Podcast: One on one with FlapKap CEO Ahmad Coucha

In this episode of Fintech Thought Leaders, QED's Head of Early Stage Investments Bill Cilluffo speaks with FlapKap CEO Ahmad Coucha.

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Show Notes

Bios

Bill Cilluffo joined QED as a Special Advisor in the fall of 2014 and became a Partner in 2015. He is currently Head of Early Stage Investments after six years as Head of International, leading QED’s Investment teams in Latin America, Europe and Asia.

Prior to joining QED, Bill spent nearly 20 years at Capital One, spanning several roles and leading several businesses. He spent the first 6 years of his career leading Marketing, product development and credit policy for Capital One’s subprime credit card business; ultimately having overall P&L responsibility, and growing the business to become the most significant player in the market. He moved on to spend 2 years in various new business development roles, spanning the telecom, medical finance and small business finance industries. Bill spent 3 years as Deputy Chief Credit Officer for the bank, playing nearly every role there was to play in the central credit function, after helping build the department from scratch in 2002.

Bill then pivoted his career to general management, leading Capital One’s Canadian, and ultimately International businesses, over the course of 6 years. Profitability of the business grew significantly under Bill’s leadership, through new product and channel introductions, acquisitions, and significant cost take out. During Bill’s last 3 years at Capital One, he led its Co-Brand and Private Label credit card business, building the business nearly from scratch to one of the top few players in the US market, through a series of acquisitions, most notably including leading the acquisition and post-merger integration of HSBC’s US credit card business, which closed in May 2012.

Bill graduated with a BA in economics from the University of Michigan, and competed the SEP program at Stanford GSB.

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Ahmad Coucha is the co-founder and CEO of FlapKap, the first and leading revenue-based embedded financing platform in the MENA region.

Prior to founding FlapKap, Coucha was the co-founder and chief strategy and finance officer of Kijamii, one of MENA’s largest and most awarded independent advertising networks.

On the academic side, Coucha finished his undergraduate degree in electrical engineering then pursued a Master in Business at IE business school in Madrid. He is also a holder of Master’s degree in Economics and Public Finance from Harvard University in Boston.

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About FlapKap

FlapKap isthe first and leading revenue-based embedded financing platform in the MENA region. Leveraging technology and data, the platform provides fast, flexible and insightful working capital financing to the digitally native businesses to unlock their full growth potential.

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Full Transcript

Bill Cilluffo:

You're listening to the Fintech Thought Leaders podcast from QED investors, your deep dive into the world of venture capital and financial services with today's digital disruptors. QED is a global venture capital firm focused on investing in Fintech companies all the way from pre-seed to IPO. Fintech Thought Leaders brings together the most talented entrepreneurs tackling today's biggest problems. If you're looking to learn more about what motivates our founders and team members to succeed, you're in the right place.

Hello, and welcome to the Fintech Thought Leaders podcast. I'm Bill Cilluffo, the head of Early Stage Investments at QED Investors. Today on the podcast, I'm thrilled to be joined by FlapKap CEO, Ahmad Coucha. Ahmad, welcome to the podcast.

Ahmad Coucha:

Thank you so much, Bill. Really excited to be with you today.

Bill Cilluffo:

Excellent. Well, look, I'm really excited to learn more about your personal journey and your journey into entrepreneurism and explore a number of different things, but wonder if you can just start by giving the listeners a 60-second elevator pitch on what FlapKap is and what you guys do.

Ahmad Coucha:

Sure, sure, sure. So basically, FlapKap, we're building the Middle East's first, and we're working steadily to make it the largest, revenue-based financing platform. We are trying to impact the B2B financing world in ways that are not very different from how the buy now pay laters have impacted the B2C financing world. We essentially provide extremely fast, flexible, and insightful financing, working cap financing, to be more precise, to digital and native businesses at large, and specifically for our first core target segment, the D2C, the direct to consumer e-commerce brands to grow their inventory or digital spend. What's really unique about our model, and unlike the traditional financing institutions, we rely on tech and leverage third party verified data to be able to credit score our clients. So instead of the normal process in which a business, like an e-commerce business, goes to a bank, most probably they will not care about them. And if they care, they will ask for a lot of work, paperwork, bureaucracy, lengthy process that will take months.

For us, we just ask our clients to connect their digital shops, digital advertising platforms. We pull the data, and we're able to credit score them in a click of a button, basically all seamless. Another really cool feature of our model is that since we have all this data about the revenue and the business, we're able to project future revenue with high confidence, and we provide our clients with the option to repay whatever funding we give to them as a percentage of the future sales with a fixed fee. So we're a hundred percent aligned with the cash conversion cycle and ability to repay.

If they sell really, really fast, we get repaid really fast, good for both of us, helping them grow, which is only fair. And if they slow down, we're in this world. We have skin in the game. We have officially launched 10 months ago, and we're extremely proud that we have partnered with tens of really exciting brands across the region between Egypt and UAE. And on average, we have helped our clients to grow by an incremented 30% in less than three months. Obviously, I always say this, we're not magicians. It's not like anyone we work with, we can help them grow this much. However, this is positive selection at its best. We look for the winners, the ones that have scalable formulas but lack the funding, and we inject the funds to help them grow.

Bill Cilluffo:

I love it. Well, later end the thing, we're going to talk about your next business as a magician, so we'll explore that.

