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Run the Numbers
From Massive Corporate to Tiny Startup: Foodics CFO Abdullah Tahboub on Making the Leap
00:50:21
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- [00:00]
A
All of that enables us to go to the future with more capabilities. So now what we will be doing is that we will be offering our customers, our merchants, the ability to have funding and loans from Forex directly. We do pre qualification for our merchants. We know who is like the risky ones who are not the risky and then we can extend loans to them within two hours versus like if they want to have a loan from the current banks, they need to go in a process which is like more three to four weeks and most likely they will be rejected because they don't have the financial statements and all of that. Here there's an algorithm that do credit rating and then the payment itself of the repayment can be done from the payment terminal. So it's a full solution. And that's all because of this integration between the payment and the SaaS which like again brings Footex to the position that be one of the biggest SaaS companies and the Fintech company as well.
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B
This is amazing. Okay, so a lot to unpack here. I'm really excited. Is this thing on?
- [01:03]
A
Yesterday's price is not today's price.
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B
Hey, welcome back to Run the Numbers, the podcast that you would love to give five stars to right now. This conversation is with Abdullah Taboo, the the CFO of Foodix. He went from a very large telecom company where he was meeting with ministers in Jordan to a team of foreign Saudi. So this guy picked up his family and his life, moved to a different country and joined tech at a company that was small at the time. Foodix is now an amazingly successful company in the Middle East. Think about it, kind of like toast, but for the restaurant industry out there. And he breaks down what the differences are between being a CFO in the corporate world versus the startup world. He's been in both. And how spending his time is different. I found that part fascinating. He gives a deep dive into the food and beverage industry, the state of it today and all of the things that are going on in Saudi right now, from amusement parks to stadiums to major infrastructure projects that impacts the entire economy, especially for people that eat food. That's everybody. Then he takes us through Foodix's business model, how it's evolved since it first launched. And guess what? Payments. They got payments, baby. We go into payments in the crawl walk run for any CFO who's looking to add payments to their stack. All this and much, much more after a short word from our sponsors. What does the future hold for business? Ask nine experts and you'll get 10 answers. Bull market, bear market rates will rise, rates will fall. Can someone please just invent a crystal ball already? Until then, over 40,000 businesses have future proof their companies with NetSuite by Oracle, the number one cloud ERP bringing accounting, financial management, inventory, HR into one fluid platform with one unified business management suite. There's one source of truth giving you the visibility and control you need to make quick decisions. With real time insights and forecasting, you're peering into the future with actionable data. Whether you're closing the books in days, not weeks, you're spending less time looking backwards at more time on what's next. If you listen to this podcast, you'll know I ask CFOs all the time to rep their tech stacks and I would say almost every one of them use NetSuite. And that's what I would use to Whether you're a company earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. Speaking of opportunity, download the CFO's Guide to AI and Machine Learning at netsuite.com metrics. The guide is free to you. That is netsuite.com metrics. Oh yeah, it's netsuite.com metrics. Please guys, I really need this. Foreign. Does your revenue recognition process feel like a total guessing game? Step right up and pick a card. Any card. You're not alone. Revenue account is getting more complex, especially with subscription models, usage based billing and evolving compliance standards.
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A
Woohoo.
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B
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A
Hey, how are you?
- [05:59]
B
Where in the world do I find you today my friend?
- [06:01]
A
So I'm in Riyadh now. It's beautiful capital of Saudi.
- [06:06]
B
Awesome. So this podcast is truly going worldwide here. And if I have it right, you went from a very large telecom company where you're meeting with ministers in Jordan, you had this massive team and then you made this kind of bold transition to a team of four in Saudi and you went to a smaller business but also a new country and a new business model, a new industry. From a personal perspective, I mean how did you take that leap of faith?
- [06:34]
A
So yes a lot of people called me crazy like by that time like I think most of my friends, my colleagues, everyone like saying Abdullah, what you are doing like again like you are the second man of a big telecom company in Jordan. We have a quarter billion dollar of revenues and then I'm moving to this company that basically nobody heard about. But I think that's where it comes to like multiple factors. I think the most important one is my personality. I'm a person who like always to have new challenges. I'm a very competitive person as well. So I like always to challenge myself and try something new. So that's on one perspective. On the other hand a lot of us happening in Saudi so Saudi is becoming innovation and entrepreneurship hub. The government with the Vision 2030 Vision have a big focus on the startup scene. So I think it was like a great opportunity for me to try all of that. In addition Footex as a company was of like at that time there wasn't a lot of startups but Footex at that time was A company that proved a success. It was at like series A at that time and it has a two great founders. So I told myself why not to leave my comfort zone and join the FedEx.
