"Mobility as a service" is the idea of packaging together one person's entire portfolio of transportation options. Even if it’s a different mode of transportation for the first mile, the bulk of the journey, and for the last mile. Car, ferry, ride share, bike, scooter, whatever - all serviceable in the same app. This is the future that Nir Erz, CEO at Moovit, can see clearly, and why Intel bought Moovit for $900M. NFX partner Gigi Levy-Weiss sits down in Israel with Nir to discuss how Moovit beat Google Maps in data, why KPIs are pure gold, how to think globally when launching locally, and what the future of transportation looks like. Highlights from the conversation: 1. Building data and data network effects How to leverage your user base to build a volunteer workforce of data (the Wikipedia volunteer model) >> pseudo-automatic data capture Two tricks for launching in new markets: acknowledge to users that the app is not complete, and directly ask them for their help Why data is central to Moovit's product value (an important factor discussed in our essay on data network effects) How to build a verticalized data moat (public transit data) that allows you to compete and beat a big horizontal incumbent (aka Google Maps) 2. The Importance of KPIs - "KPIs are gold" Knowing what the right industry benchmarks are can be extremely valuable for your company. The right KPIs can save you from wasting time and effort. Why Founders should set clear success metrics for their company or quit "Guys, those are my best years and I'm not gonna waste my best years on a company that is not going to take off. So my only request to you is -- let's set measurable goals for every stage of the company. If we’re not going to hit those goals, I’m not going to stick around." 3. The future of transport and mobility The future of transport is multimodal Cities, in particular, will be multimodal, with different transportation for the first mile, the bulk of the journey, and the last mile. People will want one seamless solution that allows them to pay for various modes of transport. "Mobility as a service" is the idea of packaging one person's entire portfolio of transport options at one access point / platform
Gigi (00:54):
Welcome Nir. Thanks for coming to our podcast.
Nir (00:55):
Thank you for having me.
Gigi (00:56):
Congratulations are in order. It's only been a few months since Intel acquired Moovit. Let's go back to the beginning, and now with tens or hundreds of millions of people using Moovit, the idea looks very logical, but at the beginning I'm sure that wasn't as simple. How did you ever get up with that idea? I mean, how did it all start?
Nir (01:15):
So the story is pretty awkward, and it's not just a simple situation where I felt the pain and I decided to solve it. So, it actually started over our training for a marathon in 2011, where my running buddy, who is a public transit engineer who plans railroads, and roads told me how much public transit users are underserved. So, the problem was defined by him, and then he said that he might have a solution that requires a lot of information.
Nir (01:46):
When I looked at the problem, I figured out that it's a huge problem. There are eight billion people around the world, and only one billion cars. You can definitely understand that most people around the world use other means of transportation than driving their cars. But at the time, 2012, only 15% of the large cities around the world had any information, in a digital way, about alternative mobility, like public transit. I figured out that there is a huge problem with information. If you ask people, what's the biggest problem with their mobility on a daily basis, they would say information. And this is how I started when I saw the problem. I wasn't sure that I can solve the problem, but I figured out that if we would be able to solve the problem, it's going to be huge. And that's how everything started.
Nir (02:34):
Basically, we took Tel Aviv Metropolitan Area as our first beta, and we didn't have any digital data about
the lines, and stops, and schedule back then. We had to build it ourselves, since Ministry of Transport in
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Israel were not willing to share this information with us, which was a great favor, because we figured out
that we will have to do [crosstalk 00:02:54]-
Gigi (02:55):
That could have killed the company, right?
Nir (02:55):
Yeah, but we figured out that we'll have to build it ourselves, anywhere around the world, which is
another lesson learned for young entrepreneurs. I mean, don't count on ...
Gigi (03:04):
On business development as [crosstalk 00:03:06] your way to get things.
Nir (03:07):
And then when we built it, we went to our friends at Waze and asked them what would be a benchmark to success. And they told us that six month, no marketing efforts, they were able to bring about 50,000 people to the platform. So I set that as my goal, and after six month and one day we had 100,000 users, and then I figured out that people need the information. People use it quite frequently, and we have a huge problem of scale. So that's how everything started.
