Ashish Tulsian:

Hi. Welcome to Restrocast. Today, my guest is Joe Frem. He’s the founder and CEO of Matbakhi. Joe is somebody who I found to be a thoughtful leader, somebody who, in his own admission, started his entrepreneurial journey in the restaurant space in his head when he was 13. And since then, not only took multiple entrepreneurial bets in life, but also has had a beautiful, illustrious career, you know, from doing his engineering degree to MBA at INSEAD to working with McKinsey for half a decade plus. And all of that was done to impress a girl. But story has much more to it. I found Joe to be somebody who is thinking about every step that he’s taking. And that thought is not only shaping his life, but also shaping the business around him. This conversation was beautiful. I’m really excited about what Joe has to offer to the world and what he’s doing with Matbakhi. I’m sure you will enjoy the episode. Welcome to Restrocast. So, Joe, welcome to Restrocast.

Joe Frem:

Hi Ashish, how are you?

Ashish Tulsian:

Great. Thank you. Thanks for agreeing to do this. Welcome on the couch. I want to start with a start. You know, I have a thesis that most of the people don’t land into the restaurant space. And I say that there’s a lot of things that people don’t really land in the restaurant industry or food and beverage industry by choice most of the times, they just, you know, fall into it somehow. Or it’s kind of a honeytrap, because that was my story. It just looked too good. I thought, it’s cool to own a restaurant, and I jumped into it headfirst, got bruised, got hurt, bled a lot, but in the process, fell in love with the problem. And you know, Here we are today. What’s your story? Where it all started for you?

Joe Frem:

So my story is basically a series of of of of doors opening. Right. That eventually led into into into the space right at 30,000 feet view. It’s the intersection of four big journeys in my life and we’ll talk about them a bit more. But let me take you back when I was 13 years old and and it was starting I was starting to realize at this early age that disproportionate wealth will happen through ownership. Ownership will get you disproportionate wealth. Yes. And then and when you’re 13 years old, you’re a set of skills are almost nothing. You can do math. You can do physics. That’s it’s you can you can you don’t have anything to add that 13, not like today 13 year olds who can do pretty much everything. But so

Ashish Tulsian:

Where were you at that time?

Joe Frem:

I was in Lebanon. I was in in Lebanon, born and raised in Lebanon. And the first the first reaction is to to really tap into the industry that works extremely well, which is restaurants back then F&B was was was big. It still is. And I started as a waiter. I would I learned how to. I started as actually as a runner, then waiter, then at 13.

Ashish Tulsian:

At 13? Oh wow.

Joe Frem:

Obviously after school and and yes, part time and and you know, this shaped me a lot because you had to learn. You have to become customer facing when you’re 13. So it shapes a lot who you are and it builds this emotional intelligence that that you don’t necessarily get in at school, for example, or for example, if you travel or whatever. Um, and then so that was this moment I wanted to, to, to, to have my own restaurant but it was too expensive. And I was 13 years old, so I was always alert right when I, when I turned 15, um, I actually identified an opportunity with, with a friend his father used to have, uh, you know, a carpet store which had a retail license. So we said, okay. And the store was to middle of two spaces, let’s move the carpet from one space another, and then go buy clothing in bulk and sell it. And, you know, in retail and and this is what we did, right? So, uh, and you will see that throughout there’s a recurring, there’s a recurring theme of distressed businesses facing struggles and then coming in, having a turnaround mentality. And I didn’t know I had it was this young age, but, you know, it was just a basic natural instinct, business instinct of, okay, we can do more with with this, right? So ran this business and still it’s still on. Of course, his father now is running it, but it’s still on. Yeah. Um.

Ashish Tulsian:

That retail store is still on? That’s run by your friend. By his father?

Joe Frem:

Yes. That’s, um. And so ever since that, that that has been and this is the start of me wanting to, to build business. A business. Because me going back to the first principle, ownership gets you disproportionate wealth, right? Um, but then very quickly, I learned that obviously there are a very large number of, of, of concepts that I need to understanding, I need to test, to be exposed to succeed. And this is when I decided to do my, my engineering degree. And that was it was not by choice per se, but because it was a challenge, had had I not been accepted in engineering school, I would have done economics. And, you know.

Ashish Tulsian:

But when you had this such an urge to own a restaurant, why did you go towards an engineering degree?

Joe Frem:

Because I then in there I believed I believed that an engineering degree will allow me to have transferable skills, uh, skills that were thought.

Ashish Tulsian:

You thought about that, or was it like a hindsight?

Joe Frem:

And so then in there, this is what I looked at all the engineers that I knew then, um, most of them were not working in engineering. And then that was a big question mark. How come an engineer is either a consultant or in financial services, or that most probably the engineering is something that will allow you is is a ticket for you? So I wanted that ticket, but it wasn’t a passion then. Of course not. For me business. And then I wanted I want to do economics, I wanted to political sciences. This is something of passion to me. In hindsight, I would have done of course I would have done engineering because, well, my, my, my intuition was there. And as I was as I finished my my degree, I started I started working with an engineering. And that moment when you feel that, okay, good. Now I have something in my hand that I can sell, great. What can I do with it? So I looked around and I found that small to medium scale projects, so in Lebanon there was a lot of offices doing large scale jobs, but the small and medium ones, it was very few who were actually taking them and it was a long tail. So the idea was why don’t we build, uh, an agency or let’s say an office for the small and medium scale, right? We do volumes. And this is where, where I launched with, with two partners, the Engineering Design Agency, which was basically an engineering company focused on small to medium scale projects, electrical and mechanical. And, uh, and we leverage all our connections. So also I had, I had, so my sister was an architect, her connections were architects. So the flow of projects was, was very.

Ashish Tulsian:

So you started this right after engineering school?

Joe Frem:

A year before I finished engineering school. Right.

Ashish Tulsian:

So while in engineering.

Joe Frem:

So yeah that was we started taking freelance and then the number of freelance projects increased and then we said, okay, great, so this is how we position our company. Um, uh, obviously there were challenges. Uh, cashflow was, it was a challenge.

Ashish Tulsian:

What year was this?

Joe Frem:

Uh, that was around 2008-2009.

Ashish Tulsian:

2008. Yeah. Okay.

Joe Frem:

Uh, lot of challenges, of course. Uh, cash flow was one of them collections from, from, from clients because they were, they didn’t collect from their original client. So we’ve had, I had to learn that. Okay, so these are things I didn’t know. They, they don’t teach you these things in engineering school. So slowly but surely I started understanding that there is way more to business and if you want to build one, if you want to build successful one, because disproportionate wealth needs ownership and you cannot have ownership in the company if you don’t know how to run it financially. So slowly but surely, I got to the to the to the conclusion that I needed to build that that set of skills.

Ashish Tulsian:

So given the fact that you were running it before completing your engineering degree, what is your family’s opinion about it? Like, what was the support system or lack of it? What was it? Um.

