Jens Wohltorf’s startup is making travel simpler by closing the first and last-mile gap that has been long underserved in the travel industry. His company has already raised close to $100M, and their service can be found around the globe. The venture Blacklane has acquired funding from top-tier investors like Recruit Strategic Partners, RI Digital Ventures, Daimler, and btov Partners.
In this episode, you will learn:
- Juggling the chicken and the egg when building a marketplace business
- Picking your investors
- Focusing on a profitable company with viable unit economics
- Top book recommendations for entrepreneurs
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Jens Wohltorf:
Jens Wohltorf is the CEO and co-founder of the global professional driver service Blacklane. Blacklane conveniently connects passengers with the spare capacities of licensed, regulated, and insured professional drivers in over 50 countries around the world. Blacklane guarantees low and all-inclusive fixed rates at the time of the booking and provides real-time service control for tens of thousands of quality cars.
Prior to founding Blacklane, Jens Wohltorf worked as Principal at the Boston Consulting Group. Wohltorf studied industrial engineering at the Technical University of Berlin with research residencies at the University of California, Berkeley, and MIT, where he studied urban traffic patterns. In 2005 he completed his Ph.D. in Telecommunications at the Distributed Artificial Intelligence Laboratory of the Technical University of Berlin.
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Read the Full Transcription of the Interview:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a very interesting story, a story of a founder that is a founder where everything started in Europe, in Germany, and I think it’s going to be very interesting to hear his story going from consulting to really building his own business and something that has been ramping up very quickly. So without further ado, let’s welcome our guest today. Jens Wohltorf, welcome to the show.
Jens Wohltorf: Thank you, Alejandro. Thanks for having me.
Alejandro: Originally born and raised in Berlin. It was in that Berlin where the Wall was still separating the East from the West, so how was it growing up in that type of environment?
Jens Wohltorf: That’s right. I was actually 12 when the Wall came down, so the first couple of years, and I still remember being isolated in the Western part of Berlin, the free part of Berlin. I lived quite close to the border, so I can still remember hearing the dogs barking and shooting at the border. I still remember when there was vacation time for a West Berlin child was quite difficult to get to the Western side of Germany because you had to transport through the communist part of East Germany. That was always quite a pain with a lot of struggle and hurdles being put in place—not easy to deal with as a little kid.
Alejandro: Yeah. I can imagine. I remember when I visited Berlin, and I actually went to the Checkpoint Charlie Museum. You would see people coming up with crazy things to go through the river to go from one side to the other without being noticed. So, there were a lot of people struggling on the communist side, unfortunately.
Jens Wohltorf: They did.
Alejandro: In your case, you were fortunate enough to have a father that was an entrepreneur, so you learned the ropes very early on. He had a moving company. When you were seeing that and growing up with him being a founder, what were you seeing, and was that the point where you told yourself that one day you would also have your own company?
Jens Wohltorf: I don’t know exactly when this point was reached, but certainly it was influential and maybe the deciding factor to see and that he was a self-made man, and he didn’t need to follow anybody else’s advice. I didn’t see him often because he went out of the house earliest in the morning and came back late. He worked extremely hard. So from that perspective, I could have thought, that’s not my thing, but I wasn’t triggered by these thoughts. I was proud to see what he built. I was proud to see when I saw those Wohltorf moving cars on Berlin streets with our name on them. I was proud to be picked up in one of those moving trucks and be delivered to school in the morning. That was all big fun. Probably, that was the decisive factor and somewhere embedded in me so that I started later on.
Alejandro: What about engineering because you went to study engineering, and you were definitely one of the first in the family to follow that type of course?
Jens Wohltorf: As first, with any academic background, there was a higher degree of school and university and Ph.D. that was quite unique. Nobody else in the family did this. I don’t know what drove me there, but I felt comfortable on that street, and I knew I wasn’t built for a scientific career. I never wanted to stay in science or a university, but I had the interest to understand technology. I was running for a Ph.D. in Computer Science. I did a thesis at MIT on Mood Choice Behavior in Telematics. I was always interested in those interfaces or in transactions between technology and business. That drove me, and that also made me then start my career with Boston Consulting after the Ph.D. Then, I finally ended up where I wanted to be as an entrepreneur and founder of Blacklane.