Gigi (03:35):
That's really cool. And you just said that not getting the data, which I think at the time the common assumption was that over time, all bus operators and everybody, everybody will have a GPS. The data will be available anyhow. You don't need any additional sources. You went the other way completely, and you basically built in a consumer base, a user-based network of data, which creates a really strong data network effect for the company. I mean, how much did you guys think about it originally, or did it just evolve into that, and how strong is it?
Nir (04:09):
So honestly, it evolved through a process, and I want to continue the story. And when we figured out that we spent about four to five months just building the static data, not even the real time data, of Tel Aviv Metropolitan Area with [crosstalk 00:04:25].
Gigi (04:25): Stations and?
Nir (04:25):
Bus stops, and lines, and routes, and schedule, planned schedule. We figured out that if that's going to be the time that will take us to bring any new city to the platform, it would take years, because there are 5,000 large cities around the world. And, if you need to spend four months just building data for every city, that's not going to work. In the same time we faced another problem, completely different problem. Because when you open an app, you open it in a country level. So, the next city we opened was Madrid, and we opened the app in Spain. And everybody outside of Madrid gives us a ranking of one star out of five, because they were insulted that we have not provided them data in their own city, Barcelona [crosstalk 00:05:09] or Valencia-
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That's very painful.
Nir (05:10):
So, we had to solve both problems. Getting the data quickly, but also make sure that people will understand why we don't have data. So, my co-founder who is 15 years younger than me, and way more naive said, "Why don't we just put the tools of building the transit data that we've created for ourselves over the web, and ask people to join us?" I was quite skeptical, to be honest, saying why people wouldn't do it. But when we combined the two problems, when you open the app in a city where we didn't have a solution, we apologized for not having the data, but we also offered people to volunteer and help us build the data.
Nir (05:49):
So two amazing things happened. One, people did not felt angry at us, because they understand the process and they couldn't give us one star, because we offer them to help. So if you are not willing to help, at least [crosstalk 00:06:03] don't bash us. So, that's one thing that happened. They stopped giving us one star. The second thing is, and that's an amazing story around the world. 1%, exactly 1% of the population were willing to actively send us an email and volunteer.
Nir (06:18):
So today we have more than 800 million users, and about eight million users volunteer to help us. Another secret is, only 10% of them were useful. The rest was just good people that tried to help, but they were not skilled to help us build the data. But if you think about a workforce of 800,000 people around the world today, that were qualified to become editors, that's amazing. So we built the data based on editors that actually spend time in front of their computers editing [crosstalk 00:00:06:47]-
Gigi (06:46):
How much does each one of them spend on average?
Nir (06:50):
Tens of hours a month.
Gigi (06:52):
And they continue doing that over a period of time?
Nir (06:54):
Absolutely. You have to understand that transit data is way more dynamic than a cartographic map, or a
roadmap.
Gigi (07:02): Sure.
Nir (07:02):
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So, every week in every large city, they change locations of multiple stops, schedules changes. So that community is doing a great job, not only in setting up a city, but mainly maintaining the transit data in the city. So-
Gigi (07:17):
What kind of recognition are they getting?
Nir (07:19):
So they just get recognition within the app. We used to send them t-shirts in the beginning, but after
2,000 people [crosstalk 00:07:25].
Gigi (07:25):
800,000 t-shirts is a lot of [crosstalk 00:07:27].
Nir (07:28):
But after 2,000 people, it became too expensive. So it's mainly a written recognition on the app, and giving them different ranks of city manager, or region manager, or country manager, and the highest rank, by the way, is an ambassador. And if you think about it, we got even extra bonus from these ambassadors, because in countries and cities where we do not have any people on the ground, and we don't know the language, like, I don't know, Indonesia, Malaysia. These guys are representing Moovit, and going back to the transit operators and ask them to provide us with access to their car fleet management, so we could have real time information for their buses.
