Daniel Ramot is the cofounder of Via which provides on-demand transit on a mass scale. The company has raised so far over $450 million from investors such as Pitango Venture Capital, Daimler, Kapor Capital, Hearst Ventures, or RiverPark Ventures. Daniel has a Ph.D in neuroscience from Stanford. Prior to Via, Ramot built supercomputers designed to discover new pharmaceutical drugs and developed avionic systems for F-15s and F-16s for the Israeli Air Force.
In this episode you will learn:
- Knowledge transfer
- Being a foreign entrepreneur
- Jumping from corporate to startups
- Landing big strategic investors
- Difference between corporate VCs and traditional VCs
- Navigating a crowded market
- Making the competitors weakness your strengths
- Learnings from the supply and demand in market places
About Daniel Ramot:
Daniel Ramot, Vias cofounder & CEO, has a Ph.D. from Stanford in neuroscience. Prior to Via, Ramot built supercomputers designed to discover new pharmaceutical drugs and developed avionic systems for F-15s and F-16s for the Israeli Air Force.
Founded in 2012, Via is reengineering public transit from a regulated system of rigid routes and schedules to a fully dynamic, on-demand network.
The Via algorithm matches, in real time, multiple passengers headed the same way with a single large SUV or van. Passengers request rides through a mobile app, and Vias systems instantly select and, if necessary, reroute the vehicle that best matches the passengers route.
Targeting the gap between outdated public transit and expensive luxury car services, the Via platform operates in New York City and Chicago, has provided more than two million rides, and is growing rapidly. Via is headquartered in New York with offices in Tel Aviv and Chicago.
Connect with Daniel Ramot:
Alejandro: Alrighty. Hello, everyone, and welcome to the DealMakers Show. I’m actually very, very excited. We have an entrepreneur today that is going to help us learn a lot. People are talking about ridesharing and new stuff coming up now as well as with electric scooters and things like that. Today, we’re going to be talking a lot about Via. So, Daniel Ramot, how’s it going?
Daniel Ramot: Great. It’s a pleasure to be talking to you.
Alejandro: Originally from Israel. What brought you to the U.S.?
Daniel Ramot: Yeah, originally from Israel. I came to the U.S. for graduate school. I was very interested in studying neuroscience. I applied to schools in the U.S. and ended up getting accepted into Stanford and went there for school.
Alejandro: Really cool. Before this, what was life like in Israel and especially with Start-up Nation? What’s this Start-up Nation that everyone is talking about?
Daniel Ramot: I spent the first, I guess, nine years of post-high school in the Israeli military. I studied physics and math as part of the program that the Israeli Defense Forces have called [1:15]. Then spent six years working for the Israeli Air Force developing avionics systems, first for F15s and then for F16s. So, I wasn’t really in any direct way part of Start-up Nation while in Israeli, but very much involved in the technology industry.
Alejandro: Got it. So then, you come to do your studies at Stanford. I’m sure that most of the people that are listening are wondering, what is neuroscience?
Daniel Ramot: Neuroscience is simply the study of the nervous system of the brain. My background, as I mentioned from the Air Force, was mostly physics and math initially. Then working as an engineer and a product manager for several years. Throughout that period, I developed a real interest in studying the brain and trying to understand how the brain works. I thought I would give it a shot and try to spend a few years learning about that. I didn’t have much background in biology, so I had to teach myself and learn quite a lot of biology to catch up. I just thought studying how the brain works is probably the most interesting thing anyone could do. So, I went to Stanford to try to get a bit of an education.
Alejandro: Absolutely. And you got your Ph.D., so not bad at all. I guess from studying how the brain works, what were your biggest lessons?
Daniel Ramot: First of all, it’s intriguing. It’s a really interesting, obviously, question to study how does the brain work? That’s a very broad question. What you learn very quickly is that it’s an incredibly complex organ and that we really don’t know that much about it. Even parts of it that we sort of understand, we understand very little about. I think the main challenge is to try to understand how the brain works, behavior, genetics. There are so many pieces that go into it. Trying to distill that into a specific question that in the course of a Ph.D. you can ask and hopefully try to answer at least a small piece of it. That was, I think, to me the initial discovery, the obvious one, that I needed to find a question that I was really excited about.
