Ashish Tulsian: Hi. Welcome to Restrocast. Today, my guest is Nadim Majdalani, CEO of eathos. Nadim packs over 17+ years of experience across private equity in restaurants. Somebody whose career was built over not only great work but even better relationships, relationships with the world of money, where credibility and your results are everything. Somebody who believes that you need to find family at a workplace or other friends at the workplace to make life better. Nadim has probably played all kinds of roles between the spectrum of private equity and restaurants. So starting from being on the private equity buying side to, you know, being an investor on board, to the restaurant groups, to becoming an operator himself and taking over as the CEO for the company. What’s great about Nadim’s outlook on the restaurant industry is that it’s a balanced view when it comes to deep questions like whether to go all out on the physical restaurants or whether to do dark kitchens and virtual brands. But at the same time, find this balance and the fundamental principle that the customer is king. And if your brand is customer-centric, the customer is going to order from you, doesn’t matter which kind of format you operate in. Nadim is also somebody who is a keen learner, somebody who is talking about podcasts as one of his greatest sources of learning. I loved my conversation with Nadim, for he brings passion to this industry which I saw swinging both sides equally from finance to the culinary side and the brand and the customer experience. Do watch. Nadim, Welcome to Restrocast.

 

Nadim Majdalani: Thanks, Ashish. Thanks for welcoming me in. I look forward to this discussion.

 

Ashish Tulsian: Thank you for accepting our invite. From what I read, what I saw, you know, so far it has been a great enriching journey. I can see, you know, very rare few, you know, are the ones who start something and then, you know, return back to it. And I think I am really interested in that part. I really have the urge to jump to that. But I will hold that. I want to know, how did you get into the restaurant industry? You know, in the first place, because my thesis is that nobody chooses this kind of insanity for themselves. They get trapped somehow and they start, you know, living and loving the pain. What happened?

 

Nadim Majdalani: So my journey into the restaurant space started probably on my first day as a professional. so I studied engineering in Lebanon and then did a masters in the U.S. and, eventually decided to move away from engineering and into the investment world. Because the Masters I did was a little bit away from engineering. I did a masters in construction management. I’m a civil engineer by training and it started, you know, I felt like I was not going to be an engineer all my life, and I wanted to be closer to business. So that was my bridge. So my first job was working in, in private equity, investing in, in Paris and a family office called the Quilvest. And on my first day on the job, I get assigned,  a project or a portfolio company to follow. Culver’s had made an investment in,  in the French chain called Pomme de Pain, which was at the time probably one of the largest,  if not the largest chain of sandwiches in France with north of 50, 50 locations. And so I saw private equity myself as a, as a way to get, especially Quilvest was not industry specialized. They were kind of industry agnostic looking after the fundamentals of the companies rather than the industry in particular. And so I saw this as an opportunity to get acquainted and get exposed to a bunch of different industries, eventually decide which industries I really like and maybe move out of the investments world and closer to the operations down at some point down in my career. So on the first day I got  I got assigned to Pomme de Pain, started following the investment with the, with the investment director who was following it. And I kind of liked it. First I think a lot of people like the restaurant industry because they believe it’s an easy industry, right? I mean, you, you know it as a customer,  you kind of have a sense of how it’s operated.

 

Ashish Tulsian: It’s glamorous.

 

Nadim Majdalani: It’s glamorous. You want to eventually own a restaurant and be able to, you know, to brag about it and invite your friends all over. And, and people don’t really understand the complications behind it, but eventually when I started, I didn’t see all the complications. I saw the ability of scaling businesses, from an investment perspective, so I was wearing my, you know, obviously my, my investor hat. It’s easy to understand and explain how you can invest in the restaurant chain, grow it, eventually sell it, and make a good return out of it, on an Excel sheet. So, so you invest, you put some that while you were before acquiring with the business, with the profit you repay the debt with the cash, you continue growing the company with more that probably and at some point,  if you’re able to have a concept which has a strong unit economics, you’ll grow it and eventually you’ll, you’ll sell, you sell it with a decent profit. So that was my first foray into the restaurant industry. Now Quilvest as a result of this investment and looking at some others started developing a little bit of a focus, thesis around it. Both in Europe where I was based as well as in the US, they sort of, so Quilvest had done a bunch of restaurant deals in the US and Europe looked at a bunch also, which we lost because of high valuations at the time. So after Pomme de Pain, so Pomme de Pain, we were a minority shareholder, so we’re not very active, we’re not sitting on the board. But my first, the first time I really dove into the restaurant industry is when we acquired the chain in the UK called YoSushi. So we acquired, you know, the, we acquired the whole company, alongside them. So alongside the management team, the founder, Robin Rowland stayed as the CEO, to help us in the growth of the company. And since we were majority shareholders, we were sitting on the board. It was my first experience actually sitting on the board,  and living on a monthly basis and the challenges that they were facing and learning so much from Robin, specifically someone who followed me in my career. I mean, I also followed in my career,  and we were on the, on the, on the deals where we were the majority shareholders. We were quite active. So we had an active approach trying to support the management teams wherever we could with our, you know, analytical firepower, etc. So I helped Robin look into the opportunity of expanding YoSushi into the US. Spent a lot of time with him looking at this specifically, spending time in the restaurants to really understand the economics. And so this is where I kind of.

 

Ashish Tulsian: What year was this?

 

Nadim Majdalani: That’s 2008, 2007-2008. So two years into my career, into private equity,  and I kind of loved it. I mean, it was also a good period for YoSushi growing a lot,  generating great, you know, unit economics, very profitable units and you know, we all only had positive stories to share, etc. at the time before it hit a little bit of a hard place. And then, and then an economic downturn. But during those times, I really, out of all the industries I sided the deals and, you know, retail clothing, we did deals in the safety equipment, like car seats for, for kids, all sorts of different industries. But the one which I, which I really, you know, got interested and excited about was the restaurant industry. So then I went to get my MBA for a couple of years, came back and.

 

Ashish Tulsian: But what was the lure?  So, you know, you were on the board you saw and you’re, you’re working with the founder. Yeah. You already saw your, YoSushi’s, you know, like from a, from a good kind of like your chair was frontline seats, Right? What was the lure? Like What, what is it? What was that oversimplified idea you had of that Oh, wow. You know, this is great. Like, why wasn’t this a great business in those days if you, if you remember?

 

Nadim Majdalani: So at the time, I started seeing the complexity of the business. So I never initially was like, oh, that’s a great industry. Let’s dive into it, et cetera. I saw the complications, but eventually you got complications across all different industries. Right. And what I really liked about this industry is how tangible is the impact you can do and how fast you can see it. So it’s obvious. It’s a customer facing industry. It’s a B2C business. Not a B2B. So it’s limited room for error at the end of the day, every mistake and it can be very costly, but at the same time, when you’re running a restaurant and you see that sales are not doing great, then you start evaluating the team. You can guess from team dynamics, maybe that maybe you’ve got the wrong manager for that team. You may not be a bad guy, but you may not be the right guy for that type of team. So rather than changing the whole team. You just shift around the managers across the sites and you see how fast things get the turnaround. I mean, how, how the team dynamics can change how and how quality of service eventually gets reflected right away on the sales and on, on returning customer loyalty, etc. So it’s this element of being able to touch the, the, the, the what you’re doing on a daily basis. See the initiatives that you’re doing, whether on new, further product development, whether on marketing activities. I learned a lot with Robin, about the five P’s. I mean, he was always about the five P’s about product and price and promotion and people and place. So he was my school, I mean, at the end of the day, spending so much time with him allowed me to really understand all the, you know, kind of all the elements of the restaurant industry being on the board as an investor gives you this, this kind of unique vantage point where you’re able to, to have this kind of 360 degrees view of the business and decide with where you eventually want to dig into a bit more. And so there were always, you know, trying to read PnLs, OK, why is staff cost higher in this unit?

 

Ashish Tulsian: It’s also, I think, the privilege of, you know, having a zoomed out 360 degree view and the power to zoom in, you know, to something is quite cool.

