Bird CEO on scooter startup copycats, unit economics, safety and seasonality

Bird’s electric scooters were on full display at the Upfront
Summit in Malibu last week, a two-day event that brings
together the likes of Hollywood, Silicon Valley and Washington,
DC’s elite. 

Not only were a dozen or so brand spanking new scooters
available to ride throughout the event but Upfront general partner
Mark Suster, an investor in the startup, was seen riding a Bird on
stage to the tune of Chamillionaire’s ‘Ridin’
Dirty.’
 Plus, Bird founder and chief executive officer
Travis VanderZanden was on site to mingle with attendees before
closing the summit with a fireside chat with Suster himself.

The pair hit on a number of topics, including the unit
economics, safety and seasonality of the scooter business. Neither
confirmed Bird’s latest raise; the startup is said to be in the
process of securing another
$300 million
at a $2.3 billion valuation, according to
PitchBook. In a 12-month period, the company brought in more than
$250 million at a roughly $1 billion valuation.

On unit economics: When Bird bursted onto the scene in
2017, VanderZanden knew he had to move quickly to beat copycats, he
explained. Operating under Reid Hoffman’s ‘Blitzscaling’ philosophy,
he dispersed hundreds of Alibaba-imported electric scooters that
were, well, pretty shitty.

“Those things were fragile,” VanderZanden told Suster.
“Clearly the unit economics didn’t work on those scooters but
that was a test anyway … Once we knew people liked riding them,
we quickly scrambled and started creating our own scooters.

Bird Zero
is the first iteration of that. What we see on the
unit economics of those, it’s like night and day.”

The company
unveiled Bird Zero, 
in October, equipped with a digital screen
to display riders’ speed, a tougher exterior and improved battery
life.

“2018 was about scaling,” he said. “2019 is about really
focusing on the unit economics of the business.”

On seasonality: Some have critiqued Bird for poor unit
economics, while others have pointed out that the success of the
business is heavily dependent on…weather. No one wants to ride a
Bird in the snow, slashing its revenue potential in the cold
months. VanderZanden said he’s not concerned with seasonality and
revealed Bird operates on a $100 million revenue run rate even in
the winter. He did not, however, clarify if that run rate is based
on fourth quarter 2018 projections — when Bird introduced Bird
Zero — or 2018 annual revenue.

“Obviously, there is seasonality in the scooters business,
there’s no doubt about that,” he said. “Yes, it’s slower in
December but this market is so big, even in our slow [weeks] most
companies would love to have that in their worst [month] … We
used to say when we’re heading into the holiday season that the
Birds would migrate south but it turns out the logistics are really
expensive, so the Birds hibernate. That’s a lesson we
learned.”

On safety: In the year or so that scooters hit
the mainstream in the U.S.,
there were casualties
. Moreover, many — kids included —
realized just how easy it is to get away with scootering sans
helmet, while others rode throughout the night. Bird, to keep
children off scooters, at least, requires customers to provide a
driver’s license when they sign up. Given the number of issues
that have arisen as scooters become increasingly popular, improved
safety measures are bound to be in the news in the year ahead.

“Safety has to be prioritized over growth,” VanderZanden
said. 

On electric bikes: Bird is one of few scooter businesses
that doesn’t offer bikes.
With all the capital its raised
, will Bird make the leap?
VanderZanden seemed lukewarm toward the prospect.

“Yeah, we think about it,” he said. “We [aren’t]
religious [about] scooters per se, we just think it’s the thing
people like the most so that’s where we started and we think
that’s the best thing to do now. We get excited about
micromobility generally… We are open and looking at all sorts of
different short-range electric vehicles in the future.”

On Bird Platform: Last year, Bird began selling its electric scooters to
entrepreneurs and small business owners, who can then rent them out
as part of a service called Bird
Platform
. VanderZanden said the service has opened Bird up to
tons of new markets.

“From early on at Bird, we had people asking ‘hey, how do we
take Bird to my city,’” he said. “We thought why don’t we
empower the local entrepreneurs to take Bird to their market… Now
we have people from 77 countries from around the world that are
interested in taking Bird to their market, which is exciting
because there is no way we as a company could get there in the
short-term. This is a way to bring Bird to the world.”

On growth: Given the number of stories on Bird and its
competitors in the tech press, it’s easy to forget that most of
the startups in the space have launched in the last year or so.
VanderZanden took a moment to remind the venture capitalists in the
audience that in that time, Bird has expanded to
100 cities
. Impressive, yes, but let’s remember the manner in
which Bird introduced scooter fleets to new markets. The company
showed up unannounced in Santa Monica, for example, a decision that
resulted in a
lawsuit
in the startup’s own hometown.

“It’s pretty incredible that 100 cities have opened their
arms and embraced electric scooters,” VanderZanden said.

On Bird’s future: VanderZanden explained that
despite a long-held interest in transportation — his mother was a
public school bus driver for 30 years — he’s only recently come
to understand the industry’s most urgent needs. He plans to put
more energy in transportation infrastructure in 2019 as a
result.

“The deeper I get into transportation, the more I realize we
don’t need autonomous vehicles, we need tunnels, all we need are
more bike lanes,” he said.

Source: FS – All Tech News 2
Bird CEO on scooter startup copycats, unit economics, safety and seasonality