Nicolas Brusson - Ozan Sönmez - Fireside Chat - Startup Istanbul 2014

🎥 Oct 01, 2014 📺 Startup Istanbul ⏱ 14m 👁 225 views

Nicolas Brusson - Ozan Sönmez - Fireside Chat ABOUT SPEAKERS Ozan Sonmez Ozan Sonmez is currently the Lead Program Designer of SDG Impact Accelerator; the first Global Social Impact Accelerator Program in Turkey built by UNDP and Ministry of Foreign Affairs of Turkey in partnership with Bill & Melinda Gates Foundation & World Food Program. He was the founding Managing Director of Growth Circuit Accelerator (GCA) in San Francisco which invested to the highest number of Startups built by Global Turks abroad. Ozan helped international startups with at least one Turkish founder, to launch in S...

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About Nicolas Brusson

Nicolas Brusson, co-founder and CEO of BlaBlaCar, has spoken at several conferences between 2013 and 2016 about the company's growth and vision. He described BlaBlaCar as a long-distance ride-sharing platform that allows drivers with empty seats to offer them to passengers traveling the same route, offsetting the cost of driving without making a profit. Brusson emphasized that the company was originally not conceived as part of the sharing economy but later benefited from that framing. He noted that the brand name, derived from users' talking preferences, has helped with word-of-mouth and press coverage. Brusson has discussed the company's approach to funding and expansion, stating that BlaBlaCar never formally pitched to large numbers of venture capitalists but instead built targeted relationships with investors over time. He said the goal is to build global companies to remain competitive against U.S. and Chinese competitors. Brusson highlighted that 80% of intercity passenger traffic is done by car, and that BlaBlaCar aims to improve road efficiency by filling empty seats. He said the company initially focuses on usage in new markets, such as India, before introducing monetization like booking fees. Brusson also predicted that as cars become autonomous, private cars will increasingly become public transport, and that the long-term trend will involve shared, self-driving cars.

Source: AI-verified profile updated from Nicolas Brusson's recent appearances. Browse all interviews →

Transcript (19 segments)

Unknown0:08

Hi everyone, still a standing crowd. There are some seats available, so don't bother. It's a pleasure to be here. I've been living in Saudi for the last eight months—it's another challenge. I'm at King Abdullah University's accelerator program. We do a little bit more high-tech and IP-based startups, but that's not why we're here. Find me on Twitter if you have any questions. I'm here at the conference. We had a nice chat a couple of days ago and I think you're gonna like the angles. The first thing I want to ask is if you know the story of BlaBlaCar.

It started in France and then it kind of grew up to this multi-million-dollar convertible company, and now it's expanding. But everything relies on the team first, and they have a pretty unique team setting. We want to talk more about how you got together, what interests you, what keeps you together so strong.

Nicolas Brusson1:07

Yes, the story of the team actually is probably different from most others here, especially most others that go to acceleration programs or boot camps. We actually formed the team over almost five years. Technically, if you look at the shareholder agreement of BlaBlaCar, we have seven co-founders, but we never let go of anyone. It was a formation process that ended up with three managing co-founders. The story really started in around 2005—it was the idea and the first website, which was very much a classified website. It was actually done by Fred, one of the co-founders. He started the story with another guy initially, and then they both had a different job and worked on the project very slowly. Then we met—the three of us, Fred, Francis, and I—around late 2006, a Friday night, meeting during an MBA in business school. No one was full-time on the project back then, and that was the first time we thought of BlaBlaCar—which wasn't even called BlaBlaCar back then—as a business. Maybe we can create a company out of that.

The company was formed. Technically the first two years it was not even a company, it was just a project. Then it took still a lot of time because I ended up working in venture capital, Fred was finishing his studies, and Francis was working for another tech company. We had the first employee and the first office in early 2009, and the first angel round in mid-2009. Essentially, from the very critical early start to the first angel funding took us like four and a half years, which is lots of time. Then after that it was the typical startup story—we grew the product, we proved the use case in the market, which for us was France. From my part, I joined the team a bit later in 2011. The key mission of my obsession back then was: how do we make this company not just a French company but a European company? I was obsessed with how do we not make BlaBlaCar just a single-country winner, how do we make it a European winner, how do we make it a company that matters on a global scale. And then we started to expand and grow, and that's maybe the story that's most well known about BlaBlaCar—the last couple of years.

