local opportunities before them. And even if they find those local opportunities at the same time as us, we’re able to prioritize them much before them. So if some opportunity comes up in Riyadh, we will prioritize it above anything else in the world, right? But for them, Riyadh is probably much lower in the pecking order. So it takes them longer to prioritize.

Mudassir Sheikha: So this product market fit is a continuous thing. You have to keep finding the next thing that’s going to give you a differentiated product, a better product that will command a slight premium on prices because we aren’t able to be cheaper than them. If we become cheaper, they will match our prices and go even below because that’s the game they can play.

Mudassir Sheikha: Now, on the family front, I think it was the first couple of years we had set expectations with our wives, that it’s going to be very, very tough for the first two years. So that expectation-setting held us for at least the first two years. They all knew it was going to be tough. In fact, they were helping us-

Shikhar Ghosh: Give me a sense of what tough means?

Mudassir Sheikha: One is like, look, you’re not at home much, so you’re leaving at six a.m. sometimes, many times. And you’re coming at midnight. So you’re basically not there when they’re awake. Even when you’re there, you’re not present. You’re not listening to them. You’re constantly thinking of what’s happening in the business or … It’s actually even more frustrating for them because you’re there, but you’re not there. And then what was also happening in the early days is we had no customer service. We were providing a 24/7 transportation service.

Mudassir Sheikha: So literally for the first few months of Careem, we kept phones with us when we were sleeping so if someone calls at three a.m., the phone that rings is the phone that is next to me and it wakes up my wife and it wakes up Magnus’s wife as well.

Mudassir Sheikha: So they were suffering from not even getting proper sleep in the early days. So that’s what the definition of tough maybe was in the early days. So the first two years we bought, and I think somewhere in the second or third year, and it coincided with me having twins and I think there was something happening in Magnus’s life as well, where I think the wives forced a discussion on us. When is this going to get better? At that point, we were a bit speechless because we felt that things would get better in two years from when we started the business. But there was no sight of things getting better.

Mudassir Sheikha: In fact, if anything, I felt I was busier two years into it than I was busy in the beginning because there was just a lot more to manage. So at that point, we rolled down what we called a family contract. Four of us sat down, Magnus, Sara, me, Saba, and we basically wrote down what we called the boundary conditions. The things that we commit to our wives that we will do on a weekly, monthly basis. So for me, I remember it included at least being home on Fridays. There was probably one or two days that I was supposed to be a home where I could actually meet her before she goes to bed. I don’t know remember what Magnus had.

Mudassir Sheikha: But the contract was sort of written. We signed it. We sent it to each other. And the idea was that Magnus and I would hold each other accountable to what we were supposed to do. And then our families could raise the flag as well and say you guys are not abiding to the contract that you signed with us. Now, I don’t know how long we followed that contract, which was sort of the sad part. Maybe a month or two months?

Mudassir Sheikha: It had some validity, it had some relevance. And then we regressed. And if I’m not mistaken, there were once or twice flags were raised and things did not get much better. At which point, there was some resignation that it is what it is. And then people start adjusting to the new reality. They start believing lives are due to some extent.

Shikhar Ghosh: So when you reflect on that, you know, because this is going on and there’s no end in sight because the ambition keeps growing, you might reach a point where the systems are in place for the transportation side of the business. But the food delivery or the telecom or the anything else that you start is again going to be brand new, with all kinds of new problems. And so you’re going to go through similar cycles of growth. What’s your sense of the trade off?

Mudassir Sheikha: So there are least two things which are different now than before. I think one is we’ve been able to build a leadership team that’s a lot more capable than what we had ever before. So these are people that are super capable that we trust. They know what they’re doing and they are extremely driven and in line with the mission and vision of Careem.

Shikhar Ghosh: So they are writing agreements with their families now?

Mudassir Sheikha: I hope that’s happening. We need to help them if they’re not doing it. So that’s one thing which is different. And we feel grateful that we’ve been able to attract these people to the journey. They feel aligned and driven to make it happen.

Mudassir Sheikha: And the second thing which has happened, and you know, we had a conversation six months ago where I think you said something very interesting. I don’t know if you remember, where you said instead of focusing on problems, focus on people. And I’ve actually made a note of it and I tell myself this every day to remind myself that look, I need to now focus on people that will drive the business. And focusing on people is not just focus on individuals, but focus on the culture-

Shikhar Ghosh: The structure.

Mudassir Sheikha: The people processes, the structure. So that’s been a huge focus for me for the last six months. And the more I get into it, the more I realize that if you just get this right, then this thing will start running like a machine. This thing will start attracting the right people. This thing will start putting the right people behind the right rules. This thing will start driving and incentivizing people the right way. This thing will start creating incentives for people to take risks.