Ahmad Coucha:

Yeah.

Bill Cilluffo:

But look, QED is thrilled to have FlapKap as our first investment in Egypt, so very excited to be partnering with you guys.

Ahmad Coucha:

Same.

Bill Cilluffo:

Well, look, we're going to dive much more into FlapKap as we go, but I'd really love to start off the podcast getting into your background a little bit so the listeners can understand your journey. So maybe take us back all the way to the beginning. Growing up in Cairo, did you always have this idea of building and creating, or was this something that came new? And when you look at your childhood, was this obvious from the start? Were there signs, or is something that you just got inspired later in life to be a builder?

Ahmad Coucha:

Love this question, Bill. Love it. Okay, so I will give you the most counterintuitive answer I think you'll be getting from most of the CEOs you'll be meeting. While growing, the only thing I didn't want to do is to become a business owner, literally. So my father, the best father I could have asked for, he passed away 10 years ago, he was a business owner himself for small business. In general, we did well. Okay? However, the lows were extremely low, extremely low. And this being a child, mostly emotionally, you're not able to rationalize everything, it left a scar on me. This seemed like extremely risky business. Why would we do this to ourselves again? Why hurting ourselves? So while growing up, from childhood up to teenage years, maybe beginning of college, all I was thinking about is I want to get the best degree from the best school to be able to get the best job at the most stable multinational, to not worry about owning and running my business. This was the mindset and the dream up until I was maybe 17 years old.

Bill Cilluffo:

Interesting. Yeah, it's interesting to see how your personal experience... And I've talked to a number of entrepreneurs over the years who come from entrepreneurial families and many times how that inspires them to go do it. It sounds like your initial reaction was the opposite.

Ahmad Coucha:

Yeah, exactly. Things didn't work well for my father many times. And I was like, "Yeah, why would I repeat the mistakes?" And even him, he was suddenly pushing me to stay away from my owning my own business, like, "Ahmad, you seem to be smart. You can be a great engineer. Don't repeat what I did."

Bill Cilluffo:

Yeah. Sounds like something in high school, you said age 17 or somewhere around there may have switched. Anything you can remember that caused you to start to think differently?

Ahmad Coucha:

Of course. It was gradual and then sudden. Okay, so two specific pivotal moments for me. The first pivotal moment was when I met my now lifetime partners, friends, and brothers, and we were in the same school together, and we just clicked. We came to know each other and we complemented each other. We had great chemistry, and during the first years of the university we were like, "Okay, let's super participate in extracurricular activities, all these gaps in college and nobody's going to fix them. Let's fix them ourselves." We started this club, things went really well, and we were like, "Okay, we have an amazing team. We have an amazing formula here." And at that point, this was almost 2008, 2009. We were really big fans of ted.com, the talks of ted.com, consuming content from there like crazy. And at that point, TED started the TEDx initiative, which is basically start your own local chapter in your city.

And we were like, "Whoa. Okay, we are starting TED in Egypt." We applied, we got the TEDx license, not even sure how they gave us the license, but we were university kids. But what happened afterwards was insane. TEDx was a success beyond what we could have imagined. Thousands of attendees, millions of views on YouTube. Even the TED team itself, like the founder, Chris Anderson and the whole team, they were so surprised that they invited us to go and speak at the TED stage and present to the whole TED Elite community our success story. So this kind of built confidence in us, and I was like, "Whoa." So we have this team together, we work together, and we deliver amazing results that even surprise ourselves. So this was the first moment I was like, "Why do I keep having this fear of starting something, even though things are working out? The evidence says otherwise."

Another pivotal moment for me after I finished school, I worked briefly for a company that I really love, I truly admire. It's Siemens, it's one of the energy giants in the world. And I was working there, I think it was the eighth months down the line after I started working. It was a business unit, a major business unit in Siemens, Egypt, major for Egypt, but minor for the world. It didn't contribute more than 0.05% of global Siemens. And at one point the GM of our business unit, he asked me to his office and he was like, "Ahmad, we really like you. You're doing amazing. We're going to fast track you, and in less than 40 years you will be sitting in my place." At that point I was like, excuse my French, "Fuck it. I'm out of here."

Bill Cilluffo:

You mean your 40 year fast track wasn't fast enough?

Ahmad Coucha:

Yeah, great intentions. For him, like, "I'm giving you my chair in 40 years. You would be even two years younger than when I got it." Great intentions, but this is 0.05% of Siemens worldwide. I was like, "No, this is not the place for me." So this was another pivotal movement for me, yeah.

Bill Cilluffo:

No, that makes great sense. So you spent this period where you started to think about entrepreneur. You had this great success with TED. If I understand, you were still number one in your class in engineering, right?

Ahmad Coucha:

Yeah. Even though my undergrad, it is low-key, nobody knows about the university. It's called Ain Shams University, it's in Egypt, not ranked even globally. But this engineering school, I got the opportunity to go to Harvard. Harvard is a piece of cake compared to Ain Shams University. Ain Shams University is the hardest thing I've ever seen in my life. Really everything is really difficult. However, I worked really hard and I was lucky to be ranked in the top almost 10 on our cohort of 3,000 people, like 3,000 people in the same cohort, in the same year. It was crazy. Yeah.

