Brad Bao, Co-founder and Chairman at Lime

David Litwak:
Hello everyone and welcome to how I got here Mozilla and focus wires podcast that delves into the innovators in travel and transportation. Today we’re joined by Brad bow, one of the two founders of lime. Lime was founded in January 2017, by Brad and Toby son, and is primarily known for popularizing the deck dockless scooters you see around every city these days. But they’re also known for operating electric bikes, normal pedal bikes, and even car sharing systems. So thank you for joining us today, Brad.

Brad Bao:
Thank you for having me here. And I’m very glad the you know, thanks again for you guys to create this awesome venue for us to you don’t really discuss the industries and also innovations everyone has.

David Litwak:
Of course, it’s it’s been an absolute pleasure so far. So we will as you know, we like to start every one of these podcasts off the same way, which is for us to ask you how you got here.

Brad Bao:
Yeah, love the question. I think I heard a lot of big fan of the series, you know, her great stories out of it as well. So more than happy to share mine. I’d like to begin with that the the creation or the genesis of lime probably is a little bit different from many other startups, right? We didn’t got hit by lightning, we didn’t like say, Hey, here’s a brilliant idea. Let’s just create it tomorrow. But I did, I do think the you know, the lime creation was a result of like a combination of, you know, passion, which is about troubles and in bikes itself, right. The that’s one thing, frustration with the the incumbents, what existing solutions, and very deep research and also entrepreneurship that’s actually at the end of it. So the very, we started lime in 2017. But we actually started work way before that. And before we, you know, Toby and I started lime, we were at a venture firm that I co founded in back in 2017 2013. And we’re doing bunch of researches and and doing you know, venture investments across the world globe. And one sector that always we are passionate about is travel and transportation, it just given the nature that you know, $1 we just love it, right, we travels a lot and I’m a pretty avid global traveler as well and be that I’m a I’m a cyclist and you know, it’s hard to tell with the Office coconut. I just love it. We grew up in China moving in the US in you know, adult back then that bike was the way we traveled you know ever since I elementary school that so it’s kind of like unsinkable in some other countries but back in the elementary schools I bike or my by myself to school. And in the university I bike roughly about 20 miles per hour per trip, right one way to to my college. And that’s why my main way of transportation. So I think the diversity of backgrounds that give everyone a little bit different kind of a perspective on the world that there are some of that, for example in the US that bikes are more see as a sports than transportation. Well as to me, bike is the main way of transporting you know myself and a hand always friends. But a Europe is kind of in the middle is well accepted as a way of transportation but meanwhile he is a really good at sports as well. So when I came to the US I converted my biking habit into more sports but always questioned that you know why this is not widely widely adopted. So when we were doing the research in on you know, shared mobility, Wilbur, everything else, right the market was was booming at a time if you think about backing the 2015 2016 era, but also meanwhile that we still found is clumsy and also, you know, stocking the traffic and all that when we in an urban setting. Everyone that he will ask the audience right to raise their hand. Have you ever felt get frustrated when you’re stuck in traffic in a, you know, urban environment? Have you ever encountered a situation that he went to you want to go to a city destination, but then figured out that you were stuck in a taxi or Uber or buses and wait and waited that you could have already walked over? Or biked over? I think everyone had that moment. Right, that frustration started to build up. And when we were loved the story there that we were running late for between the meetings in New York actually, the meeting was scheduled really tired, we thought we had enough time and there was a bad traffic right and then we went to this system called a City Bank. Then what I realized is set up an account to get a bike take me 15 to 20 minutes. And then when I go to the first station, there’s no bike and then we had to attach to the second station. We eventually find the bike we spent 1520 minute Get a bike and bike to the others place year, not quite, but near to our destination, and the dock was full, we cannot return the bike. So we were late to the meeting, we spent a lot of times setting up the account. And then we had to leave the back out of the dog. And the next day, we will find $49 because we did return to the dog, which is was not my problem, right? The and and combine that with the passion of like, you know, environmental protection, which we all agree that urbanization is faster and faster city gets more crowded, which we should also all agree that pollution in the city is much worse than before. But there’s no solution, right adding more highways or that it just doesn’t help. So we look at bikes as a way to, to to solve all the problems in when we look at an industry is why we had God ask ourselves a few questions. And that’s our, you know, roughly about six to eight months of dedicated research was on number one does that in the long term help consumers cities, communities, when you know real estate in the city in namely shared real estate, like public roads and all that stuff? It’s getting more crowded, and more more scarce? The answer is yes. Do user adopt this kind of form of transportation? Does it save their money? You know, does this save them time? Do we have any validations? So we look around and you know, cities like Amsterdam or Copenhagen that 50% of the traffic already are on non cars. And that’s a strong validation that could be done right. You know, some will ask well, you know, in the US the void some other cities is cold is rains and all that stuff. Look at Amsterdam, look at Copenhagen, I don’t think New York is any colder than that. And then we look at a more well established bike system, for example, while ago was the Berlin spike in London, the adoption rate and utilization actually is was quite high, then we further look at it citibike we saw the limitations or that do people use it? And what do we find out is you actually was highly leveraged that used during the summertime, not as much into winter. But the problem was that is he in conclusion all the system today was in comprehend in order to use to to provide a reliable service to the users, but user do love it user to use it. And the last question we have to answer is why order system are not addressing this kind of a challenge in the past any limitations and drawbacks? Does the business model work in order to be a sustainable business to provide a long term value, right, the business model has to work. So that all come back together to us. And we’re trying to answer those questions and the picture becomes more clear and clear. First is the first principle of a transportation service is it needs to be comprehensive. Hence, in order to for the user to use it cannot just only be available by has to be readily anytime anywhere user needed. Secondly, it has to be economically cheap enough for user to use it as a daily method not just occasionally use as a leisure right and the third thing is the whole system is to be so easy to use and very easy to adopt instead of spending 1520 minutes when you’re in a rush and trying to figure out so all these things come together I think the you know, we have a good way to address the challenge in terms of urban mobility and as a reminder that urban mobility, majority of the trips are short, more than 40% depends on the city 40 50% of the trips are less than two miles. So if you apply that into the current solutions, right waiting for a bus to ride for a mile or two or average take you 1015 minutes of weight and doesn’t take you to destination wedding photo for for you know taxi Uber roughly take maybe five to 10 minutes. And that adds up in terms of the most valuable thing to all of us is time. It just doesn’t worth it. And in terms of the cost per taxi and everything it just out of the reach for I don’t have a finger but majority of the people on a daily basis right occasionally Of course we all use it on a daily basis is economically not enough to be at a daily use. Then the last question we got to answer is, you know why didn’t work in the past. And what we found out are one the product and the hardware are outdated, they were created a decade or even longer. Go at a time GPS was outstandingly expensive, right, the the data connection was very expensive, they were all created by based on docks, which limited the availability of the service, and also limit the utility of it, that it doesn’t get you to where you want to go. Right. So that’s one thing. And the second thing is, was the way it was sponsored in the past, or their business model was based on city grants, or the federal grants, which limits the availability and also limits the innovations that goes into it. So based on the first principle of like, let’s go back on what the user want, instead of what’s available, the user want a cheap, out cheap alternative, get them there faster, and also is equal economic, you know, friendly. And also, one very important aspects I want to point out is a has to take less real estate war space on the ground. And it will compare, you know, the available Solutions. Today. A bike takes roughly about one 10th of the relatively are compared to a car, it consumes roughly 180 of energy word, there’s no pollution related to this, the cost is one third of what you will lower compared to a car trip. And it does need to be you know, from A to B directly, which is the darkness that we are, you know, he says, you know, kind of a useless dog. In addition to that it relationship with cities and community is the last question we need to answer. We had too many stories of like, hey, let’s just crash into that. And and we negotiated, you know, terms later or whatnot, we decided not to do it exactly. You know, we figured our customers if you would, right, it’s not only just the end users who benefit from the services, but also the community and cities and how we can help them reduce traffic and pollution. So we always insisted that we get a license and permit working with cities to, to establish the products. So what we did in 2017, that we redesign entire hardware, redesign the entire operating system. And we redefined how a private company can work with, you know, cities and government to provide a service to the general public. So that’s how we got Comm. Line comm to, to learn to life.

