Whether you’re riding a chicken bus in Nicaragua or a Greyhound in the United States, intercity bus travel is rarely a glamorous affair. Despite its essential nature in moving people for vacation, visiting family and business, this particular mode of transportation has often been reduced to its most essential components — plenty of seats, wheels, an engine and a driver — in order to make the most amount of profit for the least amount of effort.
In Latin America, advancements in technology coupled with a growing middle class with more disposable income have opened up the bus industry for disruption. Kolors, a Mexico City-based startup that is providing an elevated bus service and intelligent intercity mobility, might just have a first-mover advantage on that disruption.
Anca Gardea, co-founder, chief technology officer and head of product at Kolors, previously founded Busolinea, one of the first bus aggregators in Mexico and Latin America. As with Kolors, Gardea founded Busolinea with her husband, Rodrigo Martínez — Gardea is the technology-minded one in the relationship, while Martínez handles the business aspects. A few months into founding Busolinea, the company was purchased as a subsidiary by one of the largest intercity bus incumbents in Mexico. Gardea and Martínez went on to lead the digital unit for that company, where the two gained plenty of experience in various aspects of modernizing the intercity bus industry.
Feeling stymied by the lethargic tech so often found in larger organizations, the two decided to pivot in September 2019 and start Kolors.
“At Kolors, we’ve developed everything that’s necessary for running operations from the route planning, pricing optimization, tools like revenue management, crew and customer support, etc.,” Gardea told TechCrunch.
Everything except actually owning and operating the buses themselves. Kolors is following a model that the company has described as “if Uber and Southwest Airlines had a baby.” The startup essentially provides a technology layer to small and medium-sized bus operators to help them operate more smoothly. Kolors also provides each bus with an attendant, a Kolors employee who checks in passengers, accepts payments of cash when needed, and sells snacks and drinks — all to provide that near-luxury level of service.
“I’ve been working for over 15 years in the tech industry, and it’s not enough to be the most intelligent person at the table if you’re not a team player and a good person.” Kolors co-founder Anca Gardea
This business model, while still evolving, has attracted the attention of big investors in the mobility space. Kolors recently closed out a $20 million Series A that was led by UP.Partners with participation from Toyota Ventures, Maniv Mobility, K5 Global and Mazapil.
We sat down with Gardea to discuss how being an empathetic leader inspired her team of engineers to work for six months without pay while Kolors was starting up, why intercity bus travel in Latin America is ripe for disruption, and how the company plans to expand in the coming year.
Editor’s note: The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity.
TechCrunch: What problems is Kolors trying to solve for?
Anca Gardea: We help small and medium bus companies, where smaller can be like 15 to 20 buses and medium companies can be like 500 buses. They don’t have technology teams or customer support teams in place to actually optimize their operations or deal with frustrated customers, so that’s where we focus on to offer a differentiated service.
I think that incumbents only think about profit, and up until now, they didn’t really have strong competition, so they didn’t need to step up their customer service because customers would always come. I also think the way operational crew had been treated was poor, and they weren’t given tools to be more efficient. For example, we give our teams tablets so they can look at the passenger list in real time, have access to information and be able to make decisions on the spot.
Whose idea was it to have the bus attendant?
We call them ambassadors, and it was obviously Rodrigo’s idea. We had seen other similar examples of this in India, Czech Republic and Prague, but we thought that to put bus attendants on board was not enough. They started by attending to passengers for different problems, monitoring bus drivers to make sure they’re not using their phones. But little by little, we started adding different layers for them to sell tickets, snacks and other ancillary services on the bus.
Rodrigo previously told me your software platform is like a mix of airline and ride-hail tech. Can you explain what that looks like in practice?
We have different modules and apps. The route planning and scheduling module we built to be very agile, allowing us to modify and configure the structure of the services and trips very easily, from editing stops and schedules with immediate effect on sales channels to operational changes like vehicle changes or trip cancellations.
We are actually the most proud of the pricing and revenue management systems that we have. This is a lesson learned from the previous company. Third-party revenue management systems, which are the norm in the airline industry, usually cost millions of dollars. So as a startup, we knew we needed to build our own system; otherwise, we wouldn’t have a competitive advantage with the incumbents in the bus industry. Our platform is based on a style of pricing and inventory-based rules, so depending on the demand, the pricing on a trip segment can automatically shift between fare classes.
The complexity of route planning and pricing in the intercity bus industry can be more challenging than in the airline industry — for example, an intercity bus could have dozens of segments and price categories in just one service. We have developed airline-style technology but taking into consideration all of these challenges in order to optimize the Kolors ecosystem from routing to scheduling to pricing.
Also, to be able to compete with incumbents, we are constantly using data analysis to improve our network and pricing, and also experiment with other features to give a better product to the customer.
What was the process like of stepping away from one business and starting another within a few months, in terms of finding a team to work with you?
