Marathon Series: Bolt and the Estonian founder with a billion dollar valuation at age 25

When I arrived in Estonia it was clear to me that I was in Bolt country. The logo was on cars everywhere and even on taxis!

Joining me today is the founder of that company. Markus Villig is the founder of Bolt, formerly known as Taxify, an Estonian transportation network.

I want to find out how he did it.

Markus Villig

Markus Villig


Markus Villig is the founder of Bolt, formerly known as Taxify, an Estonian transportation network.


Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. And I do it for an audience of entrepreneurs who are driven and who want to have an impact on the world. I’m here in Estonia and one of the things that I noticed as soon as I got off the plan was this is Bolt country. There are cars with Bolt plastered around the side of them. There are taxis with Bolt on the side of them. There are scooters, as I walk around, with Bolts. I was running back, at the end of my marathon, and I saw this woman on a scooter that was a Bolt scooter and I said there’s something. She’s elegant. She was a super elegant European woman, older, on a Bolt scooter. I don’t usually see that. I guess ridesharing is the phrase that we’re going by to explain how I’d want someone to pick me up, I use my phone, and a car comes, right?

Markus: Sure.

Andrew: But you do more than that. You do scooters. Is there a broad term that you’re using to describe the company?

Markus: So overall, we see Bolt as the future of urban mobility. So we take technology and we apply it to anything that you want get on-demand. So we started off with taxis and then we moved to overall broader ridesharing. After that, we now included micromobility starting off with electric scooters. Now we’re looking at bikes, mopeds, pretty much anything that you might want to rent on demand. And actually what we just launched a couple of weeks ago was a food delivery product which we’re going to be expanding to packages and everything else as well. So the overall team is technology in cities, anything you need on demand.

Andrew: And other guys, I think, riding around with those big green boxes that say Bolt on, delivering food?

Markus: Exactly.

Andrew: You guys are a unicorn, fair to say, over a billion-dollar valuation?

Markus: Yep, we already reached more than a year ago.

Andrew: Wow wee, and how old are you?

Markus: Now 25.

Andrew: Did you have a job?

Markus: After school, this was the first thing I started with.

Andrew: First thing you started? All right, I should say this interview where we find out how you did this is sponsored by two phenomenal companies. The first will host your website, right, it’s called HostGator and the second will do your email marketing, well, you’ll see, it’s amazing. It’s called ActiveCampaign. I’ll talk about those in a minute. I read that as you were a kid in school, you wanted to be an entrepreneur, you did. Who did you admire growing up?

Markus: As long as I can remember, I always wanted to get into tech. So for a long time, I was thinking that I’m going to be a scientist and build some interesting gadgets.

Andrew: Really?

Markus: But then, actually it was 2004, and Skype got founded in Estonia. And my brother was one of the early employees there. So at the time, I was 11 and I saw that actually you can build a massive tech company from anywhere. And back then, Estonia wasn’t doing nearly as good as it is now 15 years later. So I rather understood that maybe instead of actually inventing the things myself, I should try to build a company and recruit smart people and then build things together with them. And then I got on that track and I started to learn business, basic web development, and so on in high school already. And then, yeah, when I was 19, graduated from school and immediately got into startups.

Andrew: You were in hackathons before then though, right?

Markus: Exactly.

Andrew: What did your parents think about you being in entrepreneurship? What did your teachers think about it?

Markus: I think the interesting thing was that my parents were completely not entrepreneurial. So my mother has been a teacher for 30 years. Father has been working in construction and the government for another plus 30 years. They’ve never founded a company. So I think that me and my brother, both turning up as tech entrepreneurs was quite a bit of a shock for them.

Andrew: Because he’s your co-founder here?

Markus: Exactly. So we founded Bolt together. But I think they’ve been, luckily, extremely supportive of that regardless of not being entrepreneurial themselves.

Andrew: Is this the same brother that was at Skype?

Markus: Exactly.

Andrew: What did he learn when he was at Skype?

Markus: Well, he was actually joining when there was roughly 40, 50 people there. And then by the time he left, the company had grown another 10X in 2 years. So he saw everything, how to build products at that scale. How do you hire people? How do you build an organization, of course, all the major deals and billions, and so on? So that was a massive experience for him as well.

Andrew: And the thing that you took away from it was, “This is possible. This is a new way of doing things.”

Markus: Exactly, and I think together with me, it was the whole generation of people in the Baltics. So we had just gained independence from Soviet Union, what? Less than 15 years ago and then suddenly you had the biggest tech exit in Europe coming from Estonia. So that was . . .

Andrew: Yeah, yeah. A couple of a billion dollars at a time when software was not . . . within a couple of years, within like two or three years, right?

Markus: Exactly. It was one of the fastest exits ever and one of the biggest ones in all of Europe and coming from tiny Estonia.

Andrew: Right, and some . . . you saw, “Okay, this is a possibility.” Tell me about the hackathons. Why hackathons and what happened in those hackathons?

Markus: So I think, overall, I was always into tech but then exactly when I saw the Skype exit, I got even more excited to do things even quicker. And then my brother also founded one of the biggest hackathon series in the Baltics as well called Garage48. And then when he founded that, he invited me to one of the first events. I was 16 at the time. Everybody else there was 25, 30.

Andrew: What happened at Garage48? Why is it 48?

Markus: So the hackathon format is that you start on a Friday and you need to ship product by Sunday evening.

Andrew: And garage as in like to create the Hewlett-Packard garage atmosphere within 48 hour?

Markus: Exactly.

Andrew: Got it. Okay.

Markus: Exactly. So that was pretty exciting. And randomly I happened to be on the first team with two of the Skype founders, so in that hackathon.

Andrew: Which two?

Markus: Actually, you just interviewed one of them before. So it was Jaan Tallinn and Ahti Heinla.

Andrew: And the two of them were on your team? Why do you think they were in a hackathon?

Markus: I think they just wanted to, on one hand probably, get people more excited but hackathons are actually a good way how to test your ideas and probably because they are both hackers. They actually want to build new things.

Andrew: Interesting and so why weren’t you intimidated by it? I read a couple of articles where people ask you, “How old are people on your team? How . . . ” Like they wanted to get a sense of are you, as a young guy, intimidated by having people work for you who are older? Why weren’t you intimated by them, a), yes they were older but b), way more accomplished?

Markus: I think the issue is I’ve always been extremely skeptical of all big companies. So whenever I was looking at what big companies were doing, reading it in news already when I was probably a toddler, I was thinking like, “Why are they not doing that? Why are they doing this? It’s so stupid.” So I think I already grew up with this idea that I don’t need to listen to anyone. I would better figure out things by myself. So I mean, of course, it bites you sometimes but I think starting off from foundations and thinking on your own pays off.

Andrew: Got it. And so the person who’s thinking, “Why is everyone not doing things right? I know the right way,” is not going to be super intimidated by the founders of Skype. If anything, maybe you’re taking inspiration by having them on your team. Do you remember what you guys created together?

Markus: It was actually a baby name generator. So the idea was let’s try to help parents find names for their kids.

Andrew: And how would they do that? What was it that you guys were doing differently?

Markus: So it was pretty much you entered a few criteria and then we offered you the best matches for that.

Andrew: Okay, and then you kept going into hackathons thinking, “I’m going to find a business,” or what I’m going to learn?

Markus: For me, it was more about experience and trying to build a network. So, unfortunately, when I was 19 and I actually started to build Taxify, the issue was there was still actually no entrepreneurs I could actually get on board with me. So I still pretty much had to go alone but I . . .

Andrew: You didn’t know any entrepreneurs when you came up with this idea. It was Taxify. It’s now called Bolt.

Markus: Yeah, so the issue was that even though I knew some people, they saw I was 19. Nobody wanted to get onboard. So the network didn’t really help in the beginning.

Andrew: Wow. Okay. The idea came to you from where?

Markus: A combination of things. So one was I just researching a bunch of different industries. I knew I wanted to be in tech but I was pretty agnostic of what to do. And then I saw transportation seems to be going through the biggest shift, overall. It has the biggest impact on people in terms of time, in terms of money they spend on it, and everything. And I figured that there was going to be interesting things happening here. I don’t know yet exactly what but I want to be in that space.

