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The Ten Year Itch | Amit Gupta @ Yulu
166 Plays3 years ago
‘Grind in your 20s… Hustle in your 30s… Retire in your 40s.’ Sounds like a perfect plan, right!
Founder Thesis brings you the journey of Amit Gupta, the mind behind India’s first unicorn InMobi, who in his current avatar is heading Yulu, the country’s leading shared micro-mobility service provider.
In a candid conversation with Akshay Datt, Amit harks back to his earlier days, when he aspired to start his venture at 30 and retire by 40. However, by the time he started approaching 40, he wanted to give back to society. In 2017 he founded Yulu, an IoT-based bicycle-sharing platform that rents out e-bikes for first-mile, last-mile, and short distance commutes. The mission was to reduce traffic congestion and improve air quality in urban cities.
Tune in to this episode to hear Amit speak about how Yulu is revolutionizing the way people commute by providing smart, shared, and sustainable mobility solutions.
What you must not miss!
- Efforts to indigenize and reduce external dependencies.
- Strategic partnership with Bajaj Auto.
- Fine-tuning the business as per the Indian market.
- How has COVID impacted the business?
Click here to access the transcript.
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Transcript
Introduction to Founder Thesis Podcast
00:00:00
Speaker
Take me on a tour. Take me on a tour. This could be a great intro.
00:00:11
Speaker
Hi, I'm Akshay. Hi, this is Aurob. And you are listening to the Founder Thesis Podcast. We meet some of the most celebrated sort of founders in the country. And we want to learn how to build a unicorn. Just a quick note about this show. We'd like to apologize to all our listeners for the technical and audio issues with regards to this recording. A transcript of this entire conversation will be available on our website, the podium.in.
00:00:40
Speaker
A link to
Amit Gupta's Background and Yulu
00:00:41
Speaker
the transcript will also be attached in the description of the show.
00:00:51
Speaker
Our guest today could not have been more unique. He is the co-founder of two unicorns, and instead of resting on his laurels, he decided to quit and start a brand new start-up that solves a social problem. Amit Gupta started life in a business family in Kanpur, but he was slated for bigger and better things in life, having co-founded the first unicorn from India.
00:01:16
Speaker
Inmobi. But that's not all. He also conceptualized and launched Glance within Inmobi, which today counts Google as a backer and as a unicorn by itself. And never one to settle, he's now hard at work trying to solve one of the most chronic problems facing city dwellers.
00:01:34
Speaker
traffic and last mile connectivity. You see, no matter how good a public transport or city has, people still need mobility to reach their destination from the metro station etc. And that's where Amit's 4-year-old start-up Ulu comes in.
00:01:51
Speaker
Yulu is solving the twin problem of traffic and pollution by renting out e-bikes that people can rent from drop-off at conveniently located docks. And you may think that the lockdown would have hit them hard, but you'd be surprised at the numbers. Listen on as
Journey to Inmobi and Glance
00:02:09
Speaker
Amit Gupta talks to Akshay Ghat about his fascinating entrepreneurial journey.
00:02:15
Speaker
So like when you turned 30, you like quit. A month, a month prior to that, I actually started another company, which was not in Moby, by the way, it was into business intelligence and analytics platform company. And although same time, around same time, my, my, my, my batchmate Navin, he was moving from US to India. So
00:02:46
Speaker
you know, he came to me and he was, he parked himself in Bangalore. And then we started talking about, you know, how things are, et cetera. And then he also had this idea of doing a startup. And I thought that maybe it's a good idea for me to become part of the same team. And that's how a movie happened. So rather than doing that business intelligence platform thing,
00:03:15
Speaker
I decided to M Coach back then. M Coach became in movie as you know. When you
Inmobi's Early Days and Pivot
00:03:25
Speaker
and Naveen had your initial discussions about what you will do, what was the idea and how did that evolve into what finally got executed? Like tell me about that journey of the go-to-market journey, if I can use that term.
00:03:42
Speaker
So it was 2006. And back then, mobile phone started becoming important. India started having hundreds of millions of people. Mobile was no longer in the hands of crazy rich people. It started to be seen in the hand of maid drivers, et cetera. And it was very evident that India's connectivity or communication
00:04:12
Speaker
answer is going to be this device. And we were very fascinated with what Google was doing to desktop PC, and they created this huge ad business. So that maybe this mobile phone is also going to be safe. There will be because a lot of lot of people are using it.
00:04:34
Speaker
and they're doing more than just talking. They will be consuming time on that device and maybe there's an advertising opportunity. So that's how we thought of building an ad business for mobile phones. And I think back then it was actually very, very crazy idea.
00:04:56
Speaker
because there was no smartphone. The smartest phone which was available was Moto Razr or BlackBerry. That was the smartest possible stuff. This was pre-iPhone, basically. Pre-iPhone, pre-Android, yeah. And then when we started the company, it was primarily on SMS.
00:05:19
Speaker
And we thought that we'll probably do a search. That's why the company M and coach mobile M for mobile. They're basically correct. But very soon we realized that you know, it's not going to work.