Joe Frem:

My family has been always supportive, right? Uh, they, they encouraged me since early ages to, to actually go and explore. Right. And, uh, and really, if I would, if I was to do anything with my kids now, I would do the same thing, go and explore try, lean in, uh, let the experience teach you, because it will go back to how this shaped me as well. Because without that, it’s it’s difficult to learn the value, you have to try it, test it and then you build a value. Right. Um, so this is where I had so it was clear to me that I need to build that part of my set of skills. So I did my as well. I, I, I did my MBA and, at INSEAD and then joined McKinsey. McKinsey & Company. Uh, maybe, maybe, maybe it’s small, a small parenthesis before this happening. In 2010, I was very close to achieving my dream. Uh, so we, there was again a restaurant in Beirut City that was struggling. So with a group of friends, we came in and then we took ownership of, of that restaurant. Uh, it was in downtown. And, and I learned a lot of things. And that was my first real experience in managing an F and B business and understanding where the really the power lies. And then that and that equation with the of customers, their suppliers, the location, uh, understanding the power of, of clustering. Like now you understand why you always see, uh, McDonald’s next to Burger King, next to a next to a subway. They all, they’re next to each other. They’re clustering. Right? But then I learned that then and there, without labeling it. Right. So that was and that ran for almost a year and a month or year, two months. Uh, unfortunately, there has been some uprisings in uh, in Beirut and the city in downtown Beirut, which resulted in no, no, no customers at all. Zero, nobody. There was no walk in, nothing. Food delivery then and there was, was nobody used to deliver, right. Uh, in that. Good.

Ashish Tulsian:

And in 2010. Yeah. That was not a thing?

Joe Frem:

It wasn’t, exactly so. So we had to shut down that restaurant with a lot of scars, uh, because, uh, so that was my first big failure. And, uh, and, you know, when you’re, when you’re young and you have a failure and it it’s just it’s counterintuitive, right? You want to succeed. You have all the ambitions, but you also have, you’re a bit sometimes, um, shallow, I would say, in believing your, your own faults without stress testing.

Ashish Tulsian:

Why did you go for MBA after this kind of like, failure? And why did you choose INSEAD?

Joe Frem:

So for me, it was, uh, two reasons, quite honestly. The first one is it was very clear to me that for you to learn the business of things, you have to you have to be in a very intense environment that’s going to teach you very quickly. Uh, pretty much a lot of business, business concepts and what have you. And that was for me consulting. The second one, that’s an interesting one. I wanted to impress a girl because she wanted to be and she wanted to go to McKinsey and I wanted to, so I wanted to impress her and actually get the job in McKinsey.

Ashish Tulsian:

So the INSEAD was your path to McKinsey?

Joe Frem:

Exactly. And and McKinsey hired or recruited most from INSEAD. So that’s the link. So my goal in life was to get into INSEAD and within INSEAD, I get into McKinsey.

Ashish Tulsian:

Did you get that girl?

Joe Frem:

She’s my wife.

Ashish Tulsian:

Perfect.

Joe Frem:

Brilliant. Yeah, yeah, yeah. So, so in INSEAD, it was it was a great journey. I learned a lot. And then obviously I focused I wanted to get McKinsey, so joined McKinsey here in the region. Six years into it, I learned a lot. Never thought I would leave, but then DeliveryHero came knocking in 2019 and I had no clue who they were.

Joe Frem:

I didn’t know anything about. So I knew about food delivery yet.

Ashish Tulsian:

So what happened in those six years? McKinsey And of course I can understand I’m not and ask you, why did you join McKinsey. The answer is obviously, but six years. McKinsey What happened to that entrepreneurial bug or or the dream of the restaurant? Did it like just take a back seat? Like, did you just forget it or was there was there still some something?

Joe Frem:

But so the entrepreneurial itch was still there. And during my time at McKinsey, I had developed a new business, which is an agri business, apple orchards. And so it was under under-utilised land, so developed land for it and then developed it and then started.

Ashish Tulsian:

Under McKinsey?

Joe Frem:

Yes when I was with McKinsey, but I was not the lead in it, right? I was I was supporting, uh, again, distressed asset, turnaround, goes back. So this is the same, the same thinking, right? Identifying an opportunity and then launching in and selling to the external markets. And I’ll tell you, the second one was a cider business. So great we have apples. What can we do with apples in 2018? It was it was a big issue because then there in Lebanon there was a crisis on on apples sales or apples exports. You couldn’t export apples. So we had a big stock of apples, what to do with it. And it happened to be during this time. I was in South Africa also for a start, for a project with McKinsey and I got to learn about cider and I got to go and visit. There was a cider maker who taught me a lot about what cider and and started putting the case for forward for a cider business, which which we got small a grant identified someone to actually run it in Lebanon and then we launched it. It was, it’s still small in size. It didn’t grow because I had different priorities after after this, and I’ll tell you more about it. But, but it was also, so I was scratching that itch with with these little things. Now, the restaurant business was still there, so I and you see it when you start understanding how this industry is evolving, the number of entrants, number of people who exit the entrance enter with a loud voice. The exits are very silent. Yeah.

Ashish Tulsian:

Absolutely. Yeah, yeah, yeah.

Joe Frem:

So and then this again, it’s a distress. So why? There’s definitely an opportunity there, but I didn’t wrap my hands around it. Delivery Hero in 2019, end of 2019 I think came knocking and I never thought I would, I would leave McKinsey but well, said. And after seven or eight interviews I said, Great, let’s let’s have a try. And my role was was to actually lead something called Food Services, which included cloud kitchens, new virtual concepts and other new businesses that that they were considering. Right. I was almost employee number two and in that department, and then we rebuilt the whole department. Today, I think it’s it’s a lot of people, I don’t know where they stand build a large network network of cloud kitchens.

Ashish Tulsian:

So you built that you were doing you were leading food service business for DeliveryHero in the region in the region. So where were you stationed?

Joe Frem:

So based in Dubai but servicing all the region except Saudi because back then Delivery Hero was not the majority owner in Hunger Station So now it’s it’s not the case anymore that acquired of course but but yeah so and my first my first official week of work was I think 23rd of March 2020. So a week into, you know, the whole world being declared or being declared a global pandemic. Yep. So that was very interesting. Building a team on Zoom, construction on Zoom, lobbying with the with the municipality on Zoom.

Ashish Tulsian:

What were you constructing? What was the business about? Like, what are you what is this business just like?

Joe Frem:

Yeah, so the business that I was running was basically building, you know, generator gen one, cloud kitchen, basically a rental model building stalls inside a big kitchen and then renting out each sort of.

Ashish Tulsian:

What was it called, they were calling it some name?

Joe Frem:

Delivery Hero kitchens.

Ashish Tulsian:

Yeah. Delivery and also started that that was a Talabat initiative like the kitchens or tea hubs or they had some model with Talabat as well?

Joe Frem:

So Delivery Hero was so the execution arm of Delivery Hero in the region was Talabat. So, so this is, this is from structural point of view. So basically I was Talabat employee under Delivery Hero of course. Got it Yeah. So um and yeah I mean it was a great experience to learn how to build a team in difficult situations and then grow a business out of out of nowhere and start learning from it. And, and, you know, starting to understand what all the different, you know, commercial models that you can, can create and how to partner that best with, with, with restaurants and, and slowly but surely I was talking to so many restaurants so many owners, GMs, you know and you start to learn a lot about the business in depth when you have these conversations.