 

Nadim Majdalani: Right and and you’re able to do that if you’re on the board or as a shareholder and if you’re kind of if you’re your approach is more of a hands on approach. So we were not meddling in their day to day but at the same time they valued our, you know, our approach and our they saw the value we could add and so yeah, I mean that was.

 

Ashish Tulsian: Like, why did you go for MBA?

 

Nadim Majdalani: So, I grew up in Lebanon. So I was born in Lebanon.  My father passed away when I was less than one year old. So I never met my father. I was raised by my mother. Eventually, my stepfather. And my mother is an overachiever. She’s a super achiever, superwoman. She, I mean, she spent all her career in the United Nations you know, in the children’s fund, UNICEF, supporting children and going on missions in Rwanda and all sorts of difficult places. So I saw her as an overachiever, and she was always pushing me. She was always, you know, pushing me to get better grades and to be ambitious and to go for the best, you know, always being at the top of the quartile was not enough. You need to be top decile. And down the line eventually when I finished my undergrad, that’s why I left then. And then from Lebanon, Jordan, then France eventually finished and finished my high school in Lebanon, did my undergrad in Lebanon. Then as I was applying to business school, to my first masters, it was as much about achieving myself as much as, basically getting her, validation if you, if you like, and I was able to get that. So I got admitted first then to Stanford for my first masters, and eventually I saw a point that when, when I was working in private equity, if I really wanted to reach the top levels and be a partner eventually down the line, I had no plans at that time to move out of private equity when I, when I went for my MBA. So I felt I needed to get an MBA. So I applied to two schools only. INSEAD, which had a one year program. And then I applied to the Harvard Business School, eventually got into Harvard, my employer Quilvest wanted me back. So they finance a big part of my MBA. So that was a good couple of years. I had a little bit of a different experience versus some of my other classmates because I went there married and with a child.  So my son was one year old, and my second son was born there. So it was very interesting, probably my best.

 

Ashish Tulsian: OK, you took your family there.

 

Nadim Majdalani: So yeah, we moved on. We moved all of us. We moved out of Paris and to Boston for a couple of years.  So as my, you know, most of my classmates were going on weekend trips all over. I was, I was more of, you know, the family guy. But I enjoyed it so much. I mean, it was a wonderful couple of years. It’s a big investment, both from how much it costs and from an opportunity cost as well, because these are two years where you’re in their prime, prime professional years.

 

Ashish Tulsian: And moving the family. I think it’s, at a commitment and aspiration level, it’s a big decision.

 

Nadim Majdalani: That’s a big disruption as well. But, yeah, I felt like I needed that if I really wanted to progress and be on a fast pace and, and in my career in private equity. Eventually came back. So they financed that. I have the commitment to stay with them for a couple of years after my MBA. And I was happy to come back. I mean, it was a wonderful company to work for and the group of people as well and when I came back, I met with a partner who had joined in the interim who had a long experience in the restaurant space. So, he had started as a restaurateur himself and eventually,  after, after being in  you know, cooking school,  and,  and we, we clicked really well. So his name is Ziad Umlad. So we, I started working with him on a bunch of deals that he was looking at in the restaurant space,  and eventually you know, he, we clicked well because I knew the, you know, I knew the industry from before, before my MBA. He knew it well. And also from a personal perspective, we  were,  you know, getting along. And so at some point we get a, we, we would get approached by some of our investors at, at Quilvest from the region here, from the Middle East. And Quilvest had never made an investment in the Middle East. They had an office in Dubai, but mostly for fundraising purposes too. As a representative office for months to fundraise, to invest mostly in the US, Europe and Asia. And they told us, you guys did a bunch of deals in the restaurant space, why don’t you look at the restaurant sector here in the Middle East because so much is happening. We’re talking, this is 2012, 2013. 

 

Ashish Tulsian: Was about to ask just that. So this is the time, the boom time.

 

Nadim Majdalani: It was. Yeah, exactly. So a couple of years.

 

Ashish Tulsian: Expo 2020 has been announced.

 

Nadim Majdalani: Exactly. So, so 2014 it was announced if I’m not mistaken, it was right before the announcement, but you know, all the malls were opening up. I mean Dubai had gone through the crisis and recovered, and they told us you guys know the restaurant space better than most of the funds we talked to. So why don’t you look at it and if you guys decide that it makes sense, we’ll back you so at the time, what is today’s eathos, started on a piece of paper in an office in Paris. And, at the time I told Ziad, listen, I mean, you’re working on that. I really want to get it, I really want to help you. I want to work on this because at the time I was starting, I had a second kid. I was starting to think, to feel like life in Paris was a bit difficult when you have young kids,  from a logistics perspective, you know, if you’ve got a couple of working parents, you know, getting help, the schooling, it’s, it’s a very fast-paced environment. Big city, metro, metropolitan city. It was far from our parents who were getting older as well,  in, in Lebanon. So at the time, we were like, OK, why don’t we consider a move towards the Middle East? And so, I helped Ziad. We were, we built a small team looking at the opportunity to bring a colleague here and, and, in Dubai, it was spearheaded by Fady Michel Abouchalache who was the CEO of,  of  Quilvest. And is today still the, I mean, we continued and he’s the chairman of eathos as we speak.

 

Ashish Tulsian: So, eathos started as a part of that?

 

Nadim Majdalani: As part of Quilvest, but at the time, it was built as a separate entity to Quilvest. And the idea was to open restaurants across the MENA region, and do three things. One is to sign franchise rights for concepts from, mostly from the West who are not present in the region because that was really working at the time. Look at M&A acquisitions because that’s my background as well. And eventually down the line we knew that the risk profile was higher, but eventually down the line create our own concepts. And we did all of these in the last,  ten years since eathos has been or nine years since eathos has been in operation. I joined, I joined, I decided midway through the project that, that, so at that point I approached Fady, I told them listen Fady you know I, we were always discussed that I would be working Quilvest with the idea of seeing different industries and eventually deciding which one Ilike most. Well, I’ve decided mine, I want to work in the restaurant industry, I want to get closer to the, to the Middle East,  where my family is at, our parents, et cetera. So I want to move out of the investment, space and into the or, you know, into the.

 

Ashish Tulsian: This post eathos coming up?

 

Nadim Majdalani: In the middle of eathos being started. So, he said, are you sure? I’ve decided I want to be, I want to be on the ops operational side so he said OK. Sure. So I was technically the employee number one of eathos while, it was still a project on paper.

 

Ashish Tulsian: How much of a shock or, the difference was being the navigator who feels that he knows, what it is like to drive. And now being really.

 

Nadim Majdalani: So, so let’s see, I it was a half of a job, let’s call it this way, my role. So I was not running the company at the time, so at the start, I was running finance because of my background and the business development. And we hired a gentleman and his name is Faisal Al Younis to be the CEO of the company. He came from the, from Azadea there before and so he was, he was the, he was in charge of all the Ops he had all the operational background. And I was, I was focused on dealmaking from a business development perspective, signing new franchises, looking at new locations as well. And I was in charge of finance initially,  as we grew, we, we, we brought in the financial CFO and I was really focused at the time in the, in corporate development. We did a couple of M&A deals which, which until today have been, you know, very, very great. I mean great, deals for us. We bought Sushi Art, which is the franchise of Sushi Shop, which is a European based, chain, and we acquired Joga, which is a homegrown concept here, which was started by,  Lebanese gentleman. His name is Ziad Mahdi. We, we bought the business in 2018.

 

Ashish Tulsian: What is it called?

 

Nadim Majdalani: Joga.

 

Ashish Tulsian: Joga.

 

Nadim Majdalani: They do mostly, what we do. Wrap, salad, sandwiches, mostly lounge business. We’re present in the office clusters in the DIFC city. These kinds of, you know, highly, highly populated office clusters. And so I played that role. There was a change of CEO down the line. Great gentleman. His name is Andy Holman. Came in, in 2018 to, to steer the, steer the company at the time I became a chief development officer. So I had the, there was a like a transition period where I took the reins in between Faisal and Andy. So that was really, that was really when I really dove into it.

 

Ashish Tulsian: What year was that?

