Transcript: Hasan Abasi | Haat | How Do You Launch a Product in a Market That Isn't Ready?

Intro: the customer is the easy part

Hasan Abasi: [00:04] The customer is the least complicated part if you nail what comes before it. Meaning, if you have enough good restaurants, a good enough product and a strong operation, if you bring all three, the customer, I'm telling you, is less challenging than those three.

Eyal David: [00:25] Hi, this is Eyal. This time I hosted Hasan Abasi from Haat Delivery for a conversation that, in my eyes, was inspiring, about a classic 0-to-1 entrepreneurship story. Truly, a problem that is not simple at all, that broke down into several problems, which Hasan, as he put it, solved each time up to the next milestone. It's a solution that started out very focused in Umm al-Fahm and grew into an operation that today works all over the country, and they even went abroad. Tons of lessons from a founder who never stops running, I really recommend you listen to the episode to the end. Enjoy. Hi Hasan, how's it going? Hello, hello, how are you? I'm excellent, I'm glad you came. Likewise. We planned this for a long time.

Who is Hasan: math, Technion, Intel, IBM and Google

Hasan Abasi: [01:17] So let's, in a few words, tell us a bit about yourself. Yes, so my name is Hasan, I was born in Umm al-Fahm, but from an age, I like to define myself, from a very young age, I loved mathematics, that's what drove me in life. Then I looked for something to study that connects to math. So I found computer science, I said, this is modern mathematics, I did, I studied computer science at the Technion. I did a bachelor's, felt it wasn't enough, said, come on, I'll keep going. I did a master's in computer science, not enough. Suddenly I found myself ten years at the Technion doing a PhD in computer science. So that's the academic part. And of course, along the way I taught, a teaching assistant and then a lecturer, and I got stuck there, I'm still a lecturer to this day. So that's my academic side, that's me. And I worked at a lot of high-tech companies, mostly before, as my father says, I deteriorated into selling baguettes. So I worked at Intel, I worked at IBM, I worked at Google. And my biggest achievement is that I've been married to my wife Hanarem for 11 years already. With three kids, Muhammad, Dana and Yara. So that's me. So you worked well, really nice. So let's really take it there.

Eyal David: [02:39] So you worked at Google, right? Right. And actually, you had a boy or a girl? What did you actually have? So when I was at Google, I was with my eldest son, with Muhammad.

The problem in Umm al-Fahm: no menus, no cards, no addresses

Hasan Abasi: [02:51] And then because we were relocating, going to Zurich. So we went to Zurich a few months later. My wife tells me she's pregnant with our second. We're barely managing with one, every parent, I think, understands what I'm talking about. So we decide to take a brave step that changes our lives. And we decide to go to Umm al-Fahm for a few months. So we went back to Umm al-Fahm. Like, for anyone who doesn't know Umm al-Fahm, it's 70,000 residents, over 200 restaurants. But there are lots and lots of gaps there. So me, 200 restaurants, there's no, this was back then, yes, 2017, 2018. Without, 200 restaurants and not one restaurant, without, there's no restaurant with a single digital menu. So I'm like, I want to eat, like I'm hungry and it's night, and then I call a restaurant, they start reading me the menu. And then I say, okay, I want to pay, guys. They tell me, oh, sorry, you have to pay cash, you can't pay by credit card. And then I say, okay, a courier, oh, find yourself a courier. I find one myself, he can't find my house, I live in a place without an address, there's no street name, no house number. And that's how the problem begins, before the solution, as they say in product, right? So basically this wasn't what you were used to from Zurich. Yes, lots and lots of things, and this is one of them, which yes, isn't what I'm used to. Everything is tech, everything is on a website, doesn't matter if it's an app or not an app. But there's simply no infrastructure, I don't, like just knowing what they sell, I couldn't find out, there are no photos, there's nothing, there are no ratings. Let's pause for a second, we'll get back to the story itself. Let's say what's happening now, what the company that exists today does. So the company is called Haat. Haat in Arabic, by the way, means "bring." And today we're a company that serves the whole country, like, we started in the periphery, serving places without addresses, with cash, with all that. But today we already serve everything. We started with restaurants, but we already do way beyond that, all of retail and so on and so on. I have another surprise at the end, I'll tell you about it. And we jumped, you know, from one city we're now in over 45 cities. We started with five couriers, today we're 5,000 couriers. And from nine restaurants, today we're over 3,000. We started as four employees together, guys, and today we're almost 350, some in Israel and some abroad.

Eyal David: [05:35] Crazy, okay, so you'll expand on that. So let's get back to the story now. You basically identified the problem. First of all, I assume you didn't think it would get, it wouldn't get there.

Hasan Abasi: [05:43] Right. What do you mean I didn't think? Like everyone I started working with on the problem, I said let's do something on the side. And I told my wife half a year, give me a bit of time, half a year, we were, you know, with two kids. We're three now, but there were two. And I told her, just give me half a year, it's been seven years since. Yes, no, it's amazing, I said. Everyone knows how much, like you said,

Eyal David: [06:09] exponential between the first kid and the second. You went out to get food and never came back. Totally. And she even gave you a pass, amazing. Just before we continue, click the link to the Product Builder WhatsApp group in the episode description and join the community. There you can continue the discussion, ask questions and be the first to get updates on new Tachles episodes. We're waiting for you there. And now, back to the episode. So you set out on this kind of journey and you did it, you actually started doing market research, how did you start understanding what's going on?