Mudassir Sheikha: So we just need to now build that operating system, we call it the Careem operating system, that’s going to enable us to build this thing and realize the vision. So this is something that we never did. At least, I never did it. And the more I’ve done it, the more I realize that this is something that’s missing. And once this is in place, then we will be able to take a step back and make sure that we keep evolving this thing, versus evolve the business that this thing produces.

Shikhar Ghosh: So even if you create new businesses, if the operating system is robust enough, then it will morph into that. So one of the elements of it is how do I create something new? And the something new, initially, was markets. But then it becomes products and product market and so on. But you’re building a structure to do that.

Mudassir Sheikha: Building a structure. So the thing that we have done is we’ve defined a very clear vision of where we want to be in 2030, right? We want to be the platform that enables internet commerce in this region. So that vision has been defined and that vision has been somewhat detailed as well at the next level.

Shikhar Ghosh: So if you compared that vision to any existing company, who’s the closest analog?

Mudassir Sheikha: So the companies that come closest are the companies in China like Tencent or Alibaba in the way they sort of became the platform that others are built on top of, and they provide a lot of the enabling infrastructure for internet commerce. And that’s what we believe is the biggest opportunity in the Middle East versus just a mobility opportunity or something else. Now, that vision has been defined. That vision keeps getting communicated to everyone that is at Careem, joins Careem.

Mudassir Sheikha: And a lot of the values around taking ownership start to kick in and people are like, look, this is an opportunity. I would like to do this. Then we empower them to the right resources to do this and we support them and do this, right?

Mudassir Sheikha: So one opportunity for example, one of our early, early colleagues, she realized that bus, Careem bus was an opportunity. She came up with that idea herself. She assembled a team, asked us to fund this thing. And now in the next couple of weeks, we’re launching buses in Egypt. And this was an initiative that was started by her.

Shikhar Ghosh: So what does that mean? I get on the phone and I ask for a bus and a bus comes?

Mudassir Sheikha: So, yes. Basically these are starting routes for now. So just like the buses that we had in the subcontinent where you open a thing, it tells you this is the nearest bus station, go ahead walk to that bus station, the bus will be there at this time. You get a boarding pass. You go in, you show the boarding pass, you’re in. It drops you at a predetermined location. So this was something that she, being from Egypt, understood the opportunity, understood that there was a need for it. Many of our customers will value it for long haul routes. And she basically created a team and went after the opportunity.

Mudassir Sheikha: So we’ll hopefully create these type of initiatives-

Shikhar Ghosh: And then she’s the one who has to think through all of the day to day things and build a team and do all these things.

Mudassir Sheikha: Absolutely, right? So she’s acquired a business, by the way, that was doing something similar to get a jump start. I just got on the phone with her early today and she’s saying there’s another small team that is doing something similar that she would just like to get on board full time. And get some early head start in this business. So she’s making all the decision. She’s the entrepreneur now, right? And we are basically funding her and we are supporting her to make this thing happen.

Shikhar Ghosh: You’ve been talking about the vision of slowly desegregating the pressure so it all doesn’t come to the talk. You know, if you create the right operating system then individuals take the initiative and so they have to deal with the startup phase and all of the two year cycle and all of that. Have you actually started working less as a result of that?

Mudassir Sheikha: Not at the moment. Not yet.

Shikhar Ghosh: So what does your day look like? You start at six?

Mudassir Sheikha: So the day looks like start at four. Spend the first three to four hours just doing the things that I’m supposed to do, which a lot of times is thinking through some of these topics that require more deliberate thinking. And go to the office, you know, there are bunch of meetings depending on the day and depending on the time of the month. There are review meetings that I do and now I actually block the times on my calendar to do thinking. So Wednesday, for example, is fully blocked for thinking. The morning times, of course, are fully blocked for thinking. And the other times are available for meetings, review meetings and so forth.

Shikhar Ghosh: So would it be possible to get us a weekly calendar?

Mudassir Sheikha: Yeah, sure.

Shikhar Ghosh: Yeah. Just, you know, a typical weekly calendar sort of thing. And then you go home at?

Mudassir Sheikha: There’s no fixed time but generally nine, ten p.m.

Shikhar Ghosh: Okay. So the kids are asleep, then?

Mudassir Sheikha: The kids are asleep. So the kids I generally see on the weekends. Friday is the day that I-

Shikhar Ghosh: And are you able to keep the weekend blocked off?

Mudassir Sheikha: I have been able to, except in the last few months when we’ve fundraising. Friday is a working day in many parts of the world, so Friday is when we do meetings with investors. But generally, Friday I’ve been able to block. Saturday is my catch up day. So Saturday I catch up on things that have to be done that I didn’t get a chance to do during the week, so Friday’s off.