Nir (08:08):
So that actually solved the other problem, out of about 7,500 transit operators that we represent the data, more than half gave us access to the car fleet management. So we could give a true real time information based on GPSs on the buses, and that's way beyond Google Maps. It's five, six X more transit operators that provide us data than you have on Google Maps today, worldwide.
Gigi (08:35):
And when you looked at it, I mean, you're already, clearly, you're the winner in this field, and you have passed critical mass. But at the time earlier on, when competition was around, do you feel that it's the data that made you win? It's the app? It's better service? What made you win?
Nir (08:53):
So at the end of the day, I think it's the user experience, combined with the accuracy of the data. If you think of a solution like Moovit, which is a utility, we targeted daily commuters. At the end of the day, daily commuters are pretty much aware of how they get to their destination, based on the trip planning, but they are way more focused on accuracy, the real time information, and service alerts, and all kinds of information that save their day if something goes wrong in the same day. So at the end of the day, what we figured out that people use Moovit more than any other app, because of the user experience and the accuracy of the information. We couldn't allow our app to be less user friendly than any other app, but in the same time, it's not enough. You have to provide people real value in order to create organic growth.
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And the real value is the accuracy of the data.
Nir (09:51):
Absolutely. It's not just the accuracy, it's the comprehensiveness. If you think about it in a city like
Barcelona, there's not only the local transportation, there is long distance trains that get into the city ... PART 1 OF 4 ENDS [00:10:04]
Nir (10:03):
... There is long distance trains that get into the city still have 5 to 10 stops in the urban area, which people are using as part of their urban mobility. If you do not integrate this information into their daily trip planning, you're missing part of the service that people would expect to get. So it has to serve people and generate value to people.
Gigi (10:23):
And over the years, was it the consumer data, these ambassadors that helped you, that eventually got
you to also get the company's data?
Nir (10:32):
In many aspects yes, but it's a combination. It's a combination of building tools around these editors and make sure that we can verify the accuracy of the data. We do a lot of cross tests to make sure that the data is correct. So it's a combination between the contribution of the community and the tools that we have built. but the company was very, very focused on user first. Means let's make sure that our users get the most value out of the app.
Gigi (11:03):
Yeah. It's amazing because your biggest competitor was Google, right?
Nir (11:07): Yes.
Gigi (11:07):
And Google was there on the phones to start with. Google was there with the data to start with. And you guys still manage to capture people's imagination more, and allow them to participate and contribute data, which eventually got you to have much better data than Google.
Nir (11:21):
Yes, absolutely. And when people ask me about that, I said out of the 800 million users, about 75% or 80% are Android users which already have Google maps preloaded on their device. So people bothered to download Moovit and use it, and it's all about the extra value you're getting. But it wasn't immediate, and it wasn't easy because if you think about it, it's a utility with no viral effect because the fact that you're using Moovit does not require you to invite somebody else to use it. So the only growth effect is
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good word of mouth effect, and a lot of partnerships and marketing work. All of our growth is, is free of
investment. We did not invest cash in user acquisition at all. It's completely organic.
Gigi (12:09):
That's quite impressive. And so today you are the number one public transportation app in the world. And I know you started a little bit of monetization around selling tickets, and you have the carpool. So tell me a bit about the future. I mean, when do you guys become a full blown marketplace of transportation services?
Nir (12:27):
So, it's already happening. Up to January, 2018, we were a free app, but we started to generate revenues two and a half years ago, and we're looking at ourselves now as an urban mobility app, and mobility as a service platform. We decided that we don't want to charge our users anything. We would just like to provide them more services where we can make money out of. We generate a lot of data. We collect about 6 billion data points a day from our users completely anonymously, and generates a lot of analytical maps for cities to understand how people move within the cities. We sell this information. We license a transit data information to companies like Microsoft. We provide the data for Azure maps and Uber.
Nir (13:13):
We find significant different sources of revenues to the company prior to the acquisition, and it's still growing. In a way, we're not just serving public transit users. Today, in the last three years, we aggregate almost any mean of transportation within the city to Moovit, and we developed a full blown multimodal trip planning, which also includes the ability to drive your car to the nearest exchange point, which can be a train station, park your car, and continue with public transit altogether. Eventually that's the future. That is exactly what people are looking for, a full multimodal solution that will combine first mile, last mile, and mass transit to take you to the center of the city.