Ashish Tulsian:

What were like few things that like stood out for you. If you if you remember in those days?

Joe Frem:

Obviously it was becoming slowly but surely clear to me that a cloud kitchen business cannot survive at all. Impossible. This over exposure to food delivery and you know, the cyclicality of the, the the daily, weekly, monthly, quarterly. And there there’s a lot of cyclicality in revenues, which is not good for the business. That’s point number one.

Ashish Tulsian:

What do you mean by cyclicality?

Joe Frem:

The revenue The orders would come at different times, right? In the summer. You should expect that in in December, should expect the Ramadan, you know, 40% plus in the weekend is different than your weekdays. Your your breakfast service is pretty much nothing. You know, so the hourly, daily, weekly, monthly, you let your you know your salary week is different than your midweek, Right. So you got to learn all of these things. And then you start understanding also how how restaurants look at growth throughout the cycle, right? So you start to learn a lot by talking to so many of them because we were also responsible for their growth. They needed to make money so they can stay in the kitchens. So my biggest my biggest, my biggest risk in this business was churn. So my goal was to reduce churn as much as possible because any churn means that that that stalls is going to be empty for two months time for them to leave them for someone to go back in. Yeah. So and two months out of 12, that’s a lot.

Ashish Tulsian:

But did you consider that a kitchen business or was it just a real estate business?

Joe Frem:

Definitely it was a real estate, specialized real estate business focused on kitchens. Of course it’s that business. Of course it’s you get you get rent and you get a revenue cut or revenue commission.

Ashish Tulsian:

So were you running your own brands as well?

Joe Frem:

No, eventually we we started considering that. Okay, great. Now that we have access to to to the whole market, maybe we can start identifying cuisines that we can help our relevant brands to actually grow their numbers. So we started suggesting to, to certain brands in certain locations, certain restaurants that maybe if you consider this, this or that, you might generate sales. So this is more on the consulting front, right?

Ashish Tulsian:

But you guys were not building your own brands.

Joe Frem:

No, no, no. Uh, until I think I think 2022 when we started building in collaboration with with restaurants. So we would go to the restaurant, we built the brand together and they will operate and they will do everything and then we will grow, right?

Ashish Tulsian:

So at Delivery Hero or Talabat, what was your designation?

Joe Frem:

I was VP of of Food Services.

Ashish Tulsian:

Food Services, Yes. 

Joe Frem:

Based in Dubai.

Ashish Tulsian:

And then what happened then? How did you so you jump off that ship?

Joe Frem:

One important thing that also happened, being part of, uh, being part of part of my mandate was also to look after investments of Delivery Hero in other cloud kitchen companies. And that was extremely interesting because I learned a lot by looking at how in the span of two years, right, this industry changed completely and there was a massive shift from an absolute need. You know, you couldn’t you couldn’t go to restaurants, delivery was the only way. To then after when when COVID started to relax it was it was becoming well, less of a need and more of a strategy. Okay. We expand in this location. We saw Cloud Kitchen works great. We transformed into brick and mortar, then to, you know, a balancing act between underperforming assets for for big restaurant companies. So they would pull out a certain location, their brick and mortar, and replace it with the cloud kitchen. So I’ve learned a lot on this front, but mostly also looking after investments of Delivery Hero, where I started understanding also that the legacy decisions and their impact on the business. So by looking at P and Ls, you start understanding that, okay, great, I don’t want that depreciation line to be that big. So I said, light model. Need to think about an asset light model, for example, the licensing. I don’t want to be paying a licensing fee to a big brand, right. It’s it historically would beat us. I don’t want to be overexposed to food delivery because I can see that these companies were struggling when when there was a dip in the market. You know, if it rains. Yeah, you lose 40% of revenues, too. So so these are.

Ashish Tulsian:

And it’s amazing. You know what one one big thing is that normally if it rains, right. I think I think I would rather abstract it as that while you know companies all the online delivery aggregators while they while they have allowed restaurants to increase their sales you know allow more orders to be processed, etc.. But the fact is that the constraint is availability of delivery riders, too. Right. And if you think about that piece is not regulated, for example, even to today. It beats me that restaurant brands have not started asking online delivery aggregators to have a certain SLA on a certain number of delivery riders availability at a certain like and an hourly basis at certain days, because if you think about it, because delivery operators control the demand and they also control the supply of the riders, they actually adjusted themselves. If they don’t have riders, your store is not going to be visible and hence somebody is not going to order on your store and life is good for you because you are saying, Hey, no order. I don’t even know whether the rider was there or not. The fact is the rider was knowing that your area was not serviceable. Your store did not show up to a certain consumer and you think you are coming. Yeah, right. And that led that. That really beats me because I don’t really look at it as Talabat is trying to do something wrong or Uber Eats is trying something wrong. I’m not commenting on that. I’m just commenting on the fact that this piece is not regulated because as an industry, when restaurants have stopped having their own riders, when restaurants are, you know, have started looking at their fortunes basis as 40%, with 70% revenue coming from deliveries, this becomes such a critical component that if I was running a, you know, restaurant business today, whether I can succeed in that conversation or not is a separate problem. But I would want an aggregator to give me an SLA on availability of riders, per hour and per day basis and then give me a report on the real demand my brand has.

Joe Frem:

That’s true. Look, and the logistics part of food delivery is very difficult. It’s quite honestly. And because you’re solving for peaks and and it becomes extreme, you know, and if it’s if you’re operating in off peak hours, that’s great. But people don’t eat that at 4 pm, they eat at seven, they eat at one or two. You know, So managing peaks is very, very difficult. Now, the sheer fact that the channel or the stakeholder that is managing the the demand, which is the sales channel is called aggregators, is also managing the delivery. This is this is the difficulty of it. Right. Had it been a different stakeholders imagine there is a, you know, an aggregator for delivery riders in a certain city. Right. And they are integrated with all the delivery. And the only way to actually get a rider is from that pool of riders that this particular aggregator has. The the dynamics would have been completely different, you know, completely different because the sales of this aggregator would be, look, I want to make sure that every single restaurant place, has as many orders and they’re not solving the logistics problem. They would push the logistic problem on that aggregator and then that aggregator of riders would have a single goal. I don’t want to miss any order because I think per order.

Ashish Tulsian:

But that’s the but that’s a problem. I think the problem is that I think it’s just a venture capital funded operator problem because you basically just want every piece of GMV. Yeah. Into the plate. Yeah. And, and then you realized the GMV is not being enough for you because your, you know, your margins are negative. So then you want to basically forward into what’s integrated every piece of the puzzle just to make up for the margins And that’s exactly where, you know, I think I think my comment on that constraint is that the constraint of an aggregator to maintain a certain rider base is a direct has a direct correlation with the prosperity of the restaurant brands that are listed on it. And this equation is not getting questioned right now, to a great extent actually because restaurant brands, I mean this is fallacy, right? Restaurant brand believes that Okay I mean you and me are on the same side. So if my revenue goes up, your revenue goes up. But the fact is that for the aggregator there are 900,000 restaurants. But for the restaurant there’s only one aggregator. Yeah. And that’s a problem that’s where the equation like goes horribly wrong.