Bill Cilluffo:

So you went to Siemens, a company you admired, you stuck with the stability thing, even though you started to get a little entrepreneur bug, and then just decided it wasn't for you. Did you consider more of an entrepreneurial thing in the engineering field, or did you say, "Hey, this TED thing works. Technology, information services. Wow, that was kind of neat. Let's think about that"?

Ahmad Coucha:

A hundred percent. This is exactly what happened. It seemed to me that the whole engineering career is, because I'm an electrical power engineer, is just too slow. Just too slow. On the other side, that technology, the emerging innovations, this was really exciting. This was where my heart is. I would wait to finish Siemens at 6:00 just to go and work on TED till 11:00 PM. So this is where I found, I was like, "Okay, so if this is something I like, why don't I do it the whole day?" And this was basically the seed of how I started the next venture.

Bill Cilluffo:

Sure, that makes sense. So go back half a step to the TED opportunity. Sounds like you've had way more success than you ever thought would happen. Obviously, the folks at the TED organization felt great, inviting you to speak nationally. What was the magic there? Was there one or two moments that really caused that to take off decisions you made? Or do you think the environment just happened to be ripe for it? Talk through how that success wound up happening.

Ahmad Coucha:

The stars aligned, Bill. The stars aligned. So basically because TEDx was novel, I'm being perfectly honest here, the whole TEDx initiative was really new, and whenever we went to speak to anyone and we're TED, they don't hear the TEDx guy, they just hear TED, okay? And this opened so many locked doors for us. So again, the university kids going and speaking with the biggest CEOs in Egypt, the biggest intellectual figures, every door was getting open for us. Every invitation we were offering for people to come to speak materialized. People even started trying to get warm to us, just to get an opportunity to speak.

So, again, stars aligned. It was a perfect timing. We were at the beginning, it was passion. We were really passionate about this. We really wanted to help our community, especially at that point, in 2010, this was the time before the revolution in Egypt. There was something in the air at that point. There was vibes of change. People were really excited to do something. So, again, the whole energy pushed us forward. And again, it worked, easy to do at that point, the community was hungry for it. The speakers we got were amazing. We enjoyed a positive feedback loop from one success leading to the other until we became the first and the biggest community in the world.

Bill Cilluffo:

Wow, that's fantastic. So the most successful ventures I've ever seen, clearly there's a bunch of great decisions, there's some serendipity, there's always things that don't quite go the way you want and learnings from it. Any particular learning from that period that you've been able to take with you, even though it was an overall success, things you might have done differently or things that you learned that then sort of helped you in future ventures?

Ahmad Coucha:

The mistakes were so many, I cannot pinpoint one of them. To be honest, looking backwards at what we have done, I'm amazed. We had no expertise, no experience. Nobody knew about us. So even we had logistical mess-ups. I remember one of the first events we had the whole, it is enough for thousand people, but the floor, the entrance floor, after the fact, the floor would only allow for people to come in 45 minutes because it was really small. So, again, so many mistakes out of this, but nothing major, nothing major. So we learned a lot. We learned a lot from this, and the learnings were much bigger than the mistakes we have made.

Bill Cilluffo:

No, that's awesome. That's awesome. So we're at Siemens, the 40-year fast track career path wasn't for you. Certainly understand that. Now, did you decide to go directly, I know you went to business school in Madrid at IE, which is a wonderful global institution there. Did you go right there from Siemens, or did you explore more the entrepreneurial journey first?

Ahmad Coucha:

Exactly. At that point, I was like, "No more Siemens, no more for me." At that point, incentivizing, they have TEDx Cairo, they were pushing me, like, "Come on, what the hell are we doing? Why don't we come together, start this?" Because Besim had the idea that since TEDx Cairo was an amazing social media case study, because all of our marketing was made on social media, we managed to build some capabilities in social media. We were like, "Okay, so why not commercialize this and start selling it to corporations? Why not start a social media agency?" And he had this idea and he kept pushing. And I was like, that day when I came back from the 40-year-old meeting, I was like, "Okay, Besim, I'm on board. Let's take the risk." Major upside if it works, limited downside if it doesn't work. Anyway, I had this opportunity, this employment opportunity that I'm at, so cannot get anywhere.

So I took the decision together and we started Kijamii. This was almost right after the revolution, end of 2011, mid 2011. We worked for a year and a half until I realized, "Whoa, we are going to reinvent every single business wheel out there in the world." We lack the basic business knowledge. And it felt at some point we're being too amateurish. And I decided, "Guys, I will take the opportunity to go study the business basics. I will go to one of the leading universities specialized in entrepreneurship," like the IE one. It's only 10 months, but the knowledge we will be getting will help us unblock so many things and avoid wasting a lot of time in our business. So I took this 10 months, went there, came back, and I became the chief finance strategy and creative officer of our company.

Bill Cilluffo:

That's awesome. That's impressive. That takes an impressive level of humility to decide, "Look, we don't know everything. We're going to keep making mistakes."

Ahmad Coucha:

But, Bill, humility as well as evidence. I remember our very first big client, it was a beverage vertical from the Coca-Cola company. We managed to present to them an amazing pitch, signed them, and they terminated us four months later. This was a slap on the face. It was like, "Okay, guys, this is not sustainable. We need to get our shit together and build this house properly."

Bill Cilluffo:

Yeah.