Unknown3:43

And these team stories, usually we tell you should spend a lot of time together. This is not an easy thing to find a co-founder. We've already created some events so entrepreneurs can find co-founders. But after finding that right mix, then becomes the financing problem. That story is also a little bit different than what we usually observe—when you first have the angel round and then kind of the series A, series B round.

Nicolas Brusson4:10

Yes. The first thing to mention about BlaBlaCar is we were doing something new—new in a sense that, for those who don't know, BlaBlaCar is a marketplace between drivers and passengers. It's long-distance ride-sharing. A driver driving from, say, Istanbul to Ankara offers empty seats to passengers going the same way. No one knew it—it was kind of called hitchhiking back in the 70s—but no one was doing that at scale in any country essentially, except probably Germany was the only country where people were kind of doing that. The challenge initially is you pitch a business concept and you cannot demonstrate a market size. You cannot say, 'Here is how many people are going to do that.' So it was pretty hard for us to convince investors, especially in 2009 post-Lehman Brothers, to finance this company. The first feedback we got from lots of people, including investors, was: 'Hey guys, if you get a hundred thousand people to use that in general—your usual story—you have good degrees, just go get a job and stop screwing around.' And of course we did not listen, and we started to build the company.

But the key thing I've seen working seven years in Silicon Valley and being a VC—most companies fail for something you don't expect. You don't fail because of competition. Sometimes you fail because you don't have enough scale fast enough. Sometimes you fail because you just ran out of cash. Most companies fail because they run out of cash. So the obsession was always: how do we fundraise early? How do we find early believers in the company, fundraise early, and make sure we always have the gas to go faster? Every time it was a surprise—like when we raised ten million dollars from Accel three years ago, people were taken aback. It was like, 'What the hell did you tell them? What was the story? What did we invest in?' Because back then we had a small community in France, we had no business model, no revenue, but we had a pretty credible team. What Accel backed was clearly not a revenue trajectory—it was traction of users in a single market. They really backed the potential of scaling that all over Europe, and that's what we've done in the next few years.

Unknown6:26

Before that round, how many times have you been rejected by VCs? Although your background is like in VC—you reject 95% of them, I'm sure—that took you a lot of time together.

Nicolas Brusson6:35

I can tell you, because we've never done the usual process. We never went fundraising—we were always fundraising. I think that's an interesting thing. At no time in the history of BlaBlaCar did I feel like, 'Okay, we're gonna start fundraising and we're gonna start pitching to VCs.' It was always like: to you, to your angels, this is part of the ecosystem, and you need to talk to these guys all the time. The best investors—and what I mean the best investor is the guy you want on your board—emerge well also because they tend to invest not in a pitch. If you just go fundraise and show them a pitch and say, 'Here's the story right now, please invest,' whereas if you talk to someone for a year or two, you say, 'Here's what I'm gonna do, here's what I'm gonna try to build with this company,' and you've seen them two or three times during that period, then it gets a lot easier. In fact, we never got rejected because we never actually used advisors, and when pitching, instead of going to twenty or thirty different VCs, we had very targeted relationships with guys like Accel or Index and some others.

Unknown7:47

And the funding part is also critical in your international expansion, because you created this team, then got funding, found the business model of traction in France, and expanded—first country, second, third—then you start needing the money, because it's kind of a... you need the money first to get traction, then once you have the unit economics working, you can go fast. How does it work actually for you to find the right people in different countries, invest in them, convince them that this is going to be a part of a bigger journey, and then blend them in your own culture? Now you're more than a hundred people, you're kind of an international entity. It's shifting with every new country—your percentage of different countries in the team is changing. How do you balance that culture?