Gigi (13:56):
And in that regard, do you see eventually the Moovit app being the one app you need where you're going to also be able to book everything else, or do you think that you'll have to go from the Moovit app to other apps in order to buy your tickets or reserve your ride?
Nir (14:12):
Yeah, we definitely want to be the sole platform, but we understand that we will have to compete with alternative platforms. But if I look at the user experience, again, the next step or the next level is to be able to get a full experience door-to-door with one app and one payment source. And in order to provide that, we're partnering with a lot of micro mobility services and ride hailing services. But the most important partnership we have just signed a few weeks ago is with Cubic. Cubic is the largest US fare collection company. 70% of the transit fare collection is going through Cubic systems in all of the large cities in the US starting from New York, Boston, Chicago, LA, San Francisco Bay area, the clipper cards, Miami, Atlanta.
Nir (15:01):
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And we're developing together with Cubic a unified platform for public transit payment, where in other cities as well, the technology providers will be able to use this platform, and eventually provide the users a single or a single point of payment for all services together. If you think about it, people would like to pay for transportation the same way they pay for their phone cellular bills. I mean, just consume it. Don't worry about it. We'll charge you by the end of the month, and we probably going to do it in the most efficient and optimized ways. So that's the next step of urban mobility, where there are so many different options to pay for transit.
Gigi (15:43):
It's amazing that Israel has become a superpower of mobility startups. we have the Mobileye at the top of it with their whatever 17 billion acquisition you guys with whatever their number is above a billion, and Waze and with Via, and we have GET. How come a tiny country like us, that basically has, let's face it, one of the worst transport systems in the world, has become a mastermind of mobility services?
Nir (16:13):
It's just my 2 cents. I mean, it starts with the fact that... You've mentioned it. We do not have a good system here, so the challenges are clear, and people would like to solve problems, and that's where it starts. But the true answer, I think, relates to the fact that all of the companies that you've mentioned started with a global vision in mind. In particular, in transit it's so hyper-local, and it's, I would say, regulatory-controlled, that you have to think globally and create a very robust infrastructure to serve multiple cities, multiple countries, which makes all of us successful. So if you think about the problem to begin with as global problem, and you prepare yourself and build your infrastructure correctly, then you aim very high. You aim to concur the world, and not just a city or a country. And that what differentiate, I think, most of the companies that you have mentioned. We thought global in the first place, and it's mainly because Israel is such a small market that nobody cares. So that's pretty much why I think these companies were successful.
Gigi (17:25):
And there is some ties, actually, between you guys and Waze, right?
Nir (17:29):
Yeah. So, that's another story for young entrepreneurs. I mean, when we started Moovit, I already knew that the Waze founders very well, and I suggested my co-founders to go in and consult with them. The first reaction was, "Let's not do it, they're going to steal the idea." But when I explained to them that the founders of Waze are very smart, so they either thought about it before they're doing it, and we don't know, or they decide not to do it, and we can also learn from that. They agreed, and we went to talk to the Waze founders, and we figured out that they thought it's too complicated, and they want to focus on the drivers world. And it also gave us a little bit of feedback about the challenges that we're facing. And then I asked Noam Bardin to allow [inaudible 00:18:12] to join our Board of Directors. And since then we got a lot of insights from Waze that helped us setting the benchmark for growth or world focus in different areas.
Gigi (18:26):
Yeah. That's very interesting. Many times I tell the story of how having on your side, somebody that knows what KPIs you need to strive for saves you month on month on month. I remember in one of the one of the games companies that I founded many years ago, just being able to get to the KPIs of others,
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without understanding how they got there, but just knowing how good looks like, knowing what do you need to see as retention, what do you need to see as engagement, has saved us so much time, because otherwise you can just either be good and continue working on the wrong things, or be really bad and think you're good. And that just saves you month on month. KPIs are gold.