Validation for 500 shekels: three posts and 2,000 sign-ups

Hasan Abasi: [06:42] So my character, as Hasan, I'm a person who throws himself into the water. Like, I love to touch things, really touch. So I didn't, the answer is no, I didn't do global market research, and you want a surprising fact? In my whole life I had never used a food app. Never. Like when I lived in Haifa, back in 2015-2016, I ordered by phone, it was very convenient. Also through the restaurant's website and so on. But I never imagined I was going to do this. And in the beginning it was very, I said I'll look at Umm al-Fahm. I don't want to solve the problem for the whole world right now. Hold on, there's Umm al-Fahm, I want to check what the problem is, what its size is and whether it's worth it. It started like, I started talking with friends and they started challenging me. That the Arab sector is less, like I started in Umm al-Fahm, they told me, like, people want technology less, they cook a lot at home, and they don't want to do, like, all kinds of things that don't work. They want that warmth, to talk to the restaurant owner and... and... There's actually a story I don't think I've ever told, that I said I want to test the market. So I did a few things, but I'll tell you one of the things I did, how I researched the market. I put out three posts online. Before I built anything, I put up a post with a picture of a burger, a post with a picture of shawarma and a post of pizza. And I said, if you're from Umm al-Fahm and you order food at least once a week, like by phone and so on, then fill this in and win a burger. On the pizza post you'd win a pizza, on the shawarma one you'd win a shawarma. I put it online and paid 500 shekels, I remember it well, 2,000 people signed up. And what's interesting is that the distribution, like the ratio between people who filled out the pizza, burger, shawarma form, is the same ratio as how restaurants sell today. And then I built up those 2,000 customers, and when I launched later on, I took the 2,000 and sent them messages. And that's how I did a launch for something. Amazing, for 500 shekels. Half a year, I didn't pay a shekel on marketing, half a year. Every week I send a message to 50 people, yes, for 500 shekels. And it was like, to test the market in the nicest possible way. Very naive, yes. Yes, yes, very naive. Very easy.

Eyal David: [09:22] And then basically, like when you set out on a road like that, you say, I'm very focused on Umm al-Fahm. You're saying, 70 thousand people. Yes. They also don't want, probably the issue of where the money flows too. Yes. That's also a very significant thing, that's probably why the resistance.

Why cash, and why restaurants wouldn't sign

Hasan Abasi: [09:37] So you started talking to businesses, yes. So you started, so there were a few things. So one, lots of people pay cash. Why do they pay cash? There are, it's not, there are several reasons for it. So lots of kids who hold cash from their parents. People, also on a religious level, like the Islamic one let's say, more so, people don't want to work with a banking system. No, and like, a system that has interest and loans and all that. Three, for better financial management, and four, black money in the market. So that's roughly four reasons why people use cash. So when I went to restaurants, first of all, before customers, when I went to restaurants, they told Hasan, you probably studied too much at the Technion, you've gone crazy. This isn't suited to us, it doesn't work. So restaurants didn't want to sign with me. The whole concept of a commission, of a fee, like, that was the most challenging. What are you and my partner? Let's say, in general society, there are lots and lots of companies that take commissions. That started maybe 20 years ago. Like, let's just take an example, say Cibus for the sake of example, which started 20 years back, right? So the concept was there. Now, what commission? Is it 15, 20, 30, that's another story. To come and ask a restaurant for 1%, at the level of the concept, that was a problem. It's even more of a problem because the money doesn't go through you. Unlike Cibus and all those guys. So, yes. At least at that stage, you're saying. Yes, I can tell you how we collect the money, but that didn't bother us. We, like, how we collect the money didn't bother us. First of all, let's agree on the commission, and it was, and it was big, big. And then I talked with, I don't know, if it wasn't 30 restaurants. I went myself, restaurant by restaurant, to convince them. Technology, we're going to make a revolution and all that. I managed to sign nine out of the thirty, for free. Like even for free I couldn't sign them, you understand?

Eyal David: [11:43] And then that was the end of 2019, we started running. Running with those nine. With the nine. How did you, meanwhile at this stage did you solve more problems, or did you just say, okay, I'm focusing now on bringing in these nine, I'm starting to advertise, the money doesn't go through me, the address thing I'm still not dealing with. Like, what did the initial product look like? What did it look like? No, no.

Hasan Abasi: [12:03] We, we started in 2018 to simply build the first product. Who's "we," just you? So I started, and then three more friends joined me. So at first I was alone, I went to Fiverr, I found myself a guy from India to work with me on the front end, so I took the back end and he took the front end, and then after that I recruited, and then a guy who runs operations joined me, his name is Fuad, and then a guy for marketing joined me, his name is Abed, and then a friend of mine who worked with me at Google, his name is Ali, who joined me to simply build the... to start taking it one step more seriously, to build business plans and start raising money. And then before we went to market, like it took us a year, a year and a half, so we built a business plan, like, I told you at the start that we thought about Umm al-Fahm, that was really really at the beginning. And then slowly we start falling in love, start building dreams, and the six months I promised my wife have already passed,

Eyal David: [13:08] and I already understand I want to go all in. So, just before you continue, tell us one last minute. So at this moment, when you're building a business plan, yes? What was the market size? Did you look at Israel? Did you look wider? What did it look like? And how much was Israel actually worth, for that matter?

Hasan Abasi: [13:23] So we looked at Israel at this stage, and I'm talking about an era that didn't yet have all the big players, yes? We're talking about 2018. And the market is huge, when you ask what the market size is, at what, at the level of sales volume, or at the level of the number of... I'll say,

Eyal David: [13:47] I was simply thinking, you have a market that you're now unlocking, you're starting to educate it, you're currently working with nine restaurants, but you're actually dreaming and you're saying, you completely ignore these blockers, and you say, I'm looking at the whole country, I'm looking, what does it look like?