Ahmad Coucha:

This was a key moment in our Kijamii.

Bill Cilluffo:

No, that makes sense. Were you able to get the experiences that you were hoping for from that stint and Madrid? Or how did that shape you either in ways that you predicted and wanted or in ways that may have not been expected?

Ahmad Coucha:

To be honest, I had expectations, but I had vague expectations. I didn't know what I didn't know. I only knew that I don't know. But IE business school, because I was, again, the typical engineer, I had zero knowledge about business. I didn't know what the difference between finance and accounting. This is how bad it is. So everything I was learning in IE was new for me. Everything thing, like economics 101, fascinating. Accounting 101, amazing. So every single thing I learned there opened new doors for me and was able to help me put the business on the right track because there was nothing. So anything I introduced was already an exponential improvement.

Bill Cilluffo:

Fantastic. I imagine you came back to your co-founders and then had to do a bunch of teaching based on what you learned, which is great.

Ahmad Coucha:

Yeah, you would be surprised. They were like, "Okay, Ahmad, do you know this? Do it. Don't tell us, just do it. Don't bother us learning all the other things. Let us focus on what we are doing. You focus on what we don't do and let's scale it together."

Bill Cilluffo:

Yeah, yeah. So looking back at the Kijamii experience in general, how do you feel about that venture, your middle of your three major startups? And what were a couple of your big takeaways from that stage of your life?

Ahmad Coucha:

Kijamii is an interesting case. So thankfully Kijamii is now, it is one of the largest independent advertising network in the Middle East. Fortunately, we worked really hard, but we got also super lucky. As you can tell from the beginning, this little company started by three amateur engineers, on every single VC metric, this company should have been an absolute failure. No found a market fit. They didn't know what they were doing. Even our only investor, Kareem Bushara, who is now more than a friend and a mentor and a brother, he invested, I remember $10,000. And at a later point he told us, "I definitely knew that the money I invested was never coming back. I was just interested in you guys and the learning and what we would be doing later on." So in many ways, Kijamii was destined to fail. However, we learned a lot.

This is something that in investing, I think this was the best thing we did. We learned a lot from our mistakes, and we were really keen on making this work for ourselves, for the team. We believed in what we are doing and we kept improving. We kept improving super incrementally, super incrementally. And through this journey, I learned the value of being driven. So we started Kijamii as a social media agency. We couldn't figure out where this will go. However, at this point, because we are persistent and we give our best, Kijamii has going to become now a full-fledged advertising network. We offer creative, strategy, production, media buying, digital technology product, basically the full-fledged solution. So also, this is something I learned from the Kijamii experience, that you will not know everything beforehand, before the fact. You might have a good hypothesis, but you need to work on it, learn from the evidence, and adapt according to it. You have to be extremely adaptive in your execution. So this is definitely one of the key takeaways, this one.

Bill Cilluffo:

Yeah, that's such a great lesson for entrepreneurs. Certainly sometimes entrepreneurs go into spaces they do know some elements about. Some cases like yours seem to be a great idea, there's lots you don't know. But I think this notion of adapting, being positive, always pursuing the vision, and willingness to learn, no matter how much of an expert you are in whatever you start, there's still going to be more that you don't know than you do know. So I think that's a great generalizable thought for people.

Ahmad Coucha:

A hundred percent.

Bill Cilluffo:

All right, so 15 minutes ago you sort of in a backhanded way, made fun of Harvard, said it was nowhere near as difficult as your engineering school in Egypt. You didn't make that comment, just making fun of Harvard. You actually made that comment from experience. It's fascinating looking at your background, how you've gone back and forth between education and entrepreneurship and companies. You and your wife get accepted to Harvard at the same time, having one person get into Harvard is hard enough. So talk me through how you both decided to apply. What made it the right thing for you to think about another academic experience?

Ahmad Coucha:

I always say that we won the lottery twice. This is how I see the odds here. To give a little bit of context, transitioning from Kijamii, the main company, towards Harvard, there was another transformative key moment here. In 2019, the company has grown. We even merged with another entity and we became even bigger. And at one day it hit me, this was early 2019, even late 2018, I was like, "Okay, why am I still working as an executive in the company?" I was handling the creative, I was the chief creative officer, chief production officer, and chief finance officer. I asked myself, it seems like a naive question, "Why am I still working here?" I even asked it to my partners, "Why are we still working in the company?" Everybody was like, "You're not even making sense. Where is the question?" I was like, "Guys, are we still working in the company because we are the most qualified in each of our positions?"

So me, the engineer, the entrepreneur is the most qualified to be leading the creative of a big agency like us. Is it because I'm the most qualified? I don't think so. Yeah, but we are the most ones who would be team in our business. I was like, "Yeah, okay. What about all the other multinationals who manage to institutionalize the business and create succession plans?" I don't see Martin Sorrell who started WPP pitching to clients by himself. WPP is now a bigger agency, bigger network. This cannot be the answer. At that point, I hypothesize, "Guys, first, we are staying in our jobs here because we are used to this and our ego loves it. Our ego loves coming to our network and seeing all these hundreds of people giving us the ego boost. But guess what? We are destroying value. We are in a better place to get the best in class talents to take over each of our single responsibilities first. And more importantly, we can unlock our resources to do something else more meaningful with the experience of starting things from scratch."