 

Nadim Majdalani: So that’s  2017. So between call it May 2017 and uh early 2018 when uh when Andy came in and uh and this is where, I mean where I got really into it and I think the aspect which was the toughest and the biggest,  the biggest shock for me is around managing a team. So I was always second in line before that and now all of a sudden you’re, you’re at the helm, you’re, you’re the team reporting to you with the sensitivities around the team that you need to  to take care of them. Some tensions. You know, it was not always rosy. We had, you know, some, some, some bad locations. We entered into some bad brands that we not bad brands per se, but not for maybe not the right brand for the right time. And in the, in the, for the context,  and so managing that was the, I think the toughest part of the business.  I like to do deals,  and now all of a sudden that was not the key priority. I mean, I had to do some firefighting both on the teams perspective from a restaurant perspective. We had  growing Saudi business, which was not performing exactly as per our expectations  so it was a little bit of a baptism by fire. But I learned so much during these, these eight months. Now I was happy that eventually,  Andy came in that I was able to focus again on the, on the, on the business development side of things, which eventually takes us a couple of years later, COVID starts, um.

 

Ashish Tulsian: But you moved out in between, right?

 

Nadim Majdalani: So I moved out after, in 2020, so, so COVID started obviously we all know COVID started early 2020, um the business goes through a very difficult time, like all customer facing businesses, we, we, we do what we do I think better than some of our competitors because delivery was a key, key element of all our concepts. So it’s not like we discovered delivery and we started having to do it during COVID as an afterthought. All our concepts were geared towards delivery. So actually we benefited from a market share growth perspective in hindsight during that period, and we did it well I mean, we had, you know, proper packaging, proper operations for deliveries, et cetera. So we’re not discovering it.  But we went through, I mean, I saw Andy steer the ship,  you know, brilliantly during the time, I saw what empathetic leadership meant in terms of what the decision he took to keep everyone in the company. We all took, you know, significant pay cuts for a few months, I think between April and September. And eventually we got back to our salaries. We did not let anyone go. So that was a big commitment from him because he saw that there was going to be light at the end of the tunnel eventually having to first of all, from a human perspective, where would these people go? And there was nowhere to go at the time and and, and also down the line, it was a good investment also down the line because there was going to be light at the end of the tunnel and we, we wanted to be positioned well. So we did a lot of investments into dark kitchen and virtual brand at the time, you know, it was the hot topic, and for many reasons. Mostly, some of them personal and some of them professional,  I decided that it was time for me to see something else. So we’re talking summer of 20, summer of 2020. I got approached by Majid Al Futtaim which is  the largest retail lifestyle conglomerate in the region. And they offered me  the position of head VP of Corporate Development for MAF retail, which is the full entity. So 400 plus locations across 17 countries. And I would be looking after, it’s kind of a know, almost like an entrepreneur inside the inside the, the entity where we’d be looking at creating new businesses for for example, so looking at B2B in particular, looking at joint venture opportunities, overseeing all the relationship on the delivery side with the aggregators. So so it was a very exciting role and a large company and for many reasons I decided that I had hit the you know, the end of the road at it was that I wanted to try something else. Sure. So, it was a very difficult decision. It’s probably, I mean still remember it today. I mean, the call I had to Fady first, our chairman who was my mentor at the end of the day we, we met, I mean first day he, he interviewed me for  for my role at Quilvest back in the day, he actually, the story is quite funny. He I met, I had met him a year earlier and I was interviewing for after my, my consulting job, I want to get to back to Paris after my, my master’s in engineering and he has a background in and consulting management consulting and I wanted to do consulting was, you know, it was exciting  thing to do at the time. So, so I started interviewing, getting interviews in Paris for a consulting job. And so, I had met him a year earlier and he, he helped me, he was very gracious and, you know, gave me a couple of hours to kind of coach me into what with, consulting interview, is all about and what they ask typically, et cetera. And so he didn’t know me from a business perspective. We know it really well. And so we, we, we learned a lot about each other in these two, 2 hours. And so eventually I started doing my interviews and I stayed in Paris for, for a couple of weeks to do all these interviews. So I saw him again, and he took me out for dinner one day and and I think that was when he said he thought that, OK, maybe Nadim could help and in our organization. So he took, he asked for a piece of paper from, from the, from the waiters and, and the pen, and he started drawing on the piece of paper how private equity is so much better than consulting because it’s at the intersection of. So there was a consulting circle and investment banking circle and legal circle and obviously there was an intersection of the three circles and private equity was just there. And so he sold it to me within, you know, took him one dinner to to convince me to, to, to stop, stop everything else I was doing and actually joined the joined Quilvest. So he’s been my mentor since day one and having to call Fady on that day and on September 1st I, I remember September 1st 2020 is the toughest phone call I’ve had to make, in my life. And I was dreading it and, and it didn’t go well. Obviously he was, he, he was, he didn’t took it very, he didn’t take it very, very positively after, you know, having worked together for more than 15 years, because he expected me to come and tell him I’m thinking of leaving rather than my decision is already made. And I also, and the reason I did that, and I think and for good reasons, the reason I did that is because I didn’t want it to look like I was you know, trying to negotiate my position up or ask for another job, et cetera. The, so I had made my decision I informed him so for, for,  for a little bit of time, our relationship was not as good as it was.

 

Ashish Tulsian: But, you know, it’s funny that you said that because I am in life personally is of that opinion of, of, you know, what Fady expected you to do, right? I am of that opinion. I, I actually am quite vocal about it that when people work together in any capacity. Yeah. You know, it’s not about marrying for life.

 

Nadim Majdalani: No, of course.

 

Ashish Tulsian: It’s about, you know, keeping each other informed about the variables that are hitting you in life. Yeah. Because life is happening parallel to each other, right? And like, if you’re drifting apart, like, talk about it in time, not just because it can be saved, but maybe just because, you know, the entire, the organism between you two that, that the team can bear with it. Dropping it suddenly, you know, can be can be disruptive.

 

Nadim Majdalani: No, no, of course. And I think with the benefit of hindsight, I should have done it differently. So so with with the stress and the my, my, my with, you know, COVID going on and having being away a little bit also from the family, I think I may have, may have I was definitely clumsy in my delivery and and eventually I regretted it and regret the way it happened. Not, yeah, not I mean, more form over form over substance.

 

Ashish Tulsian: I think, I think the fact that you’re speaking about it, you know, speaks volumes anyway. I mean it definitely, you know, speaks volumes of the fact that you care about it.

 

Nadim Majdalani: No, no, definitely. I mean, I valued this, this professional relationship as much as any professional relationship I’ve ever had and still till today. So, yeah, eventually I went to, to MAF, but at the end, like I said, I mean, I’m employee number one. eathos is my baby. I mean, everyone knows that in my, you know, small group of friends, my family and even my all, you know, all my professional network. So I stayed in touch with,  with the eathos people. Enjoyed my time at MAF. You know, I, it was my first foray into such a large corporate group. I mean, I always used to work in small teams. Be it at Quilvest, small teams. eathos was obviously we started from, from scratch and,  and the team was pretty, pretty small at the head office at least, very fast decision making you know, kind of sometimes operating in the silo, especially in my function business development. So kind of left side of the brain started to decide to do something and right side, I’ve already started thinking about implementation, and all of a sudden you enter a group which is, you know, the last ten, ten, 10 billion plus dollars in revenue, billion plus in profit across 17 countries, multiple layers. So it’s a new animal for me. I mean I’m not used to that. But I mean I’m a kind of a people’s person, so I can, I adjust.  I learned the ins and outs and I learned a great deal. I mean, there’s a lot of things that today I wouldn’t be the professional that I am today had I not stepped out to see how large corporates are managed and step back and into eathos. And so things around, uh uh for example uh uh processes and procedures very well structured, etcetera. Things around performance management of your employees. What, what, what,  what’s the performance management cycle to evaluate your employees, the quality of the people as well around the table. Obviously with the such a sizable group you can afford to, you know, top the people. So learning a lot from my peers as well. Learning from Hani, the CEO on how to manage teams. I mean eventually being kind of the, the  the maestro of managing different, different personalities, different teams and all playing, I mean, all going towards the same goal. But I think the things that that, that I learned most is the power of having a strong vision,  and strong values and having them communicated and trickled down all the way to the front line frontliners. So, so MAF, the vision was very clear. The vision is to, create great moments for everyone every day.  It’s a very powerful, powerful vision. And you, and you breathe it on a day to day basis. There are three values for the company, bold, passionate and together. And it every touchpoint you feel the power of having a strong vision and values which are very easily. So, so I’m going to give you an example.