Alejandro: Let’s talk about Blacklane because Blacklane was the product of being in consulting. It’s interesting because some of the best entrepreneurs that I’ve met in my life have a consulting background. I think that training to be able to grab a really big problem and break it down into really small problems that you’re tackling, I think it gives you that perspective to understand how you go about execution. How do you think that background from being a consultant has helped you on your entrepreneurial journey?
Jens Wohltorf: I think it was instrumental, and what you learn with your consulting is that you think outside the box, that you are solution-oriented, and that you are not afraid of tackling the issues and the problems. Also, that you are not distracted by people saying, “This is not going to work.” Or “We’ve tried this already and failed. It’s not going to work.” You’re hearing this all the time as you are in your consulting area. So you get used to it. There are ways around it. There is a lot of value in trying things out and being experimental. Then, of course, you learn the tools of how you strategize and how you build business plans, how you make your mind through those problems, and probably, also, the presentation skills at the end of the day when you are ending up in a pitch on the other side of the table from an investor being grilled by difficult questions. That’s normal life as a consultant.
Alejandro: 100%. Let’s talk about incubating Blacklane. Let’s talk about meeting your co-founder and you coming up with the idea with your co-founder and bringing this to life.
Jens Wohltorf: Indeed, as you said earlier, I was the use-case by traveling around the globe all the time and being sometimes lucky that the first or last mile worked, but often, not lucky that it didn’t work out and that I was wondering why this is so difficult and why are there so many greats and little shopping companies out there, but they struggle with filling up their capacities; they struggle with finding new customers. There is no global footprint for those, so there was a lot of opportunity. The main thing that drove us was that—I met my co-founder at university times during my Ph.D. thesis and in Technical University, Berlin. We figured that it’s great fun to work with each other, and we were quite successful in doing things together. But the infrastructure and the surroundings were never unsatisfying for us. We felt that if they’re not treating the infrastructure well, and they do not respect each other all the time and not this beautiful workplace that you put color if you just follow your dreams. If you enter a door at an office, and you have your picture of how perfect an office location or an organization would look like—we never found this in other companies. That was actually the main driver that we wanted to build something where people enter the door in the morning, or nowadays, open their laptops in their home office, and feel comfortable with it, and feel that they can be their authentic self and that they can bring all their empowerment and performance to the table by treating each other with respect and care. That was the main driver, more the cultural driver behind this; plus, the product itself that was the transportation part.
Alejandro: Tell us, for the people that are listening, what ended up being the business model of Blacklane, so that they understand it.
Jens Wohltorf: Blacklane is a two-sided marketplace, a highly vetted marketplace on the supply side. We offer ground transportation for the first and the last mile of global travel. You can call it Blackhouse services, shoppers services, limousine services in the U.S. It’s been available on a global basis. What we do is we aggregate high-quality content on the one side, making sure that they fit into our high standards, that everything feels and smells and tastes are most like Blacklane no matter where you bought a car. We have highly educated professional chauffeurs. Then, on the other side, we offer it to individual customers, to corporate customers like consulting firms of the world, but also to airlines like Emirates is a big example, or cruise lines, or hotel chains, travel agencies. So we’re bringing both together and making sure that the quality is always right. We engage very deeply in the service experience and in every single detail of it. That differentiates us. We’re focusing a lot on long-distance, city-to-city. Think of New York to Philadelphia or London to Manchester; Dubai to Abu Dhabi is our sweet spot. We spent an hour on a Blacklane on average, and we do it in over 50 countries, several hundreds of cities worldwide.
Alejandro: Building a marketplace is a beast. You’ve got the supply, the demand, finding the liquidity, the networking effect to happen. For you guys, it’s like building two companies at the same time, so as you were thinking about building Blacklane, how were you looking at getting that marketplace to work in the right direction, and how did you see which one was the weakest side of the equation and how you could really ramp that up so that everything would function as a whole?