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B
I have to commend you on taking that risk. I mean you get to kind of write your story in reverse order, which is always nice. But like at the time that is kind of a scary leap of faith to take. You know, going from something that seems like a sure thing to something that's riskier. You're a CFO. Do you think CFOs take enough risk in their careers?
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A
So the point is like as CFOs we are really trained to mitigate risk. So that's something that we do like day and night. We are responsible of risk management and reduce the risk to the maximum minimum possible and that start going into our personality in our life. And I think that as a CFO we need to be, yes, we have to maintain that, being cautious to risk, but we need to do it in a more balanced approach. I think once you have that opportunity to take some risk, I think you should consider it. And again like we should use our mindset to calculate the risk. If you believe that that risk is reasonable, I would, I would advise people to take that risk. And reflecting back five years after I took my, my decision, I think it was one of the greatest decision I ever made. Like, I think like yes it was risky but that's where we, you know, we have always that say you should have no pain, no gain and like you should have that risk and retain thing. So yeah, like from time to time I think I advise my colleagues and like in the CFOs like to, to take that risk.
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B
Do you have a lot of friends that come to you and say abdullah, I'm thinking about moving from this big corporate company to something smaller. Like how, how did you look at this situation?
- [09:32]
A
Absolutely. And I think actually me personally, I think I managed to convince a lot of my friends to leave their comfort zone, to leave the big corporates that used to work at and join startups. So I have at least two of my friends who joined startups because I pushed them to go there and introduce them to the founders and now they are very thankful. So I'm really happy with what I'm doing.
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B
I think the biggest question that I would ask from the outside in is what are the expectations? How do they vary from being a CFO in this corporate world versus the startup world?
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A
So it can't be more different. So in the corporate life you spend most of your time and risk management, governance board preparations, spending lengthy time on preparing a business case that you need to take to the approval committee and all of that governance. In addition to politics, which I really, really hate, but unfortunately it's part of the corporate life and like everybody knows it. While in startups completely different to start with, there's no time for politics, which is great, like you know, politics, I hate it. It just, I think it just take you slow and like you spend your resources or like your, your brain and unnecessary work. But most important, I think in the startup life you are responsible to like you have multiple hats. So in one day, yes, you are a cfo. The second day you work closely with you, the chief operation officer and focusing on how you can grow sales and commission schemes and all of that. Third day you are thinking about their expansion strategy. Fourth day you talk with the founders on which product we should focus on. And of course you spend a lot of time in fundraising activities, scaling up of your systems and all of that. So you have multiple hats. And that's actually what I really like about working with startups.
- [11:26]
B
I think it's not just the time of how you spend it on your calendar, but it's also the time of the feedback loop associated with decisions you make. So as a cfo, one thing that can always be frustrating is you make these big decisions and then sometimes you gotta wait 6 months, 12 months, 18 months to figure out, well, was that a good decision I made? And I think in the corporate world it does take longer to figure out if it was good or bad. In the startup world you can see your imprints in the business faster.
- [11:53]
A
Yeah, and like, you know, in the corporate life all decision that you will take is like just incremental impact. Like it's, it's always minimal impact. It's like whatever you do, it's a 10%, 5% increase in sales growth or cost reduction. And all of that while literally in the startup life, one decision can take your company 2x and 3x and like you, you know, you create your babies like you have a lot of babies that you keep nourishing and seeing them are growing, which in most of cases you cannot have. The same in corporate life, however, like, you know, still like there are some interesting facts about corporate. If you are a CFO who focus on business, you can drive big initiatives. So that's always a possibility. But that's like the exception while in startup live that you will do that every day. You will see like addition you took like yesterday it was the impact you in one month. And it's a continuous process of really witnessing all the impact of the initiatives and decision that you have to take.
- [12:57]
B
And I also think that how you spend your time with people outside of other departments, it's less formalized and it's a lot faster of like an iteration cycle. Being at a startup where I've worked at big companies too and it felt like I had to like step through all this bureaucracy to like set up a meeting with product where it's like like can we just talk through this right now?
- [13:17]
A
Absolutely. And that's actually very, very important. So like you just said it correctly. In the corporate life, like each department you have the finance department, a big department, you have your floor, two floors where like all finance employees and all of that. Well, nowadays I'm in my office and like if you see just one meter next to me is the chief operation officer and another 1 meter is the chief technical officer. And once we need to make a decision, it's just go from my office to their office and like start talking. And all decisions are taken that way. And that's by the way one of the things I so me personally I advocate always working in office. I'm not really advocating this remote working. I personally I don't think it's really working. And the main reason is behind that that like once you are all in the office you can make decision way much faster versus the position like where like you have to set up a zoom meeting and you need to make sure everybody's there and so on. Here in our culture, at least in Footex, all decisions are like taking very fast. So we meet together like anything. We can have a quick meeting, a quick decision and we move on rather than having all the setup of different meetings and all of that.