00:05:35
Speaker
Because when you are doing ads with respect to text, which is SMS, you are very limited by the number of characters that you can deal with. Second thing, there's no targeting. There's no delivery because it was a one-way
Building Inmobi's Business Model
00:05:51
Speaker
broadcast. And third thing is, you don't know what happens after that.
00:05:57
Speaker
So there's no capability, there's no targeting, and the medium itself was very limited because of the size, and then phones were also not big, they were very small. So all you can do is basically just, and then because of this whole A2P, which is application to person, the SMS started becoming more spamming.
00:06:22
Speaker
So anything which gets basically negative mindset, consumer experience perspective, you cannot do a good job with advertising. While we were running it, but we also started to understand that this is not going to be a future. But tell me how you actually caught that off the ground. Did you use your own savings or did you get some angel investment and then launched it and
00:06:48
Speaker
How did you spread the word? Like, I mean, you know, advertising business depends on volume of users. So how were you acquiring users to, to actually launch M coach and make money from M coach? So very good question. So we actually raised half a million dollars of angel capital, angel money. So Mumbai angel funded you in Moby M coach. We were the for them. Okay. And then a short quote.
00:07:18
Speaker
If I don't know how old are you, but my graduation also got over in 2000. Nice. So actually, do you probably remember there was a double eight, double eight? Yes. There was a short code, right? So we also basically got triple five, actually five.
00:07:41
Speaker
and anyone who was looking for some information. So they were supposed to send some keyword to that number and return will give you the best food or there's a deal going on. So that was important. And, you know, this whole pool mechanism become push mechanism where we started working with likes of NTTV, you know, quick info where they were sending these
00:08:11
Speaker
A2P messages. And we were
Global Expansion and Competition
00:08:13
Speaker
inserting ads in that. Help you understand A2P a little better. This is the first time I'm hearing this term. It's a machine which is sending a message to a person. OK. OK. And then we verify the message to you. It's called A2P. It is basically just happening on a click of a button. OK. So this is how things are.
00:08:39
Speaker
So you essentially went through a partnership route to acquire users. You tied up with these brands to help them send their advertising messages. That was the route. So that was the business model. Because it was not seen with positive eyes, feeling that it's not worth it.
00:09:05
Speaker
This is how we basically decided to look at mobile internet in SMS. Also renamed the company within Moby. So that was the background. When did you do the pivot? Because this was like post iPhone launch? It was actually before iPhone. We were running the business on mobile internet.
00:09:33
Speaker
Okay, there was a map phone Nokia Motorola, they had a very, very primitive browser. After we transitioned from this to this, then we were able to get to the business model of smartphone after one year. So what exactly did you pivot into like on mobile internet? Like what were you doing?
00:10:02
Speaker
Yeah, so it's the same thing, but rather than you trying to push an ad, the ad is more about being shown as a part of a web page. OK. Yeah. You were like building web pages for something. And then you go to an NDTV, who back then had a web page. And then web page will have links and banners, which will have ads.
00:10:31
Speaker
Okay. Okay. Okay. Okay. So that was like the initial offering, like building the web pages and monetizing them through banners for brands. Yes. Yes. And then one fine day we basically took a hard decision that we should kill, uh, uh, kill this whole SMS business. And then, uh, yeah, we never looked back after that. Okay. Okay.
00:10:59
Speaker
And then how did this VAP business evolve as the landscape changed? And I mean, in a way, Google also came into the same space when they launched Android. So how did Inmobi evolve to meet the changing landscape? So see, from a product perspective, it was the same product. In fact, Google ended up buying a competition of ours called AdMob.
00:11:29
Speaker
And that's how they got into this space. But the difference was that Google plus AdMob, they were building this business in in Western market. We basically were building this market in Asia. So that's how we were basically able to kind of things were happening in parallel.
00:11:55
Speaker
So we were able to survive and that whole model of east to west work for us. Okay. Okay. And help me understand how the revenues worked like, you know, in those years, like what was like the first year revenue and how did that grow over the next couple of years? And what was the breakup of that revenue? Difficult for me to tell you, first of all,
00:12:25
Speaker
how much I remember terms of break up, not public numbers. Okay. Imagine that mobile internet actually grew like a wildfire with our small base of revenue. So you actually do see 50 to 100x is actually kind of a wildfire. So you, you vary, you grow very, very fast.
00:12:49
Speaker
And we were adding countries after countries in our execution. So we started from India, then we added our business to Southeast Asia, primarily Indonesia, Malaysia, Thailand, Singapore. And then we added African region, European region have been next.
00:13:10
Speaker
At a country level, numbers were going. But we were adding because the platform was common. So we were able to add a bunch of new countries. Every quarter, we will be launching our business in one more country. And that's how the numbers were kind of moving in a much faster space. It was an ideal rise in terms of the growth of the business. OK. OK.