Alejandro: Right. I’m a big believer, as well, thatI don’t know if you’ve heard about this, but knowledge transfer. Being able to apply concepts that you have learned from your time doing something else to a completely different industry. We’ve seen this from Elon Mask jumping from FinTech and applying some of the knowledge to Space or some of that knowledge to electric cars. In your case, what did you learn from neuroscience that perhaps you have been applying now what you’re doing at Via?
Daniel Ramot: I’ll start with what I try to do going into neuroscience which was to try to take some of the math, the computer science, the physics that I had learned from the engineering principles and see if I can apply it to try to understanding the brain, which in the end is fundamentally an electric machine or electric chemical machine. I think there are a lot of techniques that we use in science and computer science that we canobviously, many people have done this and are doing this where you can try to understand how the brain works. A lot of what I try to do, in my Ph.D. was try to utilize some of the knowledge and experience that I had in server engineering and bring it into neuroscience. So, we try to understand behavior and tie that into the specific electrical signals of certain neurons and build mathematical models for that. That was a great experience trying to bring that together into biology. Then from there forward, I think the key thing that you learn while doing a Ph.D., and I can’t say that transportation is exactly the brain. I wouldn’t argue that, but one of the great things that you learn doing a Ph.D. is that you learn how to deal with data and how to be very critical and analytical in thinking about data, and in collecting it and organizing it. I think when you think about the problem Via is trying to solve which inherently has a lot to do with traffic, and traffic systems, and interactions between people, and road systems, and traffic, thinking about that in a structured, analytical way, thinking about how to distill a complex system like that into some simple equations much like you could think about how do I take the brain and behavior and try to instill that into a set of simple equations and use data to do that? I’d say that’s what’s really transferable.
Alejandro: Got it. Before Via, you went to work for the D. E. Shaw Research for four years. What were you doing there?
Daniel Ramot: D. E. Shaw Research is a super interesting company. After I graduated from my Ph.D., I realized I didn’t want to stay in academia. I wasn’t quite sure what I wanted to do. Then through some friends got introduced to D. E. Shaw Research. D. E. Shaw, some folks may be familiar with is a very large hedge fund. It became famous for being one of the first hedge funds to trade using computers, using computational algorithms, and was really one of the leaders in the field of quantitative trading and still is. The founder, David Shaw started another company about 15 years ago or so, called D. E. Shaw Research, which is the company I joined. D. E. Shaw Researchprobably oversimplifying it, but if I were to say tries to take a similar approach than D. E. Shaw had taken in finance and apply it to pharmaceutical drug discovery. So, we were using algorithms, computational techniques, and computers to try to discover new pharmaceutical drugs. That was the core mission of the company. In particular, the main product there was a very large custom-designed supercomputer that we were building to accelerate by a law of certain class of biological simulations called molecular dynamics. So, we were running these simulations called molecular dynamics that allowed us to visualize how proteins interact with drug molecules, how proteins fold, how they change their shape when they bind a drug molecule and try to use those simulations to discover new drugs. The main thing I worked on there was building this very interesting supercomputer to try to run these simulations real quickly.
Alejandro: Got it. Four years there. That was quite a bit of time. What were some of your biggest takeaways from this experience?
Daniel Ramot: I think the entire D. E. Shaw Research is just a great place to work. I had some fantastic colleagues. A really just great place to be for a while. But the project itself was just super interesting. So, coming from the background that I had which was in engineering and computer science, and then some biology training that I got in grad school, being able to bring that all together into, sort of going back to engineering to building these machines, these supercomputers was just a really great challenge. So, I learned a lot about technology and about building these complex systems. I also learned a lot from David Shaw and from others at the company about how to run a company. It was not a very big company. Just over 100 people. How to think about managing a small company. How to think a lot about recruiting. So, a lot of what we do at Via, there are things that I and some colleagues of mine who have come from D. Shaw learned at D. Shaw. I think a lot of the philosophy around our hiring and recruiting has come from there. It was a great learning experience.
Alejandro: Having a corporate job, it’s quite comfortable. Daniel, why did you decide to give your notice? What happened here? How did the entrepreneurial bug all the sudden hit you one day?