David Litwak:
Very cool. I so many, so many questions. Ironically, I one of the ones I had written down before we jumped on, it was about the idea of like asking for forgiveness later. And you kind of address that a little bit. But we can get back to that in a second. I wanted to ask one quick follow up question here. You guys had a few I don’t say a few iterations. But you guys once called lime bike. And that was mostly lime, right? Because there’s not as as many bikes maybe I feel like you were known for different things at different points. And it seemed like when the scooters were introduced, that’s kind of when at least you guys took off, at least in the public psyche. So can you maybe elaborate on maybe just that small part of your guys launch? How you went from bikes to scooters and more?

Brad Bao:
Yeah, totally. So when again, that you know, bait back to the story that when we launched a company, or when we start a company already had the roadmap. You know, if you ever came across our like early, you know, company presentations or pitch deck, that before we raise series A that the bikes ebikes. And all that stuff is already in the roadmap. And again, that as in transportation is not about just a product is a service, the service has one goal and one goal only is to get a user from A to B, instead of a Hey, you have to use this method versus the other method. So anything that serves urban mobility was in our roadmap. And he has the shorter distance, which is pedal bike, and then e bike, which is a longer distance in and then you know all kinds of form of transportation. But we’re iterating we’re testing we’re experimenting, of course, I think the you know, his scooter, the final form for the urban transportation, I don’t believe so. I think it will further evolve over time. And I do believe that there will be not only one product, or rather a service platform to provide all of them. So that’s how we get started in we started with the company with a brand actually lime. Nada, like bike, but the first product we launched was a lone bike. And what we found was a search word discovery issue. When we launched with only lime. You search in the App Store. What you found is like lime recipes, cocktails and all that stuff. And that make the user really difficult, right? You’re standing on the sidewalk, you look at a bike you were trying to unlock it and it says lime on it. So if you’ve searched A time, say lime, then you find that you will be frustrated, you know, Friday order non related irrelevant stuff. And that’s why we started with lump bike and then converted back into lime when we launched it a third product. But a vision and, you know, our plan never change. If the goal, the vision, the mission never changed.