Jens Wohltorf: Yeah, you are right. That’s the chicken-egg problem. What do you start with first? My learning was that demand drives the entire equation. What you need to have in place is you have to have a good relationship with supply. You have to identify the supply first. When we started in Berlin first, I knew the telephone numbers of a handful of chauffeur services in the city. But then we switched on Google AdWords and waited for the telephone to ring. Indeed, it happened, and customers called and wanted to have transportation. There were not a lot of apps and websites were built yet at that point in time, so I called our supplier and asked, “Is somebody available right now?” When we started, we often had to pay more to the supplier than we got from the customer just to make it work because only with economies of scale over time, you also get the financials. That’s the starting point. Now, if you are a no-name in the earliest days, and especially in an industry that is full of black sheep, this is a difficult starting point. People are not trusting you. People are not believing in your business model, so there’s a lot of talking, a lot of convincing, and a lot of countless physical meetings trying to explain the model and trying to be authentic, trustful, and show them how seriously you mean it and that they can trust in you. And that was the starting point. Later, after our first successes, of course, the applications of supply came, and that was much easier. Nowadays, it’s much easier to open up a new city.
Alejandro: Obviously, to build a company like this requires a lot of money, especially to get those networking effects to go in the right direction, so how much capital have you guys raised to date, Jens?
Jens Wohltorf: It’s not like comparing with the crazy ride-hailing industry. It’s nothing comparable because we always build a very healthy business model, very healthy unit economics. Our average ticket size is three digits for a single ride, so that gives you a sense of how long our rides are. You pay over $100 to $150 for a Blacklane ride on average and going 30-40 miles. We are having a solid margin of 30ish, 20%, 30% depending on the markets and the situations. So, therefore, we never needed billions of dollars like others did. It’s not that public how much we’ve raised, but it’s in the ballpark of a high double-digit million to a small three-digit million-dollar ballpark. That brought us here, and we are quite on a good track. Even after COVID-19, we are financially extremely stable. That differentiates us from most of our competitors, and the market is now there and available. It just needs to be grabbed.
Alejandro: I’ve seen online that you guys have raised closer to $100 million.
Jens Wohltorf: Good research.
Alejandro: I know you guys are not disclosing, but that’s at least what the web is saying. In this case, as you were thinking about raising money and raising money for such a tough business, I’m sure that you were also looking for good partners that could add something more than money. Especially with that strategic approach and that background that you guys have from consulting, you knew how important this was that people are going to give you the money. So how were you thinking about that?
Jens Wohltorf: You’re absolutely right. We were looking for a strategic partner that could add a lot of value to our business. Actually, we found a couple of them, such as from automotive, a very strong family business. We are having investors from the Middle East that are very knowledgeable about that region. We are having investors from the Asian side that helped us to get on track in that region of the world. Geographically, but also from an industry standpoint, we made sure that we had a good balance and a good portfolio of investors and shareholders on board. Funny enough, interestingly, we never had a U.S. investor on board even though the U.S. is, by far, our largest market. It was 30% before COVID. As it recovers much faster than the rest of the world right now, it will be way beyond 50% right now.
Alejandro: As you were thinking about, for example, raising and deploying, how does it typically work when you’re raising money and when you’re thinking about the use of proceeds for a marketplace of this nature?
Jens Wohltorf: The main use of proceeds is, obviously, on technology, on IP, and creating this marketplace, developing it, and evolving it. There’s so much more we can do, and we have built an awesome new product over the course of the last 18 months, focusing a lot of intercity transfers now and long-distance rides, but also what we call chauffeur-hailing that’s in a city on-demand services with our premium service, premium cars, and professional chauffeurs. But everything about this lives and dies with the tech side of things, so the vast majority of our investment has flown and will flow into the product.
Alejandro: In your guys’ case, you’ve had multiple rounds of financing. How have the expectations changed as you were going from one cycle to another, and especially with European investors where typically, they’re more like revenue-oriented versus growth-oriented as what you would see here in the U.S. So how has that experience been for you guys going from one cycle to another?
