Super Scaling Making the Next Big Move

[Music] thank you so much Flo it's very kind of you to share about the book and welcome everyone it's a great pleasure and honor to be here this afternoon with all of you and it's a very special topic and the topic we'll be discussing it's very ambitious and very Ambi ious company coules with the Art and Science of super scaling scaling is not just about growth it's about growth in a Smart Way efficiently and sustainability with navigating challenges such as Regional expansion team scaling and Capital Management and I'm very honored to welcome three incredible exceptional leaders this afternoon who have successfully navigated these challenges and have redefined what scaling means in their respective domain so I have the honor to welcome om anari CEO and co-founder of Abby hammed kotra kotra who is founder of flap capap and Chason yukes who is the senior executive officer of itoro Middle East and so to start my question uh what I'd love to talk about is of course about scaling and scaling is challenging but it's essential and to each of you in one two minutes if you could um tell us what's the single most effective strategy that has driven your growth and perhaps mentioning about your journey and your company and I'll start with you om if you could start you know telling about your journey and in the one line the single most effective strategy that has driven your growth thank you thank you um what I'd say is what I tell the team is uh strategy is useless uh it's all about execution uh so uh anyone who sits in a anyone who says Let's whiteboard something they're immediately fired from the company um because the point is that uh when you are building something uh trying to build something at scale and in a fast manner it's all about execution because that's where you learn that's where you iterate and that's where you're able to then change what's required for you to be able to then go back out and actually build again um so so for us that's our big focus our focus is not focusing on any strategy uh and just saying this is where we want to be and how do we best get to that goal by going and making mistakes and then making those mistakes into successes afterward so that's kind of our Focus thanks a lot and welcome Kucha fully agree with what said here maybe I will add also something really important about scaling is when to scale uh you scale prematurely and the company explodes you take more than more than the time you should take and it loses momentum so identifying that you have you have a product you have some customers that like it um these customers seem to be replicatable there are local likes you can go and acquire them and the unit economics it makes sense I think this would be the most important time to think let's scale because otherwise if you're scaling something a recipe that is not yet proven failure will be essentially inevitable in a way so execution timing Jason would you like to give your views look I think for itaro we uh you know have a different uh perspective but also quite similar at the same time um and particularly to K's point if we we look at the journey that we've gone on with Toro Middle East and the licensing um decision to come and get licensed and join the ecosystem in the adgm that took place when we' already developed a product there was already interest and it was more bringing it into the local market and um you know there was the opportunity to then grow and scale further within the the UAE and and into the GCC um and much to the point of having the the product and the uh execution and delivery of that product rather than the strategy first oh thank you so much I'd like to talk now about strategy and Market prioritization because you need to prioritize where you want to scale how do you do it and perhaps I'll start with you Omar because you started in Pakistan and and after a couple of years you mve to the UAE here and then to scale in the GCC could you tell us about Regional expansion um bring unique challenges and what has been your approach to capturing new markets effectively yeah so we um before we went International we made sure that we understood that we had a successful product first and we we've got two ends of the portfolio um and that's important before you go International going International I won't say is easy but that's the easy part but if you've got a bad product and you don't know how to execute that right all you're going to do is have mass failure across different markets uh so our Focus was uh purely Pakistan at first understand the nuances of the product uh understand how npl Cycles happen uh make sure you are get it into almost a box framework where you and your team is 100% focused and understands how this actually works the next step then is saying okay now that I understand how this works here and by the way Pakistan s to like in Egypt or Nigeria are very difficult markets to operate in so when you go somewhere else like UAE and and and Saudi for example it's it's it's much easier uh so it allows you to not make the same operational mistakes that you made in your home country um but then also go into that country being able to scale much quicker um The Next Step of that is then specifically for our industry so we're in fintech and we're lending fintech it is on regulation uh we don't play the gray area when it comes to to to fintech um our whole idea is have the open conversation with the regulator get them to understand what you're doing