Ali Halabi ‘s story carries profound lessons for entrepreneurs, particularly those navigating the tumultuous waters of the startup ecosystem in the UAE. In a candid chat on Conversations with Loulou, Ali shared the highs and lows of his entrepreneurial journey, from the crushing failure of his first startup to the eventual success of Volt Lines, a profitable corporate transportation business. His narrative highlights the emotional stress of entrepreneurship and offers invaluable insights on resilience, adaptation, and the importance of focusing on the problem, not just the solution. (For me, that very stress, self-doubt, and anxiety is what led to creating Founder Connects - a way to tackle this challenge and support others on the journey.)
Ali Halabi’s entrepreneurial journey began in 2013 when, as an expat in Istanbul, he was struck by the inefficiency of the city’s massive traffic system. Having moved from Lebanon, a smaller environment, he faced a stark culture shock in Istanbul, a city of 15 million people. Observing the traffic, he noticed that 85% of vehicle seats were empty during commutes, a realization that sowed the seeds for his first startup, Vault.
Vault was a consumer-to-consumer carpooling app aimed at reducing traffic by matching drivers and passengers headed in the same direction. Despite receiving $1.2 million in funding and launching with promising technology, the venture folded in 2017. The reasons? A lack of product-market fit and insufficient economic incentives for drivers within a sustainable pricing model. While large players like Uber and Lyft were also experimenting with carpooling, all efforts in the sector struggled to succeed due to similar challenges.
Reflecting on this failure, Ali emphasized the emotional toll it took on him as a founder. Unlike investors who may view startups as an "asset class", founders invest not just capital but also their time, opportunity cost, and emotional well-being. The failure of Vault forced him to confront a pivotal question: "Are you in love with the solution, or are you in love with the problem?"
Ali realized that his passion was not carpooling but rather addressing the root problem of empty seats in traffic. He shifted his focus from a consumer-to-consumer model to a business-to-business (B2B) approach, targeting corporate employee transportation in Istanbul. Thus, Volt Lines was born in 2018.
Volt Lines provides a technology-enabled corporate transportation service, offering efficient bus routes for companies while leveraging technology to optimize occupancy and reduce costs. By targeting businesses rather than individuals, the model eliminated many of the challenges Vault had faced. Corporate commutes in Turkey are often offered as an employee benefit, making it a $1.2 billion market in Istanbul alone.
While Volt Lines saw rapid growth initially, doubling its revenue and reaching profitability, the COVID-19 pandemic brought operations to a halt. With corporate offices closed, revenue dropped by 90% within a week. Ali described this period as one of mourning, but he and his team quickly regrouped, implementing a crisis strategy that prioritized employees, drivers, and customers.
Rather than laying off staff, Volt Lines introduced temporary salary cuts and focused on retaining drivers by negotiating reduced contracts with corporate clients. This approach minimized revenue losses to 35%, demonstrating the resilience of the B2B model compared to consumer-facing alternatives. Furthermore, the team identified new opportunities by targeting essential industries like e-commerce and healthcare, which required transportation services during the pandemic.
The biggest innovation, however, came from adapting to the hybrid work trend. Volt Lines developed a demand-responsive transport (DRT) system that allowed employees to book seats only when they needed to commute to the office, optimizing routes dynamically. This product not only addressed the changing market needs but also turned a crisis into an opportunity, solidifying Volt Lines’ position as a leader in corporate mobility.
In 2022, Ali faced another pivotal moment when Swvl, the Egyptian "Uber for buses", acquired Volt Lines in a $62 million deal comprising cash, shares, and resource commitments. It seemed like a dream exit, aligning Volt Lines with a major player that had just gone public on NASDAQ at a $1.5 billion valuation. However, Swvl’s share price plummeted from $10 to below $1 within months, largely due to market corrections and overvaluation concerns.
The collapse of Swvl’s valuation left Volt Lines’ investors and team in a precarious position. Ali negotiated tirelessly to regain control of the company, eventually succeeding in January 2023. Today, Volt Lines operates as an independent, profitable business, having weathered multiple crises and emerged stronger.
Ali Halabi's journey offers critical lessons for startup founders in the UAE, where entrepreneurship can be equally rewarding and challenging:
Continuously revisit the core problem you’re solving. Solutions may need to change, but a clear focus on the problem will guide your pivots effectively.
Entrepreneurship is emotionally taxing, but resilience and adaptability are key. Ali’s ability to adapt during the pandemic and negotiate complex situations demonstrates the importance of staying committed.
Ali’s approach to prioritizing employees, drivers, and customers during the pandemic exemplifies leadership. Putting people first fosters loyalty and helps navigate crises more effectively.
Volt Lines succeeded because it shifted to a B2B model, addressing a specific market need. Conduct thorough research to identify the most viable market opportunities.
Technology was at the heart of Volt Lines’ success, from optimizing bus routes to developing hybrid work solutions. Entrepreneurs should explore how tech can solve inefficiencies in their industries.
Negotiating protective clauses, such as collar protection in the Swvl acquisition, safeguarded Volt Lines’ investors. Founders must work with skilled advisors to ensure their interests are protected in deals.
Startup success is rarely linear. Ali’s story underscores the importance of playing the long game, staying focused on growth, and maintaining a vision for long-term impact.
Whether it’s investors, board members, or acquirers, surrounding yourself with the right people can make or break your journey. Ali’s support from key investors and advisors was instrumental in navigating challenges.
Ali Halabi’s story is a true testament to the resilience, adaptability, and grit required to navigate the entrepreneurial journey. For UAE-based startup founders, his experiences offer a roadmap for tackling challenges, pivoting strategically, and building businesses that endure. As Volt Lines continues its trajectory as a profitable, scalable enterprise, Ali’s journey serves as both an inspiration and a practical guide for entrepreneurs aiming to create lasting impact in their industries.
Source: "#63: Ali Halabi on startup failure, pivot and re-birth. An incredible story of resilience" - Conversations with Loulou, YouTube, Dec 10, 2023 - https://www.youtube.com/watch?v=cjHIyowQXAA