Jens Wohltorf: That’s right. I would say there are two components. The first one is the first couple of years, we were asked a lot about the competition from the U.S., and the obvious questions like what is Uber going to do, and how are you differentiating from them? That became more silent over the years, and we became more and more clear over the years how we differentiate and also that we are not directly competing in our space with each other. Then, the other component is exactly what you mentioned about European investors. But also, maybe, European DNA is to be a little bit more careful on the profitability side, more on the healthier business model and unit economics side. That is, indeed, a bit of our DNA. We always, from the very first day, looked that our business model is going to function and that this business model is going to earn money at some point in the future. We never just grew for the sake of growing and no matter what but only where it made sense for a more successful and also economically more successful future.
Alejandro: In this case, for you guys too to understand and for the people that are tuning in, how big is Blacklane today? Anything that you can disclose on the number of employees or anything else?
Jens Wohltorf: Yeah. There was quite a significant change just recently on the revenue side. Pre-COVID, 2019, we closed the year with a good €100 million, so $120+ million in revenue. Roughly 400 people were working from Berlin, but also from Los Angeles, and Brisbane, Dubai, Singapore, and a bit of Spain, Italy, and London. But we were and are present in hundreds of cities in 50 countries with our services. We were growing 60-100% year-over-year, even though we were not pushing everything on growth, but still, it was a successful business. We grew quite fast, what I would call healthy growth. Then COVID hit, and in April 2020, we lost 99% of revenue in a month, actually, within three weeks from over $10 million per month to $100,000.
Jens Wohltorf: Because being solely dependent on the airport transfers, that was, indeed, our main focus and main product offering, and being focused on business traveling was just not the best idea for a pandemic period, so we basically stopped the entire business, and that also made us think. We started to differentiate on our product and diversify our product in terms of this long-distance, what I just mentioned; but also, the chauffeur-hailing and the local on-demand service.
Alejandro: It’s interesting that you touch on this because, as they say, entrepreneurship is not a straight line. You’ve got the ups; you’ve got the downs. Every massive company has had a few times of near-death experiences. I’m sure that seeing revenues going from $10 million to $100,000 just literally overnight, I’m sure you didn’t sleep well. I’m sure there were all types of thoughts going through your head, so would it be possible to make us insiders, so we understand what went through your mind, and then also how do you deal with whatever is in front of you as a leader?
Jens Wohltorf: Yeah. Indeed, not much sleep and nobody would have expected this, so it was quite a hit overnight. The first thing I thought was about, “You are responsible for quite a large group of people. You have 400 Blacklaners in the company, plus their families and children. That’s over 1,000 people. Then you have 20,000 to 25,000 chauffeurs out there on the street. They’re not your direct employees, but they are quite close partners that you also feel responsible for.” So all you think about in the first days is to make sure that they are all safe and that their health is secured. You’re thinking about how fast can I bring all of my people into home offices away from the streets? That’s especially difficult for operational units like custom mechanic units and so on. Plus, how can we increase our health and safety standards so that our chauffeurs, but also our guests, are safe when they travel with Blacklane. That was the first big step for us. To deliver on the second thing was then, of course, their financial stability. Luckily, we have a good base of shareholders. We also have a large automotive being part of our shareholder base, Daimler, plus a lot of good family offices and just strong shareholders from around the world. They trusted in us, and we continue to be big supporters. Thanks to this, plus a rigid house-controlling, but without a single day off. That’s important for me to mention. I think we are probably one of the only companies in the travel space, at least the only one that I know, that didn’t lay off people during the period of COVID, without laying off people, but also with playing with governmental and aid programs and job-keeper programs, we were able to reduce our cost base by roughly 60% without any revenue, so that was also quite successful. Then the third thing was looking forward and using this as an opportunity. There are some interesting sayings out there, [22:37], and the ex-former champion who, unfortunately, died. He said, “You can’t take over [22:44] in sunny weather but when it rains.” Or “You’re not becoming a skilled sailor in calm seas,” and all those sorts of things. They’re so right. So what do you do in those periods of time when you are standing still? You use it as a pitstop, where you can finally change the engine of the car and the tires, and redoing everything, and innovate in terms of new products. That was the third pillar. After the safety, after the financial stability, the third pillar was the diversification of our portfolio so that this would never happen again that you are solely dependent on one business stream.
