Transcript
0:00 So, the first two years of the business, we focused on working with individual taxi drivers and taxi companies, and we had very good progress [music] with that. But, after 2 years, I remember there was this important meeting where we met the biggest taxi company in Serbia, and I clearly realized walking in that these people are the mafia. There's a pistol on the table. They don't care about [music] customers at all. And I realized after that meeting flying back that we are never going to work with these kind of [music] companies again. We need to pivot. We need to work with people who actually want to serve customers well, and we [music] really changed the strategy of the business after that, and we never looked back.
0:38 My name is Markus Villig. [music] I'm the founder and CEO of Bolt, the leading mobility platform across Europe, the Middle East, and Africa. On the personal side, I [music] was just completely frustrated by the experience I saw in Tallinn. Every time I needed to use a taxi to get anywhere as a teenager, it was a horrible experience. And if you design the bad experience, I mean, that's effective what you would design. I mean, there was 20 small companies you had to call. They didn't even pick up. Even if they did pick up, the car almost never made it to you or came with a huge delay.
1:11 And then the cars were really in bad shape. The drivers were very rude, and it was just really a horrible experience, not to mention the payment, and you had to always carry cash on you and so on. So, it was just all around a very bad experience. And then I started to think whether that could actually be a good business opportunity. I was 19. >> [music] >> So, really a teenager in high school. I didn't have any experience, any connections, any real resources to speak of, and I figured that I needed the first 5,000 euros to get the product off the ground.
1:44 To hire a developer to help me build a prototype, and also have some money for initial marketing. And then, since I didn't know any investors, I went to my parents and asked if they were willing to lend me or or invest in the business about 5,000. And that was a funny episode where they thought about it for quite a while because that was a big sum of money for for us back then, and initially they said that they're willing to to make this loan for me, but that comes at my own personal risk. And then if I screw it up and all this money is gone, then I can't cover my own rent during university.
2:17 Initial start was very humble. I went on the streets of Tallinn talking to taxi drivers one by one. So, [music] as it goes in most cities around the world, they're usually waiting in these hot spots around airports or other sort of train stations and so on. So, I just went to them, got in the car, and started pitching [music] that I have this idea. Would you like to make additional income by joining this platform? You're going to get additional trips each day, and you're only going to pay a commission. So, it's a very very risk-free proposition for you. You don't have to join with any fixed fees or anything like that.
2:48 And the sales went really poorly, I must say. [music] So, so that after the first couple of months, probably 90% of them told me that they're not interested because they saw it so risky. I was just a kid. I didn't even have a product back then, so I was just pitching a concept. [music] But, eventually I I had a couple of dozen drivers lined up who had given me their contacts, and they said they're they're good to go. So, that gave me the initial quantity of supply to get the the first product off the ground in Tallinn.
3:16 When we started in 2014, there was actually very little competition. So, there was almost no app-based ride-hailing companies back then. There was a couple of small ones starting up in the US and Asia, but nobody had really made it anything in Europe. Not to mention raise any significant funding or really dominate the industry. So, we we got into this thinking that it might not be that competitive an industry at all. And of course, a couple years later, it became the most competitive industry in tech [music] with our competitors raising tens of billions of dollars. So, we didn't really understand what we were getting into [music] in the beginning.
3:52 Over a couple of years, the market of course transitioned to apps. So, everybody started hailing ride digitally. And we had counter-positioned ourselves in that market by working together with the taxi companies and taxi drivers. Because they were very afraid that new entrants were coming in, and they were cutting them out completely. And that strategy worked well for us for a couple of years in many countries. But then, after that pivotal moment where we finally started to realize that most taxi companies are not going to make this transition. They are not never going to adopt these tools and become digital.
4:24 We thought that we actually have to go and start to compete against them as well. And that was a big risk because you're effectively starting to go in in some way start to compete against your own customers. And that was a very risky move in some countries, but looking back, it was the right decision to do both for the customers and for us. Our ambition from day one was that we wanted to build a company that serves millions of people, and Estonia is a tiny place. It just has a population of 1.3 million. So, clearly we thought that we're just going to start here. We're going to polish the product, make it great, and then we're going to take it international.
4:57 And that's exactly what we did. So, the first 6 months, we focused on really nailing it in the first few cities here. We got to meaningful revenue, great customer traction, and then we thought that we're ready to start with expansion. And then we raised the first round of about a million euros for for the first wave of [music] launching the next cities. Which looking back seems like a tiny amount, but back then we thought that it's all the money we're ever going to need.