This is our main capability. I'm not the best chief creative officer out there in the world, but I might be one of the best in starting businesses, at least in our region. So this was a transformative moment. It took a lot of pushback, a lot of introspecting. And at the end I was like, "Guys, we need to divide and conquer. We need to start creating proper succession plans and institutionalization for our company. This has to be weaned off its founders." And I was like, "Guys, we're starting something new." But at that point, also, it has been an eight years long marathon. I was like, "But I need first to get a visa." I was like, "Okay, guys. Before starting anything, before thinking about anything, I'll be taking a sabbatical." Originally I was near my wife. This was before us getting our video.

So we'll be taking a year off, every month a county in the typical Hollywood fashion, going like a hipster. But also deep inside of me I have this passion. It's a weird passion, but it is a real passion for economics and development. I always dreamed about going to Harvard to study economics and basically development. And I was like, "Okay, it's a moonshot, but I will apply it to the master's in economics in Harvard. This is the only program I will be applying." It's not even a matter of Ivy League, it's Harvard. It's Harvard. I want to go to Harvard. I'll only apply to Harvard. Moonshot. Moon is not coming, but if it comes... And it comes, and I'm accepted. And it's like, "Wow, shit is getting real." And at that point, the master's is almost two years, a year and a half, two years.

And I was like, "Betty," my wife, "guess what? We're not doing the one-year counties hopping. We're going to Harvard." And she was like, "Okay." So first she was a bit bummed, and I'm sure, she never confessed to this, she was a bit envious. She was a bit jealous. I think I'm getting hard times for saying this on live. I think she was like, "Oh, so now you're getting into Harvard? Okay." So she was like, "Okay, I'm applying for next year also for Harvard." Moonshot. Only Harvard. Okay, so since she's coming anyway to Boston, she would rather do something meanwhile.

Bill Cilluffo:

Sure. Was she also economics or was she a different-

Ahmad Coucha:

No education policy, international education policy. She works in development here.

Bill Cilluffo:

Awesome.

Ahmad Coucha:

And it worked. She came the first seven months with me to Boston, and then she started the next academic year. And guess what? Life. Corona happened, and we got to do our master's while hopping states in the US. We are spending almost a month in a new state every month in the Corona. So we got the mix of both. We did the master's and we enjoyed traveling. And also that Mexico, Mexico's awesome. So it was an amazing experience in so many different ways.

Bill Cilluffo:

Wow. It's wild that you were trying to choose between two options for your time away and that you wound up getting to do both. It's kind of a... Yeah, I mean so many weird things happen in the Corona phase, so many of them negative for the world, but so many other positive things. People figured out how to make the most of it. What was your favorite state?

Ahmad Coucha:

California. And I was like, "Whoa. If only I knew how awesome California is, I would have never applied to Harvard. It would've only been Stanford."

Bill Cilluffo:

Well, hey, let's get into a little bit more on FlapKap, and then I'd love to also explore your personal leadership style for the audience. But when you started to think about FlapKap, I understand you spent months doing a systematic analysis of the VC market. Where were they funding companies, where were funding companies getting created? Let's look globally at various pain points. So can you talk both about that journey in general? And again, it's not very common to see someone be that systematic.

Ahmad Coucha:

Yeah, a hundred percent. There is something really interesting here, this genesis of FlapKap. So during my years in Kijamii, we were eagerly and relentlessly working on acquiring the top of pyramid clients, the biggest clients with the biggest budgets. Because at the end, we're in the service business. In order to scale, we need to get big budgets, like the Amazons, the Netflixes, the Googles. And something fascinating I came to realize working with these clients is that, aside from being in the advertising agency, I was their bank. These super big cash-rich clients, I do a production project or media buying for them, maybe for a million dollars. They don't pay me now, they pay me maybe three or four months later, if they do, maybe even later. And I was like, "Wow, these big clients, and I'm freaking financing them." On the other hand, the smaller clients, the ones less cash-rich who are more in need of cash, they always came for us guys like, "Finance our media buying to help us scale our products."

I'm like, "Guys, you're risky. Why would I take the financing risk on you?" And we were not giving them any generous credit clients. So in a way it was the other way around. I always had this thing inside of me. If only I can crack the economics for the mid and long tail, this would've been awesome. So four years later, I am back, after Harvard, to the Middle East, and I'm like, "What's next? What I will be doing next? What is my next venture?" I had this methodology of identifying opportunities from two ways. Top, bottom, and bottom up. The bottom up is from my experience and the way I see it, I will map every single opportunity and gap and pain point that I came to see from working in Kijamii and from the ecosystem in general. So this was one approach. The other approach is, the main hypothesis of it is capital allocation reveals information.

So what I will do is, okay, I will go and see in similar markets to our markets, once with similar fundamentals, emerging markets, basically, where did the smart VC dollars go into seed and pre-seed in the last year and a half? My main assumption is these companies, these markets, especially Latin American ones, are maybe a year, two years ahead of us. They have very similar problems. Mexico is more similar to Egypt than Egypt, I don't know, maybe Turkey. No, we're super similar. So I did this sort of analysis. So all the dollars obviously I put a lot of more weight on the VCs.