if there's not a regulation around it that's fine uh but trying to do it behind closed doors and and then speaking to regulator after I think is the worst way of being able to to go into New Market so I think the first conversation you have for a business like us is go speak to regulator this is what I've been able to do in other markets this is what I want to do here how can I do it uh that's that's one part of it the second part of it is in terms of Partnerships so when you enter new geographies don't fool yourself thinking that you can come in uh knowing that market uh better than the local does so we go in and we work very closely with partners that have been there for a long time uh and understand both the regulatory as well as the cultural aspects of the market so that we can localize product uh as well as make sure that we don't uh fall into any regulatory traps and it allows us to scale from day one uh so that's something for example over here going through hub71 in in in in Saudi we have ala as a partner over there uh for us to be able to scale the book and have access to an existing user base very quickly so long and short of it is that make sure you understand you have a successful product first and then go International very good advice thanks a lot kachra with flap cap scaling across the Mina region how did you access which countries um to Target first and what strategies prove most effective in navigating diverse Regional markets so like we started off in Egypt uh we were growing really nicely however Egypt's macro was a bit too tough and and honestly we had we had for survival reasons we had to find other markets more Stabler markets especially for our stage of the company because we were not yet big enough to be able to access the funds needed if we didn't have enough of size um and at that point we looked at the different different geographical options around us in Egypt we needed to find a place of course that has an Economic Opportunity sizable and second and more importantly that it has a similar need a similar problem that we're trying to solve for and that there are many or at least some similarities with the tech the capabilities that we have built to be able to serve to these customers so and also and this is also really important and you need to find the the path with the least friction if you go for uh if you go maybe a bigger opportunity a bigger Economic Opportunity but it will take years maybe you cannot afford it so we kept we kept trying triangulate here and we got we got lucky to find that here in the UAE there's a real opportunity uh the customers the the problems we were we were solving in Egypt are very very similar here adding to it as om has mentioned um the market here is also matur in many aspects which adds which adds advantages to our product and makes our lives easier in many ways oh thanks a lot it's really really insightful Jason you have a totally different also story and perhaps you know Journey could you share about you know the Journey of Ito and now you are the country head of UAE and Mina look I think to Omar's point in terms of regul that is very important for us as a Global Financial uh platform we engage with our Regulators in in all the jurisdictions and so taking the decision to come into the UAE was looking at the regulatory Frameworks that we're in place engage engagement with the regulator understanding the um relationships that you can build and you you know we're obviously here at adgm today so um you know saying that the fs is quite an engaging regulator that believes in supervision by engagement um which is something that we we like to see across um all the jurisdictions we operate in um so you know for us that um ability to have regular uh meetings connections discussions um you know not just with the regulator but others within the community and others in the ecosystem is is really important no I agree I think we are really lucky to have a very proactive and Forward Thinking regulator in Abu Dhabi who helps you know to grow and to expand enabling you know the all the fintech companies to really do well so which is really really good and do you have any if if we talk about this uh area about navigating regulation uh and operational hles what's been your journey in terms of um entering new markets what is very unique about the the Abu Dhabi regulation or UAE regulation compared to perhaps other other other countries yeah um so depending on the market it's completely different uh and what I will say is uh and this is where the partnership aspect is very important when you go into these different places because uh you want to work with someone who has a a a friendly relationship with the regulator uh it allows you to have that open conversation to understand whether this is uh considered completely uh uh intolerable or it's something that they're open to working with you on when it comes to drafting regulation after you go through a certain process so uh we found for example again over here with audio and hub71 our ability to go and speak to adgm and get the light right licenses in place uh was was instrumental uh for for for that and in Pakistan uh as well I mean we uh because of the local VCS we had in the cap table we were able to go and now we we have a full-fledged Bank in the country so uh we're a fully digital Bank uh over there and that wasn't an easy process but it was easier because of the right stakeholders that allowed us to have a friendly meeting with the regulator