Monday, April 15, 2019
Interview with Wheels, Josh Viner and Marco McCottry
Is there room in the last-mile transportation industry for another player, and what are some of the issues that need to be solved to make industry a success? San Diego-based Wheels (www.takewheels.com) was co-founded by Jon and Josh Viner, who were the co-founders of Wag, where they raised nearly $400M in venture capital. We caught up with Josh Viner, who serves as CEO, and Marco McCottry, the company's COO, who most recently ran North American operations at Bird, and also managed Uber's midwest business, to hear about how Wheels is differentiated from all of the other last-mile transportation services out there. Wheels currently operates in Los Angeles and San Diego.
What is Wheels?
Josh Viner: Wheels is live in Los Angeles and San Diego. The mission of Wheels, is to get traffic off the road, and onto alternative forms of transportation.
How is this different from the many other on-demand, last mile transportation companies out there?
Josh Viner: We're different in two ways. One, is the form factor. You might be used to seeing scooters which are these stand-up devices with much smaller wheels. What we have developed, is an electric mini-bike. It's still compact, like a scooter, and takes up a similar profile on the road when it is docked, but it has much bigger tires. It has 14-inch wheels and a seat, which provides much more comfort, and a better overall ride experience. With scooters, they do not do well over cobblestone roads, potholes, or cracks. They really need perfectly flat roads. Our vehicle, on the other hand, is a much better experience, because you're sitting down, and it has a low center of gravity. That makes for a better experience on terrain that isn't perfectly flat. Because of those two key things, plus being a really sleek, fashion-forward design, we can reach a much larger demographic. One in three riders on our platform are over the age of 35, and many people who wouldn't try a scooter are enjoying our device.
That's the consumer side. On the operational side of things, they are differentiated as well. We have a swappable parts model, and we're able to manufacture and produce spare parts. If we need to replace something, you can easily replace it. We have a maintenance warehouse where we're able to do repairs and swap parts, so we can keep our vehicles on the road much longer. If you've seen the problems with the lifecycle of scooters, we've really taken that seriously with our model. We have a much higher uptime than the rest of the industry. In addition to that, instead of having to take scooters into your house to charge them—which is a pretty expensive operation to run—all we have to do is find the bikes, and relocate them to our hub. Our advantage is we can just swap out batteries, in a very efficient manner. You don't need to charge them overnight, which is game changing.
Josh, how did you decide to jump into the last mile transportation industry after your time at Wag?
Josh Viner: I've always been a huge fan of the transportation market, because I have a huge passion of making cities better. We feel like we did a great job with Wag in the first few years of the company, securing almost $400M in capital, and building a really great company, which was based around making cities better and people happier, and creating healthier lives. That's really what this is about in the transportation area. As we were proving to ourselves that there was a use case for last mile transportation, we started seeing lots of flaws. In fact, my brother even fell off these devices a few tims. We decided that we could build something that is safer, has a better experience, and could reach a much broader market. We came up with this idea, to use electric bicycles, which have a smaller profile than scooters. We were really passionate about this, and decided to go all-in, and create the next category of transportation company. It's been awesome.
How do you deal with the scaling issues behind this kind of business, without having to go head to head against other companies who have been raising hundreds of millions of dollars?
Josh Viner: I would say, our operational model is just so different. We've so much more advanced in building Version 2.0 of this. I see other companies, with a lot of that money just going into replenishing their supplies, replenishing their scooters, because they have a lot of their fleet having to be serviced all the time because of poor uptime numbers. We really have developed this business around high uptime, and extending the life of the vehicle.
What's the current funding status of the company now?
Josh Viner: We announced that we raised around $37M in funding a month or two ago. That came from a really great mixture of VCs and entrepreneurs and investors from many different sectors. We were able to raise a large amount of capital, in an environment where there has already been a lot of money put into the industry. Investors had to be very familiar with our business model for us to secure that funding for this business.
What was it specifically that enabled you to attract that funding?
Marco McCottry: I think it's really interesting. Three is a lot of interest and excitement over what we're doin, because of how differentiated our business model is, and how we're addressing the core problems of these businesses around uptime. Our vehicles are on the road almost every day of the week. If you look at the life of our vehicles, just about all of the vehicles we put on the road in San Diego when we launched are still operating today. If you look around at the articles and info about scooters, you may have heard their numbers are as short as six weeks to two months. We really think that an exciting product that riders like to ride, and getting the business model to work, and keeping vehicles out there by having swappable batteries, will drive the costs down. Those are the things we look at to really make this business model exciting to investors.
Marco, after your time at Uber and Bird, what inspired you to join Wheels?
Marco McCottry: I was excited about the opportunity. If think we're at the first wave in meeting core proposition of making things sustainable, and making cities a good place to live. I saw this product, saw what the company was doing, and though this was a great opportunity to be part of something that would provide meaningful value in the space. Not just in the sense of growth, and continuing on the path of attracting early adopters, but actually attracting a much broader user demographic. The fact that we are a bicycle, means we have a much broader user demographic using the product. Our vehicle goes a lot of places scooter can't go, and with 14-inch wehels, it's meant for the roads that we have today which just aren't meant for scooters, if you think about most of the cities out there. The though we've given to the product, to innovation in hardware, and opearting it, user authentication, and more really makes me excited that this is the next wave of something special to continue to move the industry forward, and take more cars off the road.
Finally, Josh—what's the biggest lesson youlearned from your time co-founding Wag, which you're applying here?
Josh Viner: That's a good question. Obviously, we built, over four years, a raspidly scaling company, and we definitely learned a lot in the process. I think the biggest one, was letting your product speak for itself. You have to have a customer-focused business, focused on delighting your customers. For Wag, our customers were the dog walkers, the dogs, and the pet owners. We really focused on them, and that's why Wag was so successful. We really focused on providing the best experience for owners and for dog walkers, and it worked out well for the company. We're doing the same here. I think what was really interesting, which we found studying how things have gone in San Diego, is how our vehicles have become San Diego's top choice among consumers. The study looked at eight popular locations, over 300 hours of research we've done, and found that our device made up 40 percent of the rides. It had the highest market share among five or six competitors. The second place, with 20 to 25 percent of the rides, was Lime. It really showed us that our device has the strongest user preference, because of its feature set and the form factor.
Thanks!