Joe Frem:

And incentives it could be it could be the case now also aggregators will solve for that capabilities. if I have 20,000 riders or if I have 5000 riders, what I end up showing will be subject to how much I can deliver. And then if my sales team to get the restaurant is doing a great job, I’m not going to tell my sales team to stop, keep adding restaurants and aggregators. But on the logistics front, we have a fleet that cannot actually service that much peaks. And this is another problem logistical, because your utilization during peaks is sort of set a target and then off peak, it’s you have an issue.

Ashish Tulsian:

I mean, even at the peak, your maximization of revenue becomes a little subjective. I you know, I think because because capacity of kitchens is generally quite like way more than what most of the people think that.

Joe Frem:

Yeah, absolutely right.

Ashish Tulsian:

So kitchens are like really elastic. I mean, my own restaurant experience was that I can tell you like one, one example as a, as a novice restaurateur. I think my first restaurant was like a quick service restaurant, which was, if I remember correctly, was 500 square feet at a high street, top location, paying top dollars in rent. And I was not a smart restaurateur, I was like, I was like a stupid kid who’s riding high on money because I was running a tech company. I used to run a telecom company. So I was like, Yeah, I mean, money’s not a problem. We will open a restaurant how will that cost. And we took like the top place. I remember. I think our first architect built out of 500 square feet, built a kitchen for 210 square feet. And because it was supposed to be a QSR, we had like very, very few seating space. Most of it, as you know, was was takeaway, drive thru, etc.. And then I remember like within the first six months we saw great success with, you know, one, it was a great location and two, like where we are better than good food. So just, you know, the demand was up and we decided that, okay, maybe, you know, we need to repurpose same space. And by the time I had also become a little smarter, you know, for the restaurant and I basically looked at the operation, I said, you know what, this something is off in this design. And I got a restaurant consultant. He basically said, Yeah, of course. I mean, your kitchen can actually be 100 square feet. I was like, Wow. And I actually tell you, we remodeled the kitchen for 80 square feet, carved out like almost like a 400 square feet worth  of seating area for casual dining. And from the same kitchen, we actually did exactly 3x the sale and kitchen was still underutilized. And the elasticity of that kitchen space just blew my mind. And, I mean, I suddenly realized that, wow, Like, that’s why age old restaurants, where owner has been sitting for ages who people like, you know, me look at them and say oh losers, but they’re not losers. These guys are killing it. They exactly know how to get the bang for the buck for each square feet. They’ve actually they actually make more money than people with 50 stores or 100 stores at times. I’ve actually seen that. That is only because they understood the elasticity of their own kitchen. They realized that demand is everything and, you know, processes can be changed to meet that demand. And that’s where I feel that, you know, even at the peak hours while restaurants, you know, kind of tend to say, well, we need to shut down, you know, our store on delivery aggregators for like half an hour. I don’t believe in that, I hear a restaurant saying at peak hours, we are so jammed that we have to like shut down our listing for like 15 minutes just to, you know, bring it down. I think that something is horribly wrong with your process and your understanding of it because you cannot explain that to me. I it’s very hard for me to understand how can you be so jammed unless, of course, you have a pizza oven And I understand that there can only be X number of pizzas that go into the oven. Yeah. For most of the cuisines like you. 

Joe Frem:

Absolutely. So I like to spend a lot of time in the kitchen to understand happening. So by the sheer fact that you’re observing a certain understanding, okay, great. My grill is over utilized, I need two grills, and maybe all of a sudden my, removing and potentially one one fryer for example. Right. Because the fryers is rarely utilized. I don’t get a lot of orders from that location for fried food which takes us back to to yeah, I was observing a lot of these businesses that delivery hero also invested in and talking to all these owners and you know then this is where the entrepreneurial itch came back and say, if I was to build my own company, these are the things that I would like to do. And I let it sit with me, right? And it was in my mind and but slowly but and that was towards the beginning of 2022. I was starting to feel that, look, I’ve learned a lot and there are a lot of things that that that we can that that we can definitely do which are low hanging fruit. Um, this is when I and this is when I had a very strong partnership with, with, with my, my, my partner now and co-founder and this is where we said, okay, look, why don’t we build our own.

Ashish Tulsian:

Was, was your co-founder at delivery hero as well?

Joe Frem:

No, he was so he was an operator, leased some stores from delivery hero kitchens.

Ashish Tulsian:

And you didn’t know him before?

Joe Frem:

I didn’t know him before. And it’s.

Ashish Tulsian:

Interesting.

Joe Frem:

It’s one of those relationships that transformed to become way more than you would have imagined to right. And to be very honest, this is my, my, my, my ethos in building relationships. I try the relationships to be, you know, long term. And you never know what can happen. Something like this can happen out of it. Like finding a co-founder, right? Yeah. Um, and we had, we had, we had the same ideas and the same perspective on, on the F&B business. Uh, and it’s funny, one day he came to me and said, Look, there’s a group of investors who named you and me to actually team up and run a business, and we got 10% of it. We wouldn’t worry about the money. They will fund it and but we get ten percent. I said, Okay, great. If there is a bunch of investors who are willing to do this, why not us? Actually leaving our jobs and and building our own and have the bigger share of it?

Ashish Tulsian:

Wow. But what is he running at that time?

Joe Frem:

He was the chief commercial officer and Chief Financial officer of of eathos. Uh, okay. Yeah. Uh, the group has multiple brands. Multiple.

Ashish Tulsian:

Yeah. Nadeem Yeah, the CEO. I did a podcast with him, by the way I’m sure you, you, you might have checked it out and yeah, I, you know, love these guys.

Joe Frem:

Yeah, they know, they know how to do. They know food, to say the very least for sure, which is great because partnering up with someone who’s been part of this organization is also very important coming from an operator mindset. Right. And then we saw things eye to eye on on, on how to build the business. Um, and it was very exciting to both of us to actually take that moment, you know, that leap of faith and say, you know what, let’s set up our business in, in Saudi and, uh, and unlock these golden handcuffs and just go ahead and jump into the opportunity.

Ashish Tulsian:

You jumped into it.

Joe Frem:

And that was that was middle 2022. Middle 2022 was in my last day and Delivery hero was August 29, 2022.

Ashish Tulsian:

August 29, 2022. And that’s when you started Matbakhi?

Joe Frem:

And this is where yes, we started Matbakhi.

Ashish Tulsian:

Tell me, how do you explain what is Matbakhi?

Joe Frem:

Matbakhi is an F&B operator for the hospitality industry. What we do is we operate all the F&B department, uh, for one to four star hotels and some five star hotels. Uh, we we improve the utilization of these kitchens by adding different services such as food delivery and catering, uh, and, and we offload all the operational hassle of F&B, off of the shoulders of hoteliers.

Ashish Tulsian:

So what kind of hotels are your customers like? You know, because most of the hotels, you know, F&B is a significant revenue. My understanding is, you know anywhere between 20 to 30% is the additional revenue that a hotel must make from F&B. I like super serious hotels can go up to 40-50% as well where you know they run great restaurants inside the hotel. What’s your sweet spot? What kind of hotels you know benefit from Matbakhi?