 

Ashish Tulsian: Give me Some anecdote. Yeah.

 

Nadim Majdalani: So first of all, the vision is everywhere, in the office in the malls. So you on the, on the introduction day, I mean, the, the, the, the orientation day, you get the pack where everything gets really well explained. And the recruitment process. So when we’re hiring people, the evaluation grid,  is supposed to meet, I mean the candidates are supposed to meet, are supposed to be evaluated on how bold we can, we think they can be, how much of a team player they can be from the togetherness perspective, and how passionate they are about the industry. And so we had to rank people on that. So there’s a constant reminder of what their values are and  and in the performance management cycle, same, same thing, you need to evaluate people and there was a leadership model as well with, you know, several, I forgot not all of them, but several traits of  of leadership that needed to be followed. And so being, I mean, and if you went to a cashier at, at Carrefour or cashier at the Vox cinema, everyone would be able to tell you today, what’s the vision of the company and what are the values of the company. So I thought it was really powerful. Uh.

 

Ashish Tulsian: That’s actually quite amazing.

 

Nadim Majdalani: To align a whole organization of 40,000 people towards the same vision and  and basically the vision is kind of your your direction. Every decision you need to make needs to, you need to keep that vision in mind, and and uh and use it as a, as a direction and you’ll make the choice of your choice be based on whether it serves the vision or it doesn’t. And always when all your interactions think about the values of the company, togetherness was very important. So at some point, you know, you get into an argument with someone from another department. Eventually, if we’re both able to step back and think about it together and you’ll find solutions eventually. Fast forward I get called by the, my relationship with Fady started to get a little bit better, different life events allowed for that to happen. And eventually the board pulls me back. I mean, Fady calls me back and, and says, listen, I mean, there’s going to be an upcoming change in leadership. Would you consider coming back as a CEO of eathos? And like I said, I had never lost, you know, connection with the business, with the people, mostly the people behind the business.  A lot of them I had, you know, either hired myself or interacted with myself directly. And so while leaving eathos was, was the, the, the most, you know, the toughest decision I had to make coming back is probably one of the easiest I’ve had to make.

 

Ashish Tulsian: Just walking back into home.

 

Nadim Majdalani: Exactly. Coming back home. I mean, and that’s, I mean, when I came back  I had a LinkedIn post, and that’s what I sent, coming back home. It just, I felt like I belong. This is where I always belonged. And I was, I was very happy to come back. I was, I was very grateful for the couple of years I spent at MAF. Learned a great deal, you know, left some wonderful colleagues behind who a lot of them are still my friends today, but I felt like I knew what needed to happen for eathos to move to the next level. I, I could, I mean, I could really know, like.

 

Ashish Tulsian: What was that? And was it, was it because, after running it, like being a part of that from the inception to so many years, you know, the blindness that all of us get genuinely because you’re on the field. So you, you lose the sight of the field stepping out at times just gives you a bigger picture. Did that happen?

 

Nadim Majdalani: Yeah. Yeah. So looking at it from the outside helped definitely the two years I spent at MAF Felt as well. I mean, another thing I learned at MAF is the power of of omnichannel,  and of of data. And I mean, omnichannel was, you know, a big priority of mine. When I came back to eathos. There were a few strategic choices that were made, towards the end of my first life that it was that I wasn’t fully aligned on and and which ended up, you know, being bets in the dark kitchen space, for example, a virtual brand creation space which ended up not not as profitable as initially anticipated. And I kind of knew there were some low hanging fruits, that we could, we could extract from the business, some things that needed to close something in the so, so I had a very strong view of how I could help the business.

 

Ashish Tulsian: And you’re building this view while you’re watching eathos from outside?

 

Nadim Majdalani: Yes. Yes. And also having discussions with, you know, privileged discussions with some of the people around. So I, I knew more about the, I’m going to say I’m a shareholder. I stayed as the shareholder at eathos, by the way, during the, the years I had left alone. So I have visibility as a shareholder. And so I knew what what they were struggling with, sometime, and, and what were where I mean, it was not a business which was suffering and, and, you know, that needed a huge turnaround. But, but there were a few things that needed fixing and one of them is around the very strong focus that or emphasis that was put around, dark kitchens and virtual brands at a time when when you know, at the time of COVID and that continued after COVID. So we have an investor base which is, you know, quite traditional. They expect to make their money down the line from selling the business as a restaurant platform. So, and we decided to, you know, we do invest heavily in the dark kitchen space and investing maybe on an uneven field versus some of the competitors. So you had, you know, the Kitopi of the world and the Reefs of the world who were raising.

 

Ashish Tulsian: Oh so you were thinking about eathos as a competitor.

 

Nadim Majdalani: Well, at the time, I mean that was, that was one of the disagreements that the, but eventually not a level playing field with these guys because they were raising tens and hundreds of millions of dollars.

 

Ashish Tulsian: Also it didn’t work for them.

 

Nadim Majdalani: Well, eventually if you look at  both of them, I think Kitopi pivoted their model to some extent right now and to more often omni channel player rather than dark kitchen operator. And we can touch on that as well. I think it’s very interesting what they’ve done. But it was at the time when the, they were marketing themselves as a, as a tech company or not, not as a, not as a restaurant operator and commanding, you know, huge valuations as a result of that. And they invested, to be fair, they invested a lot on their tech and the way their kitchens are set up and  and owning the whole, you know, chain from the tech perspective from A to Z. So huge respect for them, but they were pouring tens and hundreds of millions of dollars into, into this developing and we didn’t have that kind of money. And our investors were after the bottom line not after, you know, building,  building top line. And, and eventually one of the, also the reasons why, why, why, Kitopi pivoted a little bit. Their model, they did not change their model, but they, they started moving more into buying brands which have brick and mortar presence is also because they were profitable. I mean, eventually it helped, it helped their profit go up and also it helped them get stronger content in their kitchens because it’s a race for content. The analogy I make in the, in the, in the space for people who are not from the industry is I say a dark kitchen is like Netflix. So, so you’ve got Netflix, which is an empty box, but so Netflix is only as good as the content it has, right? No one will sign up to Netflix if they don’t have the strong content. And so the dark kitchen is the same. So it’s a race to having the strong restaurant brands in your kitchens that were able to generate volumes without having to market too much.

 

Ashish Tulsian: The ones we have to the ones who already have legs. And you know, you don’t want to create, have them build it.

 

Nadim Majdalani: It. It’s very difficult to build brands. I mean, so that’s the that’s the other fallacy around building virtual brands. So a lot of people started saying it’s so easy to create the virtual brand, right? I mean, it’s a menu.

 

Ashish Tulsian: Look at these guys however they are doing.

 

Nadim Majdalani: Exactly. You create the menu, you you put some generic packaging stickers, sticker on it with your brand. It doesn’t fly it’s fine. You just replace it. In reality, I mean, that’s if you say that to a marketing person, you just, it just kill you or eventually pass out. It takes years. It takes decades to build brands. And so thinking that you can build a brand.

 

Ashish Tulsian: Also also I think that, you know, what you’re saying is correct. I, you know, I think of this entire fallacy of building a brand. I think my perspective is it stems from, it stems from this, the lack of conceptual understanding of what a brand is in the first place. Brand is not what you say. It is. Brand happens when your customer starts saying something about you, right? And for a customer to start saying something about you, that means you have occupied a part of their mindshare for some compartment, right? You can be a particular cuisine or an item or a or a catchment area or geography or whatever, right? Or I’m in this area. I’m going to have this shawarma. Right? Right. It can be a geographical mindshare or it can be an item mindshare. That has to take many years just, you know, by logic because that customer has to get reinforced great experience again and again. Otherwise, how will this happen? It won’t work, right? So anybody when they say, I think this entire vocabulary, when somebody says I am going to build a brand, I’m like, No, you don’t. You know, customers build a brand, you you don’t do anything.