And then I just stumbled on it when we were discussing different ideas with my brother again, that, “Hey, the taxi industry in Tallinn is really bad.” At the time, it was going through phone calls and radios. So on a Friday evening, you had to call 10 different small taxi companies, wait 30 minutes then the car never show up. Then if it now show up, it’s really bad in quality. You can’t pay in card. Like it was just a disaster. So we figured, “Hey, why not actually make an app to connect all these drivers and passengers, add transparency, add ratings, improve the quality, and so on?” So that was the first idea.

Andrew: I was going to challenge you on that so badly because Tallinn here, the capital of Estonia, I feel like everywhere I go there are taxis just waiting in line. But as you answer that question, I realize, yes, they are waiting in front of my hotel and in front of the airport and in front of a few major sites but if I needed them in the middle of my run or if I lived a few blocks away from where the tourists are, I wouldn’t just be able to stick my hand out or walk out and expect them to be there, I would have to call. I get that. What about this, Uber already existed by then. It was a few years old. Did you look at Uber and say you could create the Estonian Uber?

Markus: Actually, the interesting thing was at the time, Uber was primarily working with premium cars or limousines. So we didn’t actually see them as a . . .

Andrew: Black cars.

Markus: . . . threat because our idea from the start was to build a democratic service, something everybody in the city could use because, again, I was a 19-year-old guy. I could not afford a premium car. So I wanted to build something everyone could use. And we saw our main competitors were actually similar platform to us who were first starting off by aggregating taxis and taxi companies.

Andrew: And they did exist. There were a few around the world.

Markus: Yeah, but none of them in pretty much Eastern Europe.

Andrew: Okay. Did you take any . . . well, actually, there would be no inspiration to take from them because they weren’t doing well, right?

Markus: Yeah, exactly. That was the thing. So when we looked at all of them, we didn’t really figure out why were they doing so badly in the beginning. But later, we realized that none of them were very much customer-focused. So most of them started off actually as dispatching platforms for taxi companies. So they started off from the angle of how to make it easy for a taxi company manager or a taxi driver. Most of them didn’t take the angle of like, “How do I actually make this great for our customer?”

Andrew: And as a result, what was suffering about it?

Markus: Everything. So the whole platform was pretty much engineered in a way that drivers actually did not need to improve quality. Most of them did not have electronic payments and ratings and anything. They were more just focused on like, “How do we actually bring more customers to the taxi company?”

Andrew: Got it, and it seems like maybe that was the way that they were thinking they could get more taxis onboard, right? Meanwhile, you got taxis, the first taxis how?

Markus: Literally recruited them one by one myself.

Andrew: You just go walk around and talk to taxi drivers?

Markus: Exactly. So I was 19, finishing high school and then I spent 3 months after school every day just going on the streets and hiring drivers one by one.

Andrew: How was it to talk to drivers?

Markus: Sales went really well. So every time I opened the car, 90% of the time, the driver just tells me to get the fuck out. I’m not even kidding. And most of the time they were speaking Russian and my Russian wasn’t that great. So, you know, imagine a 19-year-old guy comes in, tries to sell you to join a platform which he doesn’t even have yet. He’s pretty much just telling you about his idea. So most of the drivers didn’t care and wanted me to get out.

Andrew: And then the ones that did care, you were going to give them what? What was the offer to them?

Markus: In the beginning, I was just signing up their contact details and I told them that, “Hey, I’m currently doing market research and this is going to come out in a few months.”

Andrew: Okay and then so you had their data. Did you get them first and then your brother or was your brother in early on?

Markus: So first in the market research phase, I was primarily doing that alone. So I was just going and recruiting the drivers. Once I had enough, I figured, “Okay this is good enough validation. Let’s actually start to build a product as well.”

Andrew: And that’s when you went to your brother?

Markus: Yeah, and then when we went together to start hiring the first engineers and get the team behind it as well.

Andrew: I heard for money, you went and hit up your parents.

Markus: Exactly.

Andrew: You did?

Markus: Yeah.

Andrew: And they gave you how much money?

Markus: So that was the tricky part. So we validated that there seems to be enough drivers and passengers interested but it’s still the same.

Andrew: Wait, how did you validate the passengers?

Markus: Very easy. We just made a survey on Google Docs, just put it on Facebook, sent it to my school emailing list, and 600 people replied.

Andrew: “Would you use a taxi using an app?” That was the question.

Markus: Yeah, and, “How happy are you with taxis in Tallinn and everything?” So . . . and people were really enthusiastic. Everybody hated it.

Andrew: Right. I was imagining that nobody was really happy about the taxis.

Markus: So, yeah. Then we had enough validation from customers, drivers, and then we went to look for engineers to join and nobody did. So we spent two months just going around agencies trying to like even offer money just, “Hey, like, we’re going to just buy it as like a project basis from you. Just build the first version for us.”

Andrew: And were they willing to do that?

Markus: Finally, one freelancer offered to build it for €5,000.

Andrew: Okay, but at first nobody would build it for money even or you were trying to trying to get them to go with equity?

Markus: They were pretty much asking for like outrageous sums we couldn’t have afforded. And then one freelancer said, “For 5k I can do it.”

Andrew: Because you guys are not developers?

Markus: Well, I mean, I know enough to build, both of us, like basic web services but not in the timespan we needed, not like mobile, four different apps, riders, drivers, Android, iOS, and everything. So we figured we need to get somebody on board to help us move.

Andrew: Okay, and so you needed only $5,000?

Markus: So that’s what the guy said like, “Hey, I’m actually going to build the first prototype for this money,” of course, presuming I needed to do a lot of development and design and everything myself as well. But then I didn’t even have that. So I went to my parents and tell them how, “Hey,” so we were like, “Just lend me this 5,000. That’s what we need for this.” And again, for Estonia, this kind of money in 2014 was actually quite a lot.

Andrew: For teachers anywhere, it’s a lot to give their kids.

Markus: Yeah, so my parents said, “Okay. We put aside this money for your university study. If you spend it all, you’ve got to pay your own rent and everything.” But they finally agreed.

Andrew: So I thought university was free here.

Markus: Yeah, but you’ve still got to cover your rent, food, I mean everything else.

Andrew: And so they put this money aside?

Markus: Yeah.

Andrew: Like good parents?

Markus: Yeah.

Andrew: And so you used it, you paid it, and what happened? How much did it cost and what did you get?

Markus: So we gave him the 5k and he did sort of build the first prototype. The problem was he didn’t really take it that seriously. So the first version was extremely buggy. So after two months, I pretty much took over and still had to do a lot of modifications to actually get it to work. But pretty much without him, though, we couldn’t still have gone it that far.

Andrew: Wow. So still for $5,000 and a lot of work on your part, it’s still not that much to have a first version of this app. This is the first version, the one that I’m looking at right here?

Markus: Exactly.

Andrew: So I’m noticing a few things over here. Number one, the top is mTakso. What’s mTakso?

Markus: So we made a mistake of first of all starting with a very Estonian name. So we just first wanted to make sure it would even work in Estonia. So we named the mTakso which is pretty much short for m-taxi.

Andrew: What’s M? What’s the M?

Markus: Like reference to mobile.

Andrew: Got it. So the M is like mobile and then tax, T-A-X . . . wait, T-A-K-S-O is taxi in Estonian?

Markus: Yeah, yeah, exactly.

Andrew: You guys have 1.3 million people in the country and your own language?

Markus: Exactly.

Andrew: And you’re still going with that as a country? That’s like getting rid of everything else. You’re still sticking with this language of 1.3 million people.

Markus: Yeah.

Andrew: And a large number of you are speaking Russian?

Markus: Yeah, about 25%.

Andrew: Yeah. All right. So you launched it. There’s another thing that I want to point about this. The first version, right at the top, it says, “Hi, I’m looking for cheap taxi.” Even though the big frustration you had was, “I can’t get a taxi,” the big offer that you made people was the lower price. Why?

Markus: Well, overall, we figured that in the beginning, we don’t have very good reliability because the problem is when you start off a marketplace, you don’t have a lot of drivers, you don’t have a lot of customers. So we figured in the beginning, we’re going to go with cheaper prices and then over time, we will actually have great TTIs and arrival times as well.