Joe Frem:

So you’re right, most of the one to four star hotels there that can be is around 15 to 20% of their revenues. Uh, the issue is that on the profitability front, uh, they’re, they’re either breaking even or, uh, you know, they’re, it’s not very profitable as a business. Our, our sweet spot, anywhere from 1 to four star hotels size from 50 rooms to right now, we’re taking a 2000 hotel room, thousand to 2000 rooms.

Ashish Tulsian:

In a single hotel?

Joe Frem:

Single hotel. Yes. So the size of the rooms is important. The depth of the of the menu.

Ashish Tulsian:

But why will why will a 2000, and I’m not trying to be devil’s advocate here. Actually, I’m trying to be I’m trying to really understand for a I think 2000 is too big. I think any hotel with 500 rooms even, simply means, to like my understanding is that they have enough captive audience to run at least four restaurants. Lease those four restaurants differently or like to different brands, still make great money and operate their room service p quite profitably at 500 plus rooms. What’s what’s the catch?

Joe Frem:

So in the case of the 2000 hotel room, this is this is a Mecca and right now the F & B vertical in the hospitality of Mecca has is facing like a major inflection point.

Ashish Tulsian:

Hmm.

Joe Frem:

Yeah. Because in the past few years, Umrah was only six months old, so most of the hoteliers decided not to invest in F&B and then offered only rooms and let the let the pilgrims get their F and B from catering companies that are usually outside of Mecca because of the real estate price. You know, real estate in Mecca is extremely expensive. So now that this has changed, it’s year long, all these hotel, probably 95% of hotels in Mecca are asking this question: How can we optimize F&B? The issue is that they don’t have the muscle to actually do it because they haven’t been doing it for the past few years. And as hoteliers, as real estate people, they don’t like F&B. F&B requires a set of skill that is completely different. You know, from from from managing the quality to the suppliers to the day to day operations.

Ashish Tulsian:

The fact that the headache headache of F&B, like just, just the, just taking it up is, is the point, right. You, most of the people don’t want to take that up. Yeah I call I generally tell people that hotels and restaurants are two you know stepbrothers of hospitality industry. Yeah you know they come under the same umbrella but that absolutely 180 degree out from each other. Most of the hoteliers don’t make great restaurateurs and most of the restauranteurs are not able to venture into, you know, hotels that well. I mean, there are real estate groups which are able to do both. But most of the times, if they’re successful operators, are different people. 

Joe Frem:

Exactly and and of course we can think of great great hotels great great groups which have invested a lot of money to to do so. But then think of the Longtail. Think of the 4500 other hotels that are that that big chunk of them is a small group of hotels or maybe like, you know, a mums and pops kind of hotel, you know, it takes a lot of effort.

Ashish Tulsian:

Yeah. You know, so I think I think what you’re saying about Mecca totally makes sense because last year, ‘23 we experienced Mecca for the first time, as you know, from our perspective. So we powered Albaik during Hajj and we saw probably the largest QSR operation of four days. In a nutshell, it’s like hundreds of thousands of checks done over four days. It was it was mind numbing. It was it was great. I mean, for us, there was great happiness because, you know, we could do that. But I think the craziness was was quite something. I don’t think anywhere else in the world at a single spot that kind of craziness is available. And then and we have powered, you know, FIFA stadiums in Qatar. Like the craziness. We saw at hajj in those four days. I don’t think it’s available anywhere in the world.

Joe Frem:

And it’s it’s also it’s going to keep happening keep happening now. It’s going to happen at scale with with the vision 2030’s aspiration to achieve 30 million visitors in all Pilgrims. Expect numbers to even double so. So this is where we it was a big bet for for Matbakhi and we we jumped into that opportunity and we want to double down on this particular part of the world because we believe that this is an inflection point for us.

Ashish Tulsian:

So tell me a little bit more about, you know, Saudi Arabia, that you you went Dubai and you are from Lebanon and now you’re building, Matbakhi primarily in Saudi, is that correct? Why? I understand the why of it from an opportunity perspective, but paint the opportunity from your eyes, from, you know, for Matbakhi, what what do you look at as opportunity today and then next three years? That’s not not 2030, three years from now, what’s happening?

Joe Frem:

So let me start by painting the picture on the why, of course. And then and then we can talk about the three years as plan, three year opportunity in the parts I. So I came to Saudi Arabia at 2008. I was a trainee in engineering company and I experienced it for the first time. Then in 2013 with McKinsey, I used to come here every week to serve different clients here in the in the kingdom. So and we used to stay in hotels, right? All kinds of hotels, hotels in Riyadh, hotels and everywhere. And again, one of the projects I had to travel to potentially 20-20 locations in Saudi and have to actually stay in different hotels in these locations. So I got to see pretty much different levels of service. And the discrepancy is massive, massive. Um, so this is the first opportunity. It was very clear that by standardizing the quality, you can generate value. That was the first opportunity. The second one, obviously, after understanding the clear strategy of of Vision 2030, it was absolutely crucial for, for Saudi Arabia to double down on the tourism tourism front. And you today, if you look at the growth rate in tourism sectors, Saudi Arabia has the highest growth. Obviously, the base is low, but it has the highest growth rate, which tells you that with all the investments that are happening here, the hospitality space is going to is going to double or triple. Now, what’s definite is that, of course, you can go into a five star hotel and not care about anything else. But if you are aiming to attract the number of visitors from all around the world, you have to up the level of the one to four star hotels. And we believe that if we manage to actually create the system and to standardize quality at a higher level, everyone will benefit. This is where the opportunity comes. Now, fast forward three years from now, there are big, big events that are happening are going to happen in Saudi Arabia massively. We’re starting to feel the sense of the announcements. It’s reminds me of 2014 when when Expo was was announced in Dubai, you feel the rush, it’s reflected on real estate. It’s reflecting on the growth rates that you see, you know, the economy expanding, number of visitors. You start feeling the hype, great. How can we capitalize on this in the next three years so we can create a network of hotels that that we can use or a network of keys under management that we can leverage to actually generate more value. And add services and products that would make way more sense beyond F&B. That would be a three year opportunity for you because at the end of the day, whether we like it or not, soon enough we’re going to achieve what, 40% of our target of our five year target in terms of keys under management. Um, so there’s a lot of people who to whom we have access, what do they want, what would like. And in each in Riyadh is different than different than Jeddah. What do they want? If you think this is the biggest question, we have to answer. What do customers want? And this is our chance and this is the opportunity if we manage to do it. Well.

Ashish Tulsian:

No, that’s a that’s a big one, I think. I think I can really hear you and the way you are abstracting it is perfect, right? Because if you think about our, you know, McDonald’s and Starbucks is not the greatest coffee or the greatest burger, That’s just a consistent one. That’s all. When I enter McDonald’s or a Starbucks in any part of the world, I know exactly what I am going to get. And I you know, I think that so many times it just beats better food because, you know, exactly what are you getting your, you know, yourself into. So consistency and predictability in consumer experience be as much better than, you know, better food or higher quality stuff.