- [14:28]
B
This may be a weird question and we can strike it if you don't have a hot take on it. But you brought up the existence of politics in any company earlier. Do you think politics exist more in an in office culture than. Than a virtual culture or. It doesn't really matter, it's just. It's a representative of the company no matter how they work.
- [14:45]
A
So I think politics is not related really to that setup. I think it's more of the culture. It's the top management, what they really influence the other employees. So I think you know, like our employees, if they see that the top management is well aligned, like all the discussions, there is no hidden agenda after like behind all of these discussions, I think they will really avoid going in politics, I think politics starts when like I'm as a CFO, I have my personal agenda versus other CFOs. Like you don't have a common goal. Like and that's another thing I really like about startups. So like, and you know, in corporate life most likely you are very concerned about your career growth. You want to move to, you want to get promoted and so on. While in the startup life your main focus is to grow the company. Because everybody is well vested in the company. They have their shares, they are owners, they are the real owners of the company, they are the shareholders of the company. So that's where everybody's working together to maximize the value of that company versus in the corporate life it's more of everybody wants to maintain their budgets, their career growth and all of that.
- [15:58]
B
Yes, build a massive team.
- [16:00]
A
Exactly, exactly. Which is very different.
- [16:03]
B
That's a good take. I want to transition to talk about the food and beverage industry for a bit because I'm so fascinated by what's going on here and how technology is innovating or how technology is enabling a lot of these companies. So if you could just do an overview, I mean, what's the state of the food and beverage industry today?
- [16:20]
A
The main thing is that all that digital transformation. So if you see like 10 years ago it's like when we talk about systems it was all like many restaurants like even they don't have a system now. And like the restaurant that have a system it will be on premise system with limited capabilities. Now everybody's shifting to the cloud and the cloud gives like unlimited capabilities. Like it's all integrated systems, a lot of integrations happening from, from all system and like all strong APIs that connects different systems together which is, which is creating great opportunities. So that's from the systems point of view. In addition to creating a new business model, we see now the cloud kitchen, the dark stores and all of that which was not there. And again this is happening because of the digital enablement. So the fact that all restaurants now integrated with food aggregators and delivery companies enables basically the concept of dark kitchens to evolve more and more. We see more investment in the franchisee business as well. And where like previously it was like, like Easter sun have one store, two stores, now we can see that franchisee and that's happening a lot in Saudi as a company. Like again we have 30% market share in Saudi we see a lot of restaurants, they start with one store and now like in two years they have more than 80 and 90 stores which is like we are really proud to have our our nations like going off this huge growth.
- [17:50]
B
Hey, thanks for listening. We'll be right back after a word from our sponsors. Well, if you've listened to this podcast before, you definitely know that I think it's cool to be a fan of business. I'm obsessed with researching how the best companies operate and specifically how they manage their money. And I've learned that a company's financial stack can make the difference between world domination and obscurity. That's why I want to tell you about Brex. Because I want you to rule the world. Brex is an impressive financial services and software company that has grown immensely since it was founded in 2017. In just the last year alone, Brex accelerated customer acquisition by 50% with 91% growth in enterprise customers. And there's good reason that over 30,000 companies from startups to enterprises have flocked to Brex. Brex offers the world's smartest corporate card on a full stack global platform that is everything CFOs need to manage their finances on an elite level. Plus they offer modern banking and treasury as well as intuitive expenses and accounting automation, bill pay and travel. Wow. It's all in the roster whenever you need it. Brex grows with you. CFOs tell me all the time that Brex makes it easy to control spend before it happens, automate annoying tasks and optimize their finances. Because, listen, at the end of the day, Brex helps them make every dollar count. So if you're a fan of smart businesses too, check out Brex@brex.com metrics. That's Brex.com metrics. Trust isn't earned, it's demanded. Whether you're a startup founder navigating your first audit or a seasoned security professional scaling your GRC program, proving your commitment to security has never been more critical or complex. That's where Vanta comes in. Businesses use Vanta to establish trust by automating compliance needs across over 35 frameworks like SoC2 and ISO 27001, centralized security workflows, complete questionnaires up to five times faster, and proactively manage vendor risk. Vanta not only saves you time, it can also save you money. A new IDC white paper found that Vanta customers achieved $535,000 per year in benefits, and the platform pays for itself in just three months. Join over 9,000 global companies like Atlassian Quora the Factory, who use Vanta to manage risk, improve security in real time. For a limited time, Our audience gets $1,000 off vanta@v a n t a.com metrics that's v a n t a dot com metrics for $1,000 off. Here's a question. Do you feel like you're wasting time and energy on contract renewals or tracking shadow it spend or oh, this is a bad one Explaining rising software costs to the board. Truth is, traditional spend management is broken. That's where Tropic comes in. Tropic is an intelligent spend management solution that consolidates your spend data and processes into one unified offering, enabling insights and decisive action. It doesn't just show you where the problems are, it helps you solve them. From spotting hidden optimization opportunities like duplicative spend to automating those painful procurement workflows to give you the best market data that turns every vendor negotiation in your favor. I'm a Tropic customer myself. I've been using them for over a year and I love their price checks. They allow me to see if I'm getting a fair market deal instantly. And I'm proud to say that I am no longer using my email as our company's contract repository. I've got every document and renewal neatly organized in my Tropic portal. Isn't it time to turn spend management into your Competitive advantage? Visit TropicApp IO. MostlyMetrics See what's possible when intelligence drives your decisions. TropicApp IO. Mostlymetrics Wow. 30%, 30% market share. That's wild. And I understand that you're deeply rooted in the Middle east and North Africa. I mean what's unique about the food and beverage and the tech there that may be different than other parts of the world?