Kevin May:
Yeah, sorry, go ahead. No, no, no, no, I was just gonna say you’re talking about, you know, in the public consciousness. And I remember being in Berlin, I can’t remember what year it was for the iitb exhibition, which is the big trade show every March, and didn’t notice anything then. And then I was in Berlin, about three or four months later for a weekend with some friends. And I don’t know if it was the weather, or you just launched but they were everywhere. I mean, honestly, you couldn’t walk down a street in Berlin, without seeing someone whizzing around on the scooters. I mean, it was, it was really interesting to go, it was just three or four month period. And he was everyone was saying, if you’ve got the line map, if you if you tried the scooters, yeah. And we all had to go, obviously. But anyway, that’s as an aside, I’m interested, because, you know, I wonder how you went about your kind of demographic analysis? And how did you try and understand who was going to actually be a user? Because I would, you know, I don’t live in London, but I lived in London for 20 years, and I used to ride my push bike or get the subway or the underground. And I would use a line bike if, you know, if I wanted to, because I you know, I’m fairly fit. I like ride, you know, I like cycling my bike and stuff like that. So how did you but that’s not for everybody, not every you know, everyone wants to ride in the rain in their kind of workloads or, or whatever. So how did you go about trying to estimate what your kind of audience size was likely to be?

Brad Bao:
Yeah. I said, That’s a really great question. So first of all, you know, that, let me have a love of color to or to the exploration, right, we we have a live lab, and we have all kinds of transportation things in there, the you know, one wheelers, the two wheelers, the wheels that you mount on your shoes, and the tricycles The, the, you know, all kinds of crazy things that you could imagine, and we test all of them. And what we concluded number one thing for, for the for a good product is safety. The safety is not only in the real safety data, you know, posed to the users but also sets of safety, feeling in control, feeling secured, and feeling comfortable using it even occasionally, I think the you know, the biking population, for example, in the US, there are roughly about 1% of people, including myself right back to work by to groceries or stuff, or the 99%, that they are relatively new to this, many of them are using at a sports he parks in on trails, but not in a city or urban environment. So when we gradually launch in different products, we actually launched the bikes in roughly July in 2017, in the E bikes in in September, so roughly every six months, we launch a new product. And when we launch the scooters, what happens is given the low central gravity, and given the no requirements of physical activities, that becomes instant popular. And there’s also a little bit hint of be cool, right? The, you know, bike kind of as a little bit old school, this is the cool thing and all that. And that’s where we find out so we didn’t start to say we are going to design it for you know, younger generations, we’re we’re more mature generations or whatnot. But we actually started more fundamentally, is what it takes for urban mobility in the small form factor becomes popular, I think their sense of safety, easy access. And also, last requirements on the physical stress are the important things.

Kevin May:
just just just a quick follow up on that, if I may bread, I mean, I, as a regular cyclist in London when I used to commute there when I lived there. You know, people would say to me, how do you get to work and I’d say, Oh, I ride my bike, and they go, you’re absolutely insane. I’d never ride a bike in London. It’s absolutely crazy. The drivers are crazy. You got the tourists walking out in the middle of the street all the time, all this kind of stuff. So was there a bit of educating as part of your kind of initial marketing to say, That’s right. Oh, actually, it’s quite safe. You know, it’s, it’s because people always say, it’s not about you, the rider. It’s everybody else. So, you know, how do you how did you convince people that it was actually a safe mode of transport if they hadn’t used a bike or a scooter before?

Brad Bao:
Yeah. Is it the that’s one of the biggest thing that the line wanted to accomplish? Yeah. It’s actually not just provide a product service but generators movement, the movement of on to, you know, really key two key things. One key thing is what exactly you ask is how we not just promoting safe but also educate the public and the public means the writers and non writers idea all together and walk away city to improve it. So when we look at back on some of the histories and some of the data, number one thing is the bike incidents, the rate is actually quite low. And given the the the speed, even the mass, you know, mass in terms of the weight of the vehicle, even though it was a acident da is not as severe, the most of the SM, what happens is cardio cars when you have a 4000 pound vehicle crash into another vehicle or not a person whatnot is the most devastating state. Well as bikers, I think everyone, you know, what we learned, we all fall, right, you got a bruise, bruise or whatnot, but he’s actually quite safe. That data has been validated by you know, many of the DLT or the OT means Department of Transportation, many of the research institutions. Second thing when we look at like, you know, penetration rate matters a ton, the lowest incident rate, in terms of traffic or bike incidents is in Copenhagen, Amsterdam. And that part, if you look at it, right, it’ll even wear helmets, not not against it, I still promote, you know, promote and have really, you know, want to incentivize the user to wear helmets. But I think that explains something in the most incident happens is when there’s not enough critical mass, the car drivers are not paying enough attention to it. And that’s one of the big thing. And there is a research by I believe what but was done by Oxford. And what he found a coloration, the highest coloration of incidence and regulation is actually helmet law. Anywhere requires helmet as a law, discourage people riding on a road and in turn, discourage the city to build more infrastructure. And then in turn, led drivers to pay less attention to right as biker you probably also heard a term is called I think it’s called a Copenhagen door open. So you open the door now with your you know, left handed while we were driving. With the driver see on the left, right, you open the door handle with your right hand and naturally, that you would turn and look behind you before you open the door. So that never gets properly out of cities. Guess why? Because people doesn’t need to pay as much attention if there’s no critical mass. So I think that a few things is educated users data by statistic, what is the incident rate and how severe they are. Number two, is promote what is the safe practice which we spend a lot of time on a lot of energy, a resource, and we give even give hundreds of thousands of helmet for for free. And we create first right campaigns all over the place, you know, Germany, all over the place. The last thing is to provide the data to the city and help it help them to build infrastructure. You know, some of the examples are after we launch Seattle, you know, Oregon, Portland, and even Paris that started beautiful bike lane protected bike lane. That’s the number one measurement to promote safe rise in the city. And it benefits everyone. Yep.