Joe Frem:

But but you know it’s if you think about today, the F&B in let’s say one or two star hotel because you know or let’s say a three, to make it easier. Because F&B has been draining money, you as a GM wouldn’t invest in culinary you know muscle to actually develop the menu develop new recipes, source from suppliers. Of course you’ll have a very high level of waste because there’s not a lot of demand. So you wouldn’t want that you want, really the very basic.

Ashish Tulsian:

I think it’s also about the talent. I see that in hospitality industry, you know, while 80-90% of the jobs are actually in non branded, you know one star to three star sort of range. But the fact is that the best talent also does not want to opt for a smaller hotel anyway right so I call it the like the negative spiral of prosperity right so you don’t get the talent because you’re small and you remain small because you don’t have the talent and.

Joe Frem:

You can outsource talent in any case. So you can go and spend for a for for a consultant, for the culinary consultant to come and revamp everything. But on a day to day operation, would you want to invest without knowing that Knowing that you will you’ll incur a lot of losses? In a department that is already losing. This is where you start saying, let’s just let’s just do the bare minimum. Let us keep F&B just to get the occupancy because you know, there’s direct link between having your F&B and then occupancy room occupancy and, and let us, you know, bite the bullet on an F&B and then reap the benefits in the rooms.

Ashish Tulsian:

So Joe I can clearly see that the metric for your success is the number of keys under management, right. So you have, you have your revenue. So how do you look at your business metrics? Is your revenue average tied to a person or particular number of rooms? How do you look at a hotel’s occupancy if you can, whatever you are comfortable with, if you can dice and slice, what is the simplified view of how your business, like when you say if you tomorrow tell me that as you should, we have just signed 10,000 more keys this year in my head, What should I believe? Like what? What has happened?

Joe Frem:

Yeah, we break down the number of so usually it’s the number of hotels under management, but since every hotel has a specific number of rooms, we had to standardize it. So we said, okay, let’s consider every hotel is 100 room, you’ll have 200 and you’ll have 50. But let’s just average it out on 100. How many hotels do we need to actually take the business to a level that we aspire for? We need 10,000 rooms. We need 100 hotels. That’s how we built our our our target. Now you will have so, for example, now we’re having a massively huge opportunity in Mecca with 2000 rooms. You will have these opportunities, obviously. But as a base business, you need to consider a hotel as a 100 key. This could be a four or three or four star hotel. This means that it will have an occupancy of around anywhere between 70 to 75%. It will it will have a kitchen space anywhere between 80 to 200 meters. It will have a lot of business in non in on the breakfast front, maybe less on during lunch and dinner. It will have a 12% or ten, 10% conversion between F&B to room service. Sorry, from room to room service orders. So these are the metrics that we start with and then we say, okay, how can we improve each one so how can we take the 10% to 30%? Okay, people want choice. You put in front of them choice. People want convenience. Great QR code web app. They can automatically have you.

Ashish Tulsian:

Are you doing something to increase the room service orders?

Joe Frem:

Yeah, of course.

Ashish Tulsian:

Can you share some anecdotes what has worked, what has not?

Joe Frem:

So making sure that the customer or the guest knows that you know now there is some some additional concepts in that in that hotel that are cool that are fun on top of the hotel menu. Uh, this is the biggest hurdle, right? When people know they will try it because there’s no delivery fee and you know, in Saudi it’s very high and there is no, no waiting time and 12-15 minutes you get your order. So that’s it.

Ashish Tulsian:

Are you able to do that on on in the room service?

Joe Frem:

Obviously because we are fully integrated between the app, the kitchen display system and if there’s any call for for room service, which.

Ashish Tulsian:

So are using the hotel that you get into, you get like you basically give customers an app through which they can order within the hotel or are you talking about some or do or do the don’t tell about. No, no, no, no.

Joe Frem:

It’s it’s an app within the hotel. And then they also even if they go to the all day all the restaurant there’s also on the table same of the same QR code. You know so we’re trying to trust because we have noticed that there is a very high number of return return guests the hotel. So if you manage to educate them about, okay, these are different.

Ashish Tulsian:

I think speed of services, I mean, I travel a lot, I travel 200 days a year. And one thing that I can definitely tell you is that the the speed of service in room service is the number one impediment for me as a customer ordering from the hotel. Like invariably like the top most, you know, hotels in the world, room service times sucks, it’s not the food but time really sucks like I mean because they because they don’t have any incentive to.

Joe Frem:

Because they understand these kitchens for them not to become for them to save on on their, on their losses. So they try as much as possible to under staff and one person’s pretty much. Have you ever been in a hotel kitchen out of curiosity?

Ashish Tulsian:

Yeah.

Joe Frem:

You would walk in, you’d find like two people, maybe four, too many doing everything, doing everything right. And this is this is interesting part. It’s an asset, massive asset that and usually owners, they overspend on their kitchens because they have dreams of selling the pasta the the pizza, the you know, the the kinds of salads all kind of and reality is, well, they have the breakfast. That’s it.

Ashish Tulsian:

No I was I was recently staying in Five Palm, Dubai. And I remember day one I was there for a week and day one and I was sitting there for the first time because that’s more like popular as a party hotel. And a friend suggested that, no, you should just take a suite, stay there for like through your work week. It’s interesting. I remember day one, end of the day I ordered something. That thing appeared in like 25 minutes. It was hot. It was great. Tasted Extremely well. You know what happened? Over the next seven days, I think I, I, I ran around a big bit for food. And just because I was ordering so confidently, because I knew that the stuff is going to be here in next 25 minutes and it was going to be perfect. And I actually told, you know, them later, you know, a friend of mine, I’m common friends with the CEO and I actually told him, I said, please, you know, pass my message, this is brilliant. I can clearly see a lot of thought has gone into this. This is not by chance. I can see that, because otherwise most of the hotel restaurant kitchens don’t have incentive to be, you know, fast because they look at you as a captive customer and people only order room service when it’s compulsion. That’s not never a choice. But the difference between that compulsion and choice more than that is just the speed of service.

Joe Frem:

Absolutely. Yeah. I heard this not too long ago. It says first time entrepreneurs focus on the product. Second time entrepreneurs focus on distribution.

Ashish Tulsian:

100%, guaranteed, always.

Joe Frem:

But but we’re still in hospitality and throughout our first few or the first 12 months in Matbakhi, our goal was to actually figure out how can you build this new breed of of F&B servicing by merging the efficiency of one word with the quality of the second, you know, being able to actually balance these two and then eventually create this this new breed of of of F&B, servicing was the most difficult part and we keep and we keep learning on this because every day you learn something new that you can improve and this is the beauty of it, the power of really getting to a point where we can say that, look, this type of servicing where speed and quality come together, this is this is the Holy Grail.

Ashish Tulsian:

Absolutely. And on that note, I want to dive into your entrepreneurial journey. You know, I understand that you were there was an entrepreneurial itch. You had been on your own twice before in life, but how was it jumping off the plane this time in 2022? I’m assuming you were coming from a cushy job protected through pandemic. Delivery Hero It’s quite a pretty good, you know, large company. Jumping off. How has been last two years, if I may say, or a little less than two. Right? What’s what’s the what? How’s the heat, the entrepreneurial heat, You know, feeling? Is there heat, you know, first of all. And how are you living through it? How are you coping with it? What has changed in you?