Nir (19:02):
Absolutely, And I want to share another anecdote. When I joined my two cofounders that Moovit, they actually invited me to join a and become the third cofounder, and they asked me to be the CEO. I told them, "Guys that's my best years, and I'm not going to waste my best years on a company that were not going to take off. So my only request to you is let's set measurable goals for every stage of the company, and I want to be very Frank with you. If we're not going to make our goals, I'm not necessarily going to stay." And that's so important. And he actually drove me to raise my B round from Sequoia in the US. I really wanted [Alford Lynn 00:00:19:43] to join our board of directors. Alford were involved in the very early days of Uber, and then Airbnb, and Houzz, and DoorDash, and of course was part of Zappos. And Alford was able to bring me benchmarks that he saw at Sequoia that was really insightful for me exactly the way you say, to understand, "Are we good?"
PART 2 OF 4 ENDS [00:20:04]
Nir (20:03):
... for me, in the way exactly the way you say to understand, are we good, are we excellent or do we
suck in something? And he definitely impacted our way of moving forward in multiple areas.
Gigi (20:14):
So let's talk a little bit about the future of mobility. We've had a chat before about how future mobility would look like with regulation on one hand, the need for mass transit, rather than just private cars and so on. And today with, with scooters and flying cars soon, who knows, how do you see the future of mobility in cities? Kind of based on your point of view, which is probably, you see what's happening more than anybody else with all the data you have.
Nir (20:42):
And so one thing is for sure, to me at least, is that we're not going to end up with one mode of transportation. So it's not going to be that once autonomous vehicles will be in a production mode, everything will be autonomous vehicles. So just to make sure we're all clear, one rail can transfer about 35,000 people an hour, where different cars, bumper to bumper, even if it's autonomous can convey 2000 people an hour on a lane, and the infrastructure is very limited.
Nir (21:11):
So I clearly see that the future is based on multiple means of transportation that will have to mash into each other, and people would be very demanding to become a smooth experience. Otherwise, it's going to be a massive of private cars. So regulatory force will have a lot to do with it by restricting areas to public transit only, or autonomous vehicle only. And we see today more and more cities that starting to bid for shuttle services, last mile services.
Nir (21:47):
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And we're talking about transportation on demand, which is a mix between a fixed route shuttle and ride hailing services. But we're talking about for factors of 12 seaters. So at the end of the day, it will have to be a mix that will be regulated in multiple ways, fares and also restricted areas by the local transit authorities in this mix will have to work in a very synchronized way.
Gigi (22:15):
It's the handovers is going to be the toughest, right?
Nir (22:17):
Absolutely. If you get a trip plan that tells you to drive to the train station and you arrived to the train
station a minute after the train left, and then you have-
Gigi (22:27):
The trip's not really worth much.
Nir (22:27):
Exactly. And you have to wait 30 minutes, that's a nightmare. Or if you go to the train station, but there's no parking spots for you, it's another nightmare. All these small things has to be synchronized in order for you to be able to experience a smooth ride. And people would like to have certainty when they leave home. So driving your car, it's clearly certain. You drive your car, you have air conditioning, you listen to your music, but the only uncertainty is the traffic. In multimodal trip planning, the level of moving or the number of moving parts is so much that the future of mobility will have to take care of it.
Gigi (23:02):
So basically what you guys are doing, which is planning the entire trip is the key to streamlining future
mobility.
Nir (23:09):
Absolutely, but it's also involved with a lot of effort coming from all different companies. Uber will have to dispatch their cars based on when exactly you expect to arrive with the train. And the car or the car with a driver or without a driver cannot park there for 20 minutes to wait for you, it has to be fully synchronized. So this is what we're working on today and we're trying to build together with the multiple players around the world.
Gigi (23:36):
I'm sure that people are kind of curious on how do you think COVID is going to impact mobility? I know that many bus services have stopped or limited to less people on the bus, which is clearly difficult because you guys now need a new data point, which is, will there be room on the bus for me if it's limited to 15 to 20 people? Assuming that COVID stays with us for a few more years, how do you see this impacting mobility?