- [21:53]
A
So I think what you can see like in the region is many things of course, digital transformation. So it's have a, like, have a faster base because like again like five years ago there was no systems at all. Like they were depending on a very basic calculators to manage their business. Now everybody wants to have their proper cloud solution, so that's one. But also what's happening here, also the evolvement of cashless economies. So I recall once I joined forex around 25% of transactions were like cashless, processed by card, either debit or credit. Nowadays 65% of transactions are cashless basically and that's not even cashless. They are all based on the tap technology, not even the card insertion. So it's evolving very, very fast. And we see a two digit growth in most of our regions that we are operating in. So in Saudi we are having like around 12, 13% growth year over year. And that's of course with all the support of the government and all the initiatives that are taking place here. But yes, it's a huge change in.
- [22:56]
B
Dynamics and there's a lot going on in Saudi right now. I mean from these huge amusement parks, stadiums, major infrastructure projects. Does that help with business growth if you're serving people food?
- [23:08]
A
Absolutely. So it's driving many things. First one, the economy is becoming more diversified. So we know like Saudi was like very dependent on oil and gas. Now with introduction all of this, we see the entertainment projects happening, taking place everywhere from all the amusement park, all the Red Sea projects, and even in Riyadh, huge projects like they're establishing 130 kilometer Sport Boulevard where it's an opportunity for everybody to have sport in that boulevard. But also it will have a lot of coffee shops and all of that like in that area. So that's one. And of course the growth in the economy itself means more cash inflow and more disposable income in the hands of people, which is again like reflecting in a stronger GDP and more spend for fnb.
- [24:00]
B
That totally makes sense. I worked in Boston in an area called the Seaport district for a number of years and there were buildings that were going up where the construction people would basically, you could work basically your entire career just on one block if you just went from one building to the next. And we used to always joke that if you want to get the best sandwich in town, just look at whatever bag the construction guy is carrying back. Because they always had the best taste for like where to go get a good self. I want to talk about the business model a bit. So how is Foodix business model evolved since its first launch? I mean you were there pretty early on and I'm sure you didn't have all the revenue streams that you have now.
- [24:35]
A
Yeah, so when foodiex started like 10 years ago, the main focus was to build the cashier system. As we mentioned that there was no cache systems at all or if any, it was on premise system. So the founders initially focused on building a robust cashier system and like a cashier system that also can work in multiple locations and all of that integrations. So that was like number one task and that was the focus. And then they start adding modules one after another on the top of the cashier system, which we refer to as the source of truth. So they added the inventory, the kitchen display system and all of these modules. Then they created a marketplace which is was a very important also Addition to the system because Footix become integrated with many other systems including loyalty delivery systems and all of that. And then by time and I think the most important point was like in 2020 where Footex was like the first company in the region to get the payment license. So Fullix at that time like previously it was all SaaS offering. It was like purely focusing on SaaS and increasing their market share in the region. Then we got the payment license and by having the payment license we unlocked a lot of opportunities. So to start with, we start with providing the payment terminance which is integrated with our cashier system. So previously before foodixtime, the cashier like you have to have a separate payment terminal and they need to punch the order in the system and then punch the payment the amount of the order on that payment terminal. There was no integration at all. So we start by providing these payment terminals and providing that integrated solution which like help a lot also our merchants by having like end of day reports reconsidered and they know how much exactly the cash flow, what transaction unsettled and so on. And then we start adding more blocks over this two solutions. So we start having the waiter application which is also payment enabled. We have self service kiosks, the one that you see in the bigger streams and you can have your older and use self checkout and all of that. And then all of that enables us to go to the future with more capabilities. So now what we will be doing is that we will be offering our customers, our merchants the ability to have funding and loans from FedEx directly in two hours. You know we built an algorithm where we can do a rating for our customers. And by having that solution we do pre qualification for our merchants. We know who is like the risky ones, who are not the risky and then we can extend loans to them within two hours versus like if they want to have a loan from the current banks they need to go in a process which is like more three to four weeks and most likely they will be rejected because they don't have the financial statements and all of that here because again we know there's an algorithm that do credit rating and then the payment itself of the repayment can be done from the payment terminal. So it's a full solution. And that's all because of this integration between the payment and the SaaS which again brings Forex to, to the position that be one of the biggest SaaS companies and the fintech company as well.
