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ABOUT DANIEL: LinkedIn

ABOUT ROCKETSHIP HQ: Website | LinkedIn  | Twitter | YouTube

KEY HIGHLIGHTS

💼 Dan’s role at Zynga

✨ Joining Lyft when it was a 50-person team

🧗🏽‍♂️ Prioritizing the experience at Lyft in the midst of uncertainties

🏋🏽‍♀️ Finding the balance between drivers and riders

☄️ When Lyft decided to go bigger and expand

🏙 The prep involved in launching in 24 cities in one day

🚦 How was the response from the regulatory bodies?

🔖Challenges the team faced when entering a new city

⚖️ Managing the data across cities with different demand rates

🚕 Joining 500 Startups and working with GrabTaxi

👞Working for what was wanted and not what was needed, at GrabTaxi

🏳️How the ride-sharing industry differs in the US & Asia

🚲 Dan’s experience at Lime bikes

KEY QUOTES

Navigating the uncertainity that came with regulating ride-sharing apps

We knew we could all lose our jobs. There were a couple of things that helped me make that jump in and be okay with that. One was the fact that I recently saw something in the market and so came off as more intelligent and then two, the team. Everyone I got to meet when I joined and was interviewing. John and Logan seemed like really good guys. Their former CTO, still with the company, Chris Lambert, really great guy, Director of Growth, great guy. The Data Scientist at the time, really good dude. Everyone in the interview process, pretty dope. And I was like, this is a cool team. They’re trying to do something that’s positive. It feels really great. We operated under the assumption that we could lose our jobs.

Build the company that You want to build

We were going to compete, not just on service and product but also on values and the company that we want to build. One of my mentors there told me, “Let’s build the company that you want to build. And so you should strive to make Lyft, the company that you want it to be.”

Early Priorities at Lyft

Early priorities were trying to figure out how we balance the marketplace. And how do we go about acquiring both drivers and passengers in a way that’s efficient as well as something that we can claim is ROI positive.

Survival guide for ride-sharing apps

If your game goes over six months, and you have users that stick around past six months, you’re happy. But it’s a freemium model. And so most of your premium users are going to decay out. If you look at your user base, across everyone, you see a rapid decay across that user base. And so we have retention drop really quickly. With Lyft, what was amazing to see was that people just kept coming back. They just kept using the service. It was just really sticky.  I never saw anything like that in terms of the curves. The curves were amazing. It was basically a flat line of coming back week over week over week. And it was pretty incredible to look at that data and see that.

Initial strategy to retain drivers

 At one point, we had a guaranteed payout, where, if you’re active and you drive, even if there’s not enough demand, we’ll guarantee that you get a certain rate.  That guaranteed that as long as they drove, they were going to make a certain rate, even if there wasn’t enough demand at the time. So just drive, we’re working on the demand.

Making demand frictionless

 We understood that once they tried it a few times, it was sticky and that they were going to stick. To make the demand more frictionless, we worked on it, essentially making it free for a little bit as a promotion. That really increased demand as well.

Expanding to other markets

There was a lot of prep work in terms of making sure that we had drivers to go on every single market. That the experience was still going to be good for all the passengers in these markets, and that we weren’t gonna get shut down in any of these markets. That they were all regulatory friendly.  It was a lot of coordination across the ops team, the growth team, as well as the government relations team to ensure that we could launch in these markets with a consistent user experience that our consumers got in LA or San Francisco

Launching in 24 cities in one day

The assessment was like any other individual market that we launched. Are we seeing passengers actually take rides? Are we seeing repeat engagement amongst them? Is our driver base active? Are they continuing to drive? And are we seeing natural supply growth? Are we seeing organic pickup on both sides, essentially? And if we did, we were happy with it. The overall outcome was pretty much successful. 

Factors that led to the demise of other ride-sharing apps

In the US,  the primary competitor, outside of Uber for us, was Sidecar. In terms of the mistakes they made, I would say probably one, they were slow to scale. Two, they didn’t pull in enough resources fast enough. This would be something that I think about.  If you’re trying to build a massive network, that’s going to need a huge amount of volume, to hit profitability and hit liquidity. Like any marketplace, you need to move really fast, you need to bring in resources quickly. And you need to be able to kind of attract those resources outside of financial capital, human capital. I’m not sure if Sidecar was able to do that.

Ensuring growth in the new cities

In the US,  the primary competitor, outside of Uber for us, was Sidecar. In terms of the mistakes they made, I would say probably one, they were slow to scale. Two, they didn’t pull in enough resources fast enough. This would be something that I think about.  If you’re trying to build a massive network, that’s going to need a huge amount of volume, to hit profitability and hit liquidity. Like any marketplace, you need to move really fast, you need to bring in resources quickly. And you need to be able to kind of attract those resources outside of financial capital, human capital. I’m not sure if Sidecar was able to do that.

The downside of capitalism

Capitalism has losers. I don’t think the tech crowd focused enough on the consequences of their disruptive tech.