The MVP: cash support and route mapping instead of addresses

Hasan Abasi: [14:01] So at first we thought about a solution for peripheries around the world, all over the world. Things have changed since, but we thought about a solution for peripheries in the world, that have certain challenges. So we took it in a more strategic direction, and not in the direction of the vision, rather that our strategy is to enter the whole world through the peripheries. So that's, like, that's the change we went through in the process. So if we close the parentheses and go back, so the four of us started working on it, and from day zero we came out with a solution that knows how to support cash, knows how to support places without addresses. And places without addresses, there are lots and lots of challenges in that. So we relied on GPS, but it turns out GPS isn't good enough, it's not accurate, you don't know where the entrance to the house is, which street it is, etc. etc. And then we understood something very quickly, that you can learn, 60% of customers order from the same point, it's not like, say, Gett, Uber and so on, and then you can learn the routes, so we started mapping new routes and learning the entrance to the customer's house. So we came out with an initial solution for addresses, from day zero we came out with a solution for cash and supporting cash, we built an entire system to support cash, and gradually we improved it, but when we launched we were very targeted on the problems I had run into in 2017.

Eyal David: [15:37] So basically, it's funny that you come out of Google, so you went for a solution like Waze. Yes, right. But we'll hear this now throughout the whole story, how you basically found a problem, carved it out, basically you put, you handled many more problems so that you could actually sell. Right, right. And basically when you planned the initial version too, you really went around, I want to have businesses, I want them to be able to transfer money, and I want the person to be able to come and pick up the most basic, most critical thing. Right, right.

A printer terminal from China and a demo that sells

Hasan Abasi: [16:07] And then when we came to launch, the restaurants said, sorry. We, most of the restaurants I worked with, I met along the way, I keep running into more and more problems I didn't know about. So when I came to talk, to recruit the first customer, the first restaurant, he says, listen, I don't work with tablets, forget it, I'm not in. Tablet, I'm, I work with paper. And then I talk to a second customer, I get the same answer, a third customer, the same answer. And I say, I got it from the second one, like, after three, I can't start with a super-technological solution. And now to bring printers and do that whole thing, so we looked for a solution and found ourselves some kind of handheld terminal. Back then, like, it was less well known, now I see it everywhere, but I found something from China, which is both a printer and also kind of a handheld terminal.

Eyal David: [17:06] I have to ask you something. Yes. But there's a hell of a challenge here, it's not just the technology, it's the matter of moving off black money, like, how was that?

Hasan Abasi: [17:14] No, meanwhile, honestly back then no, I say, I always say this, it's good I didn't know how hard the problem was. Because if I had known how hard the problem was, I would have said, I can't solve it, I don't have the ability to solve it. So I didn't think too much, like, about what now, like, putting up obstacles for myself, obstacles, obstacles. No, I want to bring a solution now, I put in front of me a restaurant and a customer, that's it, the rest of the world will sort itself out, okay? If I bring a solution for the restaurant, bring a solution for the customer, both of them, like, without a restaurant I have no business, without the customer I have no business. Everything else, couriers, I'll do the deliveries myself, doesn't matter. Those are things we'll find solutions for, but those two things, I was focused on them. But how did you convince them? That's what's hard for me. So I didn't manage, and then I looked for this terminal solution and all that, and then after all the battles, I still didn't manage. So I said, okay, I'll do a strategy, so one, I solved every problem I ran into, say, the printer issue. So I found myself a terminal with a printer. And then I said, okay, I have to change the strategy, go ask about it, because it's not working. So what I did, I built the menus without them, without having signed them. I built, I took, I always did it with the nine restaurants, and I actually did it the other way around. I said, this time I'll go with the strongest restaurants, for the better. So I built their menus, I put photos, like from the internet, like I built a really really good menu, and next to each one that was there, I put its competitor. And then I sent it to the restaurant, let's say, the biggest one. Okay, let's talk, okay. So like, innocently, I accidentally tap on the competitor. Sorry, sorry, I go back. So he already starts imagining that I've already signed the competitor, then he sees his menu, suddenly he sees it with his own eyes, and I started, like, it didn't work until I demoed. So when I demoed people really really fell in love with it, but it was hard work because we didn't have, the systems were theirs at first and the onboarding of a restaurant, like we really played with databases, really me, also how do you get all the photos of all the... no, so the photos, the photos we put, like we searched for photos, that's why we launched with exactly, we launched nine restaurants. So like that's that was the start and that's how I succeeded. When I solved the restaurant problem, especially the register, you don't understand how much difficulty the register gave me, like something that sounds trivial, you put a tablet there and everything works, this part, until I understand, until I bring it from China, manage to program it, put my software on it and all that, so it prints the moment an order arrives, the restaurant could theoretically work without any technology, like an order arrives, paper comes out and you take the paper and start preparing it. So we launched the nine restaurants and traffic started. Wait, but one more second just about the payment?

Eyal David: [20:17] Yes. So at this stage did you work with digital payment? No, no, everything was cash, so how did payment work? Exactly. How did payment work?