5:24 And then we made a huge mistake though. So, we we tried to launch in about 10 cities at once. All the way from the Netherlands to Finland to Serbia, and we almost bankrupted the business. So, then at some point we realized we have to restart. We have to think about expansion in a different way. And what we did was that we threw away all of our biases. So, instead of thinking about just going to the neighboring country, which is the closest geographically, we looked at the map of the world. We made a list of the top few hundred cities in the world, and we ranked them by characteristics that we thought from first principles actually should correlate with what our product market fit is.
6:04 >> [music] >> So, we ranked them by population, by availability of private cars and public transport, >> [music] >> so we could have a good proxy for what the demand side is going to be. And then we looked at what is the unemployment rate. So, are there a lot of people out there who looking for additional ways to make income? What is the taxi regulation? Is it easy for these drivers, if they want to, to actually get on the road and start earning, or not? And after actually just a couple [music] of weeks of this analysis, all the African cities actually turned out to be the top of the list.
6:35 Large population, massive need for alternatives in terms of transportation, [music] and very high unemployment. So, clearly millions of people who would like to join these kind of platforms to make additional income. And even though we had no experience [music] in Africa, and from the sort of superficial level might might presume that it's very hard to to make actually sort of a big business in in some of these countries with fairly low income levels, what we realized was that the volume is so vast, and these economies are growing so quickly, that it makes sense for us in the long term to bet on these countries. And that's what we did. Once we figured out that there's >> [music] >> this huge new world out there when it comes to these emerging markets all the way from South Africa to Nigeria to Kenya to places like Azerbaijan, we suddenly realized [music] that the product market fit there is so great that we actually need to invest significantly less. And we were able to really accelerate the [music] growth of the business. So, we went from having no presence in these emerging markets to suddenly those being more than 50% of the business in about 6 months.
7:39 And >> [music] >> we really pivoted the whole management team attention just to double down on that and figure out how do we find even more markets like this to accelerate. Back in 2019, there was very little adoption of food delivery in most of our countries. And we thought that there's an opportunity for us to enter and build a category leader in at least a dozen countries. And that could be a multi-billion business over the next few years. We were actually very lucky that we launched it just a couple of months before COVID. So, the initial traction we had in the first few cities was good.
8:14 But then suddenly, the whole world went into lockdown. And then the ride-sharing business declined by 85%. So, you can imagine it was vast majority of our revenue. We had a thousand employees, and then you lose 85% of your business. What most of our competitors did was that they immediately raised the rounds, and they also really went after the costs. And for most of these companies, the main cost they had was employees. So, they let go 30% [music] in some case even 50% of their entire workforce. And that of course was a big drain on morale, and these companies were effectively paralyzed for the next 6 to 12 months. They couldn't do much.
8:51 So, what we did was we thought we're going to take the gamble. We're not going to let go of a single person. So, what we did was we we told the company that we're just going to be reducing salaries by a flat 20%, and then people could opt in to take a bigger cut than that if they could afford to. With founders going to zero, and most of the executives going to zero as well, just on an opt-in basis. It actually even made the team much stronger because everybody in the company realized that this is an unprecedented health crisis, and so many people are getting laid off, and it's economically putting a lot of stress on them. So, actually we had hundreds of people opting in to take quite large meaningful pay cuts, 20, 30, 40% on top of what we had offered. And actually brought the team's morale to a completely new level. And then, once the company was doing great again, and we had recovered 9 months later, we gave especially those people very generous equity bonuses as well. So, like that was a very risky bet of course. I mean, if [music] if it had taken longer, or delivery wouldn't have worked out, the company would have been in real trouble.
9:59 But, um we were very ambitious. We had a lot of confidence that this is the bet we want to do as a company. We thought this is really a crucial moment where you can actually meaningfully change your position in the entire market. And it worked out beautifully. >> [music] >> The food delivery business really took off really rapidly. And >> [music] >> actually, exactly as we imagined, just 6 months later, the first cities in Europe started opening up, and ride-sharing [music] was recovering quite nicely.
10:25 And because all of our competitors were [music] so paralyzed from the layoffs, uh and they weren't really focused, we were able to take a lot of market share. So, coming out [music] of COVID, we tripled our market share relative to what we had going in. And I think there's this perfect analogy that it's very hard to overtake uh drivers during a normal race, but you can take overtake a lot of drivers when it's raining, and I think it was exactly what happened during COVID with us.