Andrew: Because you couldn’t offer the thing that you knew people were coming in for?

Markus: Yeah. Well, fewer people care about a couple of things. One of them is the arrival time, one of them is the price, a third is probably quality. We figured, in the beginning, we’re going to go for the price first.

Andrew: By the way, I had a problem getting a Bolt out of the airport. I didn’t put my SIM card in. It was my fault. I got a SIM card. It’s so easy to put the SIM card in. I was exhausted. So I was going to pay €3.70 to get back from the airport to my hotel. I couldn’t do it. I got into a cab. As soon as I sat down, it was €4. Talk about lower price. As soon as I get in, he doesn’t even run the meter yet and it’s still cheaper.

Markus: Well, that’s pretty much why everybody uses this.

Andrew: Is it really? It’s now the big benefit, it’s cheaper.

Markus: Every single country we’re in, we’re usually the [provider 00:17:08] with the best prices.

Andrew: Do you go into countries with Uber?

Markus: Every single one of them we can.

Andrew: And you can beat them on price?

Markus: That’s one of the main arguments.

Andrew: Even though they are losing a ton of money and you’ve made a point about saying, “We’re not going to lose their level of money”?

Markus: Yeah, I think overall the biggest thesis for the whole company was that when we were about a year in and the product was working well in Tallinn, by that time we saw that competition was rising everywhere. Uber raised hundreds of millions and we realized that to be successful in the space long-term, we need to have some angle that why are we going to be the biggest player here in 10 years? And we ran all the numbers. We figured what do customers care about? And realized the number one thing we need to do is to be as cost-efficient as possible as a company. And then what tell us to do is to have the lowest commission for drivers and have the best prices. So to compare with Uber right now, I mean, they have roughly 20% that they need to collect from every fair just to be break-even. For us, the equivalent number is about 7%.

Andrew: Seven percent of the break-even because you’re . . . ?

Markus: Because we’re so much leaner in how we build everything, in marketing, how we run engineering, the whole product organization. Everything is just as lean as we can. And then what that tells us to do is that drivers pay lowest commission. So in most countries, they pay only 15% which is a lot lower than Uber usually charges 25-plus. And then it also allows us to have much better prices for the customers.

Andrew: They pay you 15% of whatever you guys collect?

Markus: Exactly.

Andrew: Got it. Okay, and so is it still 15? It’s not 20?

Markus: So that depends on the country. In most cases, we still have 15.

Andrew: Okay. So you launch it. You start getting people using it. At what point did you realize, this is a hit? It’s growing.

Markus: The first two months actually, we needed to solve huge customer attraction. So getting demand was never a big issue for us. The bigger problem was how do we get drivers onboard? And in the first months, it was really hard because those with taxi companies didn’t want to change their ways. So we pretty quickly realized we need to go for completely new drivers. And that’s when we already started to shift from taxis to the private car drivers. So just anyone who has a car.

Andrew: Got it and by then, was Lyft already doing that? Was Sidecar in the U.S. doing that?

Markus: So for us, that happened actually completely organically. So it . . .

Andrew: It was you on your own realizing, “This is where we need to go”?

Markus: So what we just saw from the data was that we have hundreds of drivers signing up. Most of them weren’t even taxi drivers. So for us, it was like, “Hey, we’re only going to be accepting 20% of drivers who come in. Why don’t you accept the rest?” So it was just actually drivers coming to us and even coming up with the idea.

Andrew: And saying, “We want to do this.”

Markus: Yeah.

Andrew: I’m still curious about why so many people knew to use what you eventually renamed Taxify when . . . I’ll put it up in a moment. First let me tell everyone about my first sponsor. It is, if anyone wants to host a website . . . did you guys host your website on WordPress at first?

Markus: In the very beginning.

Andrew: I thought so. It’s such a quick, easy way to get started. Anyone who’s listening to me who wants to launch a website quickly, even if they have aspirations to build it way bigger, and you should have aspirations to build it as big as possible, and as meaningful as possible, if you go to HostGator, you get super inexpensive web hosting. Were you the type of person who was like pricing web hosting? You were?

Markus: Yeah.

Andrew: Yeah, because why pay more? It’s just simple web hosting. It’s solved. And WordPress is free and if you go to with one click you can install it. WordPress will work for you, it would be easy to go, and yes, HostGator will let you host other platforms too or other software. But one click, you install WordPress, and you’re good to go at a super low price. Already HostGator is cheap but if you use, you will be supporting Mixergy and all my travels, and all my research to interview people all over the world, and you will get an even lower price in the offer than anyone else. By the way, if you hate your hosting company, switch. They’ll take good care of you.

I was just talking to Ahti from Skype. He said the reason it took off was if somebody used Skype, they had to tell their friend, “Go sign up for Skype.” And when they did, the friend wouldn’t want to just talk to the same person who introduced them, they’d go tell other friends, “Go into . . . ” With Taxify, I wonder, what made it grow? How did strangers know, “I need this”?

Markus: We’ve always relied on pretty much one channel and the only channel that works is word of mouth.

Andrew: So people would literally say to somebody else, that’s all you were counting on?

Markus: Exactly. So from the very beginning, the only thing we focused on was how do we make the service so good that we don’t need any marketing?

Andrew: But there was a long time when people didn’t think that they were going to take taxis for everyday stuff, right?

Markus: Sure but I think the culture was always quite different in most of the European countries especially in Eastern Europe where the taxis were historically quite cheap.

Andrew: Really? And so people were more comfortable saying, “I need to get somewhere. I’m going to get a taxi”?

Markus: Exactly. So now when you actually look at Eastern Europe, the taxi prices here are pretty much the same now that they were when we started six years ago. So it’s not like the U.S. where the prices have completely plummeted. What we’ve done here, instead, is rather improve the availability, improve the quality. But the prices are similar.

Andrew: Obviously, futzing around with the battery here. I don’t know like a battery here. I don’t know why it’s not picking up but I’m going to adjust it so that it does. So prices were inexpensive enough that people felt comfortable using it?

Markus: Exactly. So I think the issue was already six years ago that the pricing was pretty much acceptable to most people. The issue was just it wasn’t available enough and it wasn’t reliable enough as a quality service.

Andrew: It’s a good thing that this is a podcast where people are listening but I still want the video of what you’re doing. I don’t understand why this is happening. You know, give me a moment. Let me see if I can just fix that. I don’t want to keep futzing around with it. Okay, it’s recording again. I was telling you how you were doing and you said, as I said before we got started, “I take things pragmatically.” What do you mean by that? Give me an example of something that you’re more pragmatic about than most people.

Markus: When I was already a kid and in school as well, I was always very much into science and math, and then just trying to more focus on the numbers. And when we then got into business, I think I was always taking that approach with me. So most of the time, if somebody comes to me with some emotional, “Blah, blah, blah. You know, this is not working,” so on, then I just try to focus on the foundations and like, “Okay, bring me the data. Like show me exactly what is wrong and, you know, what percent should we change this for this to work, and so on.”

Andrew: Really? Because you don’t freak out?

Markus: I try not to.

Andrew: Well, what do you freak out about? I want to make sure that we don’t communicate, “Here’s a guy who everything works out easily for.”

Markus: I am getting very frustrated when I see something is irrational.

Andrew: Like?

Markus: So if something is not done based on facts, based on what the numbers show, somebody is just making emotional decisions . . .

Andrew: Have people done that with you?

Markus: I think they learn not to but . . .

Andrew: How are you as a boyfriend when you’re like this?

Markus: I think private life, I try to keep a bit different style but I think in business, this is going and it works well.

Andrew: How can you say emotional personally? I feel like I struggle in my relationship with Olivia, my wife, to be more emotional about stuff. And at work, I do think I get more emotional. Like it would bother me if that camera was not working. I was like, “Something stinks. I’m frustrated. I’ve got to fix it.” If my wife has an issue, I often think, “Well, it’s so small. The world is not going to end. It’s not that big a deal.”

Markus: True. I think that’s probably an issue for all entrepreneurs. So when you actually have a successful company of a bigger scale, then pretty much all problems you face in your private life, most of the time, seem like tiny issues, right?