Shikhar Ghosh: So last topic that I want to go through is as you’ve grown, the issue of you know, what do you keep in the central place that you can learn from everybody? And what is it that the local market has to adapt for its own thing? And that will be true of product and it’ll be true of markets, it’ll be true of this thing. So it’s this thing of saying what are the central functions that you want everyone to do more or less the same way or following the same principles? Versus what is it that someone on the ground has the autonomy to make their own choices. How do you think about that challenge?

Mudassir Sheikha: So that’s been a core challenge for the last year almost, for us. What gets done in the city? What gets done in the country? And what gets done in Dubai, which is our head office. So we made some progress on it and if you think of our position, our strategic position vis a vis others in the industry, you know, we ar a local player that has to compete with someone that has more money. And that has more engineers than us. So would probably have an edge in how much they can invest in our markets and they might have better core technology than us. So how will we win against someone like that?

Mudassir Sheikha: And our answer is that we will win by being more local than them. Meaning understanding local opportunities and adapting our product to meet those opportunities. We’ll win by running faster than them so if an opportunity comes up, something changes the market, we’re able to run and make something happen. We’ll win by having much better people and by having a culture that drives a certain mission and vision type of behavior. So these are the four things that we’ll do to win.

Mudassir Sheikha: Now the first two, we’ll win by being local and we’ll win by being speed automatically translate into empowering the front line as much as possible. Empowering the front line to make the decisions to do as much as possible that they can do on their own. And the front line for us is the cities. It’s not even the country, right? It’s not that Pakistan should do something. It’s Karachi should do something, Lahore should do something and the people that are running those cities need to be empowered to do those things.

Mudassir Sheikha: So we have two frameworks that we’ve come up with. The first is the default location for any activity is the city. So if there’s an activity that needs to be done, the first place that it actually should be done is the city. If there’s a super compelling reason for this thing to be done at the country level, then we’ll do it at the country level otherwise we’ll keep it at the city level. And if there’s a super crazy important reason to do it at the other level, we’ll do it the other way. Otherwise, we’ll push more and more stuff down to the city level.

Mudassir Sheikha: And the second framework is if the function is not done at a city level, what role does the country or Dubai play for that activity, for that function. And the default role is an advisory role. So if let’s say, pricing as a topic. You know, pricing is a pretty complicated, sophisticated topic that has far reaching implications if it’s not done right. Now, if you allow all the cities to do their own pricing, then you’re probably going to leave, you’re going to make mistakes because it’s very sophisticated. It requires a lot of, in deciding of the market, analytics. And if you do it at the country level, then you’re not going to get the agility that you need or the relevance that you need.

Mudassir Sheikha: So should pricing be done at the city level with some advisory support from the country? That’s the default one. Legal, regulatory thing? Should it be done in the city, should it be done in the country? Default is city, but guess what? Regulators are typically national. So it can be done at the country level. So the default role that a country or Dubai plays is advisory.

Mudassir Sheikha: The second type of role that a country or Dubai can play is a service provider. So they can provide a service to a city. And when that service is provided, it needs to have very clear SLAs. I need to get responses in this time, I’m going to pay this much money. I should have the ability to fire the service provider if the service provider is not performing well. And the cities will make the choice, typically, if they’re not getting the right service or if they’re not getting the right speed of service.

Shikhar Ghosh: Like the customer relationship.

Mudassir Sheikha: Like the customer relationship. And the third one is there’s some things that the country or Dubai needs to control, right? Finances is one part of it.

Shikhar Ghosh: Brand.

Mudassir Sheikha: Some of the people processes is another part of it. Certain aspects of the brand are part of it, but for the most part, we want to empower the front line and have them drive the decisions and only support them as an advisor versus become service providers or controllers.

Shikhar Ghosh: But there are common systems, right? So analytics just as an example. You cannot have the same level of person, quality, systems, all of that, at each local branch. There’s a lot of learning that happens across all these markets that’s common, even though there’s differences. How do you transfer that, then?

Mudassir Sheikha: So some of these things like analytics, growth hacking, in general, the product is expanding to cover these things. So they are starting to become a part of the product. And automatically are starting to get absorbed in what the system does, versus what people do. So that’s the way we are approaching those things which require more scientific planning, thinking, and doing.

Shikhar Ghosh: So last question and then we can stop here. You became the CEO of this company somewhat reluctantly in the sense that you had the founders and then you all got together and this was what? Two years ago now?

Mudassir Sheikha: Yeah. Two years ago, yeah.

Shikhar Ghosh: Two years ago. So, you know, as the CEO, what have you learned, what surprised you about being CEO of a really fast-growing company? And what have you learned about that?