Nir (24:02):
It just adds another layer of information that will have to be provided to the users. We're starting to work on that with multiple transit operators that put passenger counters on the buses and they transmit this information and make this available to people. But also, I think that it really going to impact so many
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other things. Working in remote from home will impact some of the level of usage of transit. It's a much
bigger question than just public transit.
Gigi (24:33):
Yeah. And that leads us clearly to the question of autonomous vehicles. You are now part of the largest power group of autonomous vehicles with Mobileye. When is this happening? In your perspective what's required for that to really happen. And would it happen in the coming few years and will this change everything like everybody thinks?
Nir (24:54):
So I'm not exposing any information that were not exposed before. So professor Amnon Joshua that the head of this business at Intel, senior vice president at Intel and leading this whole effort already announced that in 2022, we're going to run multiple production services of autonomous transportation on demand services. One will be in Tel Aviv. There's one in the US, at least one, if not two, and then one in Korea and one in Japan and one in Paris.
Nir (25:24):
So we're looking to operate it in a production mode in less than two years. Which means that we're already running some tests today with the vehicles and with the whole experience of planning a trip, calling a car, pick up and drop off in multiple places. So we're definitely doing it right now in, let's say internal tests with Mobileye employees. But this is going to be production in 2022 in multiple places. It's still not going to be a massive part of the market. And I would definitely expect they will take years before this is going to be one of the most used services. Regulation is still a big question and it's hyperlocal, so regulations are very different between countries. So we'll have to see how that evolved in parallel.
Gigi (26:15):
If there are founders listening to us that want to create a startup in mobility, what are kind of the big themes that you think are still open for disruption, let's say ripe for disruption, where people could focus on trying to reinvent some of the things that are around?
Nir (26:33):
I think that there's a lot of challenges in operating fleets, fueling cars, cleaning cars. When we think about it, if we really believe that hundreds of thousands or millions of vehicles will be autonomous, there's going to be a lot of challenges in operating the fleets.
Gigi (26:51):
They're going to drive themselves, but they're not going to clean themselves.
Nir (26:53):
Exactly. So there's a lot of additional services that will be required in order to operate such fleets. I think that's one area. Probably already several companies are dealing with it. So the level of cybersecurity for the vehicles is also important, entertainment within the cars. Other additional services in the cars can be very interesting services moving forward.
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Yeah, I agree. I think that mobility sometimes feels as if there's really no more room for startup innovation, but I think that the major changes that we're going to see are opening really huge opportunities for new companies. That let's take a few minutes to talk about your entrepreneurial experience, because you're kind of my age, which makes us not as young as we used to-
Nir (27:42): Two old guys.
Gigi (27:43):
Not as young as we used to be. And you founded a few companies before and then became an investor
also, and then came back to be a founder. What was different this time?
Nir (27:54):
It's my third startup, I have to say. By the way, the second one just had an exit about 20 days after
Moovit.
Gigi (28:02):
Yeah. That was a nice closure.
Nir (28:04):
I was part of another $360 million exit.
Gigi (28:08):
In a totally different field, right?
Nir (28:10):
It's a semiconductor company. So I think in Moovit, I came with so much more realism to the game, means setting measurable goals, thinking really big. My understanding was that making a $300 million company or a billion plus dollar company takes the same effort. And it takes almost the same time and you better be on the billion plus rather than the hundreds of millions.
Nir (28:38):
It's easy to say, but the implications are that you have to think big. You have to understand that the total addressable market has to be very large and you have to attack a much bigger market than if you want to create a niche company. That's one thing. The other thing clearly relates to fundraising. And two important things that I've learned is one, you never raise enough money if you have very large dreams. So take money whenever you can. That's a cliche, but I think it's really-
Gigi (29:06):
How much money did you guys raise ain Moovit?
Nir (29:07):
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We have raised $130 million and we ended up with spending a little bit less than a hundred before the
acquisition.
Gigi (29:14):
Is there any point that you were missing money?