Kevin May:
Just last one for me. I mean, this is more of a practical question about the mechanics of the business. Really, I mean, it’s a great idea, you will have come up with the idea. And you’ve thought about the hardware and the software and everything that’s needed to go from the idea to having as you said, you don’t want people to have a poor experience of not being able to find one of your bikes anywhere. How did you go through the process of figuring out how many bikes you needed to produce in the first city, so that you got a sense of some kind of critical mass that people were able to find a bike as and when they needed one?

Brad Bao:
Yeah. I think the you know, what we’ve done are really twofold. twofold. The first thing is we will study the city first and we’ll come up with a proposal and this actually has been done now. We’re leading the trend and it becomes a more industry standard in a way right. They just say for example, we are in discussion with London. So we will go to London and say here, why don’t we you know, if you’re uncomfortable to launch a citywide, let’s launch a district and let’s start your ballroom and, and for that part it says micromobility is wall covering we’re hyperlocal business we’re covering a mile two mile radius, but it doesn’t need to be entirely allotted. We can start with a bar or two and it will look healthy. Like how ministries honored how many street corners? This is very interesting. The Quarter matters a ton in terms of like the rally in terms of local businesses and communities and in terms of potential risk points, yeah, for, you know, for incidents, whatnot, right, and population, you know, movement of people, and it will submit a proposal to the city. So here’s my proposal, here’s the data. Here’s the stats, here’s what we learned from other cities, in a comparable city we tested and this is how many of you probably need it. You know, if we are not going to launch a city with 20 bucks, that’s more for the show. Not really, for the people for the real use. We’re not going however, to launch a city with 200,000 bikes, that’s probably too much to begin with. And the adoption curve, there is always adoption curve, right? We started with the approx me right amount to start with enough density for the user to use it when they need it. But also, you know, take into account how we can manage it, how we can service it, how we can make sure they’re safe and how we fit it the adoption curve. And the second thing we do this is the beauty of being dockless service provider, then data will tell us how many pickups here how many missing demands here how many bikes has been or scooters, has been sitting there for 24 hours without us, and there’s no demand. And that data will then help us to optimize our you know, accuracy, man, where we deploy, how many we deploy, any, any bike or scooters are not be used, and we should move out of that place. And you know, that will give us really the perfect number or the perfect method to determine not only how many we need, but where we need a man what time and this is one of the secret sauce that our life has sped up, you know, a lot of resources to develop.

Kevin May:
It’s fascinating, dude.

David Litwak:
Yeah, Brad. So you said something a few minutes ago about you wanting to start a movement. And I thought that was actually really interesting, because I’ll be the first to admit, when I first saw some of the scooters around I I didn’t my first thought wasn’t that they were cool. I was like, Oh, that’s kind of dorky a little bit. I’ll be honest. And I think the reason is because of razor like they look remind people of razor scooters that we had growing up right when we were little. And and I think, though that like I use them all the time. I live in New York City. So not what I’m here. But I have a part time in DC and they’re all around DC and I. And they’re obviously so convenient. And I feel like you did have to change hearts and minds. And I and I wonder how much of it was the you know, how much of it was just mind like people adopting a new way of doing things and how much of it was the business model? Because I remember I lived in SF for seven years and they were scoot and scoot never really took off. And I think they kind of sold in a fire sale for not mistaken to burn. And they were obviously weren’t clearly the model. But they were actually were like maybe potentially the coolest scooters are more like Vespas. Right. But they they just didn’t seem to nail the business model. Right. What was how did you balance getting the right product with the right level of cool factor to start a movement like that? And how did you think about that?

Brad Bao:
Yeah, it’s the, you know, we study as part of the the research, as I mentioned, when we started Siddiq, you know, city buys foreign buys, and the school and many other companies at the time to figure out why they got some, you know, you know, success and why they’re not taking off at the time, is it for a form factor likes good? It is a little bit too intimidating. This big, you said really high, your central gravity is high. And also more it looks more like a motorcycle, which is associated with high speed associated with each of the rates. I actually I tried it, you know, I actually think it’s quite safe. But I think the adoption will be relatively low in terms of like the user again, back to what I mentioned, right? A sense of being safe is not there. And the second part is it the given they were trying to do is more in a way station base. They’re kind of like you know, not really station base, but the end of day you’re looking at big vehicles, you need to find real estate, you end up there in corals, instead of like, you know, being convenient. So I think that take away some of the utility right as emotional part of it. There’s the utility part of it are when we were trying to you know, think about a product, right, we did a startup from two extreme ends. One extreme end is the old school commuter bike. We had a bunch of them, we were one of the largest operator in the world in terms of that but adding Edie the GPS tracking is adding you know, extra safeties or whatnot. And then the extremely They’re just a cool fact, you know, with a lot of cool factor of kind of product in trying to find where that metal is. So, electric scooter, it’s actually relatively new. I’m not, not sure you guys know the history of it, it only gets popular not long ago, the scooter was by yourself as a category was created last night, 20 years ago. And then the electric scooter really gets some traction, no, no more than like eight years ago, or even five. Before that, it was a really, really niche market. I would guess that we didn’t do have the scientific data. But I would have guessed 90% of all users, if not more, never tried a electric scooter before, before. Doing some of their first tried is really the first time that they adopted, and it does feel a bit dorky it does feels like oh, that’s the you know, whatever kid down the blog, right? I kind of say, but today you’re see the user from like, you know, 80 years old to 80 years old, the highest age I know, off was 92 was on our scooter. So I think that’s really the movement coming, I think the movement comes into first is recognize I agree upon the value the value of reduced traffic and pollution and feeling that I’m contributing to it. Right. And then the second part is that it becomes a new trend that this is actually something cool, you know, examples that have that happens in the past a lot, right? We used to use plastic bags to shoppings, all that stuff in that, you know, because of the consciousness of environmental production, we’re using paper bags and all that. And that seems like a small shift. But in the beginning people was was whining about Wow, there’s a leak the sink, you know, soaking water, it breaks why I just cannot use it, it looks like so cheap. But now it’s a normal thing. So I think our goal is to make urban transportation, you know, on a shared platform. Actually not cool, actually is you see it as a normal part of your life. And that’s how I go, but they started with the moment are people recognizing it, agree with the values and feeling contribute to it. And that’s the beginning part. So I think that journey of like, re reinvent urbanization, the urban mobility is just at the beginning.