00:13:37
Speaker
I want to kind of understand the product a little better. So like the initial business was to build websites and then put banners in it. No, initial business was not building website. People working with the website owners.
00:13:55
Speaker
Okay, shaking space on them. And so we only had a technology to provide the mats in real time. Put a code embed that into their site. Then the way very, very similar to how Google AdSense work. Right, right. We had a code for mobile sites. We'll put it up and based on
00:14:18
Speaker
the device type, location time, our system will serve an ad. And for every $100 what we make, we'll be taking 30 to 35% of that share of the revenue. It will go in the hands of publishers. Okay. And then
Success with Glance
00:14:37
Speaker
once people started launching mobile specific sites, then you
00:14:42
Speaker
essentially started offering the same thing on mobile sites and probably on mobile apps also. Correct, correct. Because philosophy remains same, but a little bit of technicality gets changed. So how did you acquire inventory? Was it like self sign up and people would discover you and sign up or did you have a team which was reaching out to places that were getting traffic and
00:15:09
Speaker
telling them that use our advertising platform. Because I guess this is essentially inventory-led business, right? If you have the inventory, then the advertisers will automatically come. Correct. So it was both. So we did have a self-serve interface. But the business actually had, if not 80, 20, 70, 30.
00:15:31
Speaker
30% of your publishers will be 70% of your business. Okay. So yeah, so we had a we had a BD team going after these publishers to get these deals in place. And always like the first few I guess you would have personally gone out to because I can see on LinkedIn that you were head of business development. So this team which was going out acquiring publishers and
00:16:00
Speaker
This was all built by you only. Correct. That was my day job. Yeah. Okay. Okay. So how would that shift like for you from being a techie to being a, you know, being in a sales role in a way? To start with, it was not super easy. At the same time, you know, you figure it out. So maybe the upbringing and then maybe the
00:16:28
Speaker
IAT system, which teaches you and I will say, I will not just give and do credit to the college, but you figure it out. I think when you are an entrepreneur, only thing you know and you learn and you get better at is to figure things out. Right. Things happen with us as well, with me as well personally, starting selling to our partners in India, to global customers, started learning Gattrick.
00:16:57
Speaker
And when you deal with folks in Indonesia and in London, in UK, in Germany, in Japan. So, yeah, you start to learn all of those things. Tell me about your learnings on how to do enterprise sales. You know, like if someone you joined a movie and you had to give them your wisdom of how to do enterprise sales, what would it be?
00:17:26
Speaker
I think it's not a cookie cutter answer because it's different for different segments. But in our case, the value proposition was reasonably straightforward. You know what, I am going to make money for you. Interesting thing that unlike right now, right then there were not many mobile first or mobile only publishers.
00:17:51
Speaker
Everyone had some kind of website for desktop. They were transitioning or adding their mobile sites also. They knew, okay, this is what monetization means.
00:18:04
Speaker
You know, you do talk about ad quality, ad formats, how much they will make. So I will not trivialize that it was easy. At the same time, you know, and we were the only, you know, there were not many companies. We had the advantage of being the only game in town. And second thing is you're making money for them. And even from an advertiser perspective,
00:18:31
Speaker
that's other customer segment, we were chasing. So they also were like, okay, I'm hearing a lot about mobile advertising, then what do I do? So we will consult them and they will say, okay, I will locate x percentage of my marketing budget for mobile advertising. So yeah, so market knew what is digital digital advertising, that he helped us in a manner for that. Yeah, a lot of things you figure out.
00:19:02
Speaker
I don't answer your question. Why wouldn't someone just sign up with Google? Why would they sign up with Inmobi? Was it because Google didn't operate in that territory? Yeah, they did not have a good sales presence. So business is all about ad dollars. And the ad dollars were local. So the publishing inventory was global, but ad dollars were local. So that's why anyone who is doing a good job on
00:19:32
Speaker
bringing the right ad dollar, probably have a little bit better advantage. And also, agency business, they value touch and feel. They know they can talk to someone. And to give it to our team also, we were doing a good job on that. So from a Google's perspective, they were live in 50 countries. We were live in like two or three countries. So our level of execution was beating them.
00:20:02
Speaker
And in the case that we were doing this business in the US on day one, certainly we would have been killed. We would have inferior product and also not put great length and breadth of our relationships with both sides.
00:20:28
Speaker
OK. OK. And so I can see that you eventually became the US head. So like you decided to take on Google head on. Yeah, I think that's a difficult and complex statement to make. US has been in Moby's largest revenue region after China. I think after that, it's China.
00:20:58
Speaker
And, you know, we basically saw that we, our market share can get actually much better. And while we had a head of US or North America region, but somewhere the team felt that the level of attention and love and care they need, they were not getting it.
00:21:20
Speaker
So among the founders, we decided that, you know, one of us should move there, that we get stability, a sense of stability, and also uplevel the team. I actually, when I went there, I had to let go a few people who were not performing and more importantly, their mindset was not right.
00:21:45
Speaker
and hired the leadership team, built the team, who were passionate, who wanted to give fight to Facebook and Google. And you needed that energy. So I did that.