The high cost of a sustainable bike-sharing app

A lot of those companies have gone belly up because basically, the business model is not profitable. These are hardware companies where you basically build and ship these bikes, and then you’ve got to maintain them. You have to re-allocate them because this is dockless, they’re going to be spread all over the city. Then you have to re-allocate them, like a team that’s on the ground with overhead on the ground and move them from A to B on a daily basis. That’s really expensive. 

Limebikes’ biggest challenge

The biggest challenge right now is actually topography. That should not be a surprise, but it would be in terms of having people take a ride uphill is not going to have that effect. The biggest challenge is dealing with the topography side effects, deployment effect, that affects a whole standpoint, deployments basically at the top of the funnel for this.

FULL TRANSCRIPT BELOW

FULL TRANSCRIPT

Shamanth

Dan, welcome to the show. I’m excited to have you here. 

Dan 

Good to be here Shamanth. 

Shamanth 

Absolutely. I would love to start somewhere in the beginning.

One of your first roles was at Zynga. This was around 2012. What was it like working at Zynga in 2012?

Dan 

It was a pretty interesting place. It was kind of like the top of the heap, so to speak. The company had just had their IPO and they were in the midst of acquiring different companies to grow specifically on mobile. I joined shortly after the IPO. Mobile was still relatively small for the company. The company was about 3000 people. It was a large post-IPO company, but its mobile team was only100.

Shamanth 

And you were working on the mobile team. Did you or your team start to see the increasing shift to mobile at the time?

Dan 

We did expect Google search volume to pick up over time. We didn’t see Facebook completely disrupting the ecosystem as significantly as it has. We should have seen that. 

Shamanth 

Why do you think so?

Dan 

Only because of the data that Facebook had. They have data on their user base compared to what the ad networks were collecting. It was available to pull from mobile devices. We should have seen it and we were excited. I was thinking about when they started launching their first ad units. Of course Facebook had a pretty close relationship given Zynga’s dominance on Facebook’s web platform. So we got early access to these ad units and we were excited about it. But it was still interesting to see that the whole ecosystem had just been disrupted.

Shamanth 

At that point, you also made your next move. Can you tell us what your next career move was?

Dan 

I joined Lyft back in 2013 when they were raising from Andreessen Horowitz. Lyft was one year old at the time. They were going for the market and were looking to scale. They felt like they had product market fit, they felt like they just had raised in a really strong round that investors and they wanted to scale on mobile, on both sides of the marketplace, but primarily passenger acquisition. 

It was a really fun place to be back then. Ride sharing was still relatively new and the company was relatively small. There were about 50 people hired by the company. We had a couple of offices, but one primary office. It still felt like a startup. Everything was really scrappy. 

Shamanth 

Four cities and 50 people definitely can be a far cry from what ride-sharing is today, what Lyft is today, but I can imagine it would have been much more intimate at the time. You joined in June 2013, this was also the time when the regulatory future of ride sharing was very much in question. My research tells me that this was also the exact month when LA basically sent a cease and desist.  At the time, a lot of cities were asking questions about Uber and Lyft. How did you personally feel every time you read in the news, that everything you’re doing could potentially be illegal? 

Dan 

We knew we could all lose our jobs. There were a couple of things that helped me make that jump in and be okay with that. One was the fact that I recently saw something in the market and so came off as more intelligent and then two, the team. Everyone I got to meet when I joined and was interviewing. John and Logan seemed like really good guys. Their former CTO, still with the company, Chris Lambert, really great guy, Director of Growth, great guy. The Data Scientist at the time, really good dude. Everyone in the interview process, pretty dope. And I was like, this is a cool team. They’re trying to do something that’s positive. It feels really great. We operated under the assumption that we could lose our jobs. I also thought if that was going to happen, I’ll get another job. “This is a great team, why not work with them.”

Shamanth 

You prioritized the experience. The quality of the experience that you thought you would be having?  I like the phrase you used – intelligent.  The other factor at the time was that Uber had been around for a couple of years before Lyft. There were also a number of other ride-sharing startups, nearly all of which don’t exist anymore. Lyft at the time had to contend not only with regulatory pressure but also the competition.  How did you feel about what was happening in the marketplace?

Dan 

There was Sidecar. I think that was the other competitor at that point, but it felt like a three-man race, for the most part.  It has actually become more competitive over time, as new entrants have taken market-specific positions and now you have more global players. But at the time, we were so small and the market was still small enough. We weren’t even looking globally. We were really just thinking of the US specifically. When we saw this three-man race between us Uber and Sidecar, we weren’t as worried about Sidecar, as we were about Uber mainly because of the funding differential. 

We were always looking at Uber as the big existential threat that wants to put us out of business. Jokingly, we saw it as the Apple versus IBM moment where Uber was IBM and we were Apple. We were going to compete, not just on service and product but also on values and the company that we want to build. One of my mentors there told me, “Let’s build the company that you want to build. And so you should strive to make Lyft, the company that you want it to be.”

Shamanth 

Lyft was in four cities when you joined. What were some of your early priorities?