When we left the other company, my team left with us. So obviously, I didn’t have the money to actually hire everybody at Kolors immediately. Some went off to fintechs, but the seniors stayed with us. In fact, some of them worked without money for six months, and when we had the seed round, we paid them back. Many of the ones who went to work at fintechs eventually came back to work with us. I had a team of 16 engineers and in the last three years we only lost one person, and we lost them to Netflix.
I’m very proud of the team. We are here because they stuck with us. I get emotional about it because it was very hard at the beginning, because we started right before the pandemic, but these people took a chance on us. I don’t know how many people would do that — to just work and believe in something, especially during hard economic times.
How did you convince your team to work for free for you as long as they did?
I didn’t convince them. Basically I said whoever can work without a salary, raise your hand, and whoever cannot because they have family or something, just let me know how much you require — what’s your minimum amount? They stayed because they believed in the company. Also we built trust over the years. It’s the way you treat people and the way you work with them.
Do you have any advice for founders who want to instill loyalty in staff?
I do think that transparency and empathy goes a long way. For example, it’s important to be mindful of team members with family, who need paternity or maternity leave. I have three kids, so I know when you have kids, you need time to bond, and the team should be able to step in while they do that.
As a founder, you don’t lose anything if you have empathy and consideration for others. I’ve been working for over 15 years in the tech industry, and it’s not enough to be the most intelligent person at the table if you’re not a team player and a good person. So just surround yourself with really capable people that have empathy and you’re gonna go a long way.
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I do understand it’s hard when you start a company to find the right people, but whoever comes with you from the beginning, who believes in you or the project, treat them well and retain them.
It feels like there’s this meme of startups offering workers perks to retain them, like meditation classes or kombucha on tap, but you’re saying it’s actually a lot simpler than that?
Yes. I’ve talked to my team about this, and not everybody wants perks. I don’t want a chair that is more ergonomic; I can buy that with my own salary. They want to be treated well, to have more flexibility to spend time with their families. They want access to certifications, and they want to be trusted to do their task without being micromanaged.
You’re running a company with your husband for the second time. How do you manage that?
We have very clear areas of focus, and we are clear with one another who makes the final decision — he’s the CEO, so it’s him. I stay focused on technology and product, and he [stays] on the business and operational side: the relationships with investors and fundraising and all that.
But we also make decisions together. He trusts me to make the best decisions on my areas of expertise and I trust him, as well. But we do consult each other.
I won’t say that we don’t have our disagreements, but we know how to work them out and we don’t take them personally. We have been together since we met in India 17 years ago. We built two companies together. We never go to sleep with a fight, you know.
The middle class in Latin America is growing and people are wanting a higher standard from their products. How does Kolors cater to this?
Of course, we offer the bus attendant experience, but more than that, we are considering the comfort of the seats and also we’re thinking about creating modularized cabin elements that can be changed depending on the customer that you expect on the particular route. Because we do have different routes, like long haul routes or short commuter routes, and within the commuter routes, some routes that are more catered to a business-class population.
A lot of people travel for business to Mexico City, so they usually pay more for the ticket if it’s a higher class and maybe gives them a table and some internet so they can work. So we have some new initiatives to cater to this. Currently, Kolors has the most reliable solution for WiFi, which is hard for bus companies to get right because of the geography and the cost. Right now our internet on the bus is free, but we’ll probably offer an ancillary service where you can pay a little bit more for a hotspot to be able to stream video.
Where do you expect Kolors to be in a year?
We do expect to expand our network quite a lot, and to be in many more cities in Mexico. We just launched another 14 routes this week and want to have 100 buses by the end of the year.
We have a plan to enter the U.S., but we are proceeding with caution because of the current economic situation. We will start with the customer that we know, which is the Latin American customer. People also come from different states along the border, like South Carolina and Florida, so we’re exploring possible concentrations of demand and what are the best points for our routes.
From the technology point, we are ready to enter anywhere, but we need to understand legislation and other factors before moving into new markets.
We also want to think about how to partner with different innovators in the space of electric or hydrogen vehicles. Right now there are few providers of clean buses, but we have some stealth projects at work right now.
I prefer to talk about the things that we have executed rather than all the things we want to do. We’re in crazy times right now, so I don’t want my words to be lost in the wind.
I lived in Silicon Valley for seven years and in the beginning I was so intimidated and felt so small because everyone seemed extraordinary. But I had a cousin who worked for Google and he said people just talk themselves up, it’s just words, and not to be intimidated by it, which is hard if you’re a first-time player or a new founder.
Are you finding there’s less of an appetite for that kind of startup bro shit-talking?
You might attract attention at the beginning, but at the end of the day, it’s the numbers that talk. We can offer investors the numbers, the growth and the experience to prove that we are serious. The funding environment is changing right now, so founders need to be focused on execution. Focus, focus, focus.