Hasan Abasi: [20:25] So anyway the commission is zero, so I didn't worry about how I collect my fees. So we said, okay, about payment, like this, the courier comes with his own money, say 500 shekels for the example, goes to the restaurant, say the price is 100 shekels, pays 100 shekels on the spot, pays the restaurant 100 shekels, goes to the customer, gets the 120, say 100 plus 20 shekels, say, delivery fee. So he got back the loan he gave, like he paid 100 and got it back, and now the 20. And we said, take the 20, it's yours. Meanwhile we didn't touch the money and we had no revenue,

Eyal David: [21:03] all in all we wanted to reach a state where everyone is happy. So you were basically recording these transactions, that's basically the thing, what was your goal at this stage, how many transactions, what did it look like,

A year of execution with no questions: 100 to 400 orders a day

Hasan Abasi: [21:14] what volume. I set it for myself like this, because I'm a very results-oriented and very milestone-oriented person, okay? So I like to build the... or my working method, as I say, I divide people into three types: one type that loves to plan, one type that loves to execute, and a third type that knows how to balance the two. So I like to plan, say, 15% of my time and make decisions, and then for a period I don't ask myself questions, doesn't matter, I don't ask myself questions. So at the start of... at the start of 2020 I brought the team, three people, I brought the team, I told them listen guys, we're launching now in Umm al-Fahm, we rented a 40-meter office, we wanted 20, they wouldn't give me that, we rented 40 meters, and we took it and said, okay, from today for a year, a full year until January 2021, we don't ask questions, we already asked, 2019, 2018, 2017, we asked, we don't ask a single question, we only execute, execute, doesn't matter, succeed, don't succeed, we keep working, we raised some money, for a year we don't ask questions. And then I set for myself, to your question, I said, if we do fewer than a hundred orders a day, we close, we don't even ask, we don't try. We'll do a year, end of the year, if we don't reach a hundred, we fold up the stall and go back. Lucky you, tell us what happened that year. No, and then we said, between a hundred and two hundred, we'll ask ourselves, say, worth it, not worth it, two hundred? But that's only Umm al-Fahm, you're saying. No, no, only Umm al-Fahm. In the first year I did nothing except Umm al-Fahm. Because today I'm in 45, but the first year I only learned the market. I don't know this world, I'm not from the logistics world, not from the marketing world, I have no knowledge. And two hundred orders is a lot, right, today? Yes. Relative to a market that isn't... relatively too, like, back then yes, today like... fine. So and we said, if we do 400, that's truly a phenomenal success. Like, that's really success. I launch, Covid arrives. I didn't put a single shekel into marketing in the first year. We set a target of 400. In April 2020 we're at 400 orders. A second later I hand in my resignation.

Eyal David: [23:53] Still, until then I was still at Google. What, were you on unpaid leave? What were you? You worked in parallel, juggled two things? Yes. Wow. Yes, I was like married with two kids. That's it, okay, so that explains it, because you worked in parallel. Yes, yes. I said, like, I want the signal, like,

Hasan Abasi: [24:10] I want the signal for it, and then I said, come on, that's it, all in, that's the sign. Covid is the point where I say, and we also hit the first milestone. So I said, from this point, I stop asking myself whether I'm in the right place or not in the right place, I'm all in. And then we start, start now building the... like, when we built the first forecast, we built it for Umm al-Fahm and all, now we start planning 10 cities. Like, from one we want to jump to 10, and then start running. And Umm al-Fahm is a relatively big city, right? Meaning, what worked there would work in Nazareth too, which is bigger, obviously. What was the next city you continued to? So naturally, geographically there's Wadi Ara, Kafr Qara, Ar'ara, Barta'a and all that. So naturally we jumped there, and then Baqa, and then a guy who heard about us came to me and said, come on, let's open in Sakhnin, and then we jumped out of order, not according to plan, we jumped to Sakhnin too, and those are like cities you opened a year later. Let's say what it means to open a city, or one second? A hell of an event. I'll tell you what, opening a city today and a year ago and before, every year it's different. Because when we got into this world we learned it from scratch and we were very open. Like we didn't go and study the literature. We said we'll check and try and move fast and decide what the best model is. We didn't take anything for granted, of course, and think about it, in those years, 2019, 2020, those are years when delivery was gaining some momentum but still wasn't cracked. Today it feels like the world is bigger, everyone knows it. We tried lots of models. So only then, like when we opened we worked in a model called a contractor, we worked with a delivery contractor. That means we didn't really manage the couriers ourselves, rather we brought in a contractor and it was cheap. Now, what about quality? Terrible. But the frenzy of the technology, like because it grew out of the periphery, so so there was a lot of local pride, so that covered up the problems we had. The product was also terrible, like, like, at the time it was cool. But today, like, there were lots of problems, lots of bugs, things didn't work, it wasn't, wasn't built for scale, when we reached 200 orders I remember all the systems crashed. So the dashboards crashed and all, I remember it really well, we reached about 200-210 orders a day. The systems, boom, everything froze, and that's the first crash

Eyal David: [26:50] And you're under pressure, customers, everyone's calling, restaurants. So, so what is, like, a launch actually, what is a launch?