 

Nadim Majdalani: I totally agree with you. And I mean, this fallacy is also the result of the times it was started in, right? I mean, it was COVID, it was a delivery driven business. So everyone was doing that. And some people have done well doing that. I mean, some there’s the Go brands, for example, just to give you an example, which was started. Go brands, it’s called Go Brands, but there was Go Chinese, Go pasta, Go salad, and Go healthy. And so they created an umbrella of brands on the Go name. And so and eventually each one, one of the things the aggregators will tell you is,  specialized concepts do better than kind of everything for everyone type of concepts. People, when they go online, they want to order from a specialist and so they built this reputation of being specialist within the  within each of these cuisines and eventually,  the positive  kind of connotation or the positive spread that happened from having Go. So people who tried Go Chinese and liked it would go and would be more willing to start to try Go salad and Go pasta, et cetera. So they’ve been successful eventually they were acquired by Kitopi. but there aren’t a lot of people who, a lot of success stories in the virtual restaurant space. And down the line the world reopened, people started going out again and all of a sudden having brick and mortar presence and.

 

Ashish Tulsian: Became a bigger and better.

 

Nadim Majdalani: Became important as it used to be, as important as it used to be. And so today, we have a couple of virtual brands that we kept today. There’s a lot that we had to shut because they were not doing volumes and eventually we had to discount a lot for people to try us. We had to buy visibility on aggregators to, to buy us. And eventually it was not trickling down to the bottom line. We were losing money on every quarter. But there’s a couple that we we kept today and we’re actually bringing them out of the dark. So, so our burgers started with virtual and now we’re opening Alien Burger is our burger concept, which we’re, we’re, we’re thinking out of the dark now. First of all, we started going into events. We have a truck now called The Beast and and we’re opening in the, in the Khawaneej area, a container soon and in December it will open. We have another brand which is very dear to our heart because also we created it from scratch called Mashrou3, which does Lebanese daily dish concept and which has a very strong following among the Levantine community. But I think part of the reason why these brands worked is one is the focus on the specific cuisine, the consistency and the quality and eventually the reason the way that we made them look like they’re, they’re real brands, they’re not virtual, it’s not like a generic packaging where you stick you put a sticker on they actually we your only touchpoint to the customer is the packaging, right? When you’re a virtual brand, and so we really invested heavily in having top notch packaging, sealing machines for the stews so that people are wowed when they open their bag.

 

Ashish Tulsian: And a large part of that experience, right when a customer walks into your restaurant, you control their experience. Exactly. But when your food goes out.

 

Nadim Majdalani: You lose part of it.

 

Ashish Tulsian: You lose a large part of your control of that experience. And the only experience they have before eating your food is unpacking.

 

Nadim Majdalani: And so we worked a lot on that and so be it on the the the, you know, the, the packaging we’re using, the methods we’re using to seal like I was saying, the quantities as well. I mean, we were looking generous, at a time where value for money was a very important thing. These are the main reasons why these brands started to really get traction and get repeat orders, et cetera. And eventually we decided to bring them out of the dark. So, so we’re really excited about doing that next.

 

Ashish Tulsian: 

But just to complete the story, right? So you, you basically said that, you know, you were called back, you walked into home, you know, you, you came back home, you, you know, and there were like decisions which were taken at the time, you know, due to COVID for dark kitchens. You of course, were kind of against them, you know, from a principle, you know, from like how they look and the economics of it. So then what did you, like, You entered and what did you do?

 

Nadim Majdalani: So I’m not against dark kitchen per se. I just thought the betting the future of the, of the company on that was, was not the best use of our capital. And two I’m not a believer in virtual brands per se. So dark kitchens can serve a purpose, but we were not using them, to serve that purpose specifically or we’re not using them efficiently basically. So what I did is we opened, we had opened a bunch of kitchens and hotel and hotels, for example, there was this wave of saying, OK,  hotel kitchens are underutilized assets, so let’s go in and pick them up and we’ll take care of the breakfast and we’ll do you know, a ton of room service and  and we do deliveries from there. Well, guess what I mean, it’s difficult to get room service. The, the hotels which have decent room service, you know, a high level of you know, occupancy typically would like to control the experience. So you end up going into some of the, you know, apartments, hotel, apartments hotel or long term stay hotels where people are not ordering room service, are not coming for breakfast. And so, so this stream of revenue is not there. On top of that, I mean the Dubai Municipality comes and smacks you a 7% municipality retroactively, this happened to us on delivery revenues that you’re doing from the hotel which, which kills your profitability at the end of day. And they looked at it retroactively and so we closed all our hotel kitchens, we closed we stopped all the virtual runs that were not making money using, you know, staff and losing money but eventually were. The reason I’m saying we I’m not against per se is I think betting the future of the company was the was not the right approach but using it as a complement or as an enabler of the brick and mortar strategy is definitely a good approach. And and since I’ve been back to eathos, I’ve shut I think four dark kitchens four or five dark kitchens, but we’ve also opened three or four dark kitchens. But to go back to the Netflix fallacy, the, the Netflix the Netflix analogy. We put strong content in this kitchen. So we have our strong brands in the kitchens we opened, we have tortilla, we have sushi art, we have Kababji, we have the Rosa’s Thai all our brands which have strong kind of strong brand equity. And we’re using these kitchens as a radius extender, to either reach new areas where we’re not, that we’re not covering properly test new areas that we want to eventually cover. So it’s a great, I mean dark kitchen when you think about it, it’s a very low, low investment, low CapEx way of testing a new,  new trade area. And we’ve already done, we’ve gone full circle where we tested the trade area for Tortilla and uh and the circle of the JVC area and now we are signing a location in the JVC area for a brick and mortar. Eventually the brand will graduate from the going from the dark to brick and mortar because I actually believe that strongly. It’s a graduation.

 

Ashish Tulsian: It’s a plus one.

 

Nadim Majdalani: It’s a graduation from, from, from the dark and to becoming customer facing because we’ve seen it time and again whenever we were in the trade area with a dark kitchen, whenever we opened a physical location, not only did we benefit from the dine-in business, but the delivery business exploded as well because.

 

Ashish Tulsian: Your credibility, your credibility goes up because the customer.

 

Nadim Majdalani: Customer know that you’re on the corner, you’re legit or that you’re not there and know that you’re not delivering from 20 to 20 minutes out, you’re literally around the corner. So, so we’ve done that and we were able to turn, a business which was struggling from a financial perspective into a hugely profitable business today for us. I mean, all the dark kitchens we’ve opened recently from the second months they turned a profit, even the dark the virtual brand, the couple that we’re operating, are making profit out of these dark kitchens. And so when you use dark kitchens with a very specific purpose,  and you’re super strict about, you know, having to meet certain criteria in order to open dark kitchen in a certain area, then they can be a great enabler to your business. And we’re going to continue building dark kitchens.

 

Ashish Tulsian: Nadim, on Dark Kitchens. And you very strongly said that Dark Kitchen being profitable. I,  I wonder, and I, you know, of course this is my, from my vantage point, it is also information, you know, but, but mostly it’s, it’s not the information or the numbers, it’s the information of the, of the economics, you know, of any business. And I’m talking about country level economics, right? Because we, we look, we, we, we have aggregators placing orders in collective brands doing united country level, et cetera. And when we, when we see that, I I believe that it’s borderline impossible to turn a profit on a dark kitchen unless of course, you’re flying either insane volumes or insane AOVs, then those can be outliers. But for like mid level AVO, mid-level traffic. It’s very difficult because that pie does not have the juice. I mean, like one mistake. I mean, even if you are super efficient, I I’m yet to see like somebody reporting like a bottom line theoretical bottom line possibility of 5%. It’s very difficult what’s what’s happening here?

