The Lean Startup Conference kickoff at the Nob Hill Masonic Centre in San Francisco was the opportunity for Zipcar co-founder Robin Chase to give us our weekly fix of shared economy.
The leanest startup ever
Zipcar, founded in 2000 by two Cambridge, MA moms Robin Chase and Antje Danielson, is one of the leading car sharing services in the USA. It provides automated access to Zipcars parked all around cities with a simple online reservation system by the hour or the day. The leanest possible startup you could ever think of in its beginning, it was acquired by the car rental giant Avis in May 2013 for $500 million and is now approaching 1 million members. By the time they launched, Zipcar had already raised $700,000, but that launch didn’t come without a few iterations. Zipcar is the leanest possible startup you could think of when it comes to car sharing. « In April 2000, we had a website where you could see one calendar showing the availability for the only car we had, a VW Beetle », Chase says. Customers had to make a reservation online, go to Chase’s house in Cambridge where the car was parked, sneak to the backyard to find a cushion on the porch that was hiding the key underneath. Walking back to the car, they would find a paper indicating rental times in the glove box. For three months that was how people used Zipcar. Then the system evolved for another three months. An automated access with a special card was provided to the customer. In fact, each card could open any of the Zipcars. But that’s how you iterate. Today’s card-based RFID technology would have taken months and money to develop without any validated learning, one of the founding principles of the lean startup.
“Zipcar”, says Chase, is an lean company in the sense that it learned how to leverage excess capacity and enable others to do the work ». Indeed, we only use our cars 5% of the time, and Chase felt a way could be figured out to allocate the remaining 95%. She also improved the user experience by slashing the typical 20 minutes waiting time you have to face when you rent a car. If you were to rent the car for only one hour, there is no way you would wait a third of the time to get on the road. That’s why Zipcar customers do the paperwork and pay online. Zipcar’s success story emphasizes a new organizational model, often referred as « shared economy »: « It took 60 years to IHG to get 645,000 hotel rooms, and AirBnB caught up in 4 years with 650,000 rooms. This is a typical example of « Peers Incorporated » », says Chase: there are things that individuals (« Peers ») can do to leverage excess capacity, and they need an organization (« Incorporated ») to centralize and market the whole thing. That’s how Skype, Facebook, YouTube, Wikipedia, eBay and Flickr were created, and still grow today.
Driving change for the environment
Today Chase is the CEO of Buzzcar, Zipcar’s French counterpart. With 7,000 cars parked all around France, she has already started to shake European markets. Her persistence in fixing the transportation market reflects a broader vision she has on environmental issues. Reminding us that the global temperature is to increase by 7°C if we don’t meet current goals by 2060, she wants to instill the audience a will to foster change. Change in the way we act (riding your bike instead of driving your car, eating less meat), change in business leadership, change in the way we take action through local politics and communities. For those of us who still aren’t convinced, she quotes Richard Branson, saying that “Climate change is the biggest wealth-creating opportunity of our generation.” And the lean startup is the only way
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