Joe Frem:

So jumping into it was a big leap of faith, of course. And, you know, I remember this is back then. I was saying, will I ever is it going to ever struggle to find a high paying job? That was my biggest question. And when I got the answer on that one, I said, it’s a no brainer.

Ashish Tulsian:

What was that answer?

Joe Frem:

I believe that at this point in my career, there is there’s really few things that that that stop me from from actually delivering on any project. Okay. And, um, and that was both the driver to actually believe that we can, I can get a high paying job and I will if I need to actually go back into employment, I would be able to, uh, in the same time this belief will let me jump into entrepreneurial journey with full fledge all in, you know, do or die. Because other than that, you know, the biggest hurdle for someone is your own perception of what you can and cannot achieve. And if you start putting these barriers and and, you know, these these curtains and then oh no, what will happen if, for example, if if, if, if we don’t succeed or what will happen if if we will run out of money or what will happen. So you start putting all of these, you know, scenarios that scare you and and you don’t solve the problem. You sit and the problems will consume you, you know, So when, when, when I jumped into this, it was definitely due to the huge support of my family, my wife in particular, Uh.

Ashish Tulsian:

She’s still in McKinsey?

Joe Frem:

You know, she, she wasn’t a McKinsey, but she wanted to be in McKinsey. Oh, but she wanted to. Yeah, yeah, yeah. But she’s, she was very supportive and, and this support is not a one time support. Yeah, you should totally do it. No, that’s an every day support. Right. Because of that. A roller coaster, emotional roller coaster that entrepreneurship is, uh, it’s, it’s consistent that. Right. So she’s always there to be the cushion to support, to lift me up when I’m down and then and celebrate with me when I’m, when I’m high. Um, so that was and the belief of look, at this point in our careers, my co-founder and I, we have accumulated all kinds of learnings. We’ve reached a point my, my co-founder and I where we said, okay, at this point of our careers, we’ve kind of accumulated all the knowledge on how to build a business in F&B, in hospitality and how to run and what are the the challenges that we need to avoid or the, you know, the hiccups that we need to avoid. Um, all of this resulted into, into having a very nice journey so far. Um, obviously entrepreneurship is a roller coaster, so the highs are high and the lows are low. But if you know that, if you know that after a low that is high, it doesn’t really impact you as, uh, I mean as it would impact someone.

Ashish Tulsian:

But what what changed, you know, was that a change in the first six months? Because generally, you know, there is one view of jumping, you know, into entrepreneurship and the fact that lows can be really, really low highs can be really high. But did anything change inside you as well? Like experiencing it full on is very different, right? You experienced entrepreneurship and you did not have as many liabilities in the past. And then you’re making an assumption here, right? But I’m just trying to read from your life so far. And this time, you know, you I’m sure you’re taking care of you. You have worked you know, you have had a great career to not have liabilities which may be weighing you down. But then, of course, you have a family. You know, you you know, it’s a different age. Did anything change emotionally after six months, after three months after? Was it a point where you felt oh shit this is real or has it been just smooth?

Joe Frem:

Yes, yes. Uh, yes. I felt this, of course, the like when our our first round, when we were just a PowerPoint presentation, we went and then I talked to a few investors and many we got too many notes right. And most of them we were VCs because we were too Greenfield at this point in time. Hmm. Uh, so at this point in time we said, okay.

Ashish Tulsian:

And people like Eatopi, etc.. Were also raising funds, so I’m sure must be of a little help from a perception perspective.

Joe Frem:

Then and there. Yes. But it was very clear in the later part of 2022 that, look, uh, there’s a, there’s a crisis coming, okay? Everybody’s weathering for that crisis. Uh, those who have already investments with, with, with companies that they are doubling down because to protect these companies and protect their, their interest in these companies. So there was a big challenge to actually raise there. But then we looked at our network, uh, who has been accumulating a lot of like wealth during the past two years. And yeah, we managed to raise what we needed to raise and, and automatically this tells you that whatever challenge you would face in this and that’s the learning, whatever challenge that you will face, you can, you can freeze and say, oh, no, I’m going to die. I’m going to I’m going to lose everything. Or you can say, okay, great, how can we solve it? What are the different things that we should we talk to? Who can who can advise us? Right. Um, there’s always, there’s nothing that doesn’t have an answer. Everything. Any problem can be resolved. It’s just a matter of understanding what you what you should sacrifice sometimes to actually get the answer or get the get the solution done.

Ashish Tulsian:

What the division of work between you and your co-founder?

Joe Frem:

Rodolph is is leading operations. Uh, I’m leading a growth and investor, you know, capital raising.

Ashish Tulsian:

Okay, So like, if I, if I go a little deeper in that, what’s your day like?

Joe Frem:

What like my day like is so there are different practices that I that my days split with. Right. Not necessarily every but of course there are almost five practices.

Ashish Tulsian:

Give me a view of a week if not a particular day right like.

Joe Frem:

So definitely that is a big chunk of it to engage with the team and make sure that that uh, our northstars are clear to everyone and, and we make sure that we always bring back everything that we do into a bigger picture so people see the value and see the, the, the purpose of what we’re doing, because this business is very brutal. If you lose track, sometimes it will consume you and you will burn out. To avoid this. It is extremely important to always communicate why we’re doing what we’re doing, right. It’s it’s it’s trivial, but it’s very important. There’s that there’s a lot of discussions with hotel groups that, that I conduct, uh, to plan our future expansions, uh, discussions with investors for, for future rounds of investment. Um, then I have growth conversations, particularly, of course the number of hotels, but also, uh, understanding what are the new concepts that we need to that, that we need to launch, uh what are the different spend that we need to focus on in terms of marketing or, or, or overall on the growth side? So.

Ashish Tulsian:

So when you say marketing, you mean you know your customers or hotel’s? 

Joe Frem:

So It’s a B2B2C, right? So we have a B2B element, Okay. Just directly hotels, which is and then you have the B2C, which is the food delivery as well, because from that hotel we service the region. And then you how.

Ashish Tulsian:

Many virtual brands are you running? You’re talking to the virtual brand.

Joe Frem:

Today We have, Yes. Yes. Which is which is a small part of our business. Um, we have 12 brands and planning to take that to to 24 by the end of the year.

Ashish Tulsian:

So when you said 12 brands right now and it’ll become 24, let’s say each brand represents what like a particular cuisine or do you have multiple brands in the same cuisine as well, how, how do you, how are you thinking about this?

