Interview with Ahmed Khaishgi, Staircase Ventures Advisor, on the Founder Journey, Operating Metrics, and Leadership

June 23, 2024

The Advisor Series – Featuring Ahmed Khaishgi

Staircase Ventures has an outstanding team of advisors supporting our portfolio companies. In this blog series, we introduce you to each of our advisors, share their stories, and highlight some of their insights and advice on building startups.

Introducing Ahmed Khaishgi!

Ahmed was the co-founder and CEO of SquareTrade, growing it to be one of the world’s largest consumer electronics warranty companies, with over 150 million policies, before exiting to Allstate in 2020 for $1.4 billion. After several years leading special projects at Allstate, Ahmed returned to entrepreneurship. He co-founded AutoComplete, a software company using AI to provide a best-in-class buying experience in auto insurance. 

As a Staircase Ventures advisor, Ahmed brings a wealth of experience in growing companies and teams. He intimately understands the challenges of scaling, execution and operational prioritization, and how leadership styles change over time. 

Our Associate, Robbie Marks, had the opportunity to chat with Ahmed about the lessons learned from launching SquareTrade, how he thinks about execution and his advice on leadership for the next generation of founders. 

Founder Journey and Raising Capital

Robbie: “Take us back to the early days of SquareTrade. How did it begin? What went well? What went wrong?” 

Ahmed: “We got everything totally wrong because we launched right before the big dot com bust. My co-founders and I were at McKinsey at the time, and since we were consultants, we thought everything would be easier than it turned out to be. With lots of struggle, we were able to build a decent company but we realized it was never going to scale. At one point, eBay wanted to acquire the technology we built, but for a price we didn’t want to sell it at. So, six years in, we pivoted completely to a new model, not out of foresight but out of desperation not to die. I think that’s often how many companies succeed: the founders remain resilient and keep pushing their startups forward.”

Robbie: “What was your experience like transitioning from a consultant to a startup founder and do you have any advice for those considering the founder journey?” 

Ahmed: “​​I’m sure there’s tons of academic research on this, but I think brains are very malleable and flexible and you can learn to do anything if you just start exercising that muscle. You will build a new skill very rapidly as long as you’re willing to try,  and as long as you are willing to fail and not give up. I also think it’s critical to have co-founders that you trust. I don’t think I could ever start a company as a solo founder. I think that’s extremely hard to do. We were a founding team of three and it made things easier because we were able to lean on each other and complain about how no one understood how we felt. There is a sense of camaraderie. Having co-founders allows you to get through the bad times.” 

Robbie: “Did you raise from VCs? What was your experience like raising capital? 

Ahmed: “Back in 2000, we went straight to the bigger VCs – and remember it was a different time back then, the angel and early-stage investor network was limited – but frankly we didn’t know what we were doing. We were not execution oriented and it was clear in our meetings that we were just a bunch of consultants with PowerPoint so we got rejected by all of them. I think we got rejected by 29 VCs in that time and it’s not good for the soul when people tell you, perhaps rightly, that your idea kind of sucks.”

Robbie: “So, what happened – how did you land the first cheque?”

Ahmed: “We got super lucky. After many rejections, we ended up meeting with a friend of a friend, Tomas Layton – a successful entrepreneur and investor. The meeting was not very formal; it took place at a Jamba Juice. Tomas really liked our idea and in the end, he decided to invest $250k or so. With that cheque, we were able to round out a few more “angel” investors and then we were off to the races.”

Robbie: “What advice would you give to founders who are trying to raise capital today?”

Ahmed: “You just need one person to believe in you and then at least you have a shot at taking it from there. If we hadn’t randomly met Tomas at a Jamba Juice… You don’t need 29 VCs to believe in you, you just need to find that one.” 

Operations and Execution

Robbie: “As you scaled SquareTrade, how did you think about execution, KPIs and metrics?”

Ahmed: “We probably didn’t do things the right way. And if I think back to that time, I wish I had a mentor early on who was much more of an operational execution mentor. I think it might have saved us a year or two on this stuff. I think running a company requires a certain kind of discipline around KPIs and metrics. We ended up doing that pretty well but it was a skill I learned organically.”

Robbie: “Any advice on which KPIs to track? Did you have a north star metric?”

Ahmed: “I think every business is different, but you have to build a good financial model and deeply understand how the operational levers of the business drive financial performance. Ideally, you will only need 4 or 5 financial drivers and 2 or 3 key metrics to distill the business down to the highest leverage points.”

Robbie: “How should founders think about implementing KPIs today?”

“The real value of KPIs occurs when you understand how they actually drive the financials of the business and how you can tie every project that your company works on into a specific KPI. You have to think of the business as a machine. It has certain gears, inputs and outputs and you have to understand, not just how the gears work or how the inputs work or how the outputs work, but how the whole thing works together. 

“I think many young CEOs, including myself, don’t spend enough time understanding the metrics and how the machine works. Nor do they spend the time making sure everyone in the company also understands it. This is one of the biggest issues I see nowadays.”

Leadership Styles

Robbie: “Let’s discuss your leadership style. What was your approach to leadership and operating as the CEO?” 

Ahmed: “I think my leadership arc followed a path that is not uncommon for people who are new to leadership roles. At one end of the spectrum, and typically at first, I was quite dictatorial – the “I know best and I will tell you what to do” type of leader. And this is normally not a good thing. In the opposite direction, I was sometimes afraid to make decisions. And these two things, which contradict each other, often occur at the same time. 

Robbie: “Why do you think this happens and how can leaders overcome it?”

Ahmed: “The reason I think leaders are sometimes paralyzed with decision-making is that they overestimate the option value of a project. That is, they don’t want to kill a project that might work out. So I think in one way you are a bit dictatorial and don’t listen to others and at the same time you’re afraid to make decisions and won’t kill things because you feel like any individual project could have value. True leadership is balancing these extremes.”

Robbie: “How did your leadership style change over time to find balance in these extremes?”

Ahmed: “The first thing is to focus, focus, focus. Cutting out extraneous things is probably the greatest thing a CEO can do as a company gets bigger. By definition, you don’t know everything that is going on within the company, so you need to make sure you are focusing on the things that only the CEO can do and ensure you do those things well.

“The second thing, for me, was that I always liked having a broad span of control and multi-layered teams. I never wanted it to be too hierarchical, and as you scale this becomes more difficult. It can create a little bit of chaos, but I think it’s really important to have strong communication within your company so that everyone knows that good ideas can come from anywhere.”

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