00:22:01
Speaker
And along with that, I also started another product called Glance, which was trying to figure out a business model with telcos as well as with the headset manufacturers. So I was wearing two hats back then. So tell me about Glance, what exactly was it that you launched? Certainly.
00:22:29
Speaker
So Glance is a platform for lock screen. For any acquired phone, there's a lock screen. When you switch on the phone, you see the lock screen, and then you log in. And basically, you put up your password, and you get into that. Rather than me showing you a boring lock screen, we basically came up with this idea of putting live to that lock screen.
00:22:57
Speaker
If you buy, for example, Samsung or Xiaomi phone in India, they come prebuilt with that product. You are being shown interesting news, fun, entertainment, motivation. So it's kind of a wallpaper, but it is very contextual and it's very, very rich, very feature rich. That product also became
00:23:22
Speaker
very, very big. In fact, three months ago, Google invested a large sum of, you know, equity money, so that was a very unique one. Decided to make that product a separate company. And investment happened in that company also.
00:23:44
Speaker
OK,
Founding Yulu to Solve Urban Issues
00:23:45
Speaker
OK. But how did you acquire users for this thing? Was it through OEM tie-ups or? It was through OEM tie-ups. So it was a B2B2B2 model. And what made you take this bet that you need to build something like Glance? What was the insight that you were saving here? Certainly. So it is actually non-linking with your Google problem, a Google point where we were like, OK,
00:24:14
Speaker
Google has access to 1.5 billion people or devices. OBE also has the same number of devices we see on our network. True publishers, though. But the depth, so advertising business, there are two things that actually give you or make you a winner. First, how much is the share of time of user you control from a media consumption perspective? The second important area
00:24:45
Speaker
Right. So Facebook and Google back then, they were taking almost 20 to 25 minutes of daily usage time across the properties. And that's the reason they were very powerful. So the type of targeting they can allow and type of ad formats they can do is significantly different than, you know, InboB was doing. So
00:25:10
Speaker
You know, one part that you try to make a service, which is like Facebook, YouTube, et cetera. The second part was that, okay, you know, how do we, because making those B2C property is not easy. You, you need to come up with a value proposition, which may, may not happen. Large and very meaty, uh, you know, depth in terms of data decided, okay, you know, where this data is going to,
00:25:38
Speaker
getting accommodated and where do you get the maximum time. So I think after some thinking it was very evident that in this entire mobile internet value creation has actually happened for the app players as well as the OS or the ecosystem providers. But these handset manufacturers, they basically have been beaten down because the average selling price has only gone down and the hardware has only shrunk.
00:26:10
Speaker
And you might have seen even Apple's latest earning report where their profit pool actually has now lopsided in the favor of App Store. Their hardware has not gone up in the last 10 years.
00:26:24
Speaker
This was the learning. And that is to be going to likes of substance and show me and oppose and be was understood that okay, yeah, they need to also make some value in this entire mobile internet. They do they don't understand the content. They don't understand advertising or for that matter, any form of paid and promoted media. We came handy.
00:26:52
Speaker
So when we presented that, oh, this is a consumer value proposition, we will be building a consumer habit. And then sometime those content pieces can also have a commercial angle. We will make sure that the commercial angle is a secondary point. What you want to do is create a value for the customer log screen. And they love the idea.
00:27:20
Speaker
And we built on that and we got almost every major handset manufacturer sign up for that. Okay. But this became a way for them to make their low cost phones, like give them a stream of revenue, like for years after the sale happened in a way.
00:27:45
Speaker
do that because I said that you were doing that commercial intent messages only that much. For example, Amazon came up with a phone which they were selling you for cheaper price. If you forgot a tablet where you can say that, okay, I will see ads and then you will have $50 off.
00:28:12
Speaker
We have not done that. At least no one has done that in India. The primary reason is also because India, the harpoons of the ad dollars are not very high. So money you can make per user in the US and India, then 1 is to 10. It was not worth it.
00:28:35
Speaker
But they understood that there's a value. It's being sold as a feature. It's a strong feature for all of these guys. Yeah, they're happy about it. And they also make money sometimes. But the money currently is not very significant. I would say it is decent. At the same time, it is not big enough the way US can give you a study of $50.
00:29:02
Speaker
won't have that level of advertising goodness, at least in India. So this was essentially an experiment that scaled up. What were the other experiments that you would have run at Inmobi? I imagine that, like any other tech startup, they would have been a culture of trying out a lot of things. So as a company, Inmobi did many things.
00:29:29
Speaker
Me individually, only I led this part because I was busy with business side. And only during my last two and a half years with the company, I owned this product agent to execution. But at the company level, we tried some products later. Some was also a commerce discovery platform. We tried innovation was in the DNA.
00:30:08
Speaker
If you like to hear stories of founders then we have tons of great stories from entrepreneurs who have built billion dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple Podcasts and subscribe to the show.