I respect the smart ones, and guess one of them is QED, obviously. And I kept prioritizing these things and I took the answers, I took the results, and I passed them through another filter, which is the me filter. What do I want to do? I wanted to work on something that is really scalable. I wanted to work on something that has social impact, and I wanted to work on something that, at least most of the days, I would be excited to go to the office and work on, putting all this together, input black box, output revenue-based financing. It was on top of the chart, really, really ahead of the second best. So it was kind of love at first site in a way.

Bill Cilluffo:

That's awesome. And it's easy to see where your experience from Kijamii sort of leads directly into where revenue-based finance is going, right?

Ahmad Coucha:

A hundred percent. Getting back to the original story, revenue-based financing is helping the middle of the pyramid grow faster and giving them the advantages that bigger players have. But the smaller ones don't have cash. It fit really nicely with the whole story.

Bill Cilluffo:

Definitely, definitely. So you're roughly a year in at this point. How are things going? What's been... In the TED experience, things kind of went so much beyond what you'd ever thought. In the other experience, you had some challenging times very early and then sort of grew from that. So there's no linear path to success. How's it going so far one year in?

Ahmad Coucha:

So far, it's going as planned and much better than feared. We started at the peak, and then guess what? Downturn came. And during downturns, our product becomes really risky, because who is in most need for the finance during downturns? The ones that are dying. So it has been an interesting time trying to figure out the changing economics and the changing product during such radically different period from what it used to be two years ago. So again, much better than fear because our main fear in our business is defaults. I always tell our team, we're not in the business of financing. We are in the business of getting repaid. This is our objective. Any monkey can finance. Any monkey. Any monkey can give money, but only a master can get the money back. So we're always trying to be conscious of who we are lending to and how we would be giving to someone. So far, touching wood, things have been moving as planned.

Bill Cilluffo:

I actually think it's fascinating. I think the conventional wisdom out there is that starting a lending business when you're going into a downturn, that's not such a great thing. I almost see the opposite. So if you're learning how to lend money when you're in a downturn, you tend to have the incumbents pull way back, you can learn, get your credit right, et cetera. It can be a wonderful time.

Ahmad Coucha:

Hundred percent.

Bill Cilluffo:

It's a lot less fun being a big lender when you hit a downturn. But when you're just getting started, I think it can be a fantastic-

Ahmad Coucha:

You get an opportunity, because guess what? When things are stable, there are limited cracks to find you way through. But when things are shaking and cracks are getting bigger and people are reluctant, this is when risk-takers can create opportunities, as long as they're educated. Risk-taker is not being excessively risky risk-takers basically.

Bill Cilluffo:

Definitely. So recognizing a year is not that long a period of time, is there anything you can point to, just one thing you feel like you really got right so far? And maybe one thing that you've already said, "Hey, we made that wrong decision. We decided to change course"? Anything specific you can point to?

Ahmad Coucha:

So if there is one thing with did right so far, it would be we managed to find businesses in real need for our financing to unlock massive value. This is the best. So one of our first clients, he owns a workshop for manufacturing shoes and selling it online. When we started working with this amazing local business, maybe he had, I don't know, 15 employees in his workshop. 10 months later, he has doubled the amount of people working. Again, these are jobs created during a downturn, a really, really tough downturn in our part of the world. Getting calls from this now friend and saying, "Guys, you really have changed my life. I used to make maybe X a month. This is my net amount. I'm making now 2.5X. My employees, they're working more, they're getting bonuses. Our suppliers are super happy, we're keeping them afloat."

This is the kind of feedback that makes me feel proud. We're doing something really right here. Let's keep on scaling it and finding more similar businesses like this to help them go to the next level. So this is on what we did well side. On the mistakes, obviously countless. We have part of our guiding principles called the 10 commandments here in FlapKap, one of the commandments, it has the picture of an M&Ms. The M&M. The commandment says the M we love, the M we hate. Okay?

The M we hate is freaking mediocrity, zero tolerance for mediocrity. The M we love is mistakes, as long as we don't repeat them. So we have many of them. But the personal one for me, this is not easy to admit, but it is, it's a wrong first hire. One of the first hires I did, insanely intelligent ex consultant, but no, you're not getting your hands dirty. So it was almost two months and, sorry, this is not working. Thank you so much. I appreciate all the credentials you have, all the McKinseys you have, but we're here in a startup. We're not here to make presentations. So this was a tough decision to make, but it paid off well. At that point it was tough, but it paid well, thankfully.

Bill Cilluffo:

Yeah. Well, you just highlighted a piece there, which is important. Failures are going to happen. Embrace mistakes, but realizing it quickly, moving on, try not to make the same mistake.

Ahmad Coucha:

Cutting the losses. Cut the freaking loss as soon as possible.

Bill Cilluffo:

Yeah.

Ahmad Coucha:

Hundred percent.

Bill Cilluffo:

Hey, last question directly about FlapKap, and I'd love to spend our last segment here talking about leadership and how you think about that.

Ahmad Coucha:

Yeah.

Bill Cilluffo:

But where is your vision for FlapKap? So it's been a year doing all this hand to hand combat, getting it done in the middle of a downturn, but five years from now, 10 years from now, where is FlapKap and what will you have accomplished?