Andrew: Right. Yes.

Markus: So it’s hard to, again, calibrate when you get home from work and not try to somehow make those things small because otherwise people around you just get upset.

Andrew: Yeah, and I do still have a problem with that. I have kids now. People say, “It’s so hard to have kids. You know, you have to change diapers, wake up.” Are you kidding me? A diaper is not that big a deal. I spilled water on a table. I take a napkin. I wipe it up. It’s not that big a deal. But with a company, if you fail, right, if you go out of business, how many people work for you now who could go home with no salary?

Markus: One point two thousand.

Andrew: One point two thousand people directly working for you, right? And that doesn’t include the drivers who are counting on you.

Markus: Exactly. Well, that’s a half a million.

Andrew: Yeah. Half a million, total, including the drivers?

Markus: Yeah, that’s a half-million drivers.

Andrew: Half a million drivers. It’s huge, right? And so change of diaper. Who cares? What’s the biggest thing? So the baby smells? He got diaper rash? You fix diaper rash. Those are the small issues. At what point did you decide to take on funding?

Markus: So well aside from the first 5,000 from my parents . . .

Andrew: Did you pay it back? It was a loan from what I understand.

Markus: It was a loan but I think it paid off for them quite well. So . . .

Andrew: Did you pay back or you converted it into equity?

Markus: It was actually a mix. So . . .

Andrew: Really? So they ended up with equity in the company?

Markus: Yeah.

Andrew: How proud do you feel about that?

Markus: Well, now they’re enjoying their retirements. So I think it was a good call.

Andrew: Did they get to sell some of their shares?

Markus: Yeah.

Andrew: They did? Really, seriously, as a son, even someone who’s not emotional, do you feel like a sense of [inaudible 00:25:46] over it like, “I’ve done good?”

Markus: Well, I think overall, it wasn’t like that they couldn’t take care of themselves. So in that sense . . .

Andrew: You’re not getting Estonian on me? I bought my parents a wire for their iPhone and then I bought them an iPhone and I’m still very proud of that.

Markus: Well, I think overall, again, it depends on like what context you’re coming from. But given the [time 00:26:08] they are over 60 and I mean they have enough money to last them another few hundred years, I think the reality is that they are not going to be changing their lifestyle too much. So I think they are pretty much standing exactly . . .

Andrew: Right, but I’m getting at you. You, emotionally, you don’t feel like, “This feels good. I’ve done good.” No, you feel . . .

Markus: Well, I mean, definitely it’s a positive feeling but I think overall, again because I know they were completely happy without it anyway then it’s not such a drastic change.

Andrew: Do I feel a little bit crazy to you Estonians? I’m getting more excited about every entrepreneur that I’ve talked to and every little thing that they’ve done than they’ve gotten about themselves. All right, so beyond the 5,000 that you got from your parents, when did the next funding come and what made you decide to do it?

Markus: So the next round was about a year in. Once we had a really well-working business in Estonia and then we needed funding to expand to the neighboring countries and cities, so we took on about $70,000 at first.

Andrew: $70,000?

Markus: Yeah.

Andrew: Okay.

Markus: A very small amount but we wanted to get also people who could bring in some experience. So we mainly got it from people who had previously worked in startups in the region as well.

Andrew: For example?

Markus: We had a couple of people coming in from Skype, for example, and they actually brought in a lot of their network as well.

Andrew: Who are the Skype people?

Markus: [Andres Bortin 00:27:20] was one who’s now building a startup and the other one was . . . so I mean, there was actually multiple people. But one of them, for example, was running [inaudible 00:27:31] which is a [inaudible 00:27:33] startup and then the one was . . . now he’s running [inaudible 00:27:38] but yeah. I mean there was a lot people there.

Andrew: Okay, and so what did they bring in that helped you build your business?

Markus: Well, I think, actually looking back, the problem was we were relying a bit too much on outside investors in the beginning in terms of bringing in experience. So I think this a problem most first-time entrepreneurs do which is that they expect people are going to come in and tell them what they should do. In reality, what we found out was that they were all coming with good ideas but they didn’t actually get the basics because they haven’t been living and breathing it for a year. So I actually learned over six months that, hey, okay. All of these are good guys. They have a lot of a lot of experience but I’ve still got to make my own decisions.

So after that I was pretty much shifting my focus more not to actually look at like extra value, added value investors bring, but just like, “What are the terms you’re going to give me and do you give me enough independence to execute?” So luckily, I made that sort of learning or mistake very quickly with friendly investors.

Andrew: Okay, and so then when you started going to different countries, what was different?

Markus: There was a lot of learnings with it. I think the biggest thing for us overall was that we got it wrong with, how do you get product market fit? So we looked at it as most companies do which is like you, first of all, you pick a market and then you start to iterate on the product until it works. So for us, we took that first neighboring markets like Finland, Latvia, Lithuania. And then we tried to start to iterate the product and the operations to make it work there. What we actually then understood about a year later was that actually, the product we had was completely fine. The issue was with the market itself. So instead of then what we did was that we kept the product the same but we just started to look around, “Okay, which market in the world can we deploy this to?”

Andrew: Which market wants our product as it is?

Markus: Exactly.

Andrew: What were you iterating on your product before you realized that?

Markus: So we were thinking, okay, do we work with taxi companies? Do we work with taxi drivers? Do we work with private cab drivers? What exact features are we going to build like, you know, what is missing in this market? It might be pre-bookings or it might be real-time orders or it might be payment methods or . . . I mean there’s a very like big variety of things that you could potentially say are all showstoppers to succeed in the market.

But after a while, I realized that actually all the basic foundations are there. It is just the issue that these markets are pretty much being run by sort of like taxi cartels who don’t really actually care about customer experience. So we’re just wasting time trying to get them on board. Let’s instead keep the product as it is and let’s find easier markets. And that’s when we flipped the whole approach around and we just did a massive research in about 50 countries in the world.

Andrew: What are you looking for or what were you looking for back then when you . . . it’s funny because you just said 50 markets. You’re in, I think, exactly or just about 50 markets. No, it’s not 50 markets right now.

Markus: We’re now in over 30 countries and a couple of hundred cities.

Andrew: Yeah, yeah, I was misreading it. So what were the criteria that you were looking for?

Markus: Well, for us, the number one thing was always how do we get supply and supply of drivers? So we just did a big list of all potential cities and started to look how many drivers does each city have?

Andrew: How do you identify how many drivers or potential drivers each city has?

Markus: Well, two things. One was that, in most cases, there was some public registry available of how many licenses there are.

Andrew: You mean how many taxi drivers there are?

Markus: Exactly.

Andrew: Even though at the time when you were already shifting away from taxis?

Markus: Exactly, but we still figured that it’s going to be a good indication of, “Do the drivers feel like there’s no competition and they don’t care?” Or is it actually a really like properly working market where the drivers feel the competition and they are, you know, eager to try out new products . . . ?

Andrew: So the more drivers there are per a thousand people, the better? What else were you looking for?

Markus: And then the second thing was exactly was potential drivers. So pretty much, sure, one thing is you might have a small number of drivers today but maybe there is a big potential. So then we ran a lot of Facebook ads in these cities is to see actually how much interest there is for new drivers.

Andrew: Ahead of time . . .

Markus: Exactly.

Andrew: . . . do you want to drive? And then you were looking to see how many you could convert? Okay.

Markus: Exactly and then once we had that data, we saw that, “Hey, there is massive driver interest in some of these markets and let’s actually focus on those instead of wasting time with these taxi companies who actually don’t care at all.”

Andrew: Right, and by then you already called the company Taxify and the idea was at first Taxify as in, “Taxis, we’re going to like digitize you, modernize you.

Markus: And also take private hires and pretty much convert anybody who has a car into a taxi.

Andrew: Eventually, that’s what it became?

Markus: Yeah.

Andrew: I talked to a taxi driver on the way over here. He said, “I know what Taxify means but I don’t want to tell you.” I go, “Why not? Just tell me.” He goes, “It’s a little . . . ” “Well,” I said, “Tell me.” He says, “It’s taxi F U. They were going to come and . . . ” Because he was a taxi driver who also at some point drove for you guys. At some point, you guys didn’t get combative with them but you said, “We don’t need them anymore. This is not us and if we’re taking away market share from them, they’re not moving anyway.”