00:30:31
Speaker
So just like my 30 year promise to myself, I had up 40 years promise to myself. But I will be retiring. Although when I started turning, I realized that that's not something I will actually enjoy doing. At the same time, I did ask myself and some of my mentors. And I realized that I want to do something for the social impact.
00:31:00
Speaker
And this itch of me led to thinking about Hulu, because in Moby, actually, it was a very different setup. We did have an opportunity to make something for social impact. But that would be done out of CSR, not as a company's vision. So yeah, I thought about it. I thought, if I don't do it, then maybe I'll regret when I turn 50.
00:31:29
Speaker
But so this was the thinking. So that led me to think about you, Lou, and then I was very lucky and fortunate to get a very amazing co-founding team. So kind of believed in that vision. So we came together. So you wanted to do social impact. Why did you narrow down on specifically short distance commute?
00:31:59
Speaker
Yeah, so the pain point I wanted to solve or we wanted to solve was reduced traffic congestion to improve the air quality. And the solution part of that became what we are doing. We think that is probably another path to solve for that problem. Why I chose mobility? The reason was that these two problems, in fact,
00:32:29
Speaker
me and my friends and my family. It cuts across gender, age, your financial status, religion, irrespective, you will get stuck in the traffic, no matter how fancy is your car. You have to be the same air, no matter how, whatever you are. So there are problems in India.
00:32:55
Speaker
which you can skirt, you can have your way. But there are problems which you have to be part of, or you are part of. So try to pick up something which is, as I said, impacting me and my friends and family, so that I am reminded of that vision every day. Okay. Okay.
Yulu's Launch and Strategy
00:33:15
Speaker
And like, did you have global examples, which you saw and then decided this is how you should do it? You know, like,
00:33:24
Speaker
What helped you form your product vision? Yeah, so luckily there was some work happening in China and also in the US. So there was some early, you know, built out of your own thinking that this is how the solution will look like. However, that copy paste did not work or has not worked generally in India. So you have to figure out something for India.
00:33:54
Speaker
And this is what happened with us as well. We did start with using pedals bicycle where there was an IOT where you can locate the bike, open it, bring an app. But the bicycle was only solving for limited use cases. And when we had this ambition of moving millions of people to sustainable mobility, cities like Delhi, Bombay,
00:34:23
Speaker
every city where the weather condition is not on your side, and even Bangalore, like after two kilometer, a person who is commuting for work, they were not willing to pedal. This was more of health care or fitness on the weekend. We were not fascinated with reducing gallery.
00:34:48
Speaker
You know, we were fascinated with reducing pollution and traffic congestion. So we began to use Ulu for the daily commute. And we started working on the electric mobility part, which was also ticking out of the boxes. So instead of struggling, you know, you have a small battery giving you all the power to move forward. The product, what we have chosen
00:35:17
Speaker
is also legally a bicycle. So it is just a bicycle, very simple product that has a driving license or any complexity. It's simple to ride another claim to fame is that anyone who has done any two wheels in their lifetime can ride that product in less than 30 seconds. So it doesn't matter in what stage of life you are able to balance two wheels and you can drive
00:35:47
Speaker
Super cool, super easy product. Good for women, good for even senior citizens. And really youngsters love it. So they have no hassle experience. So they find Uloos in front of their college, offices, homes, metros. So wherever you think that people are moving, we are able to create our parking spots. We call them Uloosoons.
00:36:16
Speaker
they can pick our bike from those places using Vulu app, and then you have to drop it back at one of our network parking areas. Typically, it's close to their destination. I have multiple questions to understand this better. Inmobi was like a tech play where
00:36:41
Speaker
you probably did not need to bother with things like government licensing and permissions and stuff like that. But I imagine even to launch with simple cycles, there must have been a lot of government hurdles to cross. How did you cross those hurdles? Did you need some sort of permission to offer cycles on rent and also the parking spaces? How did you acquire those parking spaces? How did you get this off the ground?
00:37:10
Speaker
So actually technical answer is because of bicycles. There is actually no technical, no requirement for you to take any permission. You remember in your childhood, I don't know if you have rented a bicycle. No. I did. That's how I learned my bicycle. OK. I did not need to have a permission from the city authorities. He's just doing his job.
00:37:39
Speaker
But what we realized that working with government is very, very important. They are the ones who are going to support you, give you spaces for parking, and they will also help you with a wellness session. And this is where one of our co-founders, whose name is Arke Mishram,
00:38:05
Speaker
He's actually is a pro in this policy making, working with government, et cetera. So that's how we basically started building all of that. And we went to the cities Bangalore and Pune. This is what we want to do. This is what we have done in terms of our own product. But a lot of encouragement and support from the city authorities.
00:38:35
Speaker
And that's how our journey started. OK. And to get this off the ground, did you first take permissions and get the government relationships in place? Or did you just build an app, get some cycles, and launch it in one city? Tell me about that. Yeah. So we actually chose the second part. The only difference was that we were not launching at the city level.