same thing in Saudi so I think the The Regulators are very similar across the different regions uh but the conversation is very different when you come in with a friendly face as opposed to trying to attack it in a different way I agree I'll move to Capital Management and financial sustainability and everybody wants to talk about you know when you raise money and and when you know you're stuck at the scaling phase how do you manage funding and I'll perhaps start with you KRA yeah great question like we learned it the hard way when to raise money when you don't need money whenever you're in in real need for the money it doesn't come you need to be building a relationship uh or ships as as earlier as possible of course it has been a bit tough in in the raising environment the the last few years luckily it is getting a little bit better um the appetite is getting there not as not not as you it used to be but at least there's some appetite here and one of the key learnings for us in the past Trace was some times like Founders can be counterproductively over optimizing right you can find the right investor uh there seems to be great fit between what you're building and what they're looking for their thesis and then you get uh you get too hung up on like specific details maybe the valuation maybe the valuation even though there are so many other aspects that you can need you can think of and unlock value from but some Founders get stuck in this the process gets super delayed some momentum is lost in building the company and it becomes at the end net negative so sometimes you know like if you're if you find the right partner if you leave a little bit of money on the table not something big maybe 5% you know like you know just just a little sign to to make sure that the other partner understands that you appreciate them to get the conversation going fast get the money and keep running it will be a big net positive look for foror it's a different Journey right we're we're part of a a Global Group uh um the entities themselves still have to go through the same processes of uh putting forward their plans and budgets and making sure that uh you know we're we're not just uh spending money for the sake of spending money um but you know it's a different process for us because we we we're funded by our uh big bigger brother if you like yes um I think again because we started in Pakistan um and and background wise I used to cover Emerging Markets on the investment side for a long time liquidity Cycles in these markets can be short so you have to take advantage of them when they're there take in as much Capital as you can just don't spend it so we for example when the world was a beautiful place in 2021 we raised a significant amount of capital but we became profitable within six months of our launch and we didn't spend any of that money uh and what that allowed us to do so the The Secret of staying uh building a large company in emerging market is just staying alive uh and so if you come out the other side of a macro headwind uh and someone else even if they have better product Etc but they just been fiscally imprudent uh they'll automatically disappear so just stay alive that's the that's the goal and so don't spend thanks thank you so much I'd like to now move my question to technology technology as a catalyst for growth and discussing the role of technology and Innovation to scale and this question is to to all of you Technologies at the heart of innovation and how has it enabled your company uh to scale efficiently and what role does it play in streamlining operation or reaching more customers so like maybe in in our in our side like the B2B side unfortunately like there is there's so much fluff around the rule of Technology you know so so many Optics here sometimes companies claim that they have technology like its value is close to zero sometimes it's negative and and we have been very mindful from the beginning not to self deceive ourselves and the way we look at it the way we look at it is to ask ourselves in dollar value what is our Tech Advantage okay so we're trying to do something for instance a bank a Legacy Bank is doing okay we look at the process we ask okay how many people work there how many work how many man hours what does this cost and compare it to our process with the use of the technology that we have been building if there is no Delta of at least 15 to 20% Then we don't have a take advantage okay so this is one key metric that we keep a close eye at it another metric we also look at is is while scaling is the scale in number of the employees that have the team size is going with the same pace of that of the revenue we take insane Pride insane Pride that the company has more than 10x while our team has only twox this is when we feel okay we really have a tech Advantage here because again the operations are getting more streamlined what has been taking maybe 10 hours last year now it's taking 5 hours or 4 hours and this is where the real Advantage the real Edge comes in dollar value not fluff not big words dollar value thanks a lot KRA look I I Jason I was going to look at it more from eto's Global Perspective where we we have millions of clients around the globe and trying to service those to a high standard keeping a a good client experience keeping them engaged keeping them coming back to to to our product offering rather than going to one of many competitors is is hugely important to us so you know trying to understand put yourselves