How I Got Here, episode 41 - Nicolas Brusson of BlaBlaCar

Thanks for having me. So, I'll try not to tell you my whole life story. I was probably not meant to do entrepreneurship. I studied physics in France in the late 90s and moved to the US in 1999 to complete my master's and PhD. During the dot-com and telecom boom in the late 90s, I ended up in Berkeley where most people weren't finishing their degrees but going into startups. I didn't know about startups, venture capital, or Silicon Valley stock options—it was foreign to Europeans at the time. I joined an early-stage startup in optical telecommunications, which raised $85 million from Kleiner Perkins and other big VCs. We grew fast, but then the 2002 recession hit and the company went from 150 to 10 people. That's how I got into startups. I spent seven years in the Valley, then wanted to go back to Europe around 2006-2007 to do more of that in Europe and spend some time in venture capital. That's where I met Frédéric, my co-founder, during an MBA at INSEAD. He had started a website called covoiturage.fr, essentially carpooling.com. I fell in love with his passion, and it felt like the eBay of services. This was pre-iPhone, Facebook was still a private network. We started working on that, which became BlaBlaCar, part of the sharing economy, but we were early—2006-2007 was almost two or three years too early. The start of BlaBlaCar was not a fast journey; it was a long, painful ride from 2006 to the first funding in 2009 during the recession, leading to the more known stories of 2012 and beyond. So I got into startups almost 20 years ago, and BlaBlaCar has been the opposite of how you create a startup today—it was slow, painful, and hard to raise money initially.

Yeah, it started in many ways, but I would say it started as a concept in Frédéric's brain. He was looking for a train for Christmas to go back to his family from Paris to the west coast of France. All trains were booked, so he thought there must be a classified where he could find someone driving there and book a seat. There was a website like Craigslist in France, but very few were doing that. It was seen as risky and unreliable, something from the 70s. He started developing a simple website, and that's when we met. At the beginning, people saw it as hitchhiking, which was a big issue. They felt that people don't hitchhike anymore, so we were doing it online. But our thesis was that through mobile and social networks, we could create trust within a community and make it a much larger transport network, not about hitchhiking but about optimizing empty seats in cars. 80% of long-distance travel in Europe is done by car, and the empty seats represent the biggest seat inventory on earth, bigger than planes, buses, and trains, but poorly optimized because cars are private. We needed to solve that to create a transport network, but people thought we were doing hitchhiking online. That's why fundraising was tricky. We pitched to a group of business angels at INSEAD and the feedback was negative: they said if we got 100,000 users we'd be lucky, and there was no business model. Today we have close to 100 million members globally in 22 countries. The reason it took time is that the ingredients for the sharing economy—mobile phones, Facebook—weren't there yet. The iPhone hadn't come out, Facebook was small. Social networks plus smartphones would help create trust. It became a thing around 2010 with the term 'sharing economy', and Airbnb raised money from Sequoia. Perception changed overnight. For us, usage grew continuously, but before that it was 'you're doing hitchhiking, that's weird' and then it became 'sharing economy for cars, that's huge'. That disconnect between user reality and investor perception helped us.

It's almost the opposite question: what is it about the US that made carpooling so hard to crack? Today carpooling works in France, Spain, Germany, Russia, Ukraine, Brazil, Mexico—many places, but not well in the UK. The main reason it didn't work in the US is the lack of first-mile and last-mile urban transport. In Europe, we have good public transport, so passengers can easily reach the meeting point. In the US, if you get dropped off in Los Angeles or the Bay Area, it's hard to get around. Also, petrol prices are cheaper in the US, so the financial incentive to share is weaker. That was the biggest problem. Zimride (later Lyft) faced that issue. Another reason was that investors thought that if it didn't work in the US, it wouldn't work in Europe. There are still not many players doing carpooling at scale in the US.

There are a few things we did early on to differentiate carpooling from hitchhiking. Hitchhiking is unscheduled, no price, no trust. We replicated the behavior of booking a train or plane: you book a seat in advance, there's an agreed price set by the driver, and community vetting—passengers send a request, drivers accept or refuse. So it's scheduled, transparent pricing, paid online. We built a trust layer using ratings, verified driving licenses, license plates, etc. The match rate increases with more data. We don't manage a transport network; we manage matching based on time, money, and trust. That's unique.

The north star has been the same for years: zero empty seats. We optimize the inventory of car seats, and now bus seats, potentially train seats, to maximize fill rates for environmental and economic reasons. Over time, we evolved from just carpooling to realizing we have a massive audience looking for rides from point A to point B. So we started adding more supply: buses via M&A (Ouibus, Bus4 in Russia/Ukraine). The goal is to connect an inter-city network with in-city options. BlaBlaRide is an experiment for first and last mile. We want to connect people to the first and last mile in cities.