Ahmad Coucha:

Yeah, this is an amazing question. By the way, it's a tough one because you're always learning new things. But if you ask me today from what I see, from what I can feel, from what I can envision, my vision is quite simple. The middle is underserved. The middle of the pyramid businesses, they're freaking underserved, and they have been underserved for passionate reasons. Banks will never cater to them properly. But with the rise in technology and the rise in later, there is so many ways to help this underserved middle be better served. I want to become the leading growth financial partners of the underserved middle to help them get the financing they need at the right amount they want, in the right way they deserve, at the price they afford, as simple as this.

Bill Cilluffo:

That's awesome. I love it. Well, and it also doesn't lock you into a specific solution or a specific product. Over time, you're probably going to find a number of ways of meeting those needs.

Ahmad Coucha:

We learned it in my previous journey, it's always path driven. It's always path driven. And you have to be open to... As long as you have core capabilities and resources that you're building on, laser focused strategy on who you are serving, how you want to solve the problems, you have to embrace the evidence and opportunities basically.

Bill Cilluffo:

Nice, nice. Okay. Well, look, I'd love to jump into leadership and capabilities and how you think both about yourself and the organization. For help, we had a chance to talk to some of your colleagues, which we really appreciate them being so generous to share some of the feedback. So we spoke to friend Bahi Abiles. I'm not sure I've totally pronounced that right. Hopefully it's close. Who says you're a rare CEO that can balance being organized, analytical, but yet compassionate, which is a great combination. How do you think about balancing those? On one hand, needing to be objective, you talked about being analytical and top down, but also you're here to build a team. You're all about people. I can tell even as you tell the story of your client come through, how empathetic and compassionate you are. How do you think about juggling these, and how do you make that combination work?

Ahmad Coucha:

Yeah. First I have to admit that I'm a redeemed robo human. I was the most engineering you've ever seen in your life. Very analytical. I believed math can solve everything in life because this math is the universal language of creation. And guess what, if we use it, everything would be solvable. Obviously, so many frustrations. So many frustration. So I learned from an enlightened self-interest point of view that if you don't put the heart in the same level, if not higher of that of the mind, totally counterproductive, totally counterproductive. It will not work. You can simply try, but it will be counterproductive.

Bill Cilluffo:

Yeah, I think that's one of the big lessons from running businesses, is that they're all, some more than others, all at the end of the day, people businesses. There's very few where it's two people in a closet with a computer. There's probably a few like that, but not very many.

Ahmad Coucha:

This is the exception, not the rule. At the end, my success depends on people. And guess what? People are people. People are humans. If for any reason they're not motivated, they will not work. Even if you ask them a hundred times to work, they will not work. And if they work, it will be like the worst work you'll get ever. So realizing this midway, especially my work in Kijamii in a creative industry, this was talent heavy. This was super talent heavy. So I realized that I have to develop my ability to work with humans. And I had this transformative moments, because I was always... I would go in a meeting with the most clever arguments, best structure, most logical, everybody will shut up because they're billed. But guess what? They go out of the room and they work relentlessly at proving me wrong. Of course, I embarrassed themselves.

I made them look like shit in front of themselves and others. I came to the realization that I will never again win an argument by losing a heart. Never. In fact, also, another commandment in FlapKap, another one of the 10 is be hard on the fact, soft on the people. For us to disagree, it doesn't have to mean that we become disrespectful to each other. We need to put the people as important as the fact at hand. We need to be respectful to each other and understand and empathizes and realize that at the end we are humans. So yeah, this is how I think because Bahi has seen me from the very early on, so I think this is why he mentioned this combination of being analytical and people-centric, because of the redemption and the improvement I worked on to be... Still a lot of work to be done, but way better than where I were 10 years ago.

Bill Cilluffo:

Yeah. No, it's a great adaptation, especially starting life in college as an engineer. I guess not starting life, but starting your professional life as an engineer and quickly going into the TED business, which is all about people and all about inspiring people. It's a great juxtaposition, and learning those throughout your career is critical.

Ahmad Coucha:

Hundred percent.

Bill Cilluffo:

Another person we talked to, someone you're working with still today, Nur Hassam, marketing manager, if I understand that correctly. She described you as the best mentor she's ever had, and you earlier today talked about mentors that you've had. How do you think about the role of mentorship? What makes you successful as a mentor to others? But how have you also been, it sounds like you've been a great user of mentorship, the other direction. How do you think about that subject as it relates to leadership and building the company?

Ahmad Coucha:

Mentorship, for me, first, I was lucky to receive the mentorship from Kareem. He believed in us and he gave us a lot of his time. And I think, especially when this was given at the early parts of our career, we enjoyed a compounding beautiful effect of this mentorship. So in a way, it feels like I want to. There is this push inside of you, you have to pay back to others somehow. You got this privilege, and it's only fair to give it to someone else. And second, when you see someone who is young and they have the hunger and they have the talent, the stars are aligned. They just need some direction, and they will be massive achievers. Nur, joined us in Kijamii right after school. I think she was 20. Until this day, she is with us, and she is leading, one of the top four leaders in the company.

Again, quarter of the business relies on her. So in a way, doing well by doing good, stars aligned. I wasn't expecting that Nur would become one of the people building Kijamii with us, but things worked out. I gave it her best. She's worth it. I loved... This is also something really important about mentorship. It's not out of duty only. You must enjoy the conversation with the person, you enjoy seeing the improvement and the evolution. So we always enjoyed each other's company. We enjoyed our conversations together. So it was only natural to be able to support each other to help her grow, basically.