David Litwak:
I love that, you guys, your goal was basically to commoditize and normalize not to maybe set it up as something cool. And I actually think that’s a really good distinction. If, you know, to the kind of way of thinking about it, I wanted to ask you so you know, what’s interesting is I think the first way bike share and scooter share may burst into the public psyche was in China, right? mobike and all these other guys that I don’t actually know the full state of Minnesota, but I know a lot of them were bankrupt if I’m not mistaken. And I know there are literally called bike graveyards of orange and yellow bikes piled up and in different cities in China. And, you know, so actually, I think this is kind of like a two part question here. And that, you know, one part of the reason that was the case is that there weren’t a lot of competitive moats or barriers for those those companies in particular, you know, at least not enough to stop, you know, Alibaba and Tencent going at each other with a bike proxy war. But you know, the that’s what part of a wider question of why did you choose America because I remember I studied abroad and France, in Paris, in 2008, I think 2007. And they already had the leap, they had a culture of bike sharing in 2007. And I feel like something a trend that we’re we see a lot in this podcast, you know, we asked the blah, blah, car founder this as well as like, you know, why didn’t you know, carpooling work in America? And he said, Well, that’s America specific thing. And it’s, it’s, you know, sometimes, you know, the behavioral patterns really matter in a country. So I actually found it a little surprising that you guys, especially with your Chinese background, and the population of bikes in China, that you chose America. So I think there’s got to be some insights there.

Brad Bao:
Yeah, I said the, you know, great question. Thanks for that. Let me answer it in two parts as well. Right, the first part, in terms of the best models or data list, I, again, you know, do our research, I look back to the histories and in the with the focus on two things, do user use it? If the user don’t want it? No one’s gonna shuffle the, you know, a new product or service other folk. And the second part is, is there a business model to be built to provide a service and also create a sustainable business and why is not working in the past. So the first bike share to be clear the first dockless Bike Share. Now even dock was created in 1942. In Amsterdam, it’s called a white bike. If you search online and look for white bike, it’s still there. And it started with exactly the same idea with exactly the same vision to using Bike Share bikes and devices like this to you know, to ease the urban urban transportation and a big starting was the idea however at the time was based on his order base. So a bunch of people you know, donate their bikes the painted or white, entirely white, so very distinguished and they put on a street everyone can borrow it, when you use it, you put it back on the street. Brilliant idea. And that vision has never it didn’t work. And the reason being is the you know, there are many game theories goes into that. And the reason being if there’s not enough identity, or or security kind of, you know, measurements, guess where the bikes end up with the organs, like literally in a relatively short time. So then what happens is that daddy was created in in the form of dock based bike shares, and that’s all of the places and mostly funded by the government is everyone’s see the use of it see the benefit of it. Technology at a time Harbor was in comprehend. Without a GPS without data leak, right? It relies on on the real estate, to create, you know, talks, and they’re super expensive. If the audience is interested, you can look into how much they cost is astonishing number right, I can literally tell you that he would create a station and based bikes, the bike plus the service contract in five years without worse, cost more than my car. That’s how much it cost and it doesn’t make sense anymore. So then move forward, I think the bike share in China, you know, validated few things. So number one thing they validated is user love it. Regardless, let’s put the business you know, aside, the user loved it. They use it for convenience, they use it for saving time, they use it for reduced pollutions, whatnot, right. And also, they’re much less expensive than other alternatives. The second thing they validated is, you know, in terms of the operating model, that with the current technology, you could be done with GPS with data behind it with algorism data dynamically, you know, balancing rebalancing, or even fixing the bikes or the water vehicles, it could be done, what they fail to do. And this is one of the reason that the Elisa’s to believe that USA Europe better market is the disconnection between the cost of the vehicle itself and the users willingness to pay. So per trip, the bike share in China and on average, fetch roughly about 50 cents RMB. And that translates into roughly about seven cents, US dollars. In the US, I think $1 trip for our bike share is pretty much a no brainer, right? That the this is probably the cheapest ever transportation you ever had, in terms of like getting a ride on a bike and scooter cost a little bit more. But still is best alternative, roughly about the same price or a little bit higher than a bus without the weight without, you know, the walk at the beginning or at the end. So in terms of the value, those are the cheapest way. But guess what $2 means compared to seven cents per trip, you’re looking at, you know, 30 x in terms of revenue, but guess how much our bikes or scooters costs compared to their bikes, they’re universal. A bike you’re buying from the factories, you know, for the China market or for the US market, they’re roughly the same we it’s more expensive, I can tell you that since we have higher standard in terms of like, you know, America mental protect, friendly paint, you know, better sec, better safety devices, more sturdy, bigger frames for for the body builds here. But the end of the day, you’re not looking at 30 ads of cost. So that’s one of the reason we did it in the second part is China has been well served in that regard. I’m not just seeing the back here in terms of urban transportation, Asia, in general has more robust systems compared to USA Europe. How many bus lines are running in Beijing? The time when I had my startup over there, that was like 70 years ago, I have 200 bus lines, yes, seven major, you know, subways and then sublimate with small buses that’s shared and you know, the top talk, right? The tuck tuck little cars running around taking a run for two Arby’s and all kinds of things well as in the US in particular, this market is very well out there served. And that’s one of the reason that we see the opportunity but also see that as a mission for us to Do you really feel the gap?