Dan 

Early priorities were trying to figure out how we balance the marketplace. And how do we go about acquiring both drivers and passengers in a way that’s efficient as well as something that we can claim is ROI positive. We had an LTV on our driver base, but one of the first things I did was try to figure out what the LTVs of our passengers were. It was really incredible to see because I was coming from gaming, where you see a six-month lifespan, and you see rapid decay. If your game goes over six months, and you have users that stick around past six months, you’re happy. But it’s a freemium model. And so most of your premium users are going to decay out. 

If you look at your user base, across everyone, you see a rapid decay across that user base. And so we have retention drop really quickly. With Lyft, what was amazing to see was that people just kept coming back. They just kept using the service. It was just really sticky.  I never saw anything like that in terms of the curves. The curves were amazing. It was basically a flat line of coming back week over week over week. And it was pretty incredible to look at that data and see that.

Shamanth 

People never stop commuting.

Dan  

Exactly. They don’t stop using transportation. Again, it was with the context of seeing rapid decay that you see in gaming.  So we were like, “Oh, my God, this is like night and day.” Where you have entertainment versus an actual utility. That was a big difference.

Shamanth 

Having worked with games myself, I’ve seen that natural decay. I can understand why you would naturally come to expect that of any product. And when you see people love your product enough to want to continue using it no matter what, it can be very satisfying. One of the things you mentioned was balancing the marketplace between drivers and riders. How do you go about doing that?

Dan 

The biggest challenge for Lyft was hiring drivers. I think that’s still where the war is today. It is acquiring and retaining these folks. Given that now they have a lot of options across different players. Uber is still the biggest competitor in the US. But there are other regional options, specifically in New York City like VIA and Juno and some of the other players. So you want to make sure you optimize for supply when you look at the marketplace. 

You want to make sure when you acquire these folks and go through the background checks and are able to get through the full application process, which has a decent amount of friction in it. That they’re not sitting idle and that they’re able to make money. We solved this a couple of ways. At one point, we had a guaranteed payout, where, if you’re active and you drive, even if there’s not enough demand, we’ll guarantee that you get a certain rate.  That guaranteed that as long as they drove, they were going to make a certain rate, even if there wasn’t enough demand at the time. So just drive, we’re working on the demand. We’re gonna pay you a floor. That was one tactic that we used. 

We realized quickly that it was inefficient. And so we tried other stuff in terms of how do we increase demand, and get people just to buy the product. We understood that once they tried it a few times, it was sticky and that they were going to stick. To make the demand more frictionless, we worked on it, essentially making it free for a little bit as a promotion. That really increased demand as well. It was more cost-effective than the floor. We found a way basically to stop paying people a guaranteed fee and found different ways to spike demand pretty quickly, such that our supply was active.

Shamanth 

You very strategically spiked the demand so you can meet supply and try to build a virtuous cycle that would feed off.

Dan 

Essentially, with the idea of – if supply is happy they’re going to recommend their friends and drivers. As long as we can essentially make them happy. We did focus on both but the priority was still to ensure that supply was happy with their experience.

Shamanth 

That makes sense. Because the more drivers there are, the less my ETA would be as a passenger, the sooner I get a ride, and the more likely I am to come back.

Dan 

Yes 100%.

Shamanth

At this point, you guys were still small. You were in four cities. At what point in time did you think ride-sharing could take off and become the widespread phenomenon that has since come to be? Was there a specific inflection point?

Dan 

I would say probably when we raised our series D, and we were about the launch in 24 markets. Uber was taking off well, trailblazing a little bit. Back in the time when we were in a few markets, we didn’t see this. I don’t think anybody necessarily saw it. We pitched what we pitched out externally but internally, we weren’t really sure that it was going to become the phenomenon that it is today. That changed over the course of 2013 as we just penetrated more markets. I don’t know if there was one single inflection point, I guess I would go back to the series D. 

Over the years, as we penetrated more markets, and as we became regulated in a lot of these cities, we slowly came to believe that ridesharing was here to stay.

Shamanth 

Did you say that you guys launched in 24 markets in a single day?

Dan 

Yeah. We did. And that was a big moment. When we planned that launch, we were still catching up with Uber. And so we wanted to show investors that, hey, we can actually gain ground really fast. And we can do big launches like this too.

Shamanth 

What was the preparation process behind launching 24 cities in a single day? Anytime prior to that, you guys had not done anything comparable.

Dan 

Yes, we had never gone that aggressive and so it was a big challenge. There was a lot of prep work in terms of making sure that we had drivers to go on every single market. That the experience was still going to be good for all the passengers in these markets, and that we weren’t gonna get shut down in any of these markets. That they were all regulatory friendly.  

It was a lot of coordination across the ops team, the growth team, as well as the government relations team to ensure that we could launch in these markets with a consistent user experience that our consumers got in LA or San Francisco. In terms of generating the supply to build the kick-off network in these markets, it was a lot of work in terms of sourcing the right drivers. Additionally, back then, and probably still do today, I would imagine, our founders wanted to vet every single driver that we had when we would launch a city because we knew that these guys are going to recommend their friends if they are enjoying the service and we’re successful, and they’re going to set the tone for the other drivers that we onboard. The driver experience and the drivers are part of the product. We were being very careful with who we allowed being a driver.

