A couple of weeks ago I attended a great MeetUp at NYU Stern. One of the founders of BlaBlaCar, Frédéric Mazzella, was there to talk about building a company with 20 million users and $110M in funding. Despite the success of this company internationally, I am guessing you have never heard of BlaBlaCar, a company based in Paris, France. As Mazzella explained, it is not a viable concept in the US for two reasons, gas is too cheap, and drive times between cities are too long. BlaBlaCar essentially facilitates ridesharing between cities in Europe, and now India and Mexico. Because gasoline is so expensive in those countries, and cities are close enough to make driving, rather than flying, the preferred mode of transport, there are 20 million people who have signed on to participate. The company has had exponential growth for 14 years.
Mazzella explained that they have achieved this growth through trial and error, and also by staying on task and keeping things simple. BlaBlaCar went through four of the potential five business models before finding the right one, and then they stuck with it. A simple transactional fee is charged for facilitating the carpool. They have not deviated from their model since they discovered it worked. Mazzella conceded that there are probably other sources of revenue that BlaBlaCar could tap into, but what they have set up is working, so they won’t make any changes to the financial model until they have maxed out their market growth. Considering that the company has an international growth strategy, they probably won’t be making changes any time soon. Some of the audience members at the MeetUp were surprised by BlaBlaCar’s narrow strategy. When Mazzella expounded on the many hours cars in Paris spend parked (about 95% of the time) one audience member asked about the potential for utilizing that excess capacity. This sounded like moving BlaBlaCar into the Airbnb category or some kind of mash-up between BlaBlaCar and ZipCar. Mazzella replied that they had found a model that worked and was going to build it out to maximum capacity (they are in 19 countries and counting) before even considering making modifications.
As a novice entrepreneur, it was interesting to hear someone articulate how a business that is such a creative concept and has been so disruptive, is also quite rigid in its rollout and strategy. Many of the principles of BlaBlaCar sound very familiar: Refine and Simplify, the Member is the Boss (aka “the customer is always right”), Never assume, Always check. Some of Mazzella’s key mantras sound a little different: Think it, Build it, Use it; Share more, Learn more; Fail, Learn, Succeed. It will be interesting to see how this company continues to grow, and what happens to the company culture as it grows.
Personally, I hope they try to launch in the United States sometime soon. I appreciate that the cost of driving, and owning a car is much cheaper in the US, but I do think that our culture is changing to embrace the sharing of resources. Increasingly it seems that people want to share, even if they can afford not to. For example, there are certainly people who are making lots of money through Airbnb and VRBO, but there are also those who embrace the concept as a way to make use of resources they have, but don’t need, and to meet new people and connect with their community. (see this post as an example: http://blog.airbnb.com/burnout-bliss-tessas-art-rejuvenation/)
This is a key part of our philosophy at GoKid, parents are not simply coordinating carpools out of necessity, but also because it makes sense. My car can seat 5 children with seat belts. It just feels foolish not to fill as many seats as I can when I am literally driving past the homes of my children’s classmates on the way to school. The distance is short and the money savings of carpooling for such a short ride are negligible, but I want to reduce my excess capacity nonetheless. And, critically, every carpool for kids is saving parents’ time, which is something none of us seem to have enough of!