David Litwak:
A lot. That’s when I talked about this years ago when we started talking about the multimodal future. For the longest time in America, you’ve had taxis and subway. And that’s it. And there was nothing kind of in between and how basically you’re seeing like a slicing and dicing of every single price point usage case. Now, and I think that’s a great point that like a lot of Asian countries had multiple tiers existing already in between in a way that in America, we didn’t like your your clip there about building for a bigger frame, as Americans are fatter than before. Yeah, I can, I can imagine that. There’s a lot of interesting cultural changes. So I have one last more before I turn it back over to Kevin, which is we, you know, I feel like I watched the rise of Uber and Lyft in San Francisco and then necessary clamped down afterwards. And I think there was they had an attitude. And I alluded to this earlier of ask for forgiveness, not permission. And, you know, flouting a lot of local city and state laws. And I think you could say by a lot of standards, they got away with it. Now, obviously, in California, there’s a, you know, a bill that potentially could screw them. And so you might your strategy might be vindicated, right. I think a lot of people fell who were industry observers that the scooter industry paid the price for their recklessness that you guys ended up with extra regulations, extra RFPs, and more. That was basically a reaction to we let Uber and Lyft run wild, we’re not gonna do that, again, with these scooters everywhere. I’m curious how much of your strategy to engage with city was based on just that new reality? versus Do you? Did you actually think that what Uber and Lyft did wasn’t a smart idea in the first place?

Brad Bao:
Yeah, is it the there might be nuances, you know, for different segments, or that. And for us, that is, it was very clear, ever since the day one that we we determined that we’re going to work with 3d not using the, you know, the old strategy, and, you know, explain a little bit better that the thinking process, you know, behind it, and the second thing we were bagging, for regulators. Again, I think the main reason I would say three, right first for for, you know, the Uber Lyft was like that micro mobility is an entirely different thing. They have very strong incumbents, you know, like taxi unions or whatnot, right? Their incompetence would not allow any regulation will pass, right? There was startup at a time, they will have millions or hundreds of millions of revenue and 10s of millions in lobby cost high. That’s my guess. Right. Yeah. But I think that’s one of the thinking process in there. Well As for us, we’re, what are we up against this? There’s no, such a system that a powerful war has the you know, that strong center lobby, blocking us? Well, right. And then the I think that’s one of the key key differences in terms of just business logic. Now, we don’t go against anyone we’re not up against like taxi unions as Uber left the dead. We’re not up against like hotel chains as Airbnb did. We are providing a service. But the most important thing, however, for us, is, as I briefly mentioned earlier, is we’ve determined that our customers is not only just users, we have three groups of customers, we have the users that are all riders. And then we have the communities we’re serving. We’re are in their community, on their blogs on the street. So we pay a lot of attention to the down riders, how do we make sure they are not, you know, clouded, or blocked the sidewalks? How do we even have the technology called a sidewalk detached, right sidewalk, right interaction, all that stuff, till to protect and to help the community and in that the other one is the city, again, back to the vision and also, you know, what we want to achieve, we want to achieve our two things by the movement. Everyone participate, even they don’t, right, they can be part of the movement and supporting it supporting water change and city is critical in there. And the second thing is to reinvent urban urban mobility and that we cannot achieve it by ourself. To be clear, infrastructure is with the cities, how they plan the bike lanes Do they have that is protected or not right in many things that goes with it. So they’re our customer, you don’t piss off your customer go against them. You just never do that. And we see them as a customer even they’re not paying us revenues or that we even their cities come to us are willing to give us grants and subsidizes to create a program and was a look, you know, here’s here’s the deal. We will not take the money. Instead, we’ll give you the data You can use it to build more bike lanes, protected bike lanes, education, you know, campaigns who will work with you on those things. And that’s the vision. So I think the fundamentally based on our logic, we we don’t have to we don’t need it. We don’t want to do it. But also vision wise city, our customers, our partners, and we cannot achieve what we wanted to achieve without their help. Yeah, so funny. upside, we go ahead, oh,

David Litwak:
well, I just won’t comment and then I’ll turn it over to Kevin actually, just, it’s funny that I, I posted something on LinkedIn, like four or five weeks ago when Uber bought a company called auto cab, or I go, and it was kind of a funny full circle, because, you know, I’ve been in industry for nine years. And all for all nine years, up until about six weeks ago, Uber was talking about how they didn’t want to work with anyone else. Not working anyone else at all, I was gonna do it all by themselves. And I, and I remember thinking like, you know, you’re 20 $30 billion dollars is a pittance and the trillion dollar transportation industry you need, you’re going to need to work with everyone else. And I just made a joke that they went through, like the five or six stages of you know, transportation, startup grief, which is thinking we’re going to take over the world and ending with Okay, fine. We’re more of a platform. Well, we’ll work with other people now. And like, it seems like you guys started at SpaceX. So congratulations on skipping through all the other arrogance.