Joe Frem:

We have we have different brands and the same cuisine was with different, you know, positioning for each brand. Um, obviously we have identified some key cuisines that we need to be in for sure. And it always starts from if we are servicing a certain hotel, what would it mean? What would the guests want? Let me give you an example, in one of the hotels that we’re shooting not too far from here, by the way, they have a big French, uh, community or big number of French guests. So making sure that that we have a Cod sandwich, making sure that we have, you know, a profiterole brand. These are little things that will transform the guest experience in the hotel. And also, of course, we will sell it on on on food delivery platforms. Now, the big question is some talk sometimes you look at Burger Brands and Saudi Arabia are are big, right? Yeah, it’s a big cuisine. So of course we will have a burger brand. Of course. But is this a differentiating factor for the guests inside inside the hotel? Maybe not. So that’s why sometimes you actually focus on the niche part of of the burger segment, right. Or or you would want to go an extra mile on the type of burgers that you do, uh, to actually create the differentiating factor for that hotel or for that, for the, for the guests inside the hotel.

Ashish Tulsian:

But are you synthesizing different brands for different hotels you take up or are you also trying to standardize certain brands that might be available in like literally every hotel?

Joe Frem:

You’re right, so there is a base for pretty much all the hotels. We know what are the brands that are or what are the cuisines that are a must to be in every hotel. But then eventually you will start finding. Um, so for example, in one of the hotels that we’re working in and we, our top selling brand is not, is not appreciated because the base the structure, the demographics of that hotel are completely off, right? So they’re, they’re focused completely on, on Americans, English and South African. And so so one of our top selling brands is not selling there. Great. So this is where you start. You start of course, we’re still a new company. We still have a long way. But if you think of the end game, you will have a large portfolio of brands where we would pick and choose which brand and which location and so we can elevate the guest experience and then of course sell on on it for delivery, uh, in these locations.

Ashish Tulsian:

So you’re talking about the practices that you do with the team, right? So one is this part which is growth, you know, making sure that your northstar, you know, team is aligned. What else?

Joe Frem:

Um, there’s, you know, stakeholder management, including investors. I like to make sure that all investors are always engaged. They feel that they have a say in the business. They feel that that they are part of the business. They’re not just, you know, quarter to quarter kind of an engagement, which really don’t like. That is, of course, the the team building. And this means understanding what are the capabilities that are missing in our team and how to attract the best talent there is the vision practices, and this is something that I focus on myself, which is, okay, great, this is the vision for Matbakhi. Where do we want to take? How can we take that business to oh, to become 10x, right. And what are the implications on the organization. So the vision practices that certain projects that I like to lead, uh, is very specific. Uh, like gives us.

Ashish Tulsian:

Uh, give me an example.

Joe Frem:

So unlocking, unlocking a particular, a particular service in a particular hotel was extremely important for important for us because it would unlock for us the development of the relationship with hotel and eventually will get us more hotels, which happened, by the way, so that service, the way we defined it and how we needed that we needed to actually to go, you know, I needed to go from 30,000 feet to the three feet level, which I did, and I got engaged with the rest of the team and we actually delivered on this and, and and this is something that that is extremely important because I truly believe at this stage of our of our existence, one needs to be able to really plate or wear multiple hats and and have a different leadership style, right. Uh, sometimes, sometimes you have to to to lead from the front, from the back, from the middle. And it’s extremely important to to be in the trenches as well, to avoid being seen as someone just sitting on their throne and just seeing things up in the air. Right? So you need to get your hands dirty sometimes. And I take that opportunity not only to learn more about the business and about the conditions that that the team has to go to, but also to become way more effective in the conversations. Imagine how this will enrich my my conversations with other does when you get when you can communicate this level of detail. So so yeah I think this is uh these are things that they usually do.

Ashish Tulsian:

How do you keep yourself enriched? Do you read?

Joe Frem:

Yes. Yes, I do.

Ashish Tulsian:

Any, any particular book, uh, right now or do you read in like last one year?

Joe Frem:

That there’s a lot of nice books of that. And then there’s also the, the recency bias I can only remember.

Ashish Tulsian:

That’s okay. That’s right. Yes.

Joe Frem:

There’s, there’s a nice book called The Power of Habit. Don’t know if.

Ashish Tulsian:

The power of habit?

Joe Frem:

Yes. This is a book that. So let me answer the question before how to keep myself enriched. I’m usually inspired by journeys and and eventually by the people who actually run these journeys. I’m way more inspired by how you got to the end result instead of the end result itself. Right? Um, I’m a big basketball player, so I’m a big fan of basketball. But, um, for me, of course, Michael Jordan is the best player in the world. Um, but I find myself inspired by Kobe Bryant because I was capable of seeing his routines and his work ethics way more online than I managed to see Michael Jordan’s. And this is where I develop this appreciation on his mentality, on his, on his approach, on how his discipline. Right. And that inspired me a lot. And this kind of discussions of, you know, 1% improvement, this kind of continuous, continuous pursuit of of excellence, this is something that inspires me a lot and the people who actually deliver on it.

Ashish Tulsian:

So what do you consume for this? Like, is it like online videos? 

Joe Frem:

Videos, of course. Books. So for example, in The Power of Habit that I just mentioned, um they talk about some of the habits that Michael Phelps that so Michael Phelps, other than the the God given fact that his his arms are very long he used to watch every day a rerun of his whole training. Imagine. Every day Christmas, New Year’s doesn’t matter he goes to training, comes back, watches the whole video before sleeping every day like imagine if you do this every day. Mm. How and you start you know, taking stock may maybe the, the stroke was wrong. This is how you develop this day, day in, day out, this, this differential that will that will expand two three years down the line.

Ashish Tulsian:

Subconsciously becoming your own coach.

Joe Frem:

Exactly. The power of habit. This is these are the these cues that that you have on a daily basis drive to to to to self-improvement. That’s one book that I like another book that I was I’m still reading right now is, is um uh, The Diary of a CEO. It’s also very interesting book. Uh, it’s not only for CEOs, it’s just for any person who wants, who wants to make it big. Uh, it talks about 33 principles. Um, yeah, some of them are very interesting. For example, one of them is, um, the five buckets. This is something, and, and basically it says that your journey in life is five buckets, right? The first one is what, you know, right? The second one is your experience. The third one is who you know, the fourth one is what you have and the last one, which is your resources. And the last one is what people think of you, which is the reputation. And then slowly but surely, you have to, throughout your career is you have to fill every bucket and be patient in telling each and every bucket. And sometimes you would jump the gun, right? You you would you would do something that the people will know about. But that doesn’t mean that you have to fill the other buckets and you need to be as a as a professional, aware of that. So you fill these buckets and avoid having this self-belief that will drive you eventually to failure. It’s beautiful. I’m still reading this book. Uh, it’s nice.

Ashish Tulsian:

Joe. That is that is brilliant. And I think, you know, I have a, I have a few takeaways, but one of the things that definitely stands out for me is that you’re definitely a clear thinker, and the clarity that your, you know, you exude is is hard work that you do every day. You’re intentional about it. I can I can totally see that I’m, you know, extremely happy to hear about Matbakhi. And I know that your going great guns this is this is going to go places. You’re in a great market, great timing and, you know, a lot of things are coming together for you. This was a great conversation, Joe.

Joe Frem:

Likewise. Thank you very much.

Ashish Tulsian:

This is brilliant. Thank you for doing this.

Joe Frem:

It’s my pleasure.

Ashish Tulsian:

All The best.

Joe Frem:

Thank you.