Daniel Ramot: You know, it was a tough decision. I have to say because I really enjoyed what I was doing at D. E. Shaw. It was a fantastic place to work. The people there was great, and the project was just super interesting. I think I had just always had this desire to start a company of my own. In particular, my co-founder, Oren Shoval at Via and I had been friends since the early days in the military in Israel and the Air Force. We worked together in the Air Force for about four years. We were on the same project. We were in the same program together, training, and studying before then. At some point, the timing just became right for both him and for me, and it was an opportunity that we didn’t want to pass up. It wasn’t easy to make that transition, so one thing that I remember trying to do pretty consciously with myself, it’s funny, I started telling all of my friends that I was going to do this so that I would create an environment for myself that it would be very difficult to back out because it was a difficult thing to do.
Alejandro: They always say that ideas don’t just happen overnight. They take some time to incubate, and even though we don’t know that’s the case, it just happens. For you guys, how was the incubation process of Via? How did this come about?
Daniel Ramot: We spent about a year, I would say, Oren and I, trying to come up with an idea. We knew that we wanted to do something entrepreneurial. We wanted to start a company. At least, we thought we did. We were looking for that right idea that we could believe it and make that jump. Oren was just finishing up his Ph.D. at the Wiseman Institute in Israel in systems biology. He was doing very well. Looked like he could have a very promising academic career. I was pretty happy at D. E. Shaw Research. We weren’t desperate to find something, but we really wanted to, and we spent about a year brainstorming. Oren was actually in Boston for a year with his advisor who had moved to Harvard and spent a year there. I was in New York, and we were taking the train up to New Haven or down to New Haven from Boston to New London in a meeting, spending half a day, on weekends, brainstorming different concepts. I have to say we had a number of quite terrible ideas that I’m very happy we didn’t choose to pursue. Then at some point, Oren went back to Israel to the Wiseman Institute. One day he called me with essentially the idea for Via, and he had been trying to get from one place to another in Israel using a class of transport that we have in Israel called Charo taxis, which are basically translated to service taxi if you will, which is a fleet of vans often white that are not very techy. They’re not tech-enabled. They run the same routes often as the bus. They’re a little bit more flexible than the bus that you can get on and off anywhere. Along the route, you just flag them down. You get in. You pass your cash up to the front. The driver passes back the change. They’re just a slightly more convenient, more agile sort of bus that uses these smaller vehicles. Oren was trying to ride in one of these, and it wasn’t going very well, and it occurred to him that if he had an app that he could book a seat on one of these vehicles and track it as it was approaching and know when it was coming, that would be a much more efficient way to utilize this system. This van-based transportation exists all over the world. If you travel in South America, whether they’re [13:16] in Africa, [13:18] in Russia, and of course, all throughout Asia, there are these van-based systems that are very prevalent, and we had them in Israel as well. So, this experience Oren had, I think he was waiting for the van. The van kept showing up. It was full. He could never get a seat, and he was thinking, “If I could just book a seat on my app, that would be fantastic.” From there, the jump to say, “If I’ve already booked a seat on my app, and the system knows where I am and where Im going to, let’s make the system more dynamic and allow these vans to follow routes that aren’t fixed in advance. I think that idea, for him, that was the next obvious step. He called me, and as he was explainingwe have this sort of relationshipas he was starting to explain and we were just thinking, I felt like, “Oh, yeah. Of course, I get it, and it’s brilliant.” That was that moment that I think we decided to do it.
Alejandro: What ended up being the business model behind Via?
Daniel Ramot: The business model, I’d say the product is very simple in some sense. It’s something between a private car, the convenience, the flexibility, and the very personally-tailored service that you have when you’re driving your own car. One end to the bus. On the other end where it’s certainly not tailored to an individual. It’s a large vehicle that has fixed routes, fixed schedules, makes a lot of stops that don’t really have a lot to do with you, and if you’re not following that route, it isn’t super useful. We came up with a system that’s right in the middle, one might say, where we’re using these mid-sized vehicles. We can also use smaller vehicles all the way from regular sedans to minivans and vans. Those vehicles, we allow you to book a seat. If you think about it as almost a marketplace for seats, we connect to you as a passenger with a seat. Once you book a seat, we match you with one of these vehicles that can best serve you and basically aggregate you with other passengers who are headed in the same direction. The vans, their routes are determined in real time dynamically based on where people are requesting rides.