00:39:05
Speaker
is a section of a pin code. So there's an area in Bellendoor called echospace, echoworld. So we basically put 100 bikes in that area on day one. We got permission from RMZ. So they were very supportive and very diverse spaces. And then people who were working there, they saw those blue-colored bikes. And they started scanning the QR code.
00:39:35
Speaker
And everything was very simple and easy. After maybe a month or so, we were already in touch with the city authorities. And by then, we also got invited from the city of Pune. There was
Growth and Investments in Yulu
00:39:48
Speaker
a very, very dynamic and progressive officer who was responsible for the overall mobility of the city. So in Bangalore, unlike
00:40:01
Speaker
So in Pune, like Bangalore, we got permission on day one. And then we started. In Bangalore, we started because everything was happening in parallel, to be very honest. Bangalore took maybe another month or so to figure things out. So the business plan that how it should work.
00:40:20
Speaker
But I must say that we were very fortunate to get all the support from the city authorities. And the parking spaces were provided by the city authorities. So it's a combination. There are spaces provided by the city authorities. This is provided by the metro. Your real estate developers who will give you spaces in front of their tech park. And is it like paid by you or like it's a
00:40:47
Speaker
like an infrastructure for them to offer mobility to their users? You can say that a large portion of that they don't charge any money. They also see that it is their role or it is their contribution to make our cities better. How did you fund this? Because you would have had to purchase the bikes and
00:41:16
Speaker
like this is fairly asset heavy unlike say Uber which doesn't need to purchase any car here all of these bikes were purchased by you only I guess yeah yeah so we actually raised venture capital money we raised approximately seven million dollar in our seed funding and we were able to buy these assets okay good thought is while we have to pay money for the asset
00:41:44
Speaker
customer acquisition cost for us has been zero. So like Uber and Ola, they are asset right, but they have to spend a bomb building this marketplace. A lot of discounts and an acquired customer cost amount. Choice of the business model, A versus B. Yeah, you do need to raise some capital to build the business.
00:42:16
Speaker
OK. And what is the unit economics of this? How much does a bike cost you? And how much do you earn from a bike over its lifetime? And what is the lifetime of a bike? And can you talk about stuff like that? Yes, some of the numbers for sure. So in terms of the bike cost, currently, we are spending approximately 50,000 rupees.
00:42:43
Speaker
per bike that inclusive of the batteries, the extra batteries. We use swappable battery technology where a bunch of batteries are always under charging operation. Also the infrastructure which we have built for charging station. And we believe that this pricing will come down to around 30,000 rupees within a couple of years. And the primary reason is that we have a strategic time with Bajaj.
00:43:13
Speaker
who is trying to make everything in India. So currently, we have to import some components, actually, a lot of the component from outside of India. Especially batteries, I guess, because I don't think it. Battery is also from India. The space comes from outside of India, actually Japan.
00:43:32
Speaker
So there are basically a lot of external dependencies. And we think that in the next two years, as a country, we've been in a very, very good stage to indigenize all of this. The cost will come down to below 30,000 rupees. So that's one part of the equation. And then we are currently charging our customers on the basis of time. So we charge five rupees to start.
00:44:00
Speaker
and then depending on the city per minute charge of 100 rupees, 50 baht per hour, 200 rupees charge, then these bikes actually are good for three and a half to four years in the usage condition for shared mobility. Okay, got it, okay.
00:44:27
Speaker
And what is the number of bikes you have out on the road right now? And how has that grown over the last one or two years? Certainly. So our journey with respect to electric mobility is now close to two years, a little bit more than two years. And we have 10,000 electric vehicles that makes us the largest electric mobility company in India.
00:44:57
Speaker
Okay. Okay. And this number has grown. So if I talk about pre Corona back in February, 2020, we had 4,000 assets. Okay. And by September timeframe, we had 10,000 of them. So you, you actually grew during the lockdown. We grew in terms of the fleet, in terms of the revenue. So our,
00:45:23
Speaker
Our revenue grew 2.5x. Our profitability grew 3x. A good portion of basically leveraging our business comes from the density. As we were growing, we were also going denser. Density basically caught our profitability also to jump to 3x. From our pre-corona numbers. We were the only company who was showing growth and improvement in our metrics.
00:45:52
Speaker
It sounds
Yulu's Market Positioning
00:45:53
Speaker
a little counterintuitive. I would have guessed that people would not be traveling due to the lockdown and the numbers would have come down. So what is the reason for this? Yeah. So what happened that while the cities were under lockdown or there was some open up or locked on both, but there will always be someone or the other who was on the road. That is kind of the problem.
00:46:21
Speaker
And the problem was that not everyone in India has a vehicle. In fact, some of the people in India don't have any vehicle. And they need to use some public mode of transportation. And Europe became the safest mode to commute because it was a passenger or driver. Right, right. Social distancing is like built-in.
00:46:48
Speaker
So we gained significant amount of market share for people who were earlier using group mobility in some shape or form. And while the top of the funnel shrunk, the movement what we got from other buckets of mobility, that actually compensated. What do you mean by this statement? Sorry, can you just? So for example, earlier, I say 100 people were on the route.