Markus: Exactly. So I think for us the bottom line was we always look at it from a customer point of view. So we’re like, “Okay, we’re trying to work with taxis but if you guys don’t want to adapt, if you don’t want to improve your pricing, improve the quality, change any of the ways you operate, then we’ve just got to actually go with people and new drivers who are.” So that was pretty much a natural position for us.

Andrew: I’m looking at the Bolt app right now. Yes, I actually really do love it. I’m trying to see, can I . . . let’s see, if I want to go here, can I actually get a taxi still? No. No, more taxis here in the app. And still you’re nodding, right? No taxis.

Markus: Well, the specific thing in Estonia is that actually now all drivers by law are taxis. What happened instead was actually that they just lowered the taxi regulation enough that pretty much anyone who wants to drive is a taxi now. So there is not even a special thing as a taxi category anymore for us.

Andrew: But I’m not getting like a taxi, taxi in here. It’s not separated. Can I actually end up with a taxi that comes if I hit this?

Markus: Yeah.

Andrew: Really?

Markus: Yeah.

Andrew: So if I hit Bolt regular or Bolt basic, I could potentially end up with a taxi?

Markus: Exactly because from like a customer service point of view, the quality is the same, the pricing is the same. You could pay through the app. So there is no difference.

Andrew: I noticed that there were taxis with “Bolt” plastered on the side of them. That’s part of your ad campaign?

Markus: So it’s actually something we do to just create a lot more brand awareness in the city so people will actually see how many drivers we have because we have thousands of them in most of the cases.

Andrew: If anything, it feels like it understates it. You guys come like in three minutes. Within four minutes I could get somebody right here.

Markus: Exactly.

Andrew: I would have thought that would have been a bigger reason for people to switch. More than price, how fast can you get a taxi?

Markus: Well, that’s the problem with marketplaces. So when you start off, you don’t have much liquidity. You don’t have much suppliers so the availability is bad.

Andrew: So you can’t even offer that.

Markus: So you need to have some sort of other angle how to keep [inaudible 00:34:25]. Once you’re big, then, of course, you have really great arrival times. You don’t need to worry about it.

Andrew: So you’re allowing both onto your platform. Did you at some point start buying or making cars available to drivers?

Markus: So we still don’t own any cars but what we do is we work with different financing institutions and different car resellers and so on to get as much cars onto the platform as possible. So we connect them with drivers.

Andrew: That’s what the guy was telling me. Every time I get into a car with a guy from Bolt, I say, “I’m going to talk to the founder. What can you tell me?” I was really, to be honest with you, I was hoping that they would say, “What an asshole,” so then I could get into, “All right, now you’re going to be open with me.” So far so good. There was that one guy with taxi F U but other than that . . .

Markus: Well, I think there’s probably a . . . still some taxi companies in Europe were unhappy that we came and created more competition for them.

Andrew: There was a little bit. There was a sense of, “Well, taxis, yes, they’re getting 85% of the money from you but the money is less than a taxi.”

Markus: Well, actually when you look at it in the pricing in most of the cases is actually quite similar to what it was before. But what has changed is that the utilization of drivers is so much bigger. So when you look back five, six years, most of the taxis were wasting their time sitting in front of hotels most of the day, doing like two trips a day. Now, they can do two trips an hour. So even though they get less per . . .

Andrew: So even though they get less per drive, they are getting more per . . .

Markus: Yeah, they are getting much more utilization.

Andrew: All right. I wanted to know what happened when Uber came in. So you guys were still in your own little island, your own little world. At what point did it become a competition all over the world?

Markus: I think it started for us probably in 2015 with fierce competition with them but actually the thing was we were always in a competitive environment. So when we started off in Tallinn, at the same time there was three other similar startups who all had the same idea.

Andrew: Taxi apps in Tallinn, the capital of Estonia?

Markus: Exactly. So the problem was that pretty much we had to outcompete them the first two years. Then we just emerged as, “Okay, we won here. We’re probably going to do fine in the Baltics.” And then Uber came in as well. So it was never like a time when we were like, “Okay, this is easy. It’s only us versus the world.” So when Uber came in, that was the time when we really need to think hard, “What is this company about? How do we actually succeed in 10 years when they have 100 times more money than us?”

Andrew: What was your answer to that?

Markus: And it was the same thing, power of frugal. So how do we make sure we’re the most cost-efficient company in the whole space so that nobody else can undercut us?

Andrew: What’s an example of some frugality that would shock me but would make sense?

Markus: Well, one of the things was for example how we launched new markets in 2015. So I described how we were doing the research about different markets. The case was how we, for example, launched in South Africa, in the beginning, was that we never even went there. So we just put up an ad, “Hey, we’re starting to hire.” We hired 1 guy who was 21, just finishing in the university. We hired him over Skype interviews. We never met the guy. We never shipped him here. We just sent him, “Hey, here’s a presentation of how you launch the market. Here’s some money. Get an office and we want you to launch in a month.” Uber, at the time, had more than a hundred people in South Africa doing the same thing. And even today when we look, for example, in most of the country operations, we just manage to recruit people who are so entrepreneurial, who are so frugal that we oftentimes have 3, 5, 10 times less people in every city we operate in while we’re the bigger operator now.

Andrew: I’m getting it. I’m wondering why. Why were you able to compete when they were doing that? I remember when Uber came to DC. I guess I was an influencer or something. So they had an event. No, they came to one of my events and they offered everyone at the event $10 worth of . . . maybe $20 worth of Uber credit. And so we tried it and then we got hooked because it’s easier than getting a cab. How do you compete with money like that? How do you with just some dude with a PowerPoint and a need to get an office and a fresh college degree compete with them and their army of people who can . . . ?

Markus: So I think there was two things. One was that overall we had this big cost advantage of how much people we needed to run every single city. And while they were spending money marketing, we decided not to do it. And what all of that allowed us to do and still allows us to do is that we have, by far, the lowest commissions and also the lowest pricing per customer. So what’s the interesting bit here is that then we don’t actually need to speed money in marketing or anything else because people come to us organically. So when you look in London, for example, Uber used to pay a thousand bucks per driver, just to recruit one driver. We are now getting London drivers in thousands without paying them anything. They just come to us because they actually like there’s an alternative, there’s a company that pays them more, and that’s it.

Andrew: Do you pay them more?

Markus: Yeah. So the approach is . . .

Andrew: You charge less, but give them a bigger percent so you pay them more?

Markus: Exactly.

Andrew: Okay.

Markus: So the logic is you pretty much have two ways how to go.

Andrew: I love this stuff.

Markus: You can either have high commissions, make a lot of revenue, but then the drivers aren’t happy and then you need to invest a lot more into marketing or you can do what we’re doing, which is that you have lower commission, sure you make less revenue as well but you don’t need to spend money in marketing because the drivers are already happy and they come to you organically. So it’s a very different strategy of how do you actually run the business.

Andrew: I’m loading up the Uber app. Let’s suppose that I want to go back to my hotel from right here where to . . . let’s see if I even know where I am. Is this weird that I’m about to do this, put in my hotel? Let’s see how much it would cost to take . . . I picked the worst hotel to be in. Wait a minute. You guys do beat them by a few euro cents.

Markus: But I think it’s surging for us.

Andrew: You guys are actually still surging. They don’t show it anymore.

Markus: Yeah. Well, I mean we want to be more transparent than this.

Andrew: So you guys are 4.1 and their cheapest is 4.75. Wow, so you did beat them.

Markus: And that’s why we’re surging. And the [EK 00:40:16] for them was 20 minutes.

Andrew: Oh, let me see that. Let me see that actually. I like that you actually . . . you were looking over my shoulder and you saw it. Twelve minutes.

Markus: Now it’s improved.

Andrew: Twelve minutes. Maybe it was 20 minutes. Interesting. Did you freak out about them coming into your market?

Markus: Well, again, in the beginning, we were scared but then when we started to think, “What’s going to be our strategy?” And we found out that, “Okay, let’s try to build this as frugal as possible.” So we are the most efficient company nobody is going to be able to beat. And then when we committed to that and we started to compete with them, we saw they weren’t actually gaining share in Tallinn. So, sure, they were investing but we just saw our strategy of paying drivers more and having lower prices was paying off. And now, four years later, it’s clear that this is actually the way to go.