Chicken and egg: restaurants, couriers and money

Hasan Abasi: [26:59] A launch has an order, the order is like suppliers, restaurants, stores and so on, and then couriers and then customers. There's a very very critical chicken-and-egg problem there. For there to be restaurants, they tell you listen, we need traffic. And for there to be traffic you need to bring the customers, but the customers won't come if the restaurants aren't there. And there's this kind of cycle you have to break, and then couriers. And then couriers, the question is how today, let's say, let's leave how it was before, but today we manage the couriers ourselves. Meaning every courier is a freelancer who has his own life and you need to recruit them. And with couriers there's also a chicken and egg, because couriers will come to you if there are orders, and for there to be orders there need to be couriers and all that. You also need enough orders, yes. Right. And honestly, the way you solve the chicken-and-egg problem isn't a secret, it's no longer a secret, it used to be a secret. But it's not a secret, the way you solve it is expectation-setting and money. What does that mean? You tell the restaurants, let's set expectations, there won't be orders on the first day, but give me, say, a period of half a year, okay? For me to bring them. And to the couriers, you tell them, there won't be orders but I'll compensate you. And there, that's where the big money is. Like, why do you need money in this world? Because the couriers, until you stabilize the city, think about it, a courier earns 50, 60, 70 shekels an hour, multiply that by ten hours, 500, 600 shekels, multiply that by a month and it comes to about 20,000 shekels per courier. Put ten extra couriers, that's 200,000 shekels, like a very very simple calculation. And so, like, you have to set expectations, bring in the restaurants with, like, very strong salespeople, and bring money to break the chicken and egg until the city reaches a state where it can cover itself. And you haven't even described here the marketing you do. I haven't gotten to the customer, I haven't gotten there yet. I, honestly, maybe what I'm about to say will surprise you, in my eyes the customer is the least complicated part if you nail what comes before it. Meaning, if you have enough good restaurants and a good enough product and a strong operation, which there isn't yet, each of which is like its own world, yes? Like bringing in the restaurants and signing them to agreements, especially the best restaurants that agreed to work with you and all, bringing in the couriers and a good product and a product that gives everything that... when I say product it's not just the customer product, it's also the courier product, it's also the algorithms behind the automatic dispatching and the forecasting and all that, and a very very good operation. If you bring all three, the customer, I'm telling you, is less challenging than those three. Because it's a very hard world and it's easy to be disappointed by it, very easy to be disappointed. And if you look today, say, at lots of, say, let's take the country, like in the country, there are almost no B2C players, like, maybe one, right? Like, there's only one player, but there aren't too many B2C players, and that's because of the complexity of this thing.

Eyal David: [30:31] So let's get back to that. I just want you to wrap up for us for a second in terms of the solution. Yes. So really we stopped, we just stopped and moved on then. We were at the terminal that started to get going. Yes. We were at the fact that basically you, Waze-style, started mapping routes to find the entrances to houses. Right. And the locations, and basically you started bringing in the whole courier element. You told us you had a contractor company, you replaced it with your own operation, you told it really fast, really casually. Right. You replaced it with your own operation, sounds like a nightmare to me. A nightmare, a nightmare, yes, yes. What other challenges did you have along the way that you solved? So tons of challenges, one of the challenges that... Sounds to me also, sorry, but money sounds like something that... That's exactly the next topic.

First raise and learning to speak the investors' language

Hasan Abasi: [31:17] That we initially raised 200 thousand dollars. I thought it was, you know, I'm not ashamed to say it. Before that, I didn't understand entrepreneurship at all, I'm a corporate guy, yes? In the good sense, like, when, like, I grew up in corporates, like my DNA is entrepreneurial. I'm, like, energetic, want to, like, get things done and all. But I grew up, you know, I grew up in huge corporates, at Intel, IBM, Google, I don't know what entrepreneurship is, that's one. And two, I don't know how to raise money. And three, I don't know how to, like, lead marketing, like lots and lots of things. So when I raised the first time, I raised 200 thousand dollars, I think that's a lot of money. So after a few months I find myself working for free. Because I quit Google and I have no money, so for a whole year I worked for free, I don't have a single shekel. And the 200 thousand dollars I raised relatively easily, like, family and friends. Like, I approached people, I showed them the product, some know me, some less, but they know, like, roughly who I am, and they invested more in me and in the team and in me. Now when I really came to raise money I said okay, now I want two million dollars. I talked to the investors. What, Hasan, leave us alone, what, what do you want. And at this stage, just to set the picture, you're with Umm al-Fahm. With Umm al-Fahm, yes, I'm Umm al-Fahm. I started, like, raising roughly when I start leaving Umm al-Fahm. And like, start preparing. Like, the expansion. And it was very very hard for me. I don't know the language. And that, let's say, today in Arab society less so, there aren't many startups and I understand why. Because you need a few pioneers at the start to break the glass ceiling and build that community. Say, I didn't know who to approach, who would help me, yes? All my friends work at high-tech companies, there are no founders, yes? And then, like, since then we've been working hard, like, to build the community, me and other friends and all kinds of groups, some not connected to me and some connected to me. But I didn't, didn't know how to do it, and I tried, I learned while I worked, like every day, truly it was the hardest year. Seven days a week, I finish the day-to-day, it needs a lot of my time, lots and lots of problems until you learn, the systems aren't ready yet, lots of manual work, lots of, like, couriers, and we're growing. The support, like, I want to stop it, listen, these are the best problems a founder can have, right, that you have demand and you can't manage to control, control the demand. I want time now for strategy and to raise the money. 15% you said, right? And I'm like, I see, I find myself for three years, like even after the raise, I find myself working a full shift until eight on the day-to-day. From 8 to 10 maybe two hours, I don't know what I do, from 10 to 3 I work on documents, on data analysis and all, not me, me and the team. Like, crazy, three years we have no life at all, and everyone says no no no no no no. Like you try to explain and all, like how much, and think about it, it was a relatively good period, it's the Covid period and all, but I simply didn't know how to approach the right investors, from lack of experience.

Eyal David: [34:58] Wait, so one second before you continue, at this stage you're already taking a commission. Right? At this stage I started taking a relatively low commission, yes. Tell us about that for a moment before you move on to the investment.