Alejandro: Got it. You were talking about Oren, your co-founder. You guys both have kind of like the engineering, techy background. So, as you were pointing to this, I was just thinking like, “Wow.” You guys have similar backgrounds, so first and foremost, how did you guys decide to divide responsibilities. Also, you seem to have been the one that took the reigns on the business side. So, going from the engineering side to the business side, I’m sure that was also a shift for you.
Daniel Ramot: Yeah, that’s a good question. I think one of the bits of feedback we got early on is that as founders you want to find someone who really compliments your skills. If you have engineering skills, it’s great to find a business person or vice versa. Oren’s and my background were too similar. We were both part of this same program in the military. We both spent all this time in the Air Force. Then Oren did his Ph.D. I did my Ph.D., and I had some experience at D. E. Shaw. Oren spent a couple of years at McKenzie. So, we had some McKenzie experience. Generally, we were too similar, and that wasn’t the right founding team in some sense. I think that may be fair, but it’s hard for me to say. I think what’s much more important in a sense between founders is that you have a common understanding and that you get along really well, and that you work together well, and that you are just compatible in that way that you’re going to be successful together solving really hard problems because you’re going to run into a lot of really hard problems. That’s one of the great things that I think Oren and I have, we were great friends. We also know that we work together very well because we worked together in the Air Force for four years, and we built complex technology very well and faced lots of challenges, and hopefully overcame them together. I think that connection that we have, that ability to work together very effectively, that was really the most important piece for us in this understanding. When it came to dividing the responsibilities, I think we could have gone either way. In fact, a lot of times we, like I said, almost always we make all of the key business decisions together. Oren’s based in Tel Aviv. I’m based in New York, but we’re on the phone with each other certainly every day, often for hours on any given day talking through challenges, thinking about things together. We raise all the funding together. We make all the big business decisions together. We have a division of responsibility based on the fact that we decided to build the technology team in Tel Aviv, and Oren was there. So, he’s running the tech team and the algorithms. I’m in New York where we decided to launch the business initially, launch the service. So, I took some responsibility for overseeing the day-to-day of the service and the operations, but it’s really a partnership.
Alejandro: Got it. Obviously, being in New York, especially, is very commercial, very business-oriented. How was that transition for you?
Daniel Ramot: I would say that while certainly the work I had been doing up until then was much more technical and really about technology and very technology-focused in my day-to-day. The way I had always thought about it was that I was a product person. Maybe if I were to think about what is the key skill that a founding team needs? It’s really that product capability or the product intuition, and it has to be a product that you’re very passionate about, and that you really believe in and want to build because otherwise, I think it’s difficult to be successful at it. If you have that passion and those product instincts, I think that’s where you can be successful. I would say that’s what really characterizes a lot of my work is always to really think about the product and the system. The business piece, I think, you can learn. You can read a lot about. When we were first thinking about Via, we went and talked to several dozen experts in the transportation business and tried to understand how they structured their business and what the costs were. Obviously, there are a lot of regulation, and what the business challenges were. I think you can learn that stuff if you take the time.
Alejandro: Got it. What were some of those early days like there? How was it, Daniel?
Daniel Ramot: You know, it was exciting and exhausting all at the same time, I would say.
Daniel Ramot: You have very limited resources, obviously. We started out quite soon. After we came up with the idea, I went to my colleagues, and my boss at the D. E. Shaw Research and I said, “Listen. I want to try to pursue this idea with my good friend, Oren. I just wanted to let you know I’m not leaving right away, but I’ll be spending weekends working on this. I wanted to give them a lot of notice. Then for six months or so, Oren and I really tried to prove outthis was early 2012, the first half of 2012 until June 2012 when I left D. E. Shaw Research, and we formally launched the company. Those first six months were really challenging because I essentially had two jobs. During the week I was working at D. E. Shaw Research as did Oren. Then on the weekends, we were really trying to get this off the ground. We hired a couple of friends to start to build some of the original, the initial algorithms. We built a really neat simulation of how this would work on top of which actually sat that initial version of the algorithm. We started talking to, as I mentioned, a lot of transportation experts. I spent a lot of timewe figured if we were to launch the service initially, one area that was at the time poorly served by public transportation in New York was the Upper East Side of Manhattan. So, I spent a lot of time in the Upper East Side of Manhattan accosting random strangers, asking them if they wouldrunning through a survey trying to understand if they would be interested in using a system like this and what features they would expect or would like it to provide. So, we did quite a bit of market surveys. I think we talked to a few hundred people to do a bit of a market survey. We tried to raise a little money. I think one of the things of having those jobs that were pretty goodwe had some risk aversion to simply jumping without any indication from the fundraising market, from the financing market whether we could raise money for this. So, by the time we had launched the company formerly, we had nearly a million dollars, I would say, in commitments from early backers. We assumed that only about half of them would actually give us the money. It turned out that that was close. In the end, we ended up getting about $700,000 out of the million that we thought we had after we had been any kind of launching company.