Andrew: All right. I’ve got notes. I want to come back and I want to ask you about is part of the reason why you’re cheaper is that you’re copying, right? They do food, you do food. Not just them but you see other people do something, you do it. I’m going to come back to that in a second and then also what happened where you went from them coming after you to now you’re chasing them? We talked about before the interview started. We’re going to talk about that in a moment. First, I want to tell everyone that . . . what’s the second sponsor of the day? The second sponsor is the company called ActiveCampaign. If you’re doing any kind of email . . . do you guys . . . you guys must do email marketing.

Markus: Of course.

Andrew: You built your own software for it?

Markus: Now we do.

Andrew: But in the beginning, what did you use? Do you remember?

Markus: We used, I think, Intercom.

Andrew: Really? For email marketing. Interesting. That’s pretty clever. All right. If you were with ActiveCampaign, I’m going to tell you what’s nice about ActiveCampaign. ActiveCampaign will allow you to have one account and then tag people based on where they are on your site and what they are doing. So, for example, if I was looking at your South Africa website a lot, you would just tag me when I register with my email address asking to be a driver with South Africa and I’ve got this tag. And from then on, you could just message me via email, “South Africa. Interested in driving.” If I’m coming to your main site, which is what?, that’s the Estonian what? No,, is that the main one?

Markus: In Europe, yeah.

Andrew: In Europe, right. There is no main one anymore. Everything is international. So in Europe. If I was looking at videos about how to become a driver, reading articles about how to become a driver, and then I gave my email address, you would know, Andrew cares about being a driver, “We’ve got to now start messaging him based on that.” And then once I was a driver, you would automatically know, “Stop telling him to be a driver. Tell him, here’s how to succeed as a driver.” You’re nodding like you’ve got this. Andrew, this is ABCs. It is ABCs.

Here’s the problem, it’s too hard with most software to do this stuff. ActiveCampaign gives you all that feature. Users don’t have to do anything. You automatically manage every part of their experience and they make it so easy anyone can use it. It’s called ActiveCampaign. I want you guys to go check it out at, All right, you were starting to answer that one question, copying.

Markus: Controversial.

Andrew: That yeah.

Markus: I think actually in many ways, it’s clear that Uber and others are starting to copy us in some things.

Andrew: How?

Markus: So we were actually the first company in the world to launch scooter sharing on the same platform as ride-hailing. So I think now in the U.S., for example, you see Lyft and Uber has scooters on the platform too. We actually did before they did. So I think there’s some things where we were first. I think with food, it’s clear that it wasn’t by far the first company that Uber actually launched food delivery. There was companies in China already like Grab who were doing that years before. So I think it’s clear in the space that . . .

Andrew: Grab was doing it after.

Markus: Well, I mean Gojek, for example, etc. So what we see is that there was actually, it’s pretty clear these things are so closely tied that eventually, I think, all the ridesharing companies are going to do probably scooters, probably food delivery as well. The question is how quickly can they get there and where do you start off?

Andrew: And you’re doing food in the same app?

Markus: Not in the same app. We have . . .

Andrew: [inaudible 00:43:56] sell. So I was like using your app like a power user now because I’ve got to get around. I didn’t notice that, that was in there. What’s the advantage of putting scooter in the same app as this?

Markus: We’re still testing this out. So it might be eventually there’s going to be a separate app for the bikes and scooters but for now, we want to see how the customers use it actually.

Andrew: You mentioned or maybe we didn’t mention DiDi. DiDi is an investor. Why didn’t DiDi do so well? Why did they beat Uber and then they became the investor to go to?

Markus: Overall, when we look at any of the ridesharing bigger battles around the world, whether it’s in the U.S. or China or India or South-East Asia, then every single time, the local player has pretty much money as Uber, the local players have won. So the only times where actually they have not won is when they are far outcompeted in capital, so they have 5 or 10 times less money to spend. And the thing . . .

Andrew: Wait, give that to me again. You’re saying that Uber wins whenever they have more money?

Markus: Sure.

Andrew: Except with you, you’re saying that they didn’t.

Markus: Yeah. Well, I mean, in our case, they are losing even when they have more money.

Andrew: So you’re saying in your case their money didn’t help them but anywhere else, it’s all about money. Whoever has the most money is going to win in your case?

Markus: Well, I’d say yes, as usual, in business, capital is one of the, of course, the major variables. So if you can just outspend your competitor on marketing and distance and everything, that’s going to have a big impact. Of course, on top of that, you need to look at how well they deploy that money. I think in our case the advantage has been that sure, we always have less money than they and others but we’ve been just so frugal and efficient in how we spend it. So them having larger budget has not really mattered. I think both of us are growing well in Europe, both of us are growing well in Africa but we’re gaining share because just fundamentally, we have a much lower cost base.

Andrew: Okay, so back to DiDi, your investor, why are they doing so well?

Markus: I think in their case, they had two things on their side, one was that for the first time, actually, they had pretty much as much money to allocate to the market as Uber did. So they weren’t outcompeted that they were going against much bigger budgets. That was a crucial part. The other part was that it was a local company. So China is a very different market. And if you’re there, you just understand the local nuances, marketing, payments, everything a lot better. So I think that gave them a bigger efficiency on how they were using that budget as well.

Andrew: Okay, got it and then you told me earlier that at some point you realized, “I don’t need the investor who’s got the knowledge and connections and everything else.” Why was DiDi a good investor for you? Yes, they gave you better terms, right?

Markus: Well, I think DiDi is one of the few exceptions to that in a sense that in their case, we really saw that they were biggest ride-hailing company in the world and they were operating at the scale a hundred times ours at the time. So they actually could show us a lot of what they were doing in China and we hoped to learn from that and vice-versa we could show them how we’re doing in Europe and Africa which are very different markets. So we hoped there is going to be a lot to gain from them. And I think in the first 6 to 12 months both sides did. But what we realized actually quite quickly afterwards was that still, the markets are so distinct. A lot of the things that work in China don’t work in Africa, don’t work in Europe. So I actually . . .

Andrew: Like what?

Markus: Well, overall, for example, safety, in Africa, it’s a major issue, how do drivers get access to vehicles is a major problem. Those are not really day-to-day biggest like top-of-mind things you need to solve in Europe or China most of the time most of the time, for example.

Andrew: All right. Okay. And so it turns out that there wasn’t much collaboration that was necessary?

Markus: Yeah, I mean, we still have a great partnership with them. I just think both sides, in the beginning, were pretty much expecting a bit more that can be shared and gained but now everybody sees that it’s a very distinctive business depending on the market you’re in.

Andrew: Speaking of, one of the things that blew me away, and I’m running marathons on every continent this year and so I’ve gone to experience different apps that I only used to see online. One of them is Grab. Of all of the country’s apps that I’ve seen . . . why did Grab make you smile as I said that? What is that you think about that?

Markus: I think they’re one of the first, if not the first, ride-hailing app that’s now successfully expanding further than transportation. So they started off similarly in rideshare, then doing food but now they’ve even gone way further than that, going into just overall powering local e-commerce, merchant payments, and everything.

Andrew: I went to buy a sandwich at the store in my building that I was working out of and they would accept credit cards or Grab. How are they stuffing so much into their app? What is it about that market that’s allowing them to stuff more in the app and not confuse people but actually make it more useful?

Markus: Well, the design part, of course, is always a complexity of if you start to bundle too many services into one, you need to be extremely creative and very just strict on how do you actually design it so people can use it? But I think on the background, the business reasoning behind it is quite clear which is that in, for example, Southeast Asia or Africa, if you’re running a ridesharing platform which is the dominant one and you have tens of millions of customers [or 00:48:58] interact with you on a daily basis, you are already the biggest e-commerce company in most of those regions. And next to that, you pretty much have a lot of whitespace. So there’s not a lot a ton of competition in Southeast Asia and many of those fields. So you can pretty much leverage all of the technology and user base you have to actually go into those next areas of business as well.