Mudassir Sheikha: The biggest learning and the biggest surprise has been around people leadership, right? We are a business that’s growing rapidly. We are a business that whose process and systems are behind where we are as a business. So people are working really, really hard. And people get exhausted and they work really hard. They need to be rallied and they need to be encouraged and they need to be inspired. So that task was a surprise that in the role that I’m playing now, you know, I can look at Magnus and look at Abdulla and say, look, you guys should play that role, even though they do that role but I feel now this is my responsibility now as the CEO of the business.

Mudassir Sheikha: And it takes time, it takes thinking. It takes a lot of doing, you always have to be positive even when you’re having a bad day.

Shikhar Ghosh: And the cause-effect relationship is never completely clear. You did something inspirational. The numbers don’t change immediately.

Mudassir Sheikha: Yeah, they don’t change immediately but we’ve actually been pleasantly surprised that our colleague NPS, strongly correlates with our growth numbers. Now, of course, it could be cause and effect but when we’ve invested in people and getting people excited, we’ve actually seen growth happen I those markets. And where we’ve had leaders that have not invested enough in people, we’ve actually seen growth over time slow down. So there’s a high correlation between people, motivation.

Shikhar Ghosh: And this all analytical in the sense that you could just look at the numbers. It’s not a subjective thing. So that says that this is by far the most effective sort of way that you can do it.

Mudassir Sheikha:

So we tell people now, don’t drive growth. Growth is an output. Drive experience for our captains and customers that’s going to bring growth. And drive engagement for your people and that’s going to drive growth. So focus on these two things and growth will happen. And we’re starting to change the KPIs that we look at as well. So instead of people looking at growth rates, we’re in the process of shifting to the input KPIs, which people can influence and then the growth is an output.

Shikhar Ghosh: So what’s an example of an input KPI that would affect growth?

Mudassir Sheikha: Experience is an interesting one, right? Both on the captain side and the customer side. And on the customer side, for example, experience is a function of, you know, when you open the app, is a car available? What percent of the times is a car available? What ETA do you get? You know, what’s the completion rate of the trip? So these are experience KPIs that we look at that tell us what retention rates will be for customers on some longer term basis.

Mudassir Sheikha: And on the captain side, similar KPIs. How much time is the captain spending, getting paid for a trip or is he waiting? What is the quality of customers that we’re giving him which is measured by the ratings that he gives to the customers. So these are the experience KPIs both for the captain and customers. And if he do them well, then a lot of the metrics start improving and we started seeing healthier growth happen as a result versus just trying to see, hey, I need 10% growth tomorrow. I’m going to give a promo code that gives people 50% off for the next 10 trips. And I’ll see the growth, but as soon as that promo code is over, the growth will vanish, right?

Shikhar Ghosh: Yeah. It’s sugar high that you get in that process. When did you shift or start shifting towards the input rather than the output metric?

Mudassir Sheikha: So in the Careem operating system, one of the principles is invest in experience to get growth. And experience is both captains, customers. And the quality experience is the quality engagement part. So we have at least defined a principle around I and now we’re figuring out the KPIs that we should put behind it and then we start changing all the dashboards to focus organization on these KPIs. And you know, you worked at BCG and I spent some time at Mackenzie.

Mudassir Sheikha: Someone, one of our colleagues that worked with us on the OS, he asked me, do you know where Mackenzie’s revenue was? You know, I was an EP at Mackenzie, but I didn’t know what Mackenzie’s revenue was because is not something that the organization spoke about ever. The organization always spoke about other things, right? Client satisfaction, repeat work from those clients, and there was a belief that if you focused on these things, then they don’t have anyone to follow, right? But even at relatively high levels in that organization, you had no idea what a business was producing, right?

Mudassir Sheikha: So we want to start focusing people on the right KPS and then growth will happen.

Shikhar Ghosh: Somebody that we had in class one day was talking about profitability as being like jet fuel for an airline. So they say, you know, you can focus on profitability like you focus on jet … You need it in order to keep the business and so on. But that’s not what generates anything. If it’s a necessary part of it, but it’s the customer service, it’s the on time, you know, it’s all of those things.

Mudassir Sheikha: Profitability then is an output, right? It’s an output of you doing all the right things, right? And then profitability follows.

Shikhar Ghosh: Right. And so it’s interesting because you started by saying, you know, we focus on the outputs, the growth, every other thing. And now you’re coming full circle and going back to saying once you see all the linkages, then you can reliably focus on this side because you know that it’s going to carry through. Thank you very much.

Mudassir Sheikha: No, thank you.

Shikhar Ghosh: Great.

Shikhar Ghosh

Posted by Shikhar Ghosh

Shikhar Ghosh is a serial entrepreneur, angel investor, and Professor of Management Practice at HBS. Named one of the "Best Entrepreneurs in the US," by Businessweek, Ghosh has led some most innovative tech-based companies in the US and advised hundreds of entrepreneurs.