Nir (29:16):
No, not in Moovit. In my previous companies? Absolutely, yes. But I think I went out and raised money always two years before I really needed it. And that's really important to understanding what are the inflection points that allows you to raise money. But in the same time, I wasn't really argumentative about pricing or valuation. It was all about at the end of the day, I didn't try to optimize the valuation. I really tried to optimize enough cash for the company to run moving forward to the next milestone. That was one important thing. The other thing about that relates to who I would like to work with. You can divorce your wife, but you cannot divorce your investors almost at all. And it means that ... and I'm still with my wife for 30 years. So it requires that-
PART 3 OF 4 ENDS [00:30:04]
Nir (30:03):
I'm still with my wife for 30 years. So it requires that we, as entrepreneurs, really need to do due diligence about who we're going to partner with. It's a very long journey, and you want your partners, the investors, to be really aligned with your vision. And otherwise, it's not just money. Money can make things very complicated. So for me, at Moovit, I was so much focused on not only how much money I raised, but also who is going to invest in the company, and who exactly is going to sit on my board. I think it helped. The early stage investors were the ones that kept me running forward, and they were the most involved in the acquisition. So it just tells you that I've picked the right people.
Gigi (30:44):
And so do you think that when you think about your investors, the main thing is their strategic
alignment?
Nir (30:51):
I don't know if we can call it strategic alignment. It's about understanding if they're willing to help you pursue your dream. And if they have a long enough patience to see you pursuing this dream, and they're not forcing you to change directions all the time, and if they believe in what you're doing, they should let you run and support you. And I think it's crucial.
Gigi (31:16):
And when you think about starting Moovit, you started as the third time founder, what were the benefits of being a multiple time founder in creating this, and what was the biggest pitfall, the one thing you feel that you might've done wrong because you're a multiple time founder, or you almost made wrong because of that?
Nir (31:32):
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So the benefits were clear. I mean, when we came to raise the A round, I got six VCs that were competing on the deal, even though they were not sure exactly what we were doing. So that's a great advantage. So the first round was very quick. And I also tried not to spend unnecessary time on terms and stuff. I could do it very quickly.
Nir (31:56):
The pitfalls, I would say that sometimes you think you've seen everything and you know everything. So I almost told my co-founder, "Forget about the community. I mean, it will never work." So one of the things that I've learned from that is even though you believe that you are very experienced, you should let people have a very long leash within your company to do crazy stuff, even if you're not sure that it will work. Don't always trust your experience. Let people try crazy stuff, almost when you're sure it's not going to work. And I almost missed this. And that was crucial to Moovit development.
Gigi (32:30):
Yeah. We have a playbook for second time founders, where we list all the pitfalls that we think they will fall into, to help them avoid them. And clearly they usually don't avoid them, like we all do. But one of them is clearly not to think that you know everything, and therefore not try things, which is what you always do as a first time founder. And then as you become more confident, it's easier to fall in that pitfall.
Nir (32:54):
There's something in the feeling that I've been there before. I can tell you where, and in many cases, you're right. But in some cases when you're wrong, you can miss a huge opportunity. And the balance is very delicate.
Gigi (33:05):
I agree completely. So on the more kind of funny thing, you guys negotiate a billion dollar deal remotely, right? I mean, how do you do that? I mean, I've done a bunch of these billion dollar deals, but it always included dinners, and looking people in the eye, and yelling, and walking out of the room. But what do you do? Shut down Zoom if they upset you? What do you do?
Nir (33:27):
Yeah. Well, so first, just to make things clear, I mean, from the first call discussing the LOI, to the signing and closing, there was not even one face-to-face meeting. Everything, including the due diligence, there was not even one face-to-face meeting. It was all happened starting second week of March, and ended up in May 4th. So not even one meeting. Going back to your question, it's much more difficult to walk out of the Zoom room. But yes, that's what you do.
Gigi (34:01):
That's something you do, more or less.
Nir (34:02):
That's what you do. But we didn't really need it, a lot of these things. Because most of the things were
closed over the phone. And two very important phone calls set the whole deal. One is a phone call with
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Amnon Shashua from Mobileye, that set the deal terms. And we did have some arguments about it, but
we could find a way to compromise on that.