Andrew: And still they could say, “If you want to pay us, use Grab bucks,” or whatever they call it, “Go download another app.” But there’s not that, “Go download another app.” It has to be in here. Why is that?

Markus: I think that actually is something that still needs to be tested out. I am not extremely bullish that you need to keep everything in one app. I think that it still remains to be seen that which services does it make sense to bundle? Which ones does it make sense to break out? And for now what we’re doing as well in our case, we have rideshare and scooters in one and we have food in the second app. But again, we might bundle those altogether. We might split those up. We are always just looking at the data, looking at how customers use it.

Andrew: So before we started you said, “We are chasing Uber,” essentially. These are my words but that’s essentially what you’re saying. At what point did you decide, “You know what, if there’s Uber is a monopoly in a country, we’ve got to go there”?

Markus: Well, I’d say that in terms of the evolution of the company, the first thing was when they were coming in and we decided we’re going to focus on efficiency and we’re going to be the most frugal player in the space and let’s see how this plays out. Can we defend these markets and still keep growing? And we saw we were doing even much better than what we expected. So we didn’t really have any bigger adverse impact from them entering at all.

So we thought, okay, let’s actually now go on the offensive, so adding more markets like this where Uber is a monopoly. You see, drivers are protesting, customers are unhappy. Can we actually go in and replicate that success? And do actually people care if you come in and you’re 10%, 15% cheaper and drivers make more? And then we just made a list of all the potential markets in Europe, Africa, and then Australia and Mexico, for example, appeared as really similar markets as well. And then we just started to expand to those one by one.

Andrew: And got it. And are you guys profitable on a per-ride basis?

Markus: So on a group level, we are now almost to break-even.

Andrew: As a company?

Markus: As a company.

Andrew: Bolt is nearing profitability?

Markus: Exactly.

Andrew: Wow. Is that the first ride-sharing company that’s profitable? If, would it be?

Markus: Well, we could be just again when we’re investing in new products like food and scooters and that, of course, is going to have an impact on the [group 00:51:28] results as well.

Andrew: But ridesharing is now profitable on its own?

Markus: On its own, it’s break-even.

Andrew: Break-even?

Markus: Yeah.

Andrew: And then scooters are an investment?

Markus: Scooters is . . . that’s something we are now planning to deploy hundreds of millions into over the next five years.

Andrew: Got it and then food?

Markus: Food is a completely new one. So that we just launched a couple of weeks ago and we’re very bullish that this is going to be of similar size as the scooter business at least.

Andrew: Now, here’s the phrase that I saw from your TechCrunch article, “Right now, investors appreciate that there’s a ride-hailing company that is not out there burning a billion dollars a year,” and that’s an understatement, right?

Markus: It is.

Andrew: Right now, Bolt is doing more than $1 billion in annual rides which is more than 5 times the money we have raised. No one comes close that and it’s because you’re the cheapest, I mean, the most frugal internally with your money.

Markus: Exactly.

Andrew: What’s the future beyond this?

Markus: Well, when we look at just consumer and personal transportation spending in Europe alone, then that’s about €1 trillion per year. So it’s a pretty size of the market. So out of that, if we manage to get a piece over the next years, is in tens of billions of euros, then that’s already big enough to build a company that’s worth with a market cap of over a hundred billion.

Andrew: Hundred billion just by factoring . . . ?

Markus: So in euro . . . yeah, just purely when we look at how much is the amount of rides is going to be and what kind of future profit margin we expect on that, and so on. So there is room to build literally like a plus $100 billion company just in transportation in Europe and Africa alone.

Andrew: Why is Lyft not doing better?

Markus: I think the problem is that when you start to compare one to one, what do customers care about? Is it price? Is it availability in terms of how fast you get a car? Is it the quality, the brand, and so on? I think ultimately what it comes down to is that it’s an e-commerce business and you need to just actually have very competitive pricing. So we could have also done a different route. We could have had similarly high commissions, taken much more revenue, and then we’d have tried to invest that money into marketing and creating a very great brand. But instead what we decided to do was not to do those spending and actually offer the cheapest prices. And I think Lyft is the other way. So I think they have been much more focused on building a very positive brand in the U.S. and it’s just a different strategy.

Andrew: You said, “Everyone expects.” I’ve seen you say this several times in articles that I’ve read about you, “Everyone expected this market to be a monopoly business.” It makes sense that it would be a monopoly business. One company would drive the other one out of business and it’s too hard to create a competitor and that’s it. Why didn’t things turn out that way?

Markus: Again, the interesting bit was probably six years ago I was one of the few people in the world who thought this is going to be the case.

Andrew: You thought that it was going to be a monopoly or not?

Markus: No, that it’s going to be at least a duopoly in every single city. And I talked with pretty much every investor in the space we’ve talked to and nobody believed me. So that’s why everybody was pouring billions of dollars into Uber because they expected it’s going to be the next Uber or Facebook. But luckily, I think looking at my interest in science, math, and just being pragmatic, I didn’t look at it in an emotional way that, “Hey, they raised billions of dollars. Historically this is what has happened.” But I started to think from the ground up like, “Hey, what is actually going to happen in this space?”

So we had enough data from Tallinn to start to plot out that when you add more drivers in a city, what does that actually do to the customer experience? So how does that change your arrival time and so on? And then I imagined the scenario where what if Uber has a hundred percent monopoly let’s say in Tallinn or any city in Europe? And how hard would it be for us to come in? And every time I modeled it out, I saw that, hey, but there actually is an opening. So if you manage to always have the lowest costs then, by definition, you will always have a way to enter and actually create the second payer. So pretty much when we just run the numbers a hundred times, we saw this is going to be the case.

Andrew: But wouldn’t you have expected that you come into a new market, a company that has a lot of money would lower the prices by losing money for a while and then force you out because you can’t lose more money than them, and then they can raise prices afterwards?

Markus: Sure, but the question is how much money are they losing versus us? So if you take the example of New York, Uber is doing now billions and billions of euros’ worth of rides there every year. If they drop the commission rate they take there or they do this, now it’s worth like 10%, 20%, that’s going to cost them hundreds of millions of euros or dollars per year which they cannot afford while for us to enter a market like that costs 2 orders of magnitude less. So pretty much, if you think about the leverage like you can spend 1 million and you can make the big guy lose hundreds of millions. So nobody wants . . . that’s an unstable configuration.

Andrew: So will you go into the U.S.?

Markus: Well, U.S. in that sense already has Lyft who is pretty much doing this job, that they are this market-balancer. They are already this duopoly who’s making Uber, you know, not get too greedy but that thing was missing in Europe. So nobody was actually putting up a big enough challenge.

Andrew: So as long as there’s one person in there keeping prices reasonable, then you guys have no space? Once . . .

Markus: So, exactly. Our focus is to be the top one or top two player in every single market we’re in.

Andrew: How do you end up in Iraq?

Markus: Similarly, there was nobody else there offering a good enough service.

Andrew: And you guys just decided, “We’re going to go into Iraq”?

Markus: We had inbound interest actually as in many of these expansion cases. So actually companies, drivers, were reaching out to us, “Hey, bring your service here.”

Andrew: Individual drivers saying, “Come here and we’ll do this”?

Markus: Yeah.

Andrew: And so you sent who to run it?

Markus: We don’t actually have any team here. So we fully run it remotely.

Andrew: Really? Though right now you guys are hiring, you and I talked before we got started about how maybe there’s someone who is listening to us who might end up deciding, “You know what? I’ve got to work with Bolt. I like the way . . . ” What kind of autonomy do you give people that a founder would end up working with you? What’s the job do?

Markus: We actually do have a lot of founders in the company already and I think the thing is we’re on one hand a tech company. So, of course, fundamentally, there’s a lot of challenging problems to solve in terms of pricing, maps, and so on. But we’re also A very much an operation company. So I think a good parallel is, for example, Amazon which has a big logistics operation and tech and then the two combined. So, in our case, we have 30 country teams and each of the teams is locally responsible for finding the best fleets, finding the drivers, couriers, managing the scooters, whatever else. And they are actually running it as a CEO locally. So they are in charge of a lot of local decisions. So actually finding an entrepreneur to run the market is pretty much the best type of profile you can get.