Alejandro: Pretty cool. We’ll talk about financing in just a bit, but Daniel, here marketplaces are quite a pain. I’ve been doing marketplaces for about ten years now. I guess like in your guys’ experience really building a marketplace, it’s like launching two companies at the same time. In you guys’ case, you had the people that were looking for the rides, and then also, the people offering the rides. So, how did you guys get this kind of like chicken and the egg or supply-demand type of thing in motion?
Daniel Ramot: I’m really happy to hear, Alejandro, that you also found it difficult. I thought we were the only ones who were finding it difficult to launch a marketplace. It’s really challenging. Launching a two-sided marketplace, as you described, there’s this chicken and the egg. You need the supply. You need the demand, and if you have too much or too little of either, you can really get stuck. It’s a business that’s very susceptible to intense swings in almost in your mood. Right? One day, you’ve got a ton of demand, and you’re super stressed about, as in our case, not having enough drivers on the platform. The next day, all these drivers show up, and no one is booking rides, and you’re super stressed about having too many drivers who will not come back. They’re not getting any work. So, it’s a real challenge, and I think one of the biggest challenges is to almost maintain a level-headedness or an evenness throughout that and recognize that there are just going to be periods where you have to focus on the supply side, and there are periods where you have to focus on the demand side. It’s just to be expected. Just because you’re focusing on the supply side right now, doesn’t mean tomorrow you won’t have demand-side problems. I think that’s one piece. The other piece is our marketplace, the product we launched, fortunately for us had just a tremendous response from riders, from passengers. Most of the time where we were having to play catchup is on the supply side. That’s the only marketplace we’ve built, so we don’t have experience with other marketplaces, but I would say that helped a little bit. Most days, we knew where our priorities lay, and that was with just trying to convince as many drivers as we could to come on our platform and provide this service. This wasn’t an easy problem because we were trying to take essentially drivers of high-end luxury limousines. In particular, we were trying to use larger vehicles. At the time in New York, there weren’t really any vans that we could leverage, or there were very few, so we went after these high-end SUVs, Suburbans, and Escalades. The way we got there was we were walking around. Oren was visiting one day. We were walking around the streets of Manhattan feeling quite depressed because we were trying to get all these vans to come join our platform right before we launched, and there were very few of them, and the drivers that were willing to come, they were going to charge really high fairs that were never going to work for a mass transit service like we were trying to build. I think Oren has the benefit of being a bit of an outsider, looked at me and said, “What is that car? I see a lot of it. It’s everywhere, and it’s a big car.” He was pointing at a Chevy Suburban. I said, “That’s the most luxurious limousine that you could find in New York. It’s become the go-to instead of the stretch limo. People use these Suburbans with tinted windows, and they’re very, very expensive. He said, “Why can’t we use those?” I said, “I don’t know if you can take the most expensive limo and make the guy who’s driving it effectively a bus driver. I’m not sure that will work. He said, “Well, let’s try.” So, we went and talked to a bunch of these Suburban drivers, and we got a few of them initially to join the platform. We basically converted them, you know, the most expensive limousine into a bus, which was interesting. So, it was always a struggle to get enough of these guys on our platform.
Alejandro: Right. How was it? Like, not only you have this marketplace thing, but you guys were also dealing with the challenge of being like in a regulated or a space that has a lot of attention from regulators. What was that experience for you guys?