Kevin May:
Just Just to kind of finish this off, then I mean, I, I don’t want to add to kind of a negative tone to all this, because it’s been a really, almost kind of uplifting conversation, because it’s a very positive kind of businesses about sustainability in urban mobility and mobilizing communities and things. But I am interested in a couple of things. And that’s how did you go about tackling things like theft of the bikes, and vandalism, and more at a fundamental business level? I mean, I, maybe the report I’ve been reading earlier is wrong. But you know, they were talking about big losses that you made last year. I mean, how did how have you approached, kind of the sustainability of your own business? As you kind of, as you’ve got through the last certainly 2019 when you became the CEO, and this year? I mean, I think we can all discount any kind of business logic when it comes to 2020. But just talk us through the kind of the, your kind of own sustainable business model.

Brad Bao:
Yeah, totally. I think that’s actually very important, you know, topic, and I’d love to share our a little bit our journey was, you know, with the industry, I think, you know, first and foremost, so let me just make it very clear the order to create a world changing product or service, we have to have a sustainable business. Otherwise, it will not, it will not last, it will not achieve our vision and goals. So that has been the focus for the company. But first go back to the first one, though, there are a lot of stories to share. In terms of like the theft and all that stuff. First of all, the data shows, we have already operated, you know, hundreds of thousands of vehicles around the globe over in over like 100, you know, hundreds different cities are actually five out of the seven continents. So that part that do that data actually shows very clearly the theft is very low, probably less than a percent. That’s the number one thing I wanted to share. The second thing is, you know, how initially will always have a little bit higher, but less faff, more, a little bit more vandalism. So the vandalism came into two ways. One is trying to, you know, steal the vehicles or bikes. And the second part is, again, back to the movement. Some people believe in or some people, don’t, they, they will do crazy things or whatnot. The technology helps us a ton since every one of them are GPS tracked, and we have sensors and it will trigger the alarm. And then we can take actions on it. And we know exactly where they are even you still weird we usually saw vehicles was running on the freeway like 60 miles an hour. You know what happens? And then all we do is just follow that Chase and go stare knock on the door, say, Hey, can you return all vehicles as what vehicle? Well, here’s the GPS, here’s exactly the location in your backyard. Right. And the second thing we’ll tell them, which is very critical, as well, because our vehicles are all specifically designed for a urban shared application. And what means is not pleasant to use as a personal use. But the most important thing is there’s no resale value. You can use it you use on the street people would know what it is it is tracked by GPS without a charging infrastructure, they cannot recharge it. And most importantly, they take to you know, black market so that nobody’s gonna buy it. Right. And what do we what happened? I was sharing with you a really fun story that initially we had a warehouse. I want you to name the city when it doesn’t help in this context. Right. So we had a warehouse. Our team are getting ready to launch it. products. Yeah, it was either back here, sort of second day, when we get there, the bags are gone. Right there, we’re about to take it out of the warehouses or that what happened to third day is the most interesting thing. Right? The third day, we briefly saw some up on the Craigslist immediately got deleted, probably by by, by the owners, in the third day, they will throw back to our warehouse over the fence. Because they figured out it cannot sell it. And it’s like evidence of crime in their backyard. And that’s what happens is they will throw back over the fence into back into our warehouses. But I think the this thing’s However, what I want to emphasize is very small, percentage wise, it’s very small, and it’s very manageable. But I think most important thing, again, is that we, if it becomes a normal part of our life, if we all believe that’s creating value, not just for the riders, but for everyone of us, then, you know, we will endorse it, we will help to protect it, we have community members actually patrol the street for us, because they believe, is helping them to reduce traffic in that community. And believe this is the cheapest alternative and that the you know, for them to get around this, they be waiting for the bus line to expand or the subway line over there for over a decade. And nothing happened. Right, and there’s no way for them to get around. And they see this as a gift. So put that aside. to backup. The second question, there are distinguished characteristic of what we do. And the most important thing number one is innovation would be iterating improving, or that is a very capital heavy in terms of like, you know, do eat eration during the development, or that and we’re proud of the speed we achieved. In general, the hardware, if you ever encounter, the development cycle is somewhere between two to three years or two to five years. Well as we be iterating our products and vehicles that on a quarterly basis. So data does generated quite a bit, legislate ways to work necessary capital expenditure in the in the beginning part when the stabilized however, then we capital, then we really benefit from, you know, the innovation we have. The second part is we are a still a startup. You know, as a reminder, we’re less than four years old. We’re, you know, three years old company. We’re learning how to operate, how to design hardware products, how to operate it, how we optimize our algorithms, and all that right, the so all this come together, it was quite capital heavy and then and operational heavy for the first few years. But now we already figured most part out, the innovation never stops. We’re keeping, you know, keeping at it as a while of the figure that the sum of the data I cannot disclose due to confidentiality. But one thing that I proudly say before Coronavirus, has, we were already on the edge to be breakeven or even profitable if without a pandemic, so if you think about that the company has been already on the right track to be a sustainable, profitable business. And that is not on the cost to make it too expensive for the user. I know some business does we never change our vision, we still keep it the you know, relatively the most economic viable product and service for the users. But we further improve on the hardware design increased the, you know, durability of the vehicles and very importantly, is to optimizing and reducing our operational cost. So

Kevin May:
yeah, yeah, I mean, you took over in May 2019. I mean, you’ve had one hell of a first 18 months as the CEO, right. I mean, how have you just personally got through it. Last question, just kind of give us a sense about your own kind of kind of personality and management style. I mean, you wouldn’t have expected anything of the whole industry has had to go through when you took over in May 2019. So how have you kind of personally got through it?

