You wanna bitch about valuations and call this a bubble? Go ahead. I, for one, love that a flood of we-can-do-anything enthusiasm fueled by seemingly infinite cheap venture capital is disrupting all kinds of annoying, antiquated corners of the real world.
Groupon is changing local business in a fundamental way, Airbnb is disrupting hotels and of course in San Francisco and New York, Uber has given people willing to pay just a little more a superior taxi experience.
I don’t mean this as a knock on Uber . Uber is building a company city-by-city in a sober rational way. Get Taxi is going huge, swinging for the fences. Obviously the bigger the initial ambition, the bigger risk it could fail big. (Just ask WebVan.) And a big advantage is that Get Taxi is skipping the US and launching in Europe, where the taxi industry is a lot easier to disrupt en masse because it’s mostly made up of non-union independent contractors. (Refresher: Uber invoked legal threats immediately and can’t even legally keep “cab” in its name.)
It launches in London in two weeks, Moscow in two months and cities in France and Germany soon after that. Forget proving a concept, it’s launching in the largest cab markets first. And instead of focusing on limos and premium cars, Get Taxi is trying to replace dispatch systems in all cabs in all major European cities.
Like Uber, it has a glitzy iphone app and user experience that streamlines the ordering, tracking and payment. But it’s also like OpenTable– providing hardware to cab drivers that coordinates pickups and payments. And to get inventory for those cabs it offers a concierge-like service for high-volume cab bookers like receptionists at law firms and concierges of hotels. More on all that in a bit.
Get Taxi is founded by serial entrepreneur Shahar Smirin who splits his time between Israel, Russia, Silicon Valley and now, the various capitals of Europe. He also splits his time between several companies. Of late, he’s been particularly consumed building Vigoda.ru, a daily deal site in Russia. Like a lot of daily deal sites, it’s growing fast; 100% every three months he says. It’s doing about $50 million in revenues and offering about 500 deals per week.
Talking about Vigoda and Get Taxi, Smirin kept referencing the importance of time-to-market. That’s something I haven’t heard much in Silicon Valley since the late 1990s. In fact, most of the big winners of late haven’t been the first to market, whether it’s Google in search or Facebook in social networking. The big winners have been the companies that took their time, and got the product exactly right.
But Smirin says the difference is those are pure Internet companies. What he– and others like Airbnb and Groupon– are building are not pure online companies. They’re part online, part offline logistics companies. You need physical inventory, sales forces, a brand name, and in the case of Get Taxi hardware in as many cabs as possible. In this category of companies, he says, you can’t afford to be number two.
Looking at the wild landgrab happening in the daily deals category world-wide, you can see a lot of people agree with him– including Groupon, which has been the most international acquisitive startup I’ve ever seen. Groupon’s money-bleeding international strategy has very much been “buy now before anyone in any market gets too much traction, no matter the cost and ask questions later.”
That’s one reason Smirin loves building these types of companies. It’s anathema in Silicon Valley to say this, but his job as an Web entrepreneur isn’t to just obsess about product all day long. He’s executing on business model from day one, since these types of companies are disrupting pre-existing juicy markets, not creating new ones from whole cloth that people may or may not pay for. He’s building sales teams and delivery models, as fast as he’s looking for great engineers.
“You have to be the first to market and run fast,” he said over lunch in San Francisco last week. Wow, did I just go back in time? That sounds a lot like a throwback to the early days of the Internet, and there’s a good reason why. Back then, Web businesses weren’t just about grabbing time as a billion people already came to this vast digital medium every day, they had to evangelize why you’d go online to solve certain needs; why skeptics should “go to the Internet.” People were so un-Web savvy that they had just enough confidence to go to the online travel site they knew, not explore around. That’s not too different from the barriers of building a real-world physical business.
Get Taxi relies even more heavily on building a real-world logistical infrastructure than Smirin’s Groupon clone. Like the daily deals sites and unlike the early Web 1.0 days, there’s real and immediate market opportunity. “This is a $30 billion dollar per year market,” he says. “This is not about features and eyeballs.”
In Europe there are 600,000 taxis and most of them are independent contractors paying $5,000 per year for a dispatch service. In a classic Web play that uses the medium to disrupt a pricey middleman, Get Taxi promises to send cabs customers in a more efficient, more user friendly way for one-third of that price. Because there’s no unions or exclusivity contracts, taxi drivers can use it as a secondary system. They pay month-by-month; if it doesn’t bring them value, they can get rid of it. If it brings them value, the system quickly pays for itself. And if they’re skeptical, Smirin will even let them try it free for two months to see what it can do.
Get Taxi is trying to do more than just bring drivers more riders, it’s trying to solve pain points for drivers so they never go back to traditional dispatch services. For instance, not only does his five-inch hardware device sync with smart phones to handle the dispatch information in an Uber-like-way, it handles the payments. The service links the cab driver and the consumer by name, so the cab knows who it’s picking up, the consumer knows where that cab is and that dramatically cuts down on no-shows.
The service has been running a full 24/7 beta test service in Israel for several months, and Smirin is confident he’s ready for a London launch in August. It will be available on every smart phone from day one, and if you order a cab and Get Taxi doesn’t have a driver in its network, it will call a competitor and book one for you. “Our customer care philosophy is no excuses, no bullshit,” he says.
The bigger challenge, since Get Taxi only has a month to prove his value to cabbies, is to get a flood of riders quickly. This is where the concierge-like part of the business comes in. Smirin seeks out businesses that regularly need a large volume of cabs– places like hotels, restaurants, law firms and other large companies. He set up an OpenTable-like consumer end for receptionists to easily call and manage taxis for guests, and like OpenTable, they get points the more cabs they book. In the last two weeks he’s pre-signed 250 cabs in London and fifty businesses to send them traffic.
Get Taxi is obviously a big, gaudy, ambitiously crazy idea and fortunately Smirin has big pockets behind him. He’s already put in several million dollars of his own money behind it, and he raised $9 million more from Russian billionaire industrialist Len Blavatnik’s Access Industries Fund. Among other assets, Blavatnik recently bought Warner Music for $3.3 billion. Safe to say, there’s more cash where that $9 million came from. It’s also safe to say Get Taxi will need it.