00:47:15
Speaker
But because of Corona, people started working from home. 100 number became 30.
00:47:22
Speaker
Earlier, out of 100 people who were on the road, five people were using us. But when it became 35, then that 35, you know, out of that 5% of them were. So we were basically having seven or eight people who were using us. So we got net addition of users, significantly higher. Our usage per user per month went up by 40%.
00:47:48
Speaker
We were not only using it, but they were using even more. Same thing happened with our R-boost, monthly R-boost. Because of the higher usage, our monthly R-boost was shot up by almost 40%. We were basically a net gain from this situation.
00:48:06
Speaker
This is not the only company, by the way, the only company in India. Basically, in the world, there's a lot of global peers, what you have got. There's also such a similar amount of goodness in their respective businesses. So this concept of self-driven electric two-wheeler, which you can use for moving around the city, became a global phenomena, successful phenomena during pandemic time.
00:48:36
Speaker
okay how much do you currently earn per bike like if you are at liberty to share i've told you my my my pricing equation so really one of our trips will give us uh close to 40 bucks 35 to 40 bucks and then we made multiple trips per bike got it and uh help you understand the competitive landscape like bounce and go go as your competitors here so
00:49:03
Speaker
What is the difference between you and Banth and Bobo? If you can help our listeners understand that landscape.
00:49:14
Speaker
So, first of all, we actually don't see either of bounce or wooga as a competition. So, we are a category on its own. I think we compete probably more with an auto rickshaw and walking rather than bouncing wooga. Why is that? And the reason is, you know, for example, when you look at, let's say, a four-wheeler space, if you count Meru
00:49:39
Speaker
and that the typical taxi and Uber with the same lens. Is Meru an oversea? No, Meru has their own vehicle. Basically Meru is a fleet operator in a way. Not even a business model but also the customer segment they are targeting with their service. So let me talk about Vogo. So Vogo first of all
00:50:03
Speaker
you know, they have petrol scooters, which is being taken up by people who are gig workers. Okay, we go to go go station, the scooter and they deliver food or they deliver something. So 80 to 90% of the ATG reply is a mixed bag, there are no other makers will be used just like Google. Also, there will be people who are skipping the mid mine.
00:50:34
Speaker
So someone who would have taken, let's say, a bus or something else, they would have taken bounce. Usually at the same time, we basically are, first of all, pure electric. Second thing, our solution set is more optimized for the short distances. Our average distance, for example, in Bangalore is around 4 kilometers. Same thing for bounce is 8 or 9. And the number for BOGO is around 12, 13 kilometers.
00:51:04
Speaker
Both all of us are using two wheeler as a form factor. The business model in the TG is very different.
00:51:13
Speaker
And then there will be some overlap, so don't get me wrong. So we will have some 10, 15% overlap with everyone. But at Core, we have a solution for first mile, last mile, where someone has to go for a short distance. And yeah, so we are very specific. So if you look at the mobility landscape, so it's called multimodal
00:51:39
Speaker
transportation or multimodal mobility of a city. So we work with public transportation, we complement to their journeys, rather than fighting with them or competing with them. Like where the metro ends is where someone can pick up. That's the reason we have been given spaces at metro stations, bus stations, as a part of the solution, as a competition.
00:52:08
Speaker
And that's what vision we have got. We have no wish of replacing metro rights or bus rights. We want more and more people to take public transportation so that city can get decongested. This is our
Technology and Scaling Challenges at Yulu
00:52:29
Speaker
vision. Why did you choose a docked approach? That people pick up from a dock and drop it off at a dock?
00:52:37
Speaker
Yeah, a couple of reasons. First of all, when you are letting people drop it anywhere, they will actually leave it at all random places, which not only increases the theft and realism, but also operationally, it is supremely difficult to manage. And last but not the least, the city citizens also do not like it.
00:52:58
Speaker
Because then someone will leave it at my gate, at my park. So there's a huge backlash across the globe where this kind of model did not work. In fact, China, which was known to be the pioneer of this Doppler's concept, even now they are basically moving towards the concept of these are the designated zone areas. You are basically allowed to be parking the bikers there.
00:53:27
Speaker
I don't know if you have been to China, but many places you will see a board that shares bikes are not allowed because they will leave it in random places. It's a menace, it's a pain. So what do you think are the tech drivers for this going ahead? Are you looking at
00:53:52
Speaker
like, you know, bringing in self-driving into this or, you know, what are you focusing on as the key tech drivers to make the product experience and the customer experience better? So, you know, product is self-driving, so it's not cool because human is driving, but I think it's a very practical answer with our cultural aspects as well as infrastructure.
00:54:18
Speaker
But as far as the technology is concerned, we look at technology not by the zero and one, which is coding. For us, a great vehicle is also an engineering marvel, right? So we have a lot of work going on in making sure that the vehicle itself is basically very safe, comfortable, durable. So a lot of work happens on that.