Bill Cilluffo:

Oh, that's great. It is one of the fantastic rewarding things about building businesses and leading people. It's just folks that you see that maybe you hired when they are right out of school, super young, in their twenties, and then you look back 10 years later, 15 years later. In my case, longer than that, I don't want to give away how old I am, but fantastically rewarding experience seeing people grow over time. So actually one of the great parts of the job as a venture capitalist is just how many entrepreneurs and where did they start? And six, seven years later, when they've built great companies, where are they now? And it's wonderful to see the progress.

Ahmad Coucha:

A hundred percent, a hundred percent.

Bill Cilluffo:

Work-life balance is a topic that every entrepreneur struggles with. I'm not sure I've ever heard somebody who's totally figured it out. But as a new father in particular, that's got to be a very timely question for you, I would imagine. How do you think about work-life balance in general? And especially becoming a father, how has that changed your perspective?

Ahmad Coucha:

So first, being a father, and this is all to all other fellow entrepreneurs, for many reasons, we had to conceive as fast as possible, for medical reasons. So I wasn't eagerly waiting for the baby, and I was kind of reluctant, "Betty, come on. Is this the best time? I'm starting a business." Biology is over business. Deep inside of me, I was like, "Okay, thank you. Thank you destiny for this amazing plus." But I wasn't ready. And I thought it would make my life a complete disaster, jogging so many things. But in a way, this has been the most rewarding thing that happened to me in my life. Literally on the human, personal side, as well as on the professional side also, having my little baby. It gives you further motivation, by the way. I want to make you more proud of your dad.

I want you more secure financially. I will double down in work. I will double down in work, but not necessarily in time basis, down in the passion, the focus. And also, being a dad, having a little kid, it gives you perspective. Suddenly you become more wise in a way. I'm not wise, I wouldn't say I'm wise, but you just become more wise. You figure out, okay, well there are so many things in life. There are so many things. It's not only work, it's not only this or that. And it kind of balances your life in a good way, becomes more balanced. It's even better for the business when it becomes balanced. But also, with this, a lot of ruthless prioritization and hard swallowing for trade-offs. The kind of father I want to be is I want to be involved with my kid every day.

So every day at 6:30, he wakes up at 6:30, from 6:30 to 7:30, I'm giving him his first feed, changing his diaper, spending some time until my wife is up. This hour was my me hour, this was my workout hour, my reflections hour. So I had to shrink this me hour from five times a week to three times a week. So I'm less fit, obviously. I'm less fit. I can run less. Thankfully, I haven't gained weight, but I'm less fit at least. I dropped a hobby, chess. I don't play chess anymore. This used to consume at least an hour a day. I had to accept trade-offs. Nothing good comes without a price.

So this was on the elimination, I would say, or the prioritization level. On the other hand, I'm trying also... I'm working every day from 8:00 to 7:00. Every day I'm working from 8:00 to 7:00. But before 8:00, I'm there for my son. After 7:00, I'm there for my wife. And during the weekend, I try as much as possible to be there for family and sometimes friends. Also, I had to trade off on me going out and seeing the friends. I had to accept. So difficult, but not impossible as long as you accept the trade-offs in a way.

Bill Cilluffo:

Yeah. Again, there's no right or wrong way to do it. Everybody has their own sort of strategy for dealing with these.

Ahmad Coucha:

Hundred percent.

Bill Cilluffo:

But what is common as I talk to people is just it forces trade-offs in a way that weren't forced before and how more people think it's enhancing rather than detracting, right? Yes, I can figure out what was I doing before that I didn't really need to do as much? Where are the things that are really important in spending the time? And again, you've figured out the plan that works for you. Other people have different plans, but there's so much commonality in there.

Ahmad Coucha:

A hundred percent. Totally agree, sir. Totally agree.

Bill Cilluffo:

Yeah. That's awesome. Well, look, it's been an amazing time talking about your journey. I know our listeners are really going to love it. We've certainly enjoyed having you as part of the QED family the last several months. One question I'd really like to wrap with, so many prospective entrepreneurs hopefully will be listening to this over time, what's one key piece of advice you would give to prospective entrepreneurs that might be listening?

Ahmad Coucha:

First, almost always, almost always, at least for me, action is much better than inaction. You will learn a lot. And second advice on this, I learned the hard way, this I learned the really hard way, try as much as possible to enjoy the journey. It's really tough. It's really tough. No matter how shiny it looks from the outside, no matter how many times you see me smiling through this podcast, I've had so many tough moments today. Okay? It's really tough. So at least try to enjoy the highs as much as possible and remember that being not optimistic, it doesn't help, it hurts. That's the thing that's key for me, also, through the journey, is it's okay not to figure it all from the beginning. It's positive. These are the three top things for me.

Bill Cilluffo:

Yeah. No, I love it. I love it. It's easy to see where those are all very applicable. And enjoying the journey is great because you never know where it's going to take you. Sometimes you think it's going to take you in a great place and it's not so much. Sometimes you really aren't optimistic, and it turns out to be the best thing you've done. So very much relate to that. Well, look, thank you so much for joining us today. It's been a wonderful conversation. And again, really appreciate all the time. And to all of our listeners, take care. And thank you very much for listening.

Ahmad Coucha:

Thank you so much, Bill. It was fun.

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