Daniel Ramot: I think, on the one hand, we benefited from the fact that Uber had already launched their service in New York. They were not doing anything like what we were planning to do, which was shared rides. They were doing private rides. At that time, it was mostly high-end kind of UberBlack service. The advantage we had was that they had essentially created an opportunity or way to run a service using an app, and this class of four higher vehicles in New York. So, there was a regulatory solution. What we needed to do was just make sure that that regulatory avenue would also allow us to dispatch shared rides so that it would be okay for that driver from a regulative perspective to pick up multiple passengers. We took an approach which has been really key. It’s part of the DNA, I would say and has been really key to our business from the very beginning that we were going to be very collaborative with the city and with regulators. We went to talk to them and said, “Listen, we’re planning to use this regulative framework that limos have used in New York for decades, and limos, and black cars, and liveries. Now Uber was extending through the app, and we would like to do the same, but we would like to do something completely new. We would actually like to dispatch shared rides, have multiple passengers in each vehicle. Would that work?” We basically got the okay to do that within the statute. The way that the regulations were written, it was clear that you could do that. I don’t think the regulators every contemplated that, but just by chance, by luck perhaps, the way they’re written, it was legal to provide these shared rides. So, we talked to the taxi limousine commission in New York. We started building a relationship with them, and we effectively had their approval, in a sense, to launch, or their comments that we didn’t need any special dispensation. We could just go and do it. That approach of working together with cities, together with regulators, or partnering with them, has been very beneficial for us, and I think is what has allowed our business to evolve, to be honest, was the intention from the beginning to evolve also into and have a piece of the business. That’s very important to us these days where we can leverage our technology, our software, our professional expertise, not only to run our own marketplace but also to help cities improve their public transportation system. I think having that brand and having that success of cooperating initially in New York, then in Chicago, then Washington D.C. with the regulators, with the municipality, kind of created the foundation that we could then build on tothese days we have nearly 70 partners all over the world, different cities, public transit authorities, and so forth who we work with very closely to run public transportation.
Alejandro: And the business, you guys started in 2012. Obviously, the other ridesharing companies, they were added since like 2009, and you have the other established companies that are more on the offline-type of environment. And there’s nothing against it. Google was the 88th before coming to market and look at them today. What kind of challenges did you guys encounter like not having that first move or type of advantage?
Daniel Ramot: I think that’s a great question. On the one hand, you’re absolutely right. Uber and Get. At the time, it was GetTaxi in Israel. Lift had not launched yet by the time we were coming up with the idea. I think they launched before we launched our service in New York. On the one hand, we had all these, what I would call maybe ride hailing companies that had already been operating for maybe a couple of years. Where I think we were really innovative, and we were first was in this concept of dynamic on demand shared rides. The challenge we had was actually interesting. It was a little bit of a semantic challenge. The term ridesharing had been co-opted in a sense by Lift, and by UberX, and so forth saying you were sharing a ride when, in fact, the sharing was happening between the driver and the passenger. That has created a lot of regulatory, I would say conflict because this idea of using citizen drivers. If you go peer-to-peer drivers, folks were bringing their own car and then picking up passengers. So that sharing, again, was happening between the driver and the passenger and was referred to as ridesharing. That was a regulatory innovation if you will. A lot of cities and regulators were opposed to it. So, if we were to call what we were doing ridesharing, which we thought was the right term, we were worried that it would be misunderstood. So, I think we had a challenge when it came to the term, but actually, what we were doing, which was providing these dynamic shared rides, which we launched in New York in 2013, we were very much the very first to do that. Today, there are others. Uber and Lift have their shared services, and so forth. For a couple of years, we were probably running our service as, I think, the only one in the world really doing that. That gave us an opportunity in New York to achieve some real scale and build a real brand around that. We didn’t have the first mover advantage on the whole idea of using an app to book a ride, for sure. We were following quite a number of other players, but when it came to shared rides, I think we had this first-mover advantage that was very important in fundraising and in building the brand.
Alejandro: Got it. So, let’s talk about fundraising because for a marketplace, to follow-up on that, to get the net worth effects to turn in the right direction, you need liquidity in the marketplace. In order to have that, you need money to finance it. How much capital have you guys raised to date?
Daniel Ramot: We’ve raised, at this point, about 450 million dollars for Via. It’s really amazing to think about it. If you’d told me in 2012 that we would raise 450 million dollars, first of all, I wouldn’t have believed you. In fact, a couple of our investors told us, you are going to have to raise 100 or 200 million, and you’ve never raised any money before, so we’re not sure you’re going to be able to, so maybe we’re not going to invest because you don’t have a track record of raising any money. That was definitely some feedback we got. 450 million dollars at the time would have seemed like a huge fortune. The funny thing is that if you look at what some of the other players have raised, whether it’s Didi in China, Grab, Uber, and so forth, it feels like a tiny amount of money, which is frankly ridiculous. So, fundraising has always been if you’re going to build a marketplace like this, as you said, you need liquidity. That requires a big investment until you get to the right scale where you can start to see a return from that investment, and it requires a huge amount of fundraising and a huge effort.