Brad Bao:
You’ve been the the COVID-19 part. Yeah,

Kevin May:
just just all of that. I mean, like I said, you wouldn’t have taken over in May 2019, knowing that a global pandemic was gonna was going to, you know, kill lots of people and decimate an entire industry.

Brad Bao:
I know Yeah, it’s a really sad thing that happens in the world. And we all hope that it never happened, right? It’s a tough time, for sure. And for me that I see myself more as a builder and also a you know, I’m really good at strategy and product so that right that’s where I see myself You’ve lived depends on how you count it is fifth or sixth startup for me. So, I know my strengths. I know my weakness, I know what I’m passionate about, right? I’m all passionate about products that we’re all passionate about, like the strategies figure things out. So we start a company without me being the CEO, rather, you know, Toby was the CEO. And we’re good partners, he will has been in my team for roughly about four years before we started the adventure together. And that’s my stress is not to run a daily operations, but rather focus on the products and focus on the strategy for company, when I started as a chairman for for Lima, and focused my or energy on the product and service, sorry, on the products and also on figure out the core strategy and make sure that it were true to our vision and to the values you choose at the company grew quite fast. And that’s a little bit, you know, starting 2019, we already grow from a startup in less than two years, right, that generating, we’re probably one of the fastest ever revenue generating company in the world, in terms of, you know, time to market, and we, we probably will have the first ever global company, you know, from a small market in the US to over 100 markets, 30 countries in less than a year or half. So that puts a lot of pressure into the company management, you know, organizational wise, culture wise, hirings, and political things, everything together. And then Toby and I decided the you know, it’s better for me to step in, while we look for a nother, you know, CEO that are better for a different stage of the company. And that’s why I stopped being so I be active hundred 20% online. So it’s nothing new to me, rather than a title change. I did took on some of the responsibilities that Toby was focusing on, is he is great in terms of like, you know, sensing the consumers and are brandings as well as innovation. So he was repositioned to focus on what he is good at. And well as that I step into sort out the company for roughly for the time, roughly about a year, and Coronavirus, gave us a big hit. And even bigger since we made a decision to shut down like 90 plus percent of the market, we know we will lose a lot of ton of revenue, we know that you will be a tougher restart for us if we did that. But we also know as a service to cities to our people. We cannot, you know, be the one that helped transmit a virus before he got a solution. Yeah, so we passed the whole thing for three, four months. And then two things happened. bring us back to the market. One is more and more city come back to us and say hey, we really need you, you are essential service for us. And think about, you know, where you guys are the safest way to get a rod compared to buses, subways, or any confined transportation that you said was another one in, in a confined, you know, environment, including taxi or whatnot. Right. And we then started to provide essential services to to healthcare providers and that first responders for free. So that’s what our first return to that in the second part really triggers our full return is how we figured we can help you find that. In addition to that it would be the safe way to go around but also is the how we sanitize the vehicles. How are we handing, you know, little hand sanitizers to the handlebar and that’s the only thing you need to worry about. Right and and then you know education campaign so without so we started back to the market in roughly May. And then of course we got it really hit on the revenue side. And we had to do you know some of the layoffs in order to sustain the business. Being wild are taking our digital fundings as well. Now I handed over the company to Wayne Teague, which was the head of global operation at align. He’s doing a phenomenal job in terms of running operation, you know, the things I mentioned before, right running scaling the business running operations, as well as you know, optimizing our operating operational costs. And he’s he he is the the, you know, the next leader for line he took over running the daily operations. I’m very glad that this happens to my Chairman, back to the beginning.

Kevin May:
Okay, and I suspect we could have talked for at least another half an hour or so there’s a bunch of things that I would like to get into and I’m sure that David would as well but we try not to go over an hour and we probably there are there abouts. So thank you so much, Brad Bell from line, we really appreciate the time you spent with us today. It was a really interesting conversation. Thank you.

Brad Bao:
Thank you, Kevin. Thank you, David, I really appreciate that you guys created the series, I think the the travel industry, there’s a long way to go. There’s so many things we could do, you know, provide better product services. And also, again, I just wanted to kind of make a call here that anything that entrepreneurs do, or investors, please also keep their mental protection in mind. This is about not just a business or whatnot, revenues, profit, but it is also about how we together to create a better world.

Kevin May:
Okay, I meant to that I can’t beat that only to say, again, thanks ever so much for tuning in. If you’re a regular listener, you are a subscriber, I’m sure. But if you’re not, you can subscribe to how I got here, on the usual places. That’s iTunes, Spotify, Amazon, Alexa, Google podcasts, all those places. Give us a review, and tell us how brilliant we are. And indeed tell us how great this interview was because it was really, really fascinating. So thanks so much to Brad again, on behalf of David and I thank you very much for listening to how I got here, and we’ll see you next time.

Transcribed by https://otter.ai