Nicolas Brusson8:31

Yes. The thing we've done about expansion—the first choice we made was to expand early. We decided: it's true we had the first employee in France in 2009. In 2010 we were in Spain. 2011 we were in the UK. 2012 we acquired two companies and expanded all over Eastern Europe and in Germany, and so on. We had this very rapid expansion, and we always wanted to fund that expansion before the economics, planning to never run out of cash—which again is a key thing. We had an interesting strategy, which was acqui-hiring, which is pretty rare for a startup. Even though you have a twenty or thirty-person company, you already start thinking: maybe one way to grow is to go acquire companies. For those of you who may not know, acqui-hiring means acquiring the whole talent, the whole team, and putting them as part of the company.

And it leads to interesting discussions, actually. Every time we talk to the Polish guys, when we talk to the Russian guys, you end up actually not valuing the members or anything like that. Every time you get these interesting discussions where the guys are like, 'Oh, we have twenty or thirty or fifty thousand members,' and you end up saying, 'I actually don't care—even if you have a hundred thousand or ten thousand members, what I really value is you and you joining the team.' And if you look at that strategy, actually, companies like Google, Cisco, and so on do that. Cisco, by acquiring hundreds of companies in Silicon Valley and integrating that into the metrics and the culture. That's very much a model we follow. We don't think we're gonna invent everything and get the best people. Sometimes the best innovation, the best teams are out there, and we just need to convince them to join the adventure. We've done that four times already in three years.

Unknown10:31

And the story of BlaBlaCar. One thing that maybe as a kind of wrap-up question—one of the things we discussed before was the growth in any country is unpredictable when you enter. When you look at that, what experience in different countries might indicate what will happen in the next one? In terms of either the acquisition side or what you have not been able to do for BlaBlaCar in a couple of years—what do you think you kind of missed but you're renewing and changing the dynamics?

Nicolas Brusson11:11

Because we do something new, when we come to a new country like Turkey—I mean, we launched Turkey just last week—we launched Russia a few months ago—no one is actually doing what we offer initially. No one is actually doing ride-sharing between cities. So you create this new behavior and it's almost impossible to predict how fast it's gonna go, if it's gonna go at all, and what's gonna be the adoption. So we don't even try to model that. The mindset we have is: you know, there's only so much analysis you can do. At the end of the day, at some point you decide to try, launch a new country, think of that as a startup within the startup, and that's the way we do that with a local team driving that effort. Today we have a team in Istanbul, we have a team in Moscow, we have nine teams across the globe just launching BlaBlaCar in different regions.

We never really have a pre-set budget or target. My job is to make sure we have enough to scale if we can. Russia—we did not anticipate Russia would go that fast. Now we're investing a lot in Russia because it's scaling at the speed of light. If it doesn't, we don't. What we do is invest a bit less, get feedback from the users—we've heard 'listen to your users'—we get feedback from the user, we adapt the product, we adapt the marketing message, and then we try again.

Unknown12:32

So what can this crowd do for you? What do you need?

Nicolas Brusson12:35

Well, first we need people in Turkey. So if you're looking to join a startup in a startup, we're looking for four people in Turkey. I would say, at an event like that—it's like startup companies. I was yesterday actually at the European Commission and there was this big speech, this big theme about how do we make Europe a single digital market and how do we make Europe a better place for entrepreneurship—a very unified place, which is very interesting. Essentially, today if we want to be relevant in Europe in the wide sense—and I think it applies to any country—if we want to be relevant, we need to build global companies. It is European in the wide sense, companies, because otherwise if you just build a Turkish company or a French company or a German company, at the end of the day we're gonna be irrelevant against US competitors, against Alibaba from China—the biggest IPO in the world. We cannot stay and build local companies. So we'd say you guys should expand quickly. The Arabic market is huge—if you go to the Middle East, it's a huge market. Maybe this place is one of the best places to launch and grab this big piece of the world.

Unknown13:47

Yeah, I think that's a good note. Trend following—find a good place, you need to work a lot, you need to think of funding and expansion as fast as you can. And I think with that we're gonna go to the next... sorry, we don't have any questions. Nicolas and his team are already here, so before they leave, just grab them. They're looking for people, talented people to get into the BlaBlaCar family. Thanks so much for your time.

Nicolas Brusson14:12

Thank you.