Alejandro: Yeah. I saw that you guys have really interesting investors. You have Pitango. You have Daimler. You have Kapor Capital. You have 83North, Hearst Venture, just to name a few. How did you meet all of these people?
Daniel Ramot: Initially, and I think maybe throughout this time, you’re most likely to be successful with investors who you either know personally or have a warm introduction to. So, almost all of these investors that you mentioned, our first investors we knew personally. Then we’re introduced to these later-stage investors through either existing investors or other folks that we knew. That was one class. The Hearst Ventures, for examplethis is one example, and there are actually quite a few other examples. We had quite a lot of people once we started the service in New York, and we were fortunate to be running the service not only in New York, but in Manhattan, and in the Upper East Side in Midtown Manhattan. That was where we initially started. Then, obviously, throughout Manhattan where there are a lot of investors. They started using our service, which was not super expected. We thought, “Our service is very low-cost. We’re providing these rides at $5, sometimes less throughout Manhattan. This would really appeal to folks who are very cost-conscious.” But it turned out that actually, we were a popular service with everyone. So, a lot of investors started potentially taking the service, folks who are investors, VCs from Hearst Ventures and others, private investors, and then reaching out to us and saying, “Can we talk? We’re using your service. We love it. We started out, we were the only person in the car, but then now the cars are full. It feels like this model maybe is working. Can we chat?” We actually go quite a lot of investment from users, which was really fine. I think that’s the best validation.
Alejandro: One growth hack that you guys did that I thought it was really interesting. I see the logo of Via; I don’t know how many times a day. I’ve got to blame you for that.
Daniel Ramot: I’m sorry.
Alejandro: The logo is just so big it feels like it’s punching you in the face every time you see it, but I mean in a good way. You guys did a really, really great job on that. But I’m just saying that was just genius, and very similar to kind of like the Yelp strategies of putting the sticker on the window and stuff like that. It was just remarkable that growth hack strategy.
Daniel Ramot: Thanks. You know, that was part of the strategy was to just get that because when you think about when Via is useful to youI mean, it can be useful for any sort of transportation around the city, obviously, just like any other form of transportation, but the most important use case in some sense is your daily, whether it’s commute, or if you’re going to school, or whatever it is that you are doing once, twice a day, that sort of use case and that repeat use is really a core part of our business. So, getting that logo in front of you all the time, so that you are constantly reminded, “Oh, I can use Via, and then hopefully, that time back to this routine daily use was really a key part of what we were doing.
Alejandro: Got it. In terms of metrics, where are you guys at in terms of rides and all of this?
Daniel Ramot: You know, today, the business has really evolved, and in some sense, it’s come back full-circle because when we first had the idea, we thought we’re going to build the software. We are engineerssome really interesting complex mathematical problem. If we can solve it well, we can create a very useful technology that we can provide to cities, to transit agencies to run their public transportation system. We really thought of Via as a dynamic bus system. In 2012 and 2013, unfortunately, no one wanted to talk to us. No city was taking us particularly seriously, and certainly the MTA in New York, we couldn’t even get a meeting. So, we decided to launch our own service. We launched it in Manhattan and expanded it. When we came back around in 2017 after launching in New York, Chicago, D.C., and really, really growing it, we felt that we had collected enough data, and we had enough proof points to demonstrate that this was really working. The data was a crucial piece, and I’m not sure we fully appreciated in the beginning because that feeds back into the algorithm and has really driven the system to be dramatically improved versus the original version that we built. So, maybe, to be fair, those cities and transit agencies that didn’t really want to talk to us in 2013 were actually pretty smart, because I think the system we had then, it wasn’t really good enough. But as we collected the data over the years, we were able to build something that we felt really worked very well, and achieved the high level of efficiency, and started to really function as a mass transit system. So, we started approaching different cities around the world saying, “Would you like to use this in 2017” a couple of years ago. It took a while to convince people. I think there are a lot of other macrotrends happening including competition that probably transit agencies are feeling from ride hailing companies. They’re seeing declining ridership on their bus systems. Then a lot of funding challenges that cities all over the world are really feeling, and therefore need to make their public services more efficient. After quite significant efforts in 2017, we really ended up that year with very few partners. We probably only had signed up four different cities for our service. 2018, we really saw a massive growth. We hit an inflection point, and we finished the year with nearly 50 different partners. We’re continuing to sign up cities and transit agencies, and now corporate partners for corporate shuttles, university campuses at a very, very high rate. So, today, we have nearly 70 cities in which we operate: cities, corporate campuses, college campuses in which we either operate or are launching very shortly, including four additional cities in which we run our own consumer marketplace in Europe, in London, Amsterdam, Berlin, and Milton Keynes, and in addition to New York, Chicago, and D.C. Together, we’re completing well over 2 million rides a month at this point and are seeing very rapid growth across all of these metrics.