 

Nadim Majdalani: So I’ll go back to the content at the end of the day and I’m going to bore you a little bit with a little bit of a PnL structure. And why why why did people first get into the dark kitchens right? There’s a couple of lines in the PNL. So let’s assume that food cost is pretty much of the same, right? Whether you’re operating actually, it’s a it’s higher in the dark kitchen because you’ve got the packaging element. 100% of your sales are deliveries versus in…

 

Ashish Tulsian: And let’s give numbers that tell me the COGS and tell me the packaging COGS.

 

Nadim Majdalani: So COGS, I mean, if you want to operate profitably, you want to reach a COGS, which is below 25%. Theoretically, food costs. Mm. Packaging, you’re probably going to be depending on how much you want to invest in the AOV because that’s the that’s the biggest impact. You’re probably going to be somewhere in the 2% range if you’re not investing a lot to 5% range, if you’re really, you know, putting very premium packaging into your into your program.

 

Ashish Tulsian: Will you be able to do that in 5?

 

Nadim Majdalani: You can do that within 5% if you have volumes because packaging is a volume game, correct? I mean, there is the whole of.

 

Ashish Tulsian: My perception of high end packaging, honestly, is like as high as 8%. Of course, if your AOV is very, very high, again.

 

Nadim Majdalani: If your AOV is high or if your volumes are high, which which command I mean, the, the, the as you know, I mean the from packaging suppliers, the higher.

 

Ashish Tulsian: Correct. How much can one consume.

 

Nadim Majdalani: Exactly how much can you consume? But you can reach 3 to 5%. I mean, so call it 5%. Then the biggest two lines where you can really create an impact when you’re in the dark kitchen versus when you’re in the brick and mortar and the mall, for example, is the rent and the labor costs. The rent because you’re not paying, I mean, if you’re in the mall location, you’ll end up paying 12% in the good case scenario, 15% in an average scenario all the way up to sometimes 20% if you’re not doing great volumes and in the high and and the very high footfall mall.

 

Ashish Tulsian: And you’re on the bad spot I think after 15.

 

Nadim Majdalani: After 15, it starts being becoming very difficult to make money. So when you’re in the dark kitchen, if you do enough volumes you could drop below 5% occupancy cost. So that’s kind of seven to 10% that you’ve able to, you’re able to save on your bottom line. Right now labor costs you have only the production people you don’t have the front of house to to, to serve the business, to serve their staff. You have some dispatch people. So these are the, and you’ve got the managerial or supervisory layer on top, but you’re able to, save on labor costs on paper. But the, the, the lines where people have grossly underestimated the, the structure of a PnL in the kitchen when you’re running not great content when your brands are not premium brands, which all of which carry a strong brand equity is two lines on the PnL. It’s discounting and it’s marketing so your only way to the customer is through the aggregators. Let’s face it today where in the world where we all are and then we all know we have our own channels we’re pushing an omni channel project. We want all of the brands to be under the same roof. But omni channel includes aggregators and the customer. I mean, you need to follow where the customer is and the customers today They are going towards aggregator because of the convenience and you know, for a ton of reasons why, which I mean.

 

Ashish Tulsian: You and me, you and me will also go to aggregators, right? Because of convenience if not discounting.

 

Nadim Majdalani: Well, I try as a restaurateur to to go direct to support.

 

Ashish Tulsian: Your your empathy.

 

Nadim Majdalani: But eventually, eventually the customer does not think like that. And so your only way to the aggregate, to the customers through the aggregators and today the race has been on the aggregators for visibility has been huge. I mean, there’s a huge oversupply of restaurants in Dubai, whether they’re physical restaurants or virtual restaurants. And so if you if you want to get a share of the mind of the customer on the aggregator, you need to start investing and you invest. So they’ve all figured that out and they started their schemes where to where you can, you know, pay per click and banners, where you buy where you buy visibility on the aggregators to be out there, especially when you have a brand which is not recognized by the customers so that’s a big underestimation of how much you’re spending. So so you spend much more on the marketing line and sometimes it could go to, you know, 10%, 15% of your sales.

 

Ashish Tulsian: I see, I see global average being ten to 12% on aggregators.

 

Nadim Majdalani: Exactly. So so now the customer saw you maybe he will click, but now you need to entice him to order from you. So you need to give him a discount because now all the markets is discount driven and so, so, so all the aggregators are putting huge, you know, advantage or visibility and campaigns are going, I mean you can if you just listen to radio or see billboards every week there is a big campaign going, going on, on, you know, getting 50% off certain items buying, you know, buy one, get one, et cetera. So you need to give discounts for people to try you, especially if the brand is not again, if it’s not strong. And so when you add the and the discounts are significant and it could go from 20% all the way to 50%. We’ve even seen people put the 60% discount on that which is I think is crazy.

 

Ashish Tulsian: 60?

 

Nadim Majdalani: 60% discount. And when you add you know the fact that the another line which is the aggregator commission where when you have a mix of a hybrid model where you have them more than half of your sales if you’re a restaurant you don’t pay commissions and versus some other where you’re going 100% through aggregators who will take anywhere between call it in the 20% range if you’re a very large group all the way to 35% probably if you’re a mom and pop single store trying to uh trying to do deliveries when you add everything up it doesn’t add up. Then you start losing money on every order that you’re generating and so the aggregator will tell you we’re only taking 35% of uh or 30% of your, your top line and you’ve got the food cost, which is a 25% or maybe  30 with the packaging. Then you’ve got a 40% contribution margin on the, but I mean they’re ignoring labor they’re ignoring rent, I mean all the other items. And so you’re in this scenario where you’re losing money, like you said, I mean on average. So the way you break that is to go back to line by line. You can only break that if you have a strong brand, if you have a brand which resonates with customers, which is and usually today, let’s face it, we’re in the there’s, it’s an experiential industry. People like still to go out exchange with their friends.  and so what we lost during COVID came back and even stronger after COVID. And so strong brand equity for me means physical presence.

 

Ashish Tulsian: How do you, how do you, what is the metric that you measure across channels or on aggregators, given they don’t tell you who the customer is, they don’t give you the data. What metric tells you that it’s all well?

 

Nadim Majdalani: Multiple metrics. One metric they do. So what they don’t give you,  but as the customer level, what they can give you as an overall is the percent of repeat orders. Right? So this they, they’re, they’re happy to share with you, the click through rate. So how much, how many of people who have visited your page or actually went on the order and order your customer rating. Obviously that’s the that’s the most obvious and visible to everyone. Basically, your ability to be a price leader and your category and still generate volumes. I mean, eventually this is the biggest, for me, the, for the, for me the biggest proxy to, to brand equity is the willingness to spend of the customer.

 

Ashish Tulsian: By price leader you mean the top price?

 

Nadim Majdalani: Right being able to price higher than your competitors and still generate volumes so I think when you think of companies like Apple, they’re able to, with a, with a similar product command the 30, 40% premium and in price.

 

Ashish Tulsian: More than that actually. I mean if you, if you compare to what Android goes for in so many countries in the world like like Apple can go for almost as as much as 1000% premium.

 

Nadim Majdalani: And so eventually there are a lot of KPIs that you’re able to look at and to to give you a sense of how you’re doing from a brand equity perspective, how are you being perceived by the customer.

 

Ashish Tulsian: Do you measure all these religiously?

 

Nadim Majdalani: We, we do it religiously. We have meetings with all the aggregators, I mean, we have the advantage of being on the larger side as a group versus some of the, you know, mums and pops and.

 

Ashish Tulsian: How many, how many concepts and how many kitchens?

 

Nadim Majdalani: We have nine brands and across 40 locations between U.A.E and Saudi Arabia, mostly in the UAE.  And so we do if not monthly, quarterly meetings with each of the aggregators where we do a full business review at the brand level at the site level, understand what’s going on. And so this is, this is where I participate, but there is ongoing discussions every day with the, between the aggregators and ourselves to give us visibility on how we’re doing ops metrics. How much percentage of uh orders were delayed, were the rider had to wait at the restaurant, how much time were we open on the platform versus closed, how much percentage of our items were visible versus out of stock I mean, everything is measured. I mean, the advantage of working with aggregators, which are all tech companies, is they’ve got data and they cut it and slice it the way you want. And if you’re as long as you ask for it and you don’t go into, you know, territories which are which, where you, you ask them about market share, their market share or your market share within them or your competitors numbers, Obviously, they’re quite happy to share.