Alejandro: In your case and how things evolved, I’m sure that the vision has changed a bit from where you guys started to where you are now, so if you had to sleep tonight and you wake up in a world where the vision of Blacklane is fully realized, what does that world look like?
Jens Wohltorf: Blacklane is very good and is taking a very fragmented offline, very difficult, nitty-gritty piece of business and cleaning it up and putting a brand umbrella and service-promise umbrella over it so that people can rely on. If you think about travel, there are a lot of these little components, especially those interfaces between different modes of transportation that are still big stress-makers nowadays. Booking a flight and being on a plane is easy. Booking a hotel and checking into a hotel is easy, but the interfaces between all of those modes are difficult, the street transportation is difficult, but I think we are about to check that box. The airport experience is difficult. Think about how you navigate through an airport, especially post-COVID when people are more concerned and afraid of crowds and want to be channeled through fast-tracks even more so than in the past, or you want to help them with integration and Visa application or with [24:42] services, or they’re in a foreign destination, and you want to provide some insights into the city. You know Berlin quite well, but imagine you wouldn’t. You come to the city and would like to know what the best restaurants are, what the best nightclubs are, and now [25:00]. This is what we want to be as a resource. We’re having 20,000 to 30,000 chauffeurs on the street. They are so knowledgeable and our extended arms to serve our people, our guests, and there’s so much more we could achieve.
Alejandro: One question that I typically ask the guests that come on the show is, imagine that I put you into a time machine, and I’m able to bring you back in time to that moment where you were thinking about leaving the Boston Consulting Group and beginning your days as an entrepreneur. If you could go back in time and have a chat with that younger Jens and give that younger Jens that’s wondering what it would look like and if he could bring a solution to that problem that he was thinking. What would be that one piece of advice that you would give to your younger self before launching a company and why, given what you know now.
Jens Wohltorf: If it’s only one piece of advice, that would probably be that I waited too long to jump into this. If I could start again, I would start earlier. The earlier, the better, actually. The earlier you can learn to fall and stand up and learn your lessons, the faster you become, the bigger you go. Now, I’m in my mid-40s. If I would have started, not with 35, but maybe with 30, I would already be so much further with building Blackline. Other advice, there are so many ups and downs, as you mentioned earlier. There are also not so romantic parts of being an entrepreneur. It’s also the same with family and kids where it’s not just great. There is a lot of responsibility coming with it, and not only romantic. That’s something I was not used to. As you’re building and you’re growing up a bit in a bubble and when you are on the academics and track, when you are with a strategy consulting, everything is friendly and nice. Now the chauffeur industry is certainly a difficult one. Not the easiest. Being an entrepreneur yourself, you learn also to deal with a lot of disappointments. Also, you get to learn about people that you trust but that you shouldn’t trust. These sorts of things just happen in such an environment, and that is something that you were not used to and that you were not educated for. That would be something that I would give as advice to watch out for those things and expect things to not just go straight.
Alejandro: One more thing there, I’m sure that for you, you’ve had to read a bit to learn the ropes and learn how to build and scale companies. So in that journey of growth, more on the dogmatic side, what would you say has been a book that you wish you had read earlier?
Jens Wohltorf: One of the books I enjoyed recently was The Culture Map. That’s one that deals with all the cultural differences, and if you’re building a global company, and we’re having a company of 400 people from almost 80 nationalities, quite distributed around the world, they are a melting pot of different cultures, backgrounds, expectations, and behaviors. Understanding this and working this through so that you are building a company under the roof of Blacklane to show how a global company or a world of different cultures can work hand-in-hand is something I’m quite excited about and to see. That book helped me a lot and similar books around the same topic.
Alejandro: Nice. Jens, for the people that are listening, what is the best way for them to reach out and say hi?
Jens Wohltorf: The safest thing, I think, and the easiest is LinkedIn. Everything is on there. Just send me a message, and I’m happy to get back to you.
Alejandro: Amazing. Jens, thank you so much for being on the DealMakers show today.
Jens Wohltorf: Alejandro, thanks a lot too. Have a good day.
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