Shamanth 

So you guys launched in 24 markets on a single day. Was the outcome of that big launch clear immediately? How did you guys assess how this big launch worked out?

Dan 

The assessment was like any other individual market that we launched. Are we seeing passengers actually take rides? Are we seeing repeat engagement amongst them? Is our driver base active? Are they continuing to drive? And are we seeing natural supply growth? Are we seeing organic pickup on both sides, essentially? And if we did, we were happy with it. The overall outcome was pretty much successful. 

We were allowed to operate in most of those markets. We might have had an issue in one or two. But it was successful for the most part. It was a pretty big moment of hey, we were able to launch 24. This is something we can do when operations and growth and government relations all work together. Imagine what we can do further if we have more resources, and we’re aligned.

Shamanth

The thinking was, okay, we had this product and service that people are happy with in all cities. Now we can execute this exact same process in 24 cities. And if we can do that, we can do it anywhere.

Dan 

We launched some markets, between the 24-city launch, of course. We didn’t go from four to 28. We were already in the double digits before we did the 24-city launch. We wanted to see if we were going to prioritize a lot of longtail cities, as well as some of the more populated cities. Could we actually launch in all these markets? We could and that was the short answer.

Shamanth 

Was there a point when things from the regulatory point of view look like they were all clear?

Dan 

There was, for the most part. It probably has different points to that. I didn’t work with government relations closely. I just got the go-ahead. We’re good, or we’re not good to go in terms of advertising and growing our supply base and passenger base in those markets.  I don’t remember any kind of different budget points of Government Relations being emphatic about, “Hey, this is possible and this is impossible.” All I can remember is, for the most part, we were good post-launch. We might have had hiccups in one or two markets. But that was pretty much it.

Shamanth 

At the time, as we’ve spoken about, there were a number of other competitors. Definitely dealt with competitors in the US. Hardly any of them are around right now. At least, the ones that were prominent in 2012, 2013, and 2014. 

What do you think are some of the common mistakes that some of the smaller competitors made that led to their eventual demise?

Dan 

In the US,  the primary competitor, outside of Uber for us, was Sidecar. In terms of the mistakes they made, I would say probably one, they were slow to scale. Two, they didn’t pull in enough resources fast enough. This would be something that I think about.  If you’re trying to build a massive network, that’s going to need a huge amount of volume, to hit profitability and hit liquidity. 

Like any marketplace, you need to move really fast, you need to bring in resources quickly. And you need to be able to kind of attract those resources outside of financial capital, human capital. I’m not sure if Sidecar was able to do that. My gut feeling tells me they weren’t able to.

Shamanth

That makes sense that if it was such a competitive market, you want to have their biggest share of the market as soon as possible. You want to scale quickly.  Do you think ride sharing as a business could have supported multiple competitors? Why or why not?

Dan 

For the most part, we didn’t see a core difference in the user experience across Lyft and Uber. We tried to onboard better drivers. By better, I mean more friendly drivers. But we still saw transportation as a commodity. And anytime you’re a commodity, there’s not a lot of differentiation between you and the competitor. We also saw that for the most part, what passengers cared about was primarily just ETA and price. We knew a lot of our users had, both Lyft and Uber. They would alternate back and forth.  There was really no brand loyalty.  That still worries both companies today, where there really still isn’t brand loyalty. 

On the driver side, especially the kind of mass level of scale, most of the drivers are primarily optimizing for earnings. There’s not enough loyalty on that side, either. Looking at those elements it became apparent that there’s really no loyalty and that for the most we are a commodity on both sides of the marketplace that whoever scales first fastest, and is able to generate more liquidity for both sides of the marketplace, they’re gonna win. And users are going to be more loyal to that platform. And I feel like that’s still a reason why Uber has the advantage that it has today.

Shamanth 

That makes sense. More liquidity is faster ETAs and faster ETAs result in more earnings for the driver. That’s the virtuous cycle that gets built up. And then eventually, drivers want to use only Uber or only Lyft and not Sidecar.

Dan 

Yes. If they use both, at least they have their go-to where if one is in downtime, they might use the other but they have the first app they want to open every day. They know what that is.

Shamanth 

You went through this process where you scaled to 65 cities. What were some of the biggest challenges that you guys faced when you were about to enter a new city?

Dan 

Regulatory was still one of the biggest in terms of will the city actually allow us to operate given that we don’t have traditional licensing. That was probably the biggest challenge . Apart from that, it was building the driver base for that market. Outside of regulatory concerns, do we have a playbook that can generate drivers that we feel would be good founding drivers for the company that will create a good user experience? To be able to do that in a relatively quick amount of time, such that we don’t need to have a huge ground game or a physical presence in the city, so to speak for too long.

Shamanth 

How did you do that without having too much of a physical presence in the city?

Dan 

We had a team that we considered to be like Navy SEALs launchers. We would drop in and interview candidates that we generated for becoming a driver. We dropped them in for two to four weeks, so they could launch the city, host a couple of parties, and then be out.

Shamanth 

And then the city would operate by itself? 

Dan 

Yes. 