 

Ashish Tulsian: I mean, your interest in aggregators is interest technically is aligned. You cannot win them or they cannot win you by being against each other. You have to be on the same side. Of course, they of course, are biting from your from your pie. But I but I think one thing that you touched upon quite strongly and I personally am a believer of is that you know, for an aggregator, assuming and given that you both are on the same side, the brand and the aggregator, if you actually are able to generate brand pull, and if an aggregator understands from their data that a large part of your customers actually search your name. And then click and then convert, you know, whether they give you the data or not. But you will always be in the power position to negotiate better commissions because at the end of the day, you know, they just want to make sure that there is a repeat business happening. And if they can see that, OK, your traffic is your traffic, they can discount that.

 

Nadim Majdalani: And this is this is why been there’s been a war for it’s exclusivity by the between the aggregators. I mean, it’s even more.

 

Ashish Tulsian: That only happens for the brands who have weight.

 

Nadim Majdalani: Exactly but in Europe, it’s even more aggressive between Deliveroo and Uber, for example, Uber Eats like people like brands getting thousands of dollars upfront to go exclusive with them because the aggregators understand the power of the brands and the pull. I mean, people will follow the some some some people will will follow the aggregator. But some brands, if they know that the brand is only available on that aggregator, will go out of their way to get there from the brand they want to order from. And the aggregators understand that. And so eventually it is it’s still a race. I think it’s a bit less aggressive today in the in the in the market right now. The risk for exclusivity of the brand.

 

Ashish Tulsian: I think I think that’s that’s that’s UAE because the UAE is I think it’s quite monopolistic now for you know, let’s say Delivery Hero, Talabat, right. But in the markets where monopoly is not the the share is not that skewed, the race is on.

 

Nadim Majdalani: But it depends on your concept. So for example, today you’ve got Talabat, which is the leader in the market, you’ve got Deliveroo, you’ve got Careem, which is, ramping up Their volumes. You’ve got Noon as well, which is which is looking into entering more aggressively into the food business. But depending on your concept, you know, I mean some of the brands we know, OK, this is a Talabat brand. Oh, this is more Deliveroo brand because of the customer customer, the customer base behind them.

 

Ashish Tulsian: So Deliveroo still is a very European Central centric you know, heavy customer base. Right?

 

Nadim Majdalani: Westerner’s,  I wouldn’t say on the Europeans, but Westerners in general, I mean Talabat has a more stronger Arabic or kind of Emiratis slash Arabic, following.

 

Ashish Tulsian: What happened to Zomato’s base? Did it, did it go to Talabat truly or did it go to like did it get divided?

 

Nadim Majdalani: It’s an interesting question because when, when they acquired Zomato and eventually when Zomato decided to exit the market, Talabat had all the tools to I mean, they handled, you know, customer data, et cetera, to recover the Zomato volumes or a very large proportion that was Zomato volumes. But what I’ve, what we’ve seen at the time, we were not on Noon, but what we’ve seen is it hasn’t happened that way. It got spread across multiple platforms. So we, so, so for example, we were, and with Sushi Art with Zomato, we saw Talabat volumes go up with Sushi Art, we saw the deliveroo volumes go up with sushi art.  And hearing anecdotally about, about it from other people, we understand that Noon recovered the bunch of their, of the Zomato customers because of who the customer is behind Zomato. So Zomato, to go back to this analogy, there was a lot of, South Asian population behind going after the, given the Zomato, the, you know, Zomato where it’s coming from. And so they followed Noon apparently more so I’m not, I wouldn’t say that Talabat didn’t or Delivery Hero didn’t manage that property, but eventually they did, they went they aggressively with the, with the trying, you know, aggressive offers so that Zomato customers to bring them to Talabat. But you know the, the, the all the aggregators were ready for the disconnection they of Talabat. Right. They all went on aggressive discounting for a few weeks afterwards knowing that the there was.

 

Ashish Tulsian: There’s a large base.

 

Nadim Majdalani: A five to 10% market share of the of the UAE market probably closer to five that was up for grabs. And so so eventually it got spread I think that Talabat got the most of it, but but still the other people got it based on the customer who are behind that.

 

Ashish Tulsian: Nadim you talked about in between that you know, from being second in line when you became, you were at the forefront for a while in between. You know, it was, it was quite it was quite a task to be suddenly, you know, sensitive and to, you know, manage the emotional crisis of the people side of the things as well. What’s this Nadim 2.0 and the current one, how are you as a leader and you know, how have you like what are the two or three things that you feel have evolved inside you?

 

Nadim Majdalani: So first of all, I was able to see it from the outside and I mean that allowed me to really evaluate the business from the outside and, and coming up with a plan with 100 days plan of what I wanted to do. And then back so that helped. Seeing other leaders operate while I was at MAF also helped me,  do that. But at the end of the day, there was a positive momentum when I came back, a lot of, you know, some people in the organization were happy to, I mean, people I was close to were happy to to see me back. And there were a few modifications that were done on my, on my direct line of reporting as well. I’ve made some, some decisions in terms of, you know, bringing new people in, and, and eventually you need to show results. People, people, whether it’s your board or your team, they need to be behind you. And so I want to say people signed up to, to my plan. Eventually when I came back, I was very clear about what I wanted to do with the business with both with my board as well as with my management team. I put it on paper, I, you know, presented it to the whole, you know, head office organization. And most people, were, supportive. And so at the end people see good results. They continue supporting you. So today I’ve had two I’ve had 200 crises,  but having, having a first, because now it’s been a little over a year that I’m back, having had strong financial results, has definitely helped me,  navigate through this, these times. Now how I’ve developed as a leader, I think if I had to define myself in few words, I would probably say I’m an empathetic team builder. The way my, my way of management is try to gather a team of strong individuals who are each very strong in their own areas of expertize and try to get them all to shoot in the same direction I’ve seen when I was at MAF people who were able to, to do that and that, you know, I’ve learned quite a bit from them I’ve learned the empathy from, you know, some of the, some of them, you know, my life experiences on the personal level in the past. I’ve learned that from Andy, my, the previous CEO of eathos during, especially during the COVID period, and I have this ability to put myself in other people’s shoes and see it from their perspective, which a lot of leaders cannot do or are not willing to do. And so I’m able to do that I’m kind of work hard, play hard type of type of leader. Or I want this to be in the organization. I don’t believe sometimes, you know, some people advise against, you know, building personal relationships in the work space.  we spend so much time in the, with our colleagues that if you, if you artificially want to build walls, it’s counterproductive at the end of the day. So I think, I’m not, I’m not a proponent of of you know, you know, building artificially walls. We will build relationship, we will become friends, we will see sometimes each other outside of work and this will strengthen the work as much as long as you’re able to, to make the difference between, you know, this is personal, this is professional. And not, and not start you know, not the personal relationship, but starting to affect your, your professional dealings with these people.

 

Ashish Tulsian: I think that, like, absolutely. And I, and I just want to make a point here of just building upon what you said. I totally agree with that. And I think a large part of, current urban mental health crises is honestly a function of this, this feeling, information, undercurrent, whatever you call it, that you don’t have relationships at workplace or you don’t, you know, hang out with people you work with I think that’s like a sure shot signing up for a Mental health crises for sure, because people you are spending your like almost to a third of waking life with if you can’t relate to them and you are trying to seek some relationships on weekends, right? You’re screwed. You’re 101% screwed. I think you’ll you’ll bel you’ll be miserable. I mean, yeah, you’ll have to fill that gap with a therapist that there is no other way. Therapy is not bad. But the point is that if you’re if you’re signing up for that instead of you know, having relationships at work, I’m a I’m a big believer of of that. Either you work with people who you can relate to or you start relating to people you work with, whichever way it works for you.

