BY CHRISTOPH MEYER
ME 302C - The Future of the Automobile - Mobility Entrepreneurship is a Stanford course taught by Reilly Brennan and Stephen Zoepf in Spring 2017. This course will feature a series of guest speakers across the spectrum of the mobility industry, with Pearl, Turo, and Lyft featured among others.
In order to provide an inside view to mobility enthusiasts not enrolled in the course, I will be publishing a weekly post on the CARS blog. These posts will feature a high level summary of a brief discussion with each of the guest speakers. While the content shared in the classroom will be kept confidential and off-the-record, I will interview them for 15-20 minutes afterwards. I may probe them on topics that were covered in class but the interviewee will have the discretion as to how they answer. The goal will be to learn more about their companies as well as delve into the speakers’ views on general trends in the industry and predictions of where things are headed.
Keep your eyes out for these weekly updates - full speed ahead!
Interview with Joanna McFarland, CEO and co-founder of HopSkipDrive
I enjoyed hearing Joanna’s perspectives during class and our conversation. HopSkipDrive solves a fundamental need for millions of people and one that drove her to create the company in the first place. The company’s success is largely driven by how well she and her team understand the customer and their needs. The authenticity of the founder to the business was apparent to me from the start. Her experience also shows how important customer service will be going forward. It seems like a foregone conclusion that autonomy will unlock mobility for millions more people. Yet, for many, transportation is only one part of the equation. Specific customer segments, such as children and seniors, will need assistance and care that won’t be provided by the broader market offering. This dynamic indicates that this industry may not experience a “winner takes all” scenario that some predict.”
Q: How important do you think customization / catering to specific segments will be going forward as the transportation/mobility industry evolves?
“Different segments have different needs that require specific solutions. Just as there are multiple segments in the trucking and commercial space (short haul, long haul, TL vs LTL, etc) that require different solutions, there are multiple segments in the consumer space that will need to be addressed specifically. Kids and seniors in particular will have specific needs. Non-emergency medical transport is also unique. We are starting to see more and more corporate partnerships, for example with Uber and Lyft) working with company HR departments. Work travel also has specific needs. Some of these can be served more easily, but each segment is going to have its own product feature sets. It will be very important to really understand customers and their specific problems going forward. It’s vital to assess the needs while prioritizing due to limited resources.”
Q: How do you think about entering a crowded market — especially when there are players like Uber, Lyft, etc that can become competitors?
“In our situation, we are creating a whole new category and changing the way families think about family logistics. Our competitor is really the part-time or full-time babysitter/nanny and awareness that the category exists. Broadly speaking though, you need to ask the question: ‘Is this segment/vertical large enough to create an industry on its own? Is it differentiated enough that it matters’. If you can’t specifically build a product around this business and the needs aren’t different enough, it’s unlikely to succeed.
I think this industry will have players specific targeting specific niches. You see this across a lot of industries. The big players cover a mass audience and new entrants go after specific verticals and eventually build big businesses. We saw this with eBay in eCommerce, where other companies with specific verticals arose to fulfill specific needs.”
Q: How do you think the changes in mobility/transportation will affect currently under-served segments (children, elderly, etc)?
“Changes like HopSkipDrive are life changing for families. We’ve provided solutions that enable both parents and kids to do what they couldn’t before. We’ve helped kids win roles at auditions, make competitive club teams, and get to tutors. Parents have told us they’ve gotten promotions or in some cases gone back to work and even started companies. Most importantly, we’re helping families do what they need to without the stress of transportation so when they are together, they’re spending quality time together.
When it comes to autonomy, I think it will evolve many business models and how to cater to customer segments. It goes back to who is the segment and what are their needs. Children, elderly, medical transport are all much more than just transportation — there are so many other needs to serve. The business models may evolve but fundamentally it’s not about the driving. It’s more than getting people from point A to point B.”
Q: Do you think roads will get more or less congested as a result of this increased access?
“We are going to see so much change that it’s hard to predict. I believe there will be a blending of autonomous fleets and public transportation. Ultimately, the idea is to have less congestion. However, we may end up in a phase where we initially have more congestion. Autonomous reduces the barrier of ownership but ride-sharing is moving people towards carpool and increased fleet utilization. I think in the long term this will ease congestion but it will be an evolution.”
Q: How do you think about scaling a business when brand and personal interaction is so important?
“Establishing the brand is incredibly important and is the key to scale. You have to gain trust first, and you do that through the credibility of your brand. It’s really important to realize that brand is much more than a logo and slogan. Brand is who your company is: how you operate and make decisions. Values are very much tied to brand. We talk about this a lot: ‘Is this on-brand , is that who we are?’. It applies very much to how we hire people.”
Q: How important will being “hyperlocal” be in the this industry going forward?
“For us, families tend to be pretty local to their communities, and matching supply and demand means thinking about it on a local level. For us, it’s not about how many CareDrivers we have in the Bay Area, it’s how many do we have in Santa Clara on a Tuesday at 3:00.
Going forward, every company, regardless of industry needs to think about localization. It goes in hand with data and personalization. Localization is the norm for marketing now — that skill set is vital. We talk a lot about demographics but localization is just another layer that is important to understand customers.
We look to drivers to do a lot of the research and learning with every ride about neighborhoods and schools. We learn about local events and engage in the community. We have to prioritize but we try to listen to both sides of the marketplace.”
Q: What are the main challenges of being “scheduled” vs. on-demand? Is it possible to achieve both (Uber, etc have not really tried “scheduled”)?
“Scheduled vs on-demand each have their pros and cons, and are solving very different routing and logistics problems. To be truly on-demand requires having very dense supply and demand, which may make more sense for more general populations vs. niche segments. Our customers also have very specific schedules and needs (i.e. many schools and child activities require authorization for sign in/sign out, which means knowing who the driver is in advance).”
Q: What is your recommendation for people without a purely technical background to enter the transportation entrepreneurship sector?
“I think what is most important, more than background, is really understanding the user experience and the specific problem you are trying to solve. I can only speak for myself, but my path to entrepreneurship came from solving a very real and personal I experienced. That not only informed our approach to the problem, but also continues to keep us focused and passionate through the hi’s and low’s of entrepreneurship.”