- [27:53]
B
This is amazing. Okay, so a lot to unpack here. I'm really excited. Let's go back to starting with the cashiers. Why was that the right insertion point at that time?
- [28:04]
A
Footix need to increase its footprint and we need to make sure that we build a system that is very robust. Again, like previously, again, in my work in telecommunication, there was a lot of experience available in the market. Now when you go to the FootX part, like building FootX, there is no playbook that you can refer to. It's something that you need to build from scratch. There is no resources available. So you need to make sure that once you build that, you build it the correct way. I need to focus on this one. And that was the major focus in the early years. So they built a very robust system. And you know, we're talking about a cloud system. So you need to give the trust to your mission that that cloud system will not collapse, something that they can really rely on. So. And that gives FedEx the ability to grow its market share in the region. Having the source of trust everywhere and then all add ons or upselling can happen at later stage. But it was very important to build that first of all customer base and a really stable product. And that's what is differentiating FedEx from any other competitors now in the region that we have the best system, we have the most stable system and we have the biggest market share. So yeah, it was absolutely the right.
- [29:17]
B
Move and I want to flag that for listeners because I can't understate the importance of being the source of truth or the center of gravity within the tech stack there because it allows you all these other opportunities to expand from there. But if you don't get that right, you don't earn kind of the ability to add the other modules 100%.
- [29:36]
A
100% because again, all other modules can be built on the cashier, but it's not vice versa. So you can have the accounting system on the top of your cashier system, you can have the payroll system, you can have the loyalty system, you have all other system built on your system. You have, you can have that deep inside the advanced bi, but it cannot be done the other way around.
- [30:00]
B
And then what was the inflection point in your business expansion? I heard you say something about a payments license.
- [30:05]
A
Yes. So it is the payment. So at that time, again, Forex was only a SaaS company. Once we have the payment, FootX become a SaaS and FinTech company. And as I mentioned, it enabled us to provide a lot of products, including lending and even going way more advanced services, including the cash management Spend management, our merchants on average they Visit their dashboard 12 times a a day. So basically through that dashboard like we will be enabling our customers to view all their statements and eliminating the need basically to access their bank account. Like they can do everything from our console.
- [30:45]
B
And it sounds like if you add payments you're getting multiple bytes at the apple on potentially the same transaction, right? Like you're diversifying your revenue stream, you're more in the way of the money 100%.
- [30:56]
A
So course we have all the SaaS revenue but when now forex is processing around $1 billion of GMV on a monthly basis and that of course is monetizable GMV because like if you provide the payment terminal you can monetize all of this huge volume of transactions. So it's of course it's a great.
- [31:16]
B
Revenue opportunity and it sounds like it just starts with payments, you can go further than that. So what's next in terms of adding new offerings for Foodix?
- [31:25]
A
So as I mentioned like we will be adding the lending services and we will be adding the spend management and then all other solutions that can be built of course on the top of those two.
- [31:36]
B
And there are other vertical software companies out there trying to figure out like what their crawl walk run will be for payments and for becoming a fintech product. Can you explain what lending is in this specific industry?
