Those of us in major urban areas take for granted the convenience of ordering food through an app on our phone and being greeted by a delivery driver 30 minutes later. But this isn’t the norm in many other parts of the world. For small cities and towns, food delivery can be challenging due to a variety of factors, including poor transportation and technological infrastructure, few restaurants that deliver, and relatively limited demand compared to more populated areas.
These are challenges being met head-on by HAAT, a Middle Eastern startup that specializes in meal delivery in infrastructure-less cities not currently served by traditional food delivery services. Their delivery platform utilizes AI/ML algorithms to optimize delivery routes and reduce delivery times and they have a mobile app that customers can use to place orders, track deliveries, and receive real-time updates on the status of their orders.
I sat down with CEO and co-founder Hasan Abasi to discuss the logistical challenges meeting this unique need.
Turning disadvantages into advantages
“HAAT is Arabic for ‘to bring something,’” Hasan says. “Our platform is bringing food delivery to secondary and infrastructure-less cities. When we say infrastructure-less, we talk about cities without addresses or cities with high cash payments. The restaurants may have no point-of-sale systems or even menus, not to mention no delivery solution.
“Reaching users without addresses is challenging because of the inaccuracy of GPS. It may give you a point on the map, but you won’t know the name of the road. The road could be on your right side or your left, and it can take 10-15 minutes to figure it out. That time can make the difference between good food and OK food once it’s delivered.
“So we developed a technology that supports address-less locations by learning the roads and specific entry points for each user by previous orders from the driver’s path. We track the driver’s behavior, the text, and the labeling, and based on this data we correct the GPS location and learn new roads that don’t exist on map apps.”
HAAT’s mission and market potential
Hasan said the company’s mission to democratize food delivery started from a personal need.
“I had been working in many bigger cities, including Zurich, Tel Aviv, and Haifa, Israel,” Hasan says. “As I started a family, I decided to move back to my hometown, which is a less-structured city where there are no street names and my home had no number. Trying to order food delivery came with a lot of issues. Restaurants couldn’t take credit cards, and I didn’t have cash. There were no digital menus, and even if my order succeeded the driver couldn’t reach my home because there was no address. So I started a mission to make food delivery effortless for everyone, everywhere.
“Everyone deserves to get food delivered to their home, and the market for secondary cities and infrastructure-less cities is huge. What we’ve done in these last three years is to show the market potential. We are serving around 20 cities and showing the potential for the coming five years.”
Developing an idea into a startup
“HAAT is located in infrastructure-less cities that have a high rate of unemployment, so I felt I needed to develop skills—not just engineering or leadership skills—that would impact the community. I turned my energy to learning about finance and marketing, but it was risky for me, being married with three kids. It was a challenge to leave everything.
“When I started, I had three targets that I could aim at: A low target that would be more realistic, then a midrange target, then a high target where we’d be doing amazing. I produced a business plan for the next year focusing on the low target, expecting we wouldn’t see results until the end of the year. But I think I underestimated the market size, because within three months we reached the top target.
“You get ‘no’ until you get your first ‘yes’. That’s the dynamic with investors. You get dozens of no’s and feel like the worst CEO in the world. But then you learn from what went wrong and you improve.”
“We had proved the potential of the idea and the technology. My gut feeling was right that people in infrastructure-less cities ended up embracing us, to the extent that within a year of gradually reducing my role at my fulltime job. I said, ‘OK, either I do it now or never. I will take the risk.’ And looking back it was the correct decision.”
The ups and downs of money
“Raising money is one of the biggest challenges, and I felt I would not be able to do it. I think I only succeeded by building a business plan before I started raising money. You want to approach people with a plan that shows the company’s value. I didn’t know how to do this, so one of the first people I hired was a friend who had a background in startups and brought along business savvy. Together we built a plan to estimate the valuation, and we garnered trust from others that we knew our plan and had very clear targets.
“The gap between raising a small or large amount of money is huge. You need to talk the language of investors, and you need advisers helping you present to them if you don’t know the unwritten rules or understand the smaller nuances. We would talk to over 100 investors and each would ask me questions that I didn’t have an answer for. But by the next time I would have done additional studying and eventually felt like I could answer any question.
“You get ‘no’ until you get your first ‘yes’. That’s the dynamic with investors. You get dozens of no’s and feel like the worst CEO in the world. But then you learn from what went wrong and you improve. I’m usually not alone when I talk to an investor, I’ll have some of my team join me and they also provide feedback afterward. I never present the same thing to the next investor, even if it’s just adding one more slide, one more sentence.
“It’s now my fourth years in business, and one thing I learned is money is the least attractive thing in the short term. By which I mean if you bring in people with money to your company, they’ll probably leave you quickly or not operate according to your expectations. When I hired people, they didn’t get salaries, they got an equity—they were more like partners. And so far they are still with me, they’re still fighting in the same way. I think it’s the best thing that they didn’t see themselves as employees, but rather felt like co-founders. They are building this thing and it’s belonging to them.”
What should aspiring startup founders know?
“I didn’t realize how much fun it would be. I never understood how people in their 60s or 70s, very rich people, would be working on a startup. I would think, “You have enough money, why are you doing that?” Then after a couple years as a founder I understood they’re not doing it for the money but because it’s fun to build something from scratch.
“But it’s very difficult, and you need luck for a lot of things to come together, such as the right people and right timing. One thing I didn’t do well at the beginning was not investing in people as much as I could. Meaning that even if it costs two times more to hire one really talented person, it’s better than spending the same to hire two midrange people. Talented people bring in more money to the company than they cost to hire. I brought in one great engineer who was very, very expensive. I debated bringing him in, thinking I didn’t have the money, but eventually decided to take the chance. On day one he found an issue with our maps and the cost reduction involved covered his salary. And it wasn’t even part of his job!
The Microsoft for Startups program helped us get our business off the ground, especially the access to Microsoft’s industry experts and free credits on Azure and GitHub. The program has helped us work more efficiently, and we have been able to grow much faster than we would have without it. Founders Hub is a great place for startup founders to connect with like-minded people, learn from industry experts, and help those new to entrepreneurship get started. Participating in this program enables you to just focus on what matters most: your company.
What’s next for HAAT
“Our vision is to shape the future of food delivery, which takes empathy, innovation, and an appetite for complex logistical challenges. We’re currently operating in Israel but should start operating in one more country by November. To think in an international way is totally different than in a local market, because suddenly you’re marketing in two languages with two different mindsets and cultures. You have to support different currencies in different time zones. It’s kind of like building the company from scratch again, but with more experience and knowledge.”
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Tags: CEO, LaunchWithAI, Microsoft for Startups Founders Hub, Startups