Shamanth 

And then, of course, the flywheel would start to roll because the drivers and passengers would come on board, as more passengers come and more drivers sign up.

Dan 

The flywheel will start to roll because, for a lot of these cities, we had a floor. So we knew our drivers were going to get paid out something regardless of whether they were taken care of and more drivers would come.  The main part was, as long as we found ways to spike demand, and supply was active, they would recommend their friends and the wheel would take off.

Shamanth 

How would you spike demand in a completely new city?

Dan

We made it free.  We made it free for a couple of weeks.

Shamanth 

I would imagine you also advertised.

Dan 

We advertised aggressively, but we did make it free. And that was this huge promotion that we had for new users. What was amazing is we did tests where we made it free for a certain cohort of users versus not for the other. And then we looked at the retention. Once we ended the free period, they were pretty much comparable. And so we were like, “Wow, this is amazing. ” They just need to try it a few times, and then they’ll stick.

Shamanth 

A freemium business effectively.

When you’re at 65 cities, I would imagine you have different data profiles for each of these cities. The frequency with which somebody takes a cab in New York is probably different from what it would be in a small town in Albuquerque. So that would result in different retention curves and different LTV curves. So you would have a lot of complexity in your data. How did you deal with or manage this complexity?

Dan 

This is a really good point. It would lead to building audiences and different segments, in terms of, well, we know there’s gonna be like a high LTV crowd versus a more casual crowd.  It became a stronger focus over time. For the most part in 2013 and 2014, we were in land grab mode. Really what we were optimizing for was liquidity in any given city. We weren’t really concerned too much about the different segments and different audiences and the use case, as long as the market was generally liquid. If a passenger has requested a ride, he gets that ride within a short enough time, we were happy. So we looked at eta a lot.

Shamanth 

It makes sense. Because you don’t want to micro-optimize a campaign. When you’re launching, just because there’s so much data available, it doesn’t mean it has been necessarily made use of.

Dan

Yes. Especially if you don’t have the resources to do so. And especially if you’re playing catch-up. The main focus was entering a new market.

Shamanth 

This reminds me of what one of the other interviewees on this podcast, Adam Lovallo said, when he spoke about how LivingSocial was growing in the early days, they could have segmented and broken down easily. Or they could have just aggregated all of it and just focused on the main metrics, and they just chose not to break down each city as an individual segment, actually, absolutely could have, but they just chose not to.

Dan 

Our one metric that we primarily focused on was ridership. How many rides were we doing every single week? That’s what the company rallied itself around. Over time it became more granular looking at cities, and individual cities and looking at the liquidity in each city. But it wasn’t a big focus back in 2013 or 14,

Shamanth 

 As long as you’re hitting your key priority, which is ridership, you know you’re moving in the right direction.

Dan 

Yes. 100%. And that was the focus. 

Shamanth 

As you started moving into smaller towns, I would imagine the same online channels where advertising and attracting demand and supply won’t necessarily have applied in some of the smaller towns. How did your approach to growth change, if at all it did.

Dan 

So you’re saying they will not apply? Because they’re smaller? 

Shamanth 

Because they’re different. If you are running a game, if you are wanting to grow a game, you run Facebook ads targeted to all of America. But if you’re in 24 markets, or more including small-town America, I don’t know if Facebook ads are necessarily the best way to advertise.

Dan 

We found certain repeatable templates within Facebook and Google. In a small town, America, you’re not going to get on from an absolute standpoint, in terms of the total amount of impressions that you generate, or the reach that you have, from an absolute standpoint, be a lot smaller, as a percentage of the population. It may be comparable, actually, depending on the demographic mix in that area. So the region in Kentucky might be comparable to let’s say, Alburquerque. Young, early adopters, so millennial males, in percentage may be comparable to San Francisco, potentially. When you look at you normalize for population size. 

The main metric that gets hit is actually volume, it’s not able to do the same amount of rides, because the population is a lot smaller. For the most part, we just scaled down our expectations. We knew that a lot of these smaller cities were not going to be that big for us, they were longtail. But we were actually able to successfully leverage digital channels for the smaller markets just on a different volume scale.

Shamanth 

Was there a point when you said, okay, the volume is not quite there, maybe we should do offline advertising, and put billboards on expressways.

Dan 

The billboards and that type of advertising are actually more effective in higher dense areas. Because you just have more eyeballs that are going to see the billboard or the out-of-home advertising. It was never a part of the playbook in smaller cities. Some hyper-targeted homes we did leverage, certain train station ads, bus stop ads, and some of the smaller locales. We saw a good effect there. But the expensive flashy billboard ads, the company primarily leveraged those in really highly dense areas, because they’re expensive.

Shamanth 

Your work at Lyft led directly to what you did next. Can you tell us about the next chapter of your life?

Dan 

The next chapter of post-Lyft life for me was advising, and primarily working with a VC firm called 500 Startups, working as part of their growing team and advising their portfolio. I got to work with about 50 or so startups directly, helping them with their growth. That played a big role in setting up their growth, KPIs and just trying to help them with the right strategy, so to speak, in terms of making sure that they’re moving in the right direction, and that they’re aligned with the right metric. 