- [31:51]
A
So if we talk about the fintech like you need first of all to understand, you need to lay a very strong foundation. So it's very important to focus on the point that it's we are dealing here with the cash, the cash flow of the restaurants. So it's very important, it's like one of the very important facts that you need to gain the trust of your merchants. You need to make sure that they understand that there is no missing cash at the end of the day because like again you are dealing with their revenue, that the most important thing. So it's very important you start with a very strong foundation, you have very strong partners because as a payment company, authentic company, you will have the banks as your partners. So it's very important to have very strong banks to back you. And then you need to understand the full ecosystem and the regulations. Here in Saudi we have Sama, which is the central bank of Saudi. It's very like they have all the governance rules and all the regulation that you have to comply with. So it's very important to understand what's going on. And then you start scaling the business one step by another so you start doing more automation. You give Your customers more insights to the business. And you need to have the discipline to keep monitoring the KPIs. So you need to make sure that like for example, how fast you do the settlement, any errors in settlement, all of these KPIs, the chain of your customers and all of these KPIs related to payment business, you need to have the discipline to keep monitoring them day by day. Because again, again we're talking about the very, it's not like the SaaS business. You're talking about the cash. And then once you start expanding and scaling the business, you can add a lot of opportunities that we talked about lending and spend management. And once you talk about lending, you talk about a very strong credit scoring model that you need to build. You need to also test it thoroughly so you cannot go and do scale lending. And then you are stuck with a lot of bad debts. So you need to build it one block by another and make sure that you have a very strong credit module. Now here also the machine learning and AI is very important because you can also have this built in within your model. Understand what's working and what's not working and you keep adjusting. The nice thing about like working and again in our model is that the data that is provided, like there's huge data that you can analyze and build your credit scoring model based on. And all of that should be always reflected in your credit scoring model and keep optimizing that model.
- [34:26]
B
And that's what excited me about hearing about the lending roadmap. Because you're so well positioned with the data you have from the customer. I mean, you know how much sales they're doing, you know everything about the business that like why wouldn't you be well positioned to make a good call on if this is a good candidate?
- [34:41]
A
Exactly. And that's the big differentiation between, between us and the bank. So banks will dry on the data that the merchants provide versus in our case, we have all the algorithms built in the system and it really do the filter and the scoring directly.
- [34:56]
B
And so you have both SaaS and payment revenue streams. Right, we hit on that. SaaS came first. But how do you think about balancing group growth in both of these? It sounds like SaaS has to come before payments in terms of the roadmap. But now use the cfo. You're sitting there looking at all the revenue coming into the business. How do you look at where you're going to spend your time, what you're going to optimize for?
- [35:16]
A
So definitely it's like we will continue of course, focusing on the SaaS. Like it's our, the main thing was SaaS. So it's a revenue stream that of course will continue growing. There's a lot of opportunities in the SaaS. As I mentioned. You can create all of new modules that will upsell. But payment is the name of the game for the coming at least five years. So our main focus is increasing our penetration rate and spreading like having higher attachment rate of our payment terminals. And of course start offering the lending the forex capital to all our customers and keep optimizing the service and then adding more features including the spend management to our customers. So ultimately we believe that if we took the total revenue, it would be like 50, 50 coming from SaaS and another 50 coming from the payment business. We believe in that.
- [36:10]
B
If I was an investor, would I look at the revenue from SaaS being just as valuable as the revenue from payments. Like, is all revenue created equal in that sense?
- [36:19]
A
Yes, very much. And like, you know, when you look at the revenue like the most important thing of the SaaS business business, it's like it's a recurring revenue. Correct. And that's why there's the annual recurring revenue as one of the most important KPIs or like unit economics in our business. Now the beautiful thing of the payment, it's yes, it's transactional, but it also can be forecasted in a similar way of the SaaS business. And that's because once you create that integration between the payment business and, and the SaaS, the customer most likely will have a very high like even actually that stickiness will increase because now the customer depends completely on our services. So it's become as recurring revenue as the subscription. And that's the beauty in the model that you create a transactional revenue where you have the benefit of like the business is growing and then you are having that cut from that business. But also it's very predictable and it's recurring revenue because it's associated with that customer.
- [37:22]
B
Can you say more about the forecasting associated with payments? Because if I was a CFO looking to get into this for the first time, I mean that would keep me up at night knowing like, listen, I know how much I'm getting from SaaS, but like how do I go into this having somewhat of a reliable forecast to the payments component?
- [37:36]
A
Well, that's what you will learn during the, from your experience. So here in our region, you need to understand seasonality. So for example, we have the holy month of Ramadan where like in the first 20 days we witness a sharp decrease in volumes because of, you know, the behavior of people go more like stay at houses and like after eight or nine, they will go and have some kafchas and so on. And then in the last 10 days of the holy month, they will start going more and more to restaurants. And then we will see an increase in spending. And then like there is the month of example, for example, in September, where it's the back to school month. And you will see that the disposable income decreased significantly. That like people start allocating more and more more of their money to finance that back to school operations versus going person and so on. So what you need to be like, you need to understand the customer behavior. That's very important, important. And you need to keep this in your mind once you build your forecast, because there are very clear patterns that happens. And then of course there's association between your targets, like what merchants our sales team is targeting and how much is their total gmv. Like are they targeting the big ones or the small ones? But then you have a lot of data that you can build your forecast on, like being fortunate, like having been in the business for 10 years. We can build a very strong forecasting models based on all of these factors.