Andrew: Like the 21-year-old in South Africa.

Markus: Yeah, or a 19-year-old in Estonia.

Andrew: Which was you when you got started. I want to just ask you this other question here. I was hunting down your past. I couldn’t find anything about you like from your childhood. It’s interesting now because when you interview an entrepreneur you can go back and see what they posted on Facebook and other places. The one thing that I did as I was snooping around was I went to Ahrefs, they are a research partner of ours, and I saw that one of the big pages on your site is That stood out for me and the other one is how many Nigerian search words you guys dominate. You’re smiling as I say. Let’s talk about Why is that so big with you guys? What is it?

Markus: It’s the same thing I touched upon earlier which was that finding demand for us has always been less of an issue because we’re so focused on the customer experience as a company that pretty much customers come to us organically already. So the main thing we need to most of the focus on is how do we get drivers? So how do we actually attract fleets and drivers to the platform to make sure we always have the best availability, quality, and so on?

Andrew: And if you could get a fleet, you get a lot of drivers all at once and a fleet is someone who maybe owns a black car . . . ?

Markus: It might be anyone from a small entrepreneur who has three cars to a big fleet owner who has a thousand cars.

Andrew: There’s an entrepreneur who has three cars?

Markus: A lot of them.

Andrew: Why would they have three cars? Three like black cars type of operation or . . . ?

Markus: Well, in most cases you can have three Toyota Priuses involved.

Andrew: So someone would have three Toyota Priuses and then who drives for them?

Markus: They just rent them out to drivers. I mean, they find their own drivers, rent the cars, manage everything. So . . .

Andrew: And they decide like which of these ridesharing companies they want to send their people to . . .

Markus: Exactly.

Andrew: . . . and then they pay their people hourly and then they make money from you? How does it work?

Markus: Well, we’re a [car 00:59:52] friendly country. So there’s pretty much every model you can imagine, somebody is doing it.

Andrew: Okay, all right and then why Nigeria? Why is that like shooting up?

Markus: Well, Nigeria, well, is the fastest-growing population there, is. So you have more than 200 million people in the country.

Andrew: Nigeria is one of the fastest-growing?

Markus: Exactly.

Andrew: Okay.

Markus: So there is just massive population growth, one of the fastest-growing urbanization rates in the world, and at the same time, that is coupled with not a very good functioning public transport system. Not a lot of people have cars. So we’re providing a vital service there.

Andrew: And I love this Ahrefs. Do you use Ahrefs at all? No, because you’re not a content . . . maybe your content people are using it to figure out like what kind of content do we create?

Markus: Yeah.

Andrew: Let me close that with this, this is one of the big understandings I hope to leave Estonia with, why you? Why so many Estonians trying to succeed with entrepreneurship? So many people around the world. Why do you think that you were able to do it?

Markus: I think that’s a couple of billion-dollar question but I have a few ideas.

Andrew: Literally, yeah.

Markus: I think one of those is that we’re coming off from a quite different context. So nobody in Estonia could actually even make a company pretty much 25 years ago when we got free from Soviet Union. So I think a lot of people, immediately when that freedom arrived, were just pretty much . . . there was all this potential built up and now that has been pretty much released. So we have a big generation of people who are now just eager to start companies. Then that is coupled with that exactly colliding with the digital age.

Andrew: This happened to everyone. I don’t mean to interrupt you. Keep going.

Markus: No, no but I think the difference is that in most, if you take for example whatever, Germany, Italy, and so on, people could have always done companies in different industries. So whether it was any traditional whatever restaurant, or manufacturing, or whatnot, you could do it there. But I think Estonia, it collided exactly with the time when internet was starting to boom as well. So I think most people, when they were actually first time getting a chance to actually found a company, a lot of them also saw it was a digital age right then. So I think that’s one of the things behind it but, of course, there is a lot of . . .

Andrew: Again, this happens, again, in the U.S., not just Silicon Valley but every part of the U.S., this need for technology, this group of people, the inspiration. What is it about your personality that . . . ? What is it about the guy who went to all the hackathons, the guy who went and talked to drivers and literally said, “Fuck you,” and pushed you away, they led you to this? What is it?

Markus: I guess one of the things, again, is related to the background of where we come from that, again, in Estonia, everybody pretty much started off poor. So it’s not like we had a lot of like different layers of society but pretty much everybody started off poor and everybody already has a big work ethic due to that. And I think this is already one of the things that’s pretty much a big foundation of any successful entrepreneur, you need to be having a big work ethic. So I think that’s probably one of the big reasons in Estonia that, at least for now, is keeping people up as well that . . .

Andrew: Poor work ethic. The other thing I notice is I was hunting for resentment in the guests who I interviewed today. There was no resentment. There wasn’t this, “I was poor. I had to fight my way out of it.” No. You didn’t sense that, did you, in your life? No.

Markus: No.

Andrew: It’s, “If I end up where I was,” I was talking to one entrepreneur, he was a farmer, he says, “If I go back to farming, it’s fine.” He said, actually privately he said to me, “Andrew, right at the end of this, I think, I am going to go back to the farm.” Right, you recognize that. So it’s not the hunger to get out of this tough situation. It’s just, “I’ve got to create. This is my canvas. I’m going to create.”

Markus: And coupled with the thing that Estonia is such a small market. So pretty much everything you build, you’ve got to build internationally. You can’t really . . .

Andrew: So you’re forced to go international but you get to test here?

Markus: Exactly. So no . . .

Andrew: So you got to test the car riding place without a ton of competitors because why would Uber come to 1.3 million people and try to compete here?

Markus: With its own language.

Andrew: With its own freaking language. Well, got it. So you get your small place to test on but you’re forced to get out of your mama’s house.

Markus: Yeah, because you can’t build a big business only in Estonia.

Andrew: Okay. All right. I’ve taken a lot from this. The biggest thing is that hustle and the other one is the calm. It’s okay if things don’t work out. We’re not freaking out about stuff.

Markus: Yeah, and I think the digital focus for both the government, the schools, everything has always been that it’s really getting to tech.

Andrew: Were you one of the people who learned to code in school?

Markus: Yeah, I actually did have coding lessons in school as well.

Andrew: You did? And not from first grade though because you were older?

Markus: No. Yeah, I had it from like 10.

Andrew: That’s why when I said, “You’re not a developer,” you shot back at me and you said, “Yes, of course.” You learned English there too?

Markus: Of course. I mean that’s basic in Estonia. It’s such a small country. You need to.

Andrew: Yeah. This has been such a . . . you’re my last interview of this whole trip. This has been such an interesting, eye-opening experience to come to Estonia. I would not be here if not for Ragnar Sass. The freaking guy came to San Francisco. Sat me down. He had juice. I had coffee. He talked so loudly about Estonia that he’s got to be the loudest Estonian in the country.

Markus: Yeah, he is.

Andrew: Yeah, the person behind the bar was thinking, “Maybe I go to this freaking Estonia. I think I should. I think I should get out of here.” All right. For anyone who wants to go check you guys out, number one go to a country that has Bolt. Number two, get Bolt out of your pocket. Number three, feel free to compare their prices to the competition. Number four, go to, what’s the website? Your website for careers is like or something or . . . ?

Markus: Pretty much, and you’ll find it there.

Andrew: Yeah, you’ll find it. It was one of the big sites when I was hunting around. All right, I’m so appreciative. I still have not ridden a scooter. My plan is to get a scooter tomorrow, take my camera, that camera over there that almost died, and just go film the city, right, because there’s so much to film that I don’t want to walk around. I don’t want to be in a car.

Markus: Try it out.

Andrew: Sorry?

Markus: Try it out.

Andrew: Yeah, I will of course. Thank you so much for being in here and thank you so much for being a part of this, everyone who’s listening and I want to especially show my appreciation to these two sponsors who made this interview happen. Really, HostGator, I came to them. I said, “I want to travel the world and get to know entrepreneurs everywhere.” They said, “Yeah, of course, we’ll do it.” I said the same thing to ActiveCampaign. They said, “You’re talking to entrepreneurs?” I said, “Yes.” They said, “Go do it.” And so I’ve gotten to do it to bring them to you. Thank you all for being a part of this. Bye, everyone.

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