00:54:47
Speaker
Most of them work on the hardware side with this IoT. So, the unit that makes vehicle smart, Nikhil, is also done by YouTube. So, we have the IP. Okay. The station, for example, is also one unique product we have created. We are able to place them at mom and pop store. We have built our own private charging network.
00:55:13
Speaker
which comes in like one of its own kind in the world. It just requires a 15 MPa plug. So that is also our own innovation and our own work. The work we have been doing on the software stack side where a very high quality detect work happening using ML and AI for operational efficiency purpose.
00:55:36
Speaker
So a business model is to make sure that we have the bike at the right time at the right place and to make that happen.
00:55:44
Speaker
you'll be able to leverage technology. When you say placement is one thing that, okay, this bike is at that, you don't. But does it have a charged battery? Is it in good shape to use? There's a lot of operations that happens under the hood, where you as a customer, you come out of your building, you move with high degree of predictability that there will be users waiting for me. If I can, they will work. I will present right.
00:56:14
Speaker
And then I leave it, and something has to happen. So the amount that happens in the background, it's all driven through technology. And there's a serious amount of AI and ML and operational accidents that happens under the protocol. So you actually move bikes around every night to the places which would be optimum in terms of the demand to pick up and
00:56:41
Speaker
Yeah, so first of all, we don't have to move every push, every mic, because we're all in the natural movement. So on a given day, we will be moving maybe 10% of our asset to maximize our yield. There is a lot of demand, but supply position is low. And we basically have a way to move them. And we have to refocus seven not just the nighttime. OK.
00:57:10
Speaker
And your AIML tools would also tell you about predictive maintenance, like when something needs to be maintained or needs to be, okay. So they're telling me that these mini bikes needs to be moved from this spot to that spot. They're telling me that this vehicle is going to run out of charge. The vehicle requires this preventive maintenance and really the reactive maintenance because the customer will flag it.
00:57:38
Speaker
So yeah, this is all machine driven. What route to take to do these 10 tasks in what sequence? Now that someone did that or not, interesting pieces which is being done through technology. That's super interesting. And how responsible are customers? Do you face vandalism issues or theft issues? India is like a low trust.
00:58:07
Speaker
economy, low-trust country. So does that happen a lot or like what percentage do you see that? Yeah. So what happened when the rate is 0.6% is lowest in the world. The average is three. We actually have cracked this problem by a very unique India-centered playbook. What is that? A large portion of that is actually driven because of the fact that it is dock to dock.
00:58:34
Speaker
Okay. That is one very important point. And then we have our own ways to manage the situation. We have our own private bike marshals, our own private police. Okay. Some interesting stuff on that. Now, for my customers, you know, vandalism or misuse perspective,
00:58:57
Speaker
The biggest non-compliance for PC is that they actually leave vehicle not at Eurozone, but they will be leaving it away from Eurozone. And 80 to 90% of the time, it is actually not by intention, but it is not intentional.
00:59:18
Speaker
And the reason being that, and particularly in Bangalore where, you know, other company decided to do dock less. So they were confused as to, but I can leave this vehicle anywhere. It's only for the new guys. And when they do that, the portion of new guys, sometime they do it, then we basically give them a warning after that we start putting penalty. So they basically get on the right track.
00:59:46
Speaker
People are learning and evolution rather than the bad intent. But that sometimes do happen from people who are not over users. So they will come and sometimes they will kick the bike, they will do some damage. But instances of that is actually a handful. You can count on fingers. OK, amazing. Yudu zones are on visible places. They also know that they do something wrong with the bike.
01:00:14
Speaker
we will actually know somehow, like we have a way, then they will be in trouble. And we made sure that they are in trouble. So as a company, we have done an amazing job in compliance. So there will be some consequences of you doing something wrong with us. Okay, amazing.
01:00:41
Speaker
Have you had cases where customers have just taken the bike home? Yeah, many times. Then your IoT would track the bike and you would have to send somebody? Yeah, many times. Sometimes by intention, sometimes not by intention. They don't know what they need to do. New service.
01:01:06
Speaker
Okay, okay. If you ask me that do we have a problem with customers intention? That would be the last thing in our in our bucket. Okay, okay. So what is your plan to retire now? Like, do you have like a time frame that at this age, I will actually retire or you will never retire? I will fail on that for me, so I don't want to come. Okay. You will kill me.
01:01:41
Speaker
So that was Amit Gupta telling us about YULU bike. If you like to know more about this venture, please log on to yulu.bike.
01:01:54
Speaker
If you like the Founder Thesis Podcast then do check out our other shows on subjects like Marketing, Technology, Career Advice, Books and Drama. Visit thebotium.in that is T-H-E-P-O-D-I-U-N dot I-N for a complete list of all our shows.
01:02:14
Speaker
This episode of Founder Thesis Podcast is brought to you by Long Haul Ventures. Long Haul Ventures is the long-haul partner for founders and startups that are building for the long haul. More about them is at www.longhaulventures.com