- [39:07]
B
So, Abdullah, understanding customer behavior and quirks in business model seasonality is one of my favorite pastimes. Like, I totally dork out on this stuff. So what you were saying about the month of when Ramadan occurs and then back to school, it totally resonated with me because being a CFO at a marketplace business in the automotive sector, we would see when kids go back to school, like, nobody's getting their car fixed because they need the car on the road to drive Johnny or Timmy to soccer practice. And then when Christmas rolls around, everybody is putting a lot of money on their credit card to pay for gifts, so they don't want to go and get their exhaust fixed. But then when they get their tax return back in the March or April timeframe, they got some extra cash in their pocket and that's when sales spike. So it's just like every business has these interesting rhythms to it and you need to get some quarters under your belt to fully understand how customers behave 100%.
- [39:59]
A
And we see that like year after year. So there's like, similar to example, like in the month of November, there is like one week of school holidays and we see that the spend goes like crazy because everybody's taking vacations and like staying. And like, you see that everybody's going to restaurants and cafe shops and like big spike in the gmv. And so that's where like you need to build models where you can really capture this data and make sure they are reflected in your forecasting models.
- [40:31]
B
And if I was a CFO who's trying to staff my go to Market Motion with, with enough bandwidth to sell both SaaS and payments, how does that work? Do you have the same people internally at Foodix that are responsible for like a restaurant getting them on both SaaS and payments or do you break it up in terms of responsibilities?
- [40:47]
A
No, you have to have great specialized team like the guys who are responsible for the, for the fintech business. They need to have a strong understanding again of of the specific regulations related to that industry versus the guys responsible for the SaaS. That's very important. And also you are talking about different challenges that we have to solve for our customers. So when it's SaaS it's more our systems and asking for certain features versus in payments they are more concerned about the settlement and more concepts and more technology related to the payment business. So you need to create that specialization and with a company in our, at our scale, you need to make sure that really you provide the best service to your customers. So you need to create those specialized teams who can address these concerns in a proper way.
- [41:35]
B
That's such a good explanation because I feel like from the outside in a lot of CFOs like oh well if I had payments to this, like I can raise the quotas of all my sales reps. But it's like are they really qualified to sell something that's more specialized?
- [41:46]
A
What do you know, just to be honest, like again like when we started we thought that like back in 2020.
- [41:51]
B
Oh really?
- [41:52]
A
Of course, like that's one of the learnings. Like we thought like yeah, payment, we can add that one service. Like yeah, and we will integrate with the bank, they will do the settlement and you know, it's easy, like a very nice line. But in reality like we learned that very quickly that no, you need to have a very dedicated team. It's a complete different requirements. But that's again the beauty of working in startup. Like you always need to see, reflect clear and reflect quickly. You cannot like wait like one year and then do this. Like of course like once we learned that we did the needed adjustments in our business model and we have the right team. Yeah.
- [42:27]
B
So when you added payments, which part was most difficult to you as a cfo? Was it the forecasting and the model? Was it how to staff the Sales reps, was it the investment level that was required to build it and squaring your head around what like the R and D payback period would be.
- [42:42]
A
So I'll be very honest here. So again coming from Telecommunication background, I have very good understanding of subscriptions in telecommunication. That's what we sell different packages and different subscriptions. So it was very easy for me to understand what's going in the SaaS business. However, when we added the payment, all the concepts were new. So working with the GMV and GPV and the take rates and the bank's margin and the settlement time and instant settlement and even again anticipating these forecasts, always new for me it's something that we have learned from on the job. But that's also why you should always start small and understand what you're doing and then you start scaling the business. So for me when I started it was like all new concept. It was for me and for the company of course. But then I think like in a six months time we nail it and we start understanding exactly what we're doing dealing with and it's become part of like our something that we are dealing with on a daily basis.
- [43:46]
B
That was very honest of you because I think there are a lot of CFOs out there who are like ah, I don't really know much about this, you know, new revenue stream and they don't want to admit it at first. They think they know everything. But I think there's also a value in having really good advisors. And if I did my research right, I think Naim Ishak of Checker and formerly of of Square and Circle is on your board, right?
- [44:04]
A
Yes, 100%. So Naeem, I think like John Felix became a board member since 2019 and he was a great, he is, he is the board member now and he's a great help for us. So in many concepts like he worked with very much similar companies. So in the payment in the SaaS business, in many other concepts like even scaling the company, he always a great help and that's something I definitely also advise people to have strong advisors next to them. They need to educate themselves. Again like back to honesty, like when I joined Footex, there was a lot of concept related to fundraising and all of that that was completely new for me. So you have always to read but it's also important to have a strong advisor next to you. So for example for us in Foodex, we are part of, we are endeavor company and we are blessed to be have a huge network of advisors that we can always ask and refer to. Of course that helps a lot because like, instead of doing the mistake and like learning from your own mistakes, they will tell you, be careful, don't do that and do that and focus on this area and don't do that. So that's very important. It's always advisable to have strong advisors next to you.