Nir (34:25):
Then the second phone call was a long phone call that I had with Bob Swan, the CEO of Intel, who convinced me that even in this crazy period of time, I took a huge risk to get into this deal, because we missed an investment opportunity. As an alternative, they're serious about it. And they're looking seriously at the longterm vision and they're not going to be impacted from the COVID-19 situation.
Nir (34:50):
Both calls convinced me to take this huge risk and get into this deal. But the flip side of it, if you think about it, and on a serious note, I mean, people were available 24/7. You're at home. You have nowhere to go. Nobody travels. You can't say that you cannot reach people, because they can join the meeting in their pajamas. And it's actually takes five clicks between meetings. You don't need to go to another building. You don't need to drive. So it becomes way more efficient, in that aspect, for the due diligence and closing the deal. So the timeframe was 60 days. We closed the deal in 42 days.
Gigi (35:26):
That's very impressive. An off question. You guys have chosen to start the company, not in a very typical place in Israel. This is not in Tel Aviv, not in a city. This is a question that comes up also a lot in the United States. I mean, do I start my company in Austin, or do I start it in San Francisco? And I think that also right now with COVID, people are starting to think about it a bit differently compared to what it was before. So what made you choose that? Did it have any negative impact on the company? And would you see that now with COVID this is going to become a bigger trend of top companies starting elsewhere?
Nir (36:05):
Well, let's put it in proportions. We are 10 miles out of Tel Aviv-
Gigi (36:10): Yes. That is true.
Nir (36:13):
So it's not like the distance between Austin and the Bay area.
Gigi (36:14):
But Israelis treat it as if you're 100 miles-
Nir (36:16):
Outside, yeah. So the reason we put the office there, is because it's just one half miles from my house.
Gigi (36:24):
That's a good reason.
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And that's the only privilege that the CEO can have. The rest is just chores. But seriously, people asked us. We didn't have any problem to attract talent. And I think it relates to the story you tell, and the vision people see is in you. And I believe that now working remotely, it's even going to be easier. People can be spread all over. And as long as you pick the right people with the right talent, they can work either at the office or remotely with the same level of efficiency.
Nir (36:55):
We did not send any employee to unpaid vacation during the COVID-19 situation. And we're even hiring now more and more people. So we keep the level of efficiency almost as high as it used to be before, without the face-to-face meeting, although it's challenging. But I do believe that we will see a trend of companies starting to build their offices in more remote areas. It saves a lot of money, and it makes the company more efficient in the way of travel.
Gigi (37:27):
One last question. When you look at your experience, and I'm going to ask a stupid question, but what's the one core belief that you have about entrepreneurship that you think young founders can enjoy and learn from, the one that is not what everybody thinks, or what's unique in your thinking?
Nir (37:47):
So one advice I received more than 20 years ago goes with me all the time. I mean, I was in a conference where the guy, there was a hundred young CEOs, and the guy asked, "Who has children?" Everybody raised their hand. And you can't look at your child and say that-
Gigi (38:06): They're ugly.
Nir (38:07):
They're ugly. But he said, but you can look at your startup and say, "You know what? It's ugly, but I can fix it." And if I need to think of one thing that I always tried to be honest with myself, as I look at my startup and said, "Where exactly I think it's ugly?" And you can fix it. But if you don't have this ability to look inside and say, "You know what? We are ugly in this situation," or, "We're not performing well," it's very difficult to fix it, and your startup is not your child. You can look at it in a more objective way. And the way to do it, to my perspective, is to measure everything. And if you measure things and you compare it to the standard, or to the standard that you want to be in, and you're not there, don't try to find excuses. Try to understand why you are not there. And that's the most important tip I gave myself, and I give others.
Gigi (38:57):
Thanks. That's great. Nir, thanks so much for being with us. And I'm sure you're going to continue conquering the mobility world now from within Intel. I can't wait to get my autonomous taxi in the Moovit app, and be handed over to another transportation [inaudible 00:00:39:16]. Thanks so much.
Nir (39:15): You're welcome.