The commission war and the $3.5M raise

Hasan Abasi: [35:09] Oh wow, you're taking me back to the scars, I'd already forgotten about that. So we decide to take a commission because that's it, we ran out. Of fuel, we need some money, and I say okay, I'll take 10%. How will it be received? So I said I want 10%, we did calculations, at 10% we'll need to inject a bit of money. I went to a first restaurant, it gave me a slap, I like fell off the curve, 100%. He started getting angry at me, shouting, and I, from the shock, didn't, didn't have the courage to ask for 10% again. But you're bringing him traffic. Listen, it's very very hard market education, and I'm, like, I'm not a salesperson, I'm like a technologist who's learning, slowly, the way. I'm good at convincing and good at explaining why it's good. When it comes to the financial world, to asking people for money, you know, some kind of nerd, like, to say give me. I didn't find it hard, I found it very very hard, and as my bad luck would have it, with the first customer I went to, the restaurant, we fought. We started like having to shout, and he took it very very hard and started to, like... took it, like, to a bad place, and then I dropped the 10% concept, and then we said we won't recruit at 10%, we won't bring them in at 10%, we'll bring them in at 6%. And then we start, like, recruiting at 6%, that was also very very hard, like, starting low, taking, because why is it hard, I'll explain why it's hard, it's hard for a very simple reason, you're taking from their money, why, because at first you took 0, forget whether it's justified or not justified, doesn't matter. Today he brings in 100 shekels, all 100 shekels are his, now where do you take the 6% from, from the profit, like out of the 100 shekels, 20 shekels remained, now you say okay, you're taking 6 shekels out of the hundred, he says you're taking a third of my profit, because where will I bring you the 6% from, I'm already used to a certain situation, where will I bring you the 6% from, so the 6% you'll take from my pocket, from my home, from my kids. And then when I told this guy, what are you taking, what, are you coming to be my partner? So in the end there was nothing to do, we fought with them, we started flexing muscles and some, like, decided they were leaving us, a war started over the 6%. Today we take 20-25, but at 6% they really came at us hard, and it started, a new era started, from not wanting to work with us it became that everyone wants their own app, apps started coming out, it started, I remember the period, it was a horrible, very hard period, and I still don't have enough confidence to understand that they won't succeed. You carved out this whole road meanwhile. Yes, but no, you're still at the start of the road and all, and then a few, two, three strong restaurants start launching their own app, and against Haat, not just, like, it's not that we have an app, rather we're against an app, and some of them start going on social media and badmouthing us and all, and in the end, like, we did a very good job, and that's what I said, it doesn't matter even if it's a matter of, even if they play with the price, even that, once you play the game with the right cards and by the rules of the game it's hard to beat you, because at the end of the day a restaurant wants to make food and it needs to put its resources there, and it's hard to compete when all your resources go into making a very very good user experience, whether in the app or at the level of the operation and the whole flow. And then we signed them at 6%, and then we fought this war for a certain period, and when we came out, after, like, the 6% and the restaurants resisted, in the end they all came back to us and there was peace at home. When there was peace at home we felt we had the confidence to go out with 10% now, outside Umm al-Fahm. So outside Umm al-Fahm we started at 10%. So that's the point where we started with commissions. So if I close the parentheses again and go back to the investment, so we were already, yes, with revenue and all, and the growth was very clear, and that it's really going in a good direction. But again, we talked about the wrong investors, I didn't have the network, I didn't have a way to reach the professional investors. How did you do it? I don't know, I don't remember. I'm like, I keep talking, someone tosses me to someone, and like I, like, charged at it, like, there's maybe one of the traits, like, let me give myself some credit for a second, one of the traits is that I'm, like, crazy, that I, like, fight to the end, if you tell me now I need to walk to London on foot, I'll walk if that's what needs to be done. So like I kept going with all the no's, with all the no's I kept going, kept going, everyone tosses me to someone else and I talk with all the people, want to recruit friends, and so on, until, I don't remember how, like trying to remember, I meet Gigi Levy and I didn't know who Gigi Levy was, yes, because again, not from the world, I don't know this. And then I, I talk to him and I tell him, like, show him what I do. And he was very tough and we closed the call. There was a woman there named Shaima Arabiya who worked with him and helped me, told me this is how you need to prepare the reports and all, I didn't know exactly how to prepare them because, because I hadn't talked to, like, professional investors until then. And then, and then Gigi sends me an email, and then a friend of mine tells me, if he sent an email it means he's interested, if he weren't interested he wouldn't send it. So it starts, the company starts getting a new face. And then I charge at it, I start working hours to close the gaps, he starts asking me questions I don't really understand, like. What question, for example? He starts telling me, these are questions that are trivial today but, but back then, like, he starts telling me okay, now prepare all the cohort retention at the order level and at the sales level, and do analysis one, two, three, he wants to look at the data, and what's your churn rate, and what's the LTV to CAC, and how much. So basically he was trying to analyze risk. Yes, and I'm like, and what are unit economics, like I, you know, I'm in the frenzy of how to find a courier now and how I build and build the technology, systems, and like everything happens right away, right away, and I don't know what it is, don't understand these terms and don't know how to do them. And then I'm like charging at it with the team, like, and Shaima really helped us a lot, and then he says okay, I want to invest, and I can't believe it, I, like, remember it very very well, and then he connected me to another group called Dynamic Loop. So I talk with them and they start asking me what the potential is, how big it will get, and I came out and said there's no chance they'll invest. Because it didn't, I didn't feel the conversation was going well because, it's that they asked me hard questions. Those are questions that today I understand are, like, the questions that need to be asked, but you know, like, as a young founder who doesn't yet understand the game, and then they come back with Gigi and say listen, we'll invest together and build, now we'd like to lead a round of 1.5 million dollars, I'm like in total shock, a round of 1.5 million dollars. And they said listen, we'll start by putting in some, us and Gigi, and we'll see who joins, and we'll connect you to a few investors from our team, like from our circle. So we enter, like, that's it, enter this hall, suddenly I see myself meeting all the investors I didn't know how to reach. And then I try to close 1.5, every single one without exception that I talk to tells me I'm in. And then I close 3 million, and then more investors arrive and I tell them guys, I have no room. So 1.5, in the end I close 3.5 million dollars.