 

Nadim Majdalani: And another thing, I mean, going back to the your question on the Nadim 2.0, there’s this very the notion of trust. So some people will say trust needs to be earned. So I won’t trust, you know, my, my direct managers until they earn that trust. So I come from a different philosophy. I give my trust. And so I see the, you know, I see the positive things in people. I give my trust by default. But one very strong thing that I learned in my early days in private equity, one of my,  my, my direct managers told me trust does not exclude control. This is a very interesting line that I’ve kept. And so I trust you, but it doesn’t mean that I’m not going to review the work you’re submitting I’m not going to check on you, et cetera. So I give my trust by default. but I control, I see, I see one very important aspect is communication. I’m trusting you, but you need to communicate with me. You need to tell me whenever you’re facing an issue. Hopefully you come back, you come back with what the issue is and what is your proposed solution rather than give me a problem. Right. But, but I trust you by default. But but on the flip side, if I lose my trust in people, it’s very difficult to go back from there. So I see that, and I try to you know, instill it in my kids today. I’ve got three kids, and, you know, kids, we’ve been kids. There are things you say to your parents, the things you don’t say to your parents, but I try to tell them to reinforce this notion of trust and and how difficult is it is to recover trust once people have lost trust in you. But by default, I give my trust. And, and, but it’s happened in the past that, you know, some people have not delivered. And, and we’ve gotten to the conclusion that,  that it’s not productive to continue in this, in this relationship because, it’s going to be, you know, toxic for both, both parties and the other thing is, on, on the, my type of management, I’m not a micromanager. And to go back to the previous point, I mean eventually if you, if you feel me breathing down your neck, that probably means there’s an issue. So I’m not a micromanager, but I’m, I need internal communication to be at its best all the time. Eventually I need to be informed. I cannot, I cannot be blindsided. At the end of the day, that’s the, that’s the most important thing for me. But as I see people delivering, I mean, we, we improved and we implemented the OKRs after my, my return to, to eathos. We’re tracking it on a bi weekly basis. So people can, you know, there is this forum where we, we discuss this at the leadership level on the, on the, on the, on a, you know, bi weekly basis. If we start deviating, people will see it. And I think it’s very important eventually, but I let them do their thing I let them and I’m there to, you know, call decisions when they need to be called, resolve conflicts, when they need to be resolved. But let them do their own thing. At the end of the day my Ops director is a much better operator than I am. My marketing director is a much better marketeer that I will ever be. So, get out of their way, but be able to align them towards what the, what the vision of the company is and have them, you know,  portray the values of the company as we’ve selected them. So that’s one of the things that right after a couple of months after being back as we, we, we took a couple of days off and decided collectively as a management team what was the company purpose, vision and values. And we’re trying to stick to it because it’s the fruit of a collective exercise. So people that people feel like they, they own it.

 

Ashish Tulsian: Nadim how do you, how do you nurture yourself? What’s your, how do you learn or do you do anything specifically to, you know, keep yourself fresh, nurtured, challenged, growing?

 

Nadim Majdalani: So, so, I’ve learned I mean, I’m, I’m a, I’m a cancer survivor. So, when I was 22 years old, I was diagnosed with the, non-Hodgkin’s lymphoma when I was in Stanford studying, so, so it allowed me to, it was a very traumatic experience at the time, but eventually being able to get out of it and still being, you know, around 20 years later has a, made me a stronger person but also realign my priorities. And so health is, is is a very important element now in my life. I mean, I’ve went through ups, I’ve gone through ups and downs from my health perspective, but  the way I nurture myself right now is I’ve picked up a sport recently called, touch tennis which which is a  a variant of tennis basically, which is different than other sports, which is kind of the sport everyone’s playing today, but basically smaller court than tennis.

 

Ashish Tulsian: Is it like pickle ball?

 

Nadim Majdalani: It’s quite close to pickle ball but different. We use the same type of racket as the tennis only a smaller one. Softer ball.

 

Ashish Tulsian: It’s a variant of Tennis.

 

Nadim Majdalani: And so I’m doing that. I got hooked to that. So I use that as a, as a I think it’s the most fun way you can ever, you know, burn 600 calories in an hour. So I try to do that as much as my body allows. So now I’m having a little bit of, you know, knee issues and, and shoulder issues. So that’s what I do from a health perspective. To nurture my soul, I’m a foodie and so I,  I enjoy going out on restaurant and, you know, meeting people and enjoying new restaurants, which gets on my wife’s nerves sometimes because when we would go and on and plan a trip, the trip would be, you know, centered around which restaurants we need to need to, to, to visit.

 

Ashish Tulsian: I know, I know the feeling. Yeah.

 

Nadim Majdalani: And so,  which is like, I eat to live, you live to eat. And that’s pretty not far from reality. I mean, we’re in Rome with, with my kids and my wife this summer. And I got them to, to wait for 45 minutes in the, in line to, to, to eat a pizza. And they were like, come on, we’re not going to wait I am like believe me, it’s going to be worth it. And so at the end of the meal, they were all like, Oh, you know, this is one of the best pizza we’ve ever had. So, so, yeah.

 

Ashish Tulsian: And that and that And that’s the most gratification.

 

Nadim Majdalani: I still remind them today.

 

Ashish Tulsian: Like a proud daddy that I found this place.

 

Nadim Majdalani: Exactly. They were not very happy during the 45 minutes we’re waiting in line but but eventually yeah. I mean dealing with people around the meal, I mean,  interacting, sharing stories. This is what nurtures my  my soul.

 

Ashish Tulsian: And what for the mind?

 

Nadim Majdalani: I’ve started picking up a few podcasts recently. Audio books. I’m not a big reader. Audio books has helped me. Uh.

 

Ashish Tulsian: Which one did you listen?

 

Nadim Majdalani: I listened to setting the table by Danny Meyer. Recently, which was quite, quite interesting. The character is, is amazing. I have, I mean, I visit, you know, restaurants as well. I have, I inspire myself from restaurants. I, I visit also. I mean, there’s a few, there’s a lot of, you know, restaurateurs in Dubai which,  which I admire. One of them could be the, Natasha Sideris from the Tasha’s group. I mean, everything they do is, the attention to detail, the quality of the service is incredible. I mean, every, in every venue, the day that they open, I haven’t met her personally. Hopefully it will come.

 

Ashish Tulsian: I’m, you know, my team has been, you know, trying to get her schedule aligned. So some day soon I would love I’ll be getting her on the couch too. Chat about those details.

 

Nadim Majdalani: And but it’s, I mean, some people just get it right, and, and she’s been able to to create concepts which have a very strong identity and, and who get people to come back and eventually be able to go back to the brand equity part. People have a willingness to pay which is higher than their competitors.

 

Ashish Tulsian: And I see that. I totally see that. Who else, apart from them, that you admire?

 

Nadim Majdalani: I respect a lot Mert Askin, I mean, going into the larger group,  Azadea, I think he’s a great leader. I’m good friends with the Sumer Hamadeah who is the founder of Akiba Dori, Square Pizza and he’s opened, you know, some nightlife venues as well. So there’s a few people I don’t want a list too many people that I’m forgetting.

 

Ashish Tulsian: No but these Three are already great.

 

Nadim Majdalani: But yeah, I have a lot of, a lot of, you know, good connections. I enjoy going to these conferences, meet new people, bounce, bounce ideas. And that’s also what I do for my mind is interaction with people from the industry, getting good ideas you know, on podcasts as well. I mean, I like to have a walk when everyone’s asleep. I live not far from, from, from Kite Beach,  in this Jumeirah area. So I would go at 11 p.m., 12 pm, go up for an hour and listen to podcasts and get inspired and go back and take some notes on my phone and, and try to implement them in the, whether my life or my,  my business. So  so yeah, that’s what I do too, to stay busy.

 

Ashish Tulsian: Nadim. This is, this is absolutely a phenomenal conversation for not only you know, it’s like such a great journey, but also there are so many things that I resonate and agree with you on that it’s, it’s, it’s amazing. Thank you. Thank you for sharing your story and, and your secrets. I’m sure people who will listen to this are going to love it.

 

Nadim Majdalani: Thanks Ashish. Thanks for having me. And I really enjoyed it as well. I mean, it went very smoothly and fast, actually. And, yeah, I look forward to more conversations with you. Thank you.