Alejandro: Nice. Where do you see the on-demand transit heading?
Daniel Ramot: I think, to me, on-demand transit, which I define as different from on-demand taxis where you’re booking a car. So, when you think about the market for on-demand mass transportation where you’re booking a seat, and the vehicle that you’re in is a little bit larger than your standard car, and it’s shared by multiple passengers, and you’re really trying to build a dynamic bus that compliments the existing public transportation system whether it’s the subway, the tram, the light rail, and the high-capacity bus rounds, and perhaps replaces the under-performing low-utilized bus routes. I think that that mode of transit, this on-demand shuttle service has the potential to become a major mode of transportation in every city in the world. In fact, if you were to ask me other than the subway, I believe it has a really good likelihood of becoming the major way in which people get around cities because it hits this sweet spot. There’s this tradeoff of convenience and cost between the convenience and the private car, and the cost of the subsidized public transportation, the bus that makes it extremely interesting if you can get it to scale. And that’s what we’re starting to see in some of those cities we’re operating at scale where there’s a real opportunity to create a very high penetration service.
Alejandro: Got it. As I head towards the end of my time with founders during these interviews, I always typically ask the same question towards the end, and that is if you could go to the past and give yourself advice before launching your first business, in this case, let’s say Via, what would that advice be and why? Just one piece of advice.
Daniel Ramot: That’s a great question. I think with the caveat that I have an N of 1. This is my first startup. I think the one thing I would have done differently, and the one piece of advice I would give to founders is to move really quickly. I think that we had this idea, Oren and I, and then we took about six months, if not longer, to really prove to ourselves that it was a great idea in some sense; prove to ourselves that if we left our jobs and launched into it full-time, then we would have some financial backing by lining up investors, really work through the business case. I think we wasted a lot of time, frankly, writing a very detailed business plan and business model, collecting a lot of data. One might say it’s a very prudent approach because, at the end of those months, we had a really clear indication and case that this was viable. This was a viable idea. But we knew intuitively it was a great idea, that we were passionate about it, that we wanted to do it. I think if we had just jumped into it instead of trying to stick to our jobs during the week and only work on this on the weekend, we could have gained six months or so. And those six months are super valuable. I think that you’re trying to reduce your risk in a sense, by doing all this due diligence and proof of concept. And you are reducing your risk in those dimensions, but what you don’t realize as a founder is that you are creating substantially other risks, which is substantially greater by delaying. While delaying, there are probably others who have your same idea, and they’re moving. I think this sort of tradeoff of risk between kind of de-risking certain aspects of the project, or of the startup, by working through some of these questions; but losing time. I think in that tradeoff, time is the most valuable resource you have when you’re starting, and you should move very quickly. So, my advice is alwaysor my question is why haven’t you already launched? What’s stopping you from launching tomorrow? Can you really not just start tomorrow? Why haven’t you done it yet? That’s what I would say.
Alejandro: I love it. So, Daniel, what is the best way for the folks that are listening to reach out and say “Hi”?
Daniel Ramot: You can always email me. I’m [email protected]. I will do my best to answer, I promise.
Alejandro: Amazing. That’s kind of dangerous, but anyhow, Daniel, it’s been a pleasure. Thank you, so much.
Daniel Ramot: Thanks so much. It’s a real pleasure to talk to you.