They were just focused on the right, weekly activities so that was really cool, because Lyft at 50, was a reasonable size startup. When you’re working with 500, they’re very well known to be an early-stage investor and so you get to work with teams that are preseed if not seed, and so you’re talking about teams that are in the three to 10-person range. So a lot earlier, a lot younger, and a lot more dynamic.

Shamanth 

So you started working with this wider variety of companies. By this time, you had a bit of a reputation as the hyperlocal guy and your reputation led you to work with a ride-sharing company in a completely different part of the world. Can you tell us about that?

Dan 

I was lucky enough to actually work with a company called GrabTaxi in Malaysia. And it was the growth bootcamp that we ran with 500 startups back in 2015. I got to work with Grab for a couple of months and I really tried to help them with prioritizing, how to balance the marketplace on their side and then where to focus on what growth channels to focus on for demand and supply, and how to think about it.

Shamanth

Tell us more about what the lay of the land was with Grab. What countries were they in and what were some of the things that they were looking to achieve at the point when they brought you on board?

Dan 

They were in Singapore and Malaysia, I think they might have been in the Philippines & Vietnam, they were pretty much in land grab mode. What we pitched them was this systemic framework of how to think about growth, how to think about growing any audience, whether it’s one side of the marketplace or the other, and how to tie in basically data with insights to grow. 

That all sounds super buzzwordy but there are actually real tangible tactics that you can leverage from that in terms of surveying your audience or even trying to understand where your best users are coming from. What channels do they come from? So we really tried to instill that kind of data-driven framework within the team. 

Unfortunately, they were in land grab mode. They really didn’t have the time to optimize, and they were like, this sounds great, but a lot of this sounds like optimization, and we’re facing so much pressure against Uber to grow our market share over here and so we don’t really have time to dive into data too deep. 

So I decided that one thing that I hope that I was able to instill was doing a really loose LTV at the time, and trying to get them more comfortable with spending money on passenger growth, just by doing a really simple ROI analysis of like, if you look at LTV this way, and you don’t spend too much time putting on the bells and whistles of an LTV model, you can see that you’re going to make your money back and that it’s worthwhile spending. So we spent some time there as well working with their data science team to come up with their early LTV models and helped open up some of the ads spent in that regard.

Shamanth 

It sounds like you picked your battles because they clearly didn’t want this elaborate scientific process, which even though it was helpful, could have slowed them down. How did you feel at the time, when they said, “Look, Dan, we don’t really want this elaborate scientific process.”

Dan 

It was a bit of a letdown. We had plenty of 8 AM meetings in the morning with the team. We were driving into Kualalumpur, an hour away too. We had plenty of early mornings where we made our pitch and focus. It could have been better.  At the end of the day, I understood their concern and we worked through what we had and it was a good time. I enjoyed working with the Grab team.

Shamanth

You still helped them move some of the metrics, you helped them become comfortable with spending money to grow. And I think it worked out.

Dan 

Yes. For the most part. The LTV analysis we did, the quick, back-of-the-napkin model. We got by, both data scientists understood the rationale behind the model. And it enabled the paid acquisition team to kind of spend more money on different channels, and then quickly measure whether this was successful or not.

Shamanth 

That’s an amazing place at which to leave them when you stepped out of that project.

Dan 

Yes. I’m the type of guy who’s pretty self-critical that I wish we could have done more. But it wasn’t bad.

Shamanth

You’re very modest. To do work and ride-sharing in America has really taken off. You also worked in ride-sharing in Asia. What were some of the key differences you saw in these two completely different geographies?

Dan 

The biggest difference was car ownership. In Asia, car ownership is a luxury unlike in the United States. The incentives of why someone would drive are very different in Asia. Owners aren’t attracted by the message of, “make additional money” “make side money” or  “be your own boss.” All these people are high-income people and if they don’t own and operate a car, they’re a very different group of people than the demographic you’re getting in the US.

Shamanth 

But the taxi drivers wouldn’t be these prosperous people.

Dan 

No. The taxi drivers won’t be. Grab’s network of taxi drivers is definitely not.

Shamanth 

So this is more on the peer-to-peer side. People on the peer-to-peer side weren’t driving for money, but the taxi drivers were still driving for money. How did that impact some of the recommendations you made as compared to what you would have done at Lyft?

Dan 

In terms of the marketing messages, obviously, what you leverage and the audience that you target. The messaging and the audience can be very different given who’s happy to jump on your platform. Part of what you do there, as well, is trying to bring some of these active drivers over to your side. That’s also something that needed to be addressed. 

Unfortunately, it wasn’t there for the entire time of that launch of their peer-to-peer offering. But I imagine what they’ve done to greatly pay the peak of peer-to-peer.  What is gonna happen in that area was probably half the rate without that, but over the last two years, is probably the cannibalization of the taxi driver industry, by the peer-to-peer industry. It’s something that the drivers were worried about then. 