Eyal David: [43:52] And that was the raise. Wow, crazy. Let me tell you something, but I was thinking while you talked about it, yes? Yes. He put order into your... he probably put order into your Excel, yes? Right, right. Now, what year are we talking about? 20, end of 20, 21. Right, I was really thinking, first of all you put this marketing aside, but in practice marketing in Arab society was relatively very cheap. Right. Right? That's like one thing that's very significant. On the other hand, there was a very significant rise in consumption and you created a category here. Right. And also, like, the prices of the dishes weren't cheap, and you took the... already at this stage 10 percent, right? Yes. And probably also the cost, the associated costs were cheaper than what they were used to. Right. Unit economics is like, right. It was a great business to get into. Totally. With a forward outlook, like, in the dream, outside Israel and onward, and a market that probably no one could touch except you. Right. There probably wasn't another player running and trying to get into the area. Right. An investment, they probably, like, identified a very successful investment. Totally. On top of the founder, yes? Totally. Totally. So like... so it doesn't surprise me, like... Right. I'm saying it's just that not...

Hasan Abasi: [44:58] There were two mistakes, why it was very very hard for us. It should have been very easy. Because in 2021 money was relatively cheap. But why, one, I didn't have the experience so I didn't know how to speak the language, and two, I didn't have the circle, I didn't know how to reach these investors. Who are these investors? And then when we got in and also got organized, Shaima also helped us a lot to speak the language, and Gigi and all asked the questions. Because at the end of the day the questions repeat themselves, it's the same questions. Like, suddenly it's hard for them to surprise you, right? And you have the data and all, and they see you're prepared and you master the data and... And the journey of the hundred investors I did before Gigi, they also asked questions. They did ask questions and all, and then we prepared, we prepared, but not the standard questions, but we prepared, we built plans, business plans, how many, order forecasts and all. And then when we got to after Gigi, like the point, it really was a turning point in my life as a founder, that from that point, like, okay, it was easy, it was, like, I can't, can't believe it, like everyone I talked to, I'm in, I'm in. So what, these three and a half million dollars, what did you do with them? So we started expanding, we grew very very significantly, we closed 21 with a sales volume, like transactions, of 40 million dollars. The company grew a lot and we're in lots and lots of places, starting to expand, things start to stabilize, the systems start to become good.

Eyal David: [46:36] By systems you mostly mean operations, I take it. Yes, operations, product, like everything. So tell me, in 21, what did you actually, where did you aim?

Morocco, October 7th and the return to the core and profitability

Hasan Abasi: [46:45] So in 21 things went very very well for us, and really all the dreams we dreamed, that there's potential, and what we tried to tell investors, even turned out bigger than we thought, and the dreams start to become very big and we want to go abroad. They say forget it, come on, no, come on, let's leave Tel Aviv, let's leave the big cities, let's focus on peripheries, that was the desire, and we started planning going abroad, we said we don't want now to go, like, we'll go to the periphery in a country and go to more countries, and we started looking for countries and it was very challenging. Why challenging? Because of the geopolitics, like, the places where we saw we could add value are problematic, like, there's a problem there, you know, it's hard for us to be there physically and all, so we looked and looked and found Morocco. And then we, the investors too, were very excited about it, Morocco has lots of cash, places without addresses, there are good restaurants, and we saw lots and lots of potential in it.

Eyal David: [47:57] And then we planned to go to Morocco in mid-22. How does it work there, I have to ask, there too do you find a contractor because you don't know it, right? Where?