in the position of the client being client Centric and developing solutions that are are are better for them so not just you know what what you like or what sounds good from a sound bite perspective but implementing real change and creating a good client experience that's you know very much at the the focus of what we do with with technology thanks your views on technology what kind of tools what kind of Technology are you using to actually grow or to innovate yeah so I think uh both aspects are important so metrics are the key aspect to know that technology is enabling your business uh and the two metrics we follow very closely are Revenue to employee uh so Revenue per employee if you look at chime versus JP Morgan for example uh the revenue of per employee is astronomically higher at chime versus JP Morgan uh and that's because of Technology enablement uh lot lack of Branch Network for example uh so that's something again we follow very closely uh and we have actually a smaller team than we did at our Peak and have a much higher Revenue today than we did back then so that's one thing that we very closely monitor um uh the second aspect which is very important and if you look at this at Mass scale uh so you look at new bank uh versus a bresco for example the cost income ratio of the bank is what tells you that technology playing a key role uh uh aesco will have a cost income ratio of north of 55 to 60% and a new bank will be close to 30% for example uh and so for us that's something we focus on dramatically where is the operating leverage of your business if you have to consistently increase cost to be able to increase your your top line and income then you're in the wrong business and you're not a technology enable business which is fine but don't kid yourself so these are metrics we follow to make sure that we are constantly uh adopting and improving on technology for us to be able to increase our Top Line thanks a lot so we talked about Capital Management you talked about timing we talk about technology being in education I have to ask you the question about people about Talent so this year at the in the uee we did the future skills Forum where we invited grow startup like yourself uh talking about um talent and skills so my question is scaling at speed requires building strong teams and fostering leadership what and what are the unique skills you are after what strategies do you use to attract and retain Talent while scaling rapidly and I'll perhaps start with you uh om um so it's not easy but it's not tough either I think uh the the attracting Talent uh has has not been a problem as of late um it's the right talent that you need to understand as what your cultural fit is uh and that's something you need to understand very early on so that you don't go and we made the mistakes as well along the way saying okay we'll we'll be a bit lenient when it comes to X Y and Z but what you really want to do is saying this is our culture and this is who we want to attract in so that's one part of it the second part of it is constant Innovation so how do you this is again goes to the cultural aspect is how do you make sure that all the the way down everyone is incentivized towards uh Innovation so for example what we've done is we've created an innovation uh kind of team but everyone internally is actually incentivized should they come up with a new product you could be sitting in customer success for example or in operations that has nothing to do with product but if you come up with a product and we we then test that uh and it's successful you actually have your salary linked to the revenues of that product uh so what we make sure we do is is incentivize accordingly to make sure Innovation is constantly happening what that does automatically is that everyone is thirsty to be able to improve their skill set so then we say okay when we were lucky to go through YC Etc where we have a huge community of companies that we can say okay what do you need who is your Northstar so in your role who do you regard globally as a Northstar in that field and how do I get you them to be able to Mentor you in some way shape or form so the Endeavor Network helps us with that for example we're part of world economic Forum as well that helps us so a lot of these things really help us to be able to allow for shadowing to take place to build up your talent thanks a lot uh Omar Jason do you want to add your views I to Omar's Point cultural fit is massive you know we we're now a global organization with 1500 people around the globe and I've been building a small team locally that needs to fit into that that that much bigger machine so understanding the Dynamics of that but also being able to ensure that the the local Dynamics work as well you know there there's two sets of culture that you need to Foster and grow um you know I I don't think there's a there's no magic uh formula to it I think it's sometimes a gut feel sometimes it's interactions with individuals and understanding that you can work with that person in a particular way um and seeing how different departments will also interact um but yeah cultural fit is is massive culture fit do you have any views uh COA maybe maybe to add a point here like you can think about getting the right people like upstream and downstream Upstream I mean for someone leading a company if you if you put the right effort into hiring the layer underneath you getting them the best you solve Upstream 80% of the future hiring problems