I remember this one point, I’m driving in a taxi from my hotel to the Grab office and the taxi driver was talking about how he can’t even feed his kid, and he only has one meal a day.  That was really sad. And he was telling me about his divorce and he has this one kid and his whole life is about her and he has one meal a day because all he has and what’s happening in terms of the transportation space there is cannibalizing his lifestyle, that was really sad. I almost wanted to yell on Anthony Tan, the founder of Grab, because basically, what’s happening in this industry is painful to the folks that are currently in combat.

Shamanth 

Much as we all want to talk about disruption, that has a very real impact on a lot of people’s lives.

Dan 

Capitalism has losers. I don’t think the tech crowd focused enough on the consequences of their disruptive tech.

Shamanth 

Your experience at Lyft and Grab eventually led you to your next gig. Can you tell us about that?

Dan 

After I came back from Asia, as I said, I was advising 500’s portfolio to a really good extent, for a lot of their companies, and also doing consulting outside of that. I got to work with a company called Limebike, which is in the bike-sharing space. They reached out to me about working with them. I joined them in some capacity over the last six, or seven months. 

Bike pairing is essentially a phenomenon of dockless bike sharing, where basically, people can pick up and drop off bikes anywhere, as long as it’s a place where you can dock a bike, so posts, or some kind of physical structure that actually allows you to dock the bike. This phenomenon took off in Asia with these giants like Ofo and MOBIKE, being funded heavily by Softbank and Alibaba and all this other money that’s in Asia. Public companies kind of saw that market and who is operating.

Shamanth 

Where does Limebike operate right now?

Dan

There are 12 markets, I think, the biggest market in Seattle. They’re growing, they’re trying to operate, I guess, to bring this phenomenon to as many markets in the US as possible.

Shamanth 

Why do you think it’s an emerging and growing trend?

Dan 

Transportation is a challenge for many cities, and definitely certain countries in the world. So when you look at the challenges of the country that generated this phenomenon like in China, you have pollution problems, you have infrastructure problems, and you need to get people from A to B, and basically, automobile ownership is not a scalable solution for them. It took off solely as a solution to the lack of one public transportation there. That’s what led to its growth. 

In the US like in China, we still have our challenges. We are seeing an increasing amount of urbanization, and that’s leading to transportation challenges. Car ownership is cheaper here, but still getting around from A to B in urban areas can be taxing. If you have a car, It’s hard in dense areas.

Shamanth

And yet, in China, bike sharing companies have gone bust. What do you think that says about the future of space itself?

Dan 

It’d be super volatile. I think of that line from the Wizard of Oz, “Buckle your seatbelt, Dorothy because this is a wild ride” is really true. A lot of those companies have gone belly up because basically, the business model is not profitable. These are hardware companies where you basically build and ship these bikes, and then you’ve got to maintain them. You have to re-allocate them because this is dockless, they’re going to be spread all over the city. Then you have to re-allocate them, like a team that’s on the ground with overhead on the ground and move them from A to B on a daily basis. That’s really expensive. 

Both of those cost items, the hardware, and the team that can move them around are really expensive. And meanwhile, you’re not charging too much for a ride. A lot of these bikes are getting thrown away. There’s definitely some amount of attrition there in terms of bikes that are not able to circulate back into the ecosystem because of abuse. All of that is leading to an unprofitable company.

Shamanth 

What do you think is the way forward to make any of this sustainable?

Dan 

That’s a really good question. I imagine the amount of buy-in from regulation, in terms of how many bikes you have out there or the population in any given neighborhood or city, and where they can be done. Maybe a little bit more regulation. That’s going to be increasingly important.

Shamanth 

You saw ride-sharing at Lyft and at Grab. Ride-sharing has some parallels, but it’s not quite the same. What are the learnings from Lyft and Grab that you saw that you can directly apply to what you did at Limebike?

Dan

I think in terms of how to generate a hyperlocal audience. You can leverage the same marketing tactic in terms of building adoption or getting early adopters to buy the product. Outside of that, it’s a different use case. In bike sharing, you’re basically talking about the last mile.

Shamanth 

What does that mean? 

Dan 

Last mile transportation, basically, fulfillment on a very local level? This means, what Postmates does in terms of delivering something from A to B, like a restaurant you view within a one or two-mile radius?

Shamanth 

What does that mean? Do you have to be able to physically locate the bike easily?

Dan 

Yes. Because it means the person is willing to take that bike ride for one to two miles away, they’re not going to take an Uber or Lyft ride that’s like four or five yards. That’s going to go potentially, up to five miles long. The Limebike rides are meant for people that are probably in a shorter distance because they don’t want to travel hours on the bike. It’s a very different use case, in terms of how they’re using it. They’re going to only use bike rides if they think they’re gonna go a short distance. That’s what I meant by the last mile.

Shamanth 

I would imagine that means that has implications while you’re talking about spatial density in the city. 

Dan 

Yes. You need to have a certain level of density that you’re basically always around, always within, you know, a five-minute walk from a bike.

Shamanth 

When you were working with Limebike, what was the data you were tracking and optimizing for? How did you see it differ conceptually, from what you did that Lyft and Grab, because at both Lyft and Grab, you were optimizing for liquidity. What were you looking at when you worked with Lime bike?