Hasan Abasi: [48:06] You found now for Morocco, do you also find a delivery contractor like you did here, how does it work? No, at that stage we had already understood after a few months that, like, you have to manage the couriers. Managing them means they're freelancers and each courier is responsible for himself. And who went to Morocco to check out the delivery? So for Morocco we said we'll really build, we'll bring another Hasan, like, we'll duplicate the team we have here and he'll lead the work. So what I did in 20, I remember myself in April 22. I go out, I go out to Morocco to discover the country and find someone to lead the operation. And then we, what does the market look like here, is there a player there, you're now entering a new market. So right, I got there, I, like, we did kind of theoretical market research, but we got there to see things with our own eyes. There were two players there, one that came from Nigeria and one that came from Spain, and we saw potential, we said okay, we have room. If what we bring to the market and all that, then we have something to do there. And we started raising. And that was actually the year, the most, after the three and a half I got a lot of support and it worked well. But in 22 the market crashed. I don't know if, do you remember that period, it was a hard period, all the stocks in the world crashed, Amazon, Netflix, everyone, everything crashed. And people didn't want to put money in. But the performance was so good that the insiders kind of said we're in. So we invested there, we brought in another five million. And I started the journey to Morocco, and it was a very very interesting journey that also changed the face of the company. So as I said, we discovered, like, players there, and we said we can do it. And it took us, it took us a bit more time than we thought, like, until we built the team, until we set up stations, adapted the app, we had to support French, and we found a very strong team, I found them, like, one by one, I did a journey there. But I didn't find them on LinkedIn, I found them, I went to Morocco, I met people and people started connecting me with people, and I talked with people, say, I went to McDonald's in Israel, I told them do you know McDonald's in Morocco, give me, connect me with someone from there. And then a guy, like, from McDonald's here told me I know someone who knows people in Morocco, it was a guy who accompanies us to this day, his name is Haim Ben Sosson, former CEO of Cibus. And then he starts helping us and making connections for us. And like, in short, it's a long story of half a year. I'm on the journey to Morocco, back and forth, back and forth, meeting people, coming back, doing interviews and all, until I built a team, I'm telling you, a Tier 1 team, an amazing team, and it took us about a year, in July 2023, we start, we decide to launch Morocco. So we launch, three-four months, boom, it starts, it starts, things are going very very well for us in Israel, Morocco is starting to show some good signs, and October 7th starts. And it takes us to a different place. We now want to raise a big check, we want to raise 20 million, and we start going abroad, what's your market? We tell them, like, our market is in Israel, and going to Morocco and all, do you have a market other than the Israeli market? If not, but we have a very strong team, in Morocco we prepared something, it's too risky. So we need to make hard decisions. This is 2024, it's the most emotionally difficult year, when we can't manage to raise money, and we need to make decisions. We had a very very good team in Morocco, and we're growing and want to devour the world, there's no money. And we do calculations, in three months the money runs out. And we make hard decisions, we start by stopping all of our expansion, both in Israel and abroad. We have no money, simply October 7th did this kind of thing, people didn't want to put in money. And it was twenty, like, October 7th, October 7th, that's already after the crisis that was, and like the global crisis, and after October 7th, there's no more money, so we decided, we're stopping everything, we stopped Morocco, we're shutting down the operation. We had, we had a team of twenty people, twenty-five, we let them go in one day, we let go ten percent of the existing company in Israel, we stop anything that isn't generating money right now, and that, and that, for a moment, we go back like a step. And that was an interesting point, which actually did us very very very good, when we stopped it, we turned the company profitable. So we were very sharp. So despite everything we did, we continued with huge growth, but inward, without us going out, without us going abroad, and we change for a moment how we see the market, we say okay, we don't want the periphery as the vision, we want it as the entry point. And then from there we change our journey for a moment, and take a journey where we have lots of tools, we developed lots of things, let's go to more places. In Israel. In Israel, and there's probably value we'll add, and since then, like, a year and a half has passed, we launched lots of places, and from our own money, without raising money, and we started launching more, I'll finish with this, to say that we launched, we started finding ourselves, like, getting to know ourselves anew, and we started, we said okay, we have lots of value to bring here, and also to bring to the market we're in, and we started saying, we'll do, say, all kinds of things that don't exist, say, selling Netflix for cash. What a crazy solution. Will it work, is it even relevant, and then we do, say,

Eyal David: [54:51] Again, because of time I don't want to talk about the... that's it, let's say, we're completely out of studio time, listen, you have to come back here again, we haven't yet told about many things you're working on now, and basically now it's kind of a bummer that many companies, after 23, after 22, basically retreated into their core, because there was no choice, because they had to cut fat. With you it wasn't exactly the situation, you became more efficient because you succeeded outside, like there was oil there, but you couldn't move forward from there. That's a bit of a bummer in that respect, but on the other hand, the fact that you found your way back to the core and the resources now, and you're profitable, will probably even let you unlock a lot more things, because basically, you haven't told this yet, but there's a lot of money flowing through you here, so you know the Netflix example, so basically there's a wallet behind it. Right. There are interesting things here, come on. Totally, totally. So you have to come back here again. Totally, I'll note, I'll note that what's interesting, like you said, within that,

Hasan Abasi: [55:49] is that our growth from 24 to 25, without money, and after we closed abroad and expansion,

Eyal David: [55:57] is much bigger than 23-24. Because you went deeper, right? We went deeper, we went deeper. That's exactly the thing. We added lots of verticals, totally. Okay, we'll continue this. Totally. We'll do it like this, I do want you to tell me two things. One, tell us for a minute how people can get in touch with you, whoever really wants to, you said you didn't have a mentor.

Hasoub, how to get in touch and what's next

Hasan Abasi: [56:18] Right. So how do people get in touch with you, with what you've built, what does it look like? So today, so like this, two things. Say in Arab society, today there are, since then lots of things have developed, so I have a friend named Rabi, if you've heard of him, he founded a nonprofit called Hasoub. So this nonprofit is very very, I also help them there, give lectures and mentor there, so you can join this nonprofit, it's a nonprofit organization that simply takes founders at the start of their journey and helps advance them. In addition to that you can talk to me, like, on LinkedIn and reach out to me. Let's put a link to both.

Eyal David: [57:00] Yes, totally. I'm happy to help wherever I can. And second, what do you wish for yourself and for Haat a year from now?

Hasan Abasi: [57:08] So I want to be all over the country, those are two things, to be all over the country and also to bring the financial solution that we didn't talk about, we didn't touch on it, meanwhile we kind of talked about it. And that it continues to be fun, because I'm having a lot of fun, a lot of fun where I am, and I feel I can still give a lot.

Eyal David: [57:32] So I love that, and that I feel I'm in the right place. May it continue. Wow, I wish you all of that, and I'll tell you, you're coming back in a year. Great, thank you. Come on Hasan, thanks. Come on, thanks. Bye, bye. Hey, friends, thanks for listening. If you found this podcast valuable, you can subscribe and follow us, of course, for more episodes on Spotify, Apple Podcasts or any other app. Of course, if you didn't find us on some app, I'd be happy if you write to us. We'd really appreciate five stars on every platform and for you to follow us, so more listeners can discover us and find the podcast. You can also find the previous episodes on any app or on the YouTube channel, we have links in the description. So until next time, come on, be effective, and bye bye.