because they will be picking the right ones after them okay so so this is one but of course we need to be reasonable enough to understand especially if you're moving fast mistakes will happen Okay and the worst and mistakes are normal what's worse than making a mistake is not fixing it so and also like not only for the company for the employee if you have the wrong employee in the company guess what they will know it they will go back at home feeling um not very well at night you know the their psychology suffers I think it's inhumane to leave someone in the company if they're not a good fit for them and for the company of course so we don't shy away from letting go of the wrong people we try to be as generous as possible within our means you know leaving at least 3 to 5 months uh uh uh Severance but at the end mistakes have to be fixed if if you do them wrong and you need to make sure that the people at the top at the right people or else it gets out of control no thanks a lot thanks a lot I have my last question but a very important one about future about Trends and opportunities and so what would be your advice or looking ahead of the next five to 10 years with you know what you are doing what trends and Innovation do you see shipping how business scale globally especially in your respective you know uh company and Industry and what would be your advice so um one thing we're working on right now um is how do you constantly how would I disrupt myself uh is is kind of the focus so uh we have a view and I have a view personally that the next level of disruption for us will be blockchain and crypto in crypto uh so how do we take advantage of that so that we don't become obsolete so what we're already doing is our entire infrastructure is being transferred onto a blockchain but more so and that's a very broad statement to make but the more important aspect of that is for our our our funding uh book so if you think about it right now the the AR banking 1.0 2.0 3.0 at this point in time is essentially still under local regulation for you to pay able to take get deposits locally for you able to fund your book to be able to lend on on my view is going forward the global user becomes your deposit taking uh capability and so what we're doing is uh creating a blockchain that allows us to then be able to tokenize each of our loans and therefore someone sitting in Kanas for example could fund one of our employees that we Fund in in Pakistan uh uh where we be able to generate yield for them so um that's something which we're in again pushing forward on because I think going forward our our loan book is no longer going to be from local funding sources alone it's going to be from uh offramp and on-ramp chains that we can take advantage of good job uh I I fully agree with omir my biggest my biggest uh worry at this point is how not to be disruptors so we are supposed to be the disruptors in a way but um W with what's happening in the AI and the llms um I believe I believe personally that AI will be the biggest value Creator in the next 10 years and when we started flap capap this was fintech 1.0 fintech 1.

0 um fintech 2.0 will not be asking how AI can drive operational efficiency in my company it will be asking how can Ai and llms reinvent lending and financing in general so what I'm trying to solve for what I'm trying to solve for at this point is if I'm starting flap cap today from scratch what would be different given the technology and the evolution in a tough tough tough thing to handle because you have the tension you need to grow you cannot afford you know taking a lot of time to think and disrupt but on the other hand if we don't disrupt ourselves you know that the new companies you know we will be the incumbents for them and they will we will be sitting ducks we will be sitting D essentially very good advice Jason what's your view look I I think we have to congratulate ourselves for only mentioning AI in the last answer to to the final question you know the um it for us we we just uh did a AI hackathon in our headquarters and there is a huge focus on that across the uh fintech landscape at the moment um I think it's making sure that all areas of the business get covered because you know you if you're producing um you know for example marketing materials with your AI Solutions but you haven't got your regulatory sign off for your marketing compliance in in place then you you both parts of your business need to move together so it's making sure that you've got it coming across your whole um ecosystem and everything coming up together but we completely agree a AI is one of the main areas of focus so we have one minute left shall I challenge myself ask you one one minute each if you could offer one piece of advice because some of some of you may be some of them may be entrepreneur in the audience uh how would what would be your advice to preparing to the next big move what would it be an advice to entrepreneurs as in to become an entrepreneur yes don't do it don't do it like uh I think to be an entrepreneur you need to be uh to have this sort of dissonance in your mind you need to be accepting accepting that most probably will not succeed but at the same time have this unrealistic belief that he will succeed yeah good luck I'm I'm not one so I can't give any advice no thank you so much I think we've learned a lot we covered a lot I appreciate you know your amazing insightful knowledge and thanks a lot for being with us thank you thank you [Music]