Dan 

Lime bike is still optimizing. We did look into retention across different subsets of users to see how that’s affecting ridership. But for the most part, they’re looking at how many riders we have that are active by any given month. They’re still in this mode of basically proving out that this can be a thing here in the US. I think there was less scrutiny with Uber and Lyft given the fact that the taxi industry was already in front, and they basically proved out that people will take rides from somebody. Even after that, you can track, and cheaper they’ll definitely do it. 

With bikes, the bike sharing space and even the dock, the hypothesis of whether they’ll actually be able to generate enough adoption to be a viable transportation solution for people living in Seattle or whatever market is still a  question because I don’t think you have a bike riding culture that’s analogous to China’s. I don’t think the US has proven that around bike sharing or biking.  The habit of biking is not ingrained in the US as much as it is in China and Asia.

Shamanth 

You and I live in Brooklyn. So we see a lot more biking than is probably prevalent in most of America. This is very much of a challenge in changing consumer habits.

Dan 

Yes. Then biking also doesn’t play well, in winter and in certain parts of the country. And so it’s a lot less ubiquitous than ride-sharing, where you take a ride in whatever weather you can get there. If anything, ridesharing is more prevalent, it benefits from the crappy weather. People will take a Lyft or Uber if it’s raining.

Shamanth 

You worked with Limebike, you helped them expand, you helped them grow. How did you find the playbook for launching in a new market, different from what you did at Lyft or perhaps Grab?

Dan 

In regard to the playbook, I wasn’t a part of everything that the company has done, but primarily focused on how to leverage digital channels across both paid and organic and also the kind of seed early adopters, within different zip codes in different cities, different neighborhoods and tried to figure out which channels can help them see their list growth and their social audiences. How did they get those folks to actually adopt overnight? 

Shamanth 

Were there things that surprised you, when you worked with Limebike that had them get into multiple cities that fast?

Dan 

The biggest challenge right now is actually topography. That should not be a surprise, but it would be in terms of having people take a ride uphill is not going to have that effect. The biggest challenge is dealing with the topography side effects, deployment effect, that affects a whole standpoint, deployments basically at the top of the funnel for this.

Shamanth 

How do you give it back?

Dan 

Where the company wants to go is motorized bikes that do not have to deal with. That’s one solution. And then two, you have to get tighter on the allocation. 

Shamanth 

What does that mean? 

Dan 

Moving the bike around such that, if you can get users to go moving the bikes around in places where they can use the bike and not kind of base this about a topographical town. If there are certain areas where even if they’re popular paths, if there’s like a hill on the way, people aren’t going to want to bike uphill. So then moving into an area that’s allocated. We’re focusing on neighborhoods that have fewer challenges.

Shamanth 

Which would mean not having docking stations, at places where that would involve uphill paths?

Dan 

Or not moving the bikes, not building bikes and commuting pathways or neighborhoods, where to go from the residence to wherever they’re trying to commute to, are they going to face hills or they’re going to face a lot of topographical challenges.

Shamanth 

So no docking stations and the bikes have to be physically moved.

Dan 

Yes. So trying to reallocate the bike to neighborhoods, where at least the consumer pathway for the bike from residence to the city would be a lot flatter, would be less fiddled with hills, things of that nature.

Shamanth 

Unlike Lyft, it sounds like this will require a significant local presence.

Dan 

Yes. When you have dockless bikes, that’s a challenge.

Shamanth 

I’ve always been curious, though, what happens if there are multiple bike-sharing companies in a single city? Is that a problem?

Dan

It depends on how the city wants to regulate it. Some cities actually give exclusivity to certain players. But it can get messy. Because all of a sudden, you have like multiple bikes, you have 1000s of bikes, multiple players. I don’t think each city has come up with a solution yet. I think they’re kind of catching up to what they’re saying.

Shamanth 

In New York I know there is citi bike at this point. Do you anticipate other bike-sharing companies coming to New York?

Dan 

From my understanding, they’re already looking to give out a list of agreements. I don’t know which one it’s going to be

Shamanth 

Dan I know we are brushing up against the end of our time together today. This would be a good time to wrap up. 

Before you leave. Could you tell us where people can find out more about you? And tell us more about what you do right now.

Dan 

I run an agency. We’re a two-man shop right now. I’m working primarily with e-commerce startups, but also other B2C startups with their entire growth funnel, so you can find us on scaleuplabs.io Learn more about us there. 

We primarily work with consumer-facing startups, mostly e-commerce, but some non-ecommerce as well. And outside of that, we are working on our own e-commerce vendors. So that’s part of the reason why we work with a lot of ecommerce startups. Because strategically it’s really selfish for us because we’re working on our own ventures. The learnings that we generate on our own are definitely cross-pollinated across everything we do. If you’re an ecommerce startup or entrepreneur, definitely reach out to me.

Shamanth

Wonderful. I’m excited to see where you go from here, Dan. I think that would be a great point for us to conclude this conversation. Thanks so much again, Dan. We’re going to have to hang out again.

Dan 

It’s been great. Thanks for having me.