Yes, it's more about how we get there than an ambition. BlaBlaCar is a single app for drivers and passengers. We went into buses via M&A, acquiring apps like Ouibus and Bus4. The goal is to reintegrate all mid-long distance into one app—we have a one-app obsession now, and within a year it will be integrated. For urban carpooling (BlaBlaLines), we decided to keep it separate because the product paradigm for daily commuting is fundamentally different from long-distance weekend trips. Commuting is repetitive and scheduled differently. A separate app allows us to innovate without being constrained by the existing product. Long term, it might converge, but we built APIs between apps, and BlaBlaCar is meant to be the go-to app for all trips.

We had two distinct phases. From 2012 to 2016/17, it was about global expansion. We had a great carpooling product in France and Spain, and we wanted to be first in many markets because carpooling behaves like a C2C marketplace with winner-take-all dynamics. So we did M&A for speed—acquiring teams in Russia, Poland, Italy, Mexico. From 2017 onwards, the strategy shifted to product expansion. We launched no new countries and made no acquisitions abroad. Instead, we acquired bus companies and short-distance carpooling to add supply. We are in a phase of product and offer expansion. M&A should always fit your dominant strategy, not be tactical.

Essentially, if your core obsession is to go international, M&A should support that. If the core obsession is to build more supply and become multi-modal, M&A should support that. That's been our story. We've done about 10 acquisitions in the last seven years.

Regulation has been interesting because we are a true C2C marketplace. Drivers do not make a profit. In any country, there's a definition of making a profit. In the UK, HMRC says if you make more than 40 or 45 pence per mile, you are making a profit. We always operated below that bar. It was fundamental, especially when Uber was launching. Carpooling for long distance can stay below that threshold. For a London–Manchester trip of 200 miles, you can collect up to 90 pounds and still be below profit. That's a key difference from ride-hailing. We've been immune to many regulatory issues and have won every lawsuit. Drivers don't do it professionally; they would make the trip anyway with an empty car. It's a C2C activity.

I think we get lots of credit, knowing we don't operate in the U.S. The number of mentions in U.S. press for a service that doesn't even exist there is pretty good. In Europe, it's well known. The brand deficit in English-speaking press is because we have no consumer reality there – like Alibaba. On the investor side, since 2013–14 we've been on the radar of U.S. investors. We saw it as an interesting European play and an emerging marketplace because we launched in Russia, Brazil, Mexico.

It wasn't an obvious deal. Let me pause on the importance of tech and internet players. The bus market in Europe liberalized five or six years ago. Initially, traditional companies were expected to dominate, but now only two companies are left: FlixBus and us. We came from carpooling. To enter the bus market, we either built from scratch or acquired. The only interesting company was Webus. We initially thought SNCF wouldn't sell, but they changed strategy. Culturally, it was a massive gap because SNCF people are different. It was one of the most challenging M&As we've done. Post-merger integration is often overlooked. We invested a lot in creating common culture, but now it's behind us.

It's a very good question. I don't think carpooling will never work in the U.S. Our initial product wasn't right, and it's more complicated. No one has cracked it. But our new product, BlaBlaLines for commuting, makes more sense for the U.S. because many people commute long distances by car. Commuting could be an entry point. There's a company called Scoop in the Bay Area doing that well. Post-COVID, we'll see how shared transport bounces back. Short-distance carpooling could be the entry door.

Maybe 'fantasize' was misleading. It wasn't my dream to be acquired by SNCF, but it's possible because they have a massive balance sheet. In practice, SNCF won't buy us because they are subsidized. People might have expected SNCF to buy us early on, but we bought from them. More broadly, the European and French ecosystem has improved a lot. France has done well with government support. But Europe is still behind the U.S. and China in building massive companies. The crisis should not slow momentum. Politicians discovered tech late. Apple's valuation is as big as the CAC 40. Technology matters, and Europe is waking up but needs less regulation.

It was a natural evolution. We started as three co-founders. Until 2016, we managed as a team of three. But as the company grew, a tripod model became inefficient. In 2016, we formalized a CEO role and built an executive team. My job didn't change overnight. The other founders gradually stepped down from operations but remain board members and shareholders. We still have monthly founder meetings. Now I'm the CEO with my executive team.

Two small anecdotes. We started as covoiturage.fr, but that was weak for international and a descriptor. So we changed. We asked users, and they always remembered the feature where you choose your talkativeness level: blah, blah blah, blah blah blah. That feature was almost anecdotal but memorable. So we named it BlaBlaCar. A VC said with that name we'd never be a billion-dollar company, but we are. The beauty is that it's about trust and connection. BlaBlaCar enables millions to connect for hours. It's a social experiment. In a survey, over 80% said it was enriching, 50% changed their mind on something, and 20% revealed a secret they hadn't told friends. It's like therapy because you're not facing each other.