- [45:16]
B
I love that.
- [45:17]
A
And always ask, always ask. That's very important to ask. Don't be shy from asking.
- [45:22]
B
People love to say there are playbooks for this, but then they get shy about asking for the playbook.
- [45:27]
A
That's a big mistake. Like if you don't ask, you will never have the answer correct. So once you ask, you will learn and then you will become the master.
- [45:34]
B
Cool. Abdullah, I'm going to take you into what we call our long ass lightning round. So you're a successful guy. But I ask every guest, what's an example of something you've screwed up at work before?
- [45:45]
A
So it's something related to my leadership style. So when I became like the finance director of Omnia, I was like slow and dealing with underperformers. So I was like giving them a lot of chances and like, and I think it's more of like being afraid from having that confrontation and like just firing those underperformers basically. So I gave it a lot of chances, but then it was impacting the company. And then once I start learning that, Abdullah, you need to take this decision like you need to comes once you give that enough chances to those underperformers, then that's it. Because like, if you don't take these decisions, it's you are penalizing the company. So that's something I learned that being always transparent with underperformers, dealing with this in a nice way as well is something that I have to do.
- [46:40]
B
And we're all human, like, we don't like that friction. I definitely try to avoid it as well. But it helps you get there when you start to think, who am I penalizing? Is it somebody on my team who's picking up the slack or is it actually rubbing off poorly on my reputation that I'm keeping somebody around 100%?
- [46:57]
A
Sometimes actually that's very important because you are penalizing the company, but also you're penalizing yourself because if you are depending on them, they will be, for example, not handling a certain area, credit collection, for example, they might screw you there. And then you are responsible for that area. So it's also your personal reputation and the company. So, and like, you know, you can always do it in a nice way. Like people are like, they don't like to deal with this one because it's associated with like all the negative emotions. But like you can really do it in a nice way in a professional way. Highlight the problems and you take the decision together with that underperformer and then it's all done.
- [47:39]
B
Cool. Next one I got for you. If you could tell your younger self something, knowing what you know today, what would you tell him?
- [47:45]
A
Join the startup industry earlier. I think I, yeah, I fit in the startup life more. I like the environment where I can have multiple hats rather than one hat. I like growing business. I like the business development concept. So as a cfo, like working in a startup, I have that opportunity. Yes. To do what is expected from me as a cfo, taking care of all the reporting and the governance, but also taking care of business development. Yeah. So I should not wait until I'm 40 to move to startup life.
- [48:19]
B
Yeah. But you found it eventually which is good. Next one I got for you, can you walk me through your finance software stack? What tools does your team use today to get the job done?
- [48:28]
A
So we have Oracle netsuite as like the backbone of the accounting system, our billing system. We have the salesforce, so we have the full salesforce of the like CRM and CPQ and the billing system. So it's our billing engine which is again fully integrated with Oracle netsuite and that's very important. So always it's hard to do to work in this integration but it will like save a lot of time. We have Carta to manage all our shares and DCERN for our BI reporting tool.
- [48:59]
B
That's awesome. What's the most recent tool you bought? Do you remember dsern? Nice. Last one I got for you. What's the craziest thing you've ever had someone try to expense?
- [49:08]
A
So like, like you know, first of all, like we are always operating in Muslim countries and like you know, alcohol expense is always not acceptable and like especially in our region. So yeah, every now and then we see some people trying to sneak like in their bills, some alcohol payments. Of course, like I have good accounting team like responsible to review these things and they catch it and of course we will not fail it.
- [49:33]
B
That was a good one. Abdullah. This has been a total blast. Like I'm obsessed with the industry that you're helping to push forward and innovate and I love the career perspectives as well and I totally agree that we as CFO should be willing to take some career risk thank you very much. Run the Numbers is a mostly LLC production, yelling an intro by Fat Joe, artwork by some AI thingamajig podcasts and video editing is done by cleancast@cleancast IO. Nothing said on this podcast is intended to be business or investment advice. It's the sole opinion of me, a guy who feeds his dog too much ice cream and has a history of net operating losses. Lol. If you like this podcast, please hit subscribe. It would mean a lot to me. And Also check out mostlymetrics.com that's my newsletter where I explore business models and financial metrics. Thanks for riding with me. Share this with your friends. Peace.