Matthew: Hi, this is Matthew Wise at FounderLY. We empower entrepreneurs to have a voice and share their story with the world, enabling others to learn about building products and starting companies. It’s with great pleasure that I’m here today with Shelby Thomas Clark. Shelby is the founder of RelayRides. RelayRides is the world’s first peer-to-peer car sharing marketplace. With that said, Shelby, we’d love for you to give our audience a brief bio.
Shelby: Sure. As Matthew said in the intro, I’m Shelby Clark. I grew up in Denver, Colorado. After college, I started my career in management consulting, and it took me about one day to realize I really didn’t like helping big companies get bigger. Eventually, I got the startup bug and got involved in a number of startups. Most notably, I got involved in Kiva.org and it’s really like this. Kiva is a peer-to-peer micro finance lending platform. So, you can lend $25 to a baker in Kenya who wants to borrow a $1,000 to buy an oven and start a little business to make some income. Kiva was a really great experience. It’s turned into one of the fastest growing non-profits of all time.
I got involved about four years ago, and they had done $200,000 in loans at the time, now they’ve done about $250 billion in loans. It was a story of crazy hockey stick [inaudible 01:33] and also a really inspiring one that really affected hundreds of thousands of people’s lives on a really intimate basis. Kiva had a big impact on me for a couple of reasons; one, is it really sort of opened my eyes to the impact that businesses could have on social issues. So a business with a social conscious could do just as much as any other charity or philanthropy.
The second thing that was really interesting for me was the concept of connecting people online for an offline [inaudible 02:06]. So, when I was involved, I think, in late 2006, I’d been on Facebook for a couple of years. And so, I was used to connecting with people online, but when I was making new connections [inaudible 02:18], and Kiva was one of the first times that the connections that I made online were actually impacting the offline world.
So, with that background, I was inspired to start a company of my own and eventually came across RelayRides, which took the concept of car sharing, which was something I was a big fan of in a great way to live without a car and yet still have access when you need it, but really taking it to a crowd source form. Something that leverages the connections that we have and leverages about 250 million cars that are on the road in the United States by finding a way to make it safe and convenient for people to connect in their own communities. We can offer some of the same benefits as car sharing but in a way that is way more useful to way more people, in way more areas.
Matthew: What makes RelayRides unique? Who is it for and why are you so passionate about it?
Shelby: So, as you mentioned, RelayRides is the world’s first peer-to-peer car sharing market place. There is a lot of buzz words in there, so I’ll explain what it means. RelayRides, we’re a car sharing market place. We provide on-demand access to vehicles located right in your neighborhood, by the hour, by the day. You sign up. You can search through our marketplace and find cars to meet your needs. We reserve it; you just walk up to the car, the car is usually a couple blocks away. You hold the smart card over a sensor on the windshield, the car unlocks, you drive off.
This sounds really similar to other car sharing services, like Zip Car, City Car Share, except that the difference is that we’re peer-to-peer. As opposed to owning and maintaining a big fleet of vehicles, we’re a platform that allows car owners to rent out their cars to neighbors when they’re not using them personally.
People who might use this are urban dwellers who have a car and don’t use it very often; it sits around all the time as well as people who don’t have a car and can use convenient, affordable access to mobility. That’s really what we’re trying to empower and enable is to make it easier for people to live without a car and to give people more options compared to a decade ago really when the option was owning a car or not owning a car.
We find that there is a lot of people who fall in between there. Who sometimes need a car or frequently need a car but a car that is sitting idle a lot of times. By providing more transportation options to people, what happens is that fewer cars will be on the road and people drive less.
Matthew: What are some of the technology and market trends that currently exist, and where do you see things developing in the future for your space?
Shelby: So, RelayRides was the first peer-to-peer car sharing marketplace, but a couple of other ones have sprouted up in the last couple of years. There are a couple of different models. Ours is, right now, technology [inaudible 05:24] so basically we install a device in the car and that provides access to the borrower and have a reservation. It eliminates the need to meet up and exchange keys.
A couple of major competitors go for a key swap model, so basically a car owner lists their car, whenever somebody reserves the car, the car owner and borrower meet and exchange keys. It has some advantages in that it’s easier to get a car up and running on the system, but really what it’s done is restriction into the reservation process. It doesn’t make the mobility quite as spontaneous or as freeing as the model that we’ve chosen.
I may be a little bias, but I would say the most interesting technology, innovation or trend that’s happened is that cars are becoming networked. If you look across the different car manufacturers, they’re creating a platform for the car. So, Ford has something called Sync, Toyota has something called In Tune and these are becoming actual platforms that people can build apps on it and different applications. It is sort of surprising that we spend all this money on our cars and our mobile phone is more powerful, more connected than our cars are. In a couple of years, this is really going to change.
One thing we’ve done is we actually announced a partnership with GM, and GM has a technology structure called OnStar. It was really built as a safety and piece of mind sort of thing, and among the things it can do is if you’re locked out of your car it can help you unlock your car. What we’ve done is we’ve tied into that partnership, we’ve tied into the OnStar platform.
If a car owner owns a GM car and it has OnStar on it, there’s 15 million of these cars on the road right now. When a borrower reserves those cars, the borrower walks up, and they can unlock the car with their mobile phone. It goes through our system and over to OnStar and down and unlocks the car. So, it provides really great experience, but really eliminates the need to install hardware in the car and reduces a lot of friction in the on board process.
It’s really exciting to see car manufacturers embracing and moving into shared mobility space, something that could arguably be against their interests. The more shared cars that are on the road, arguably fewer cars are sold. I think what GM is seeing and hopefully, what some other car manufacturers are seeing is that not everybody wants to buy a car. There are some people who want the access mobility as opposed to owning it. We’re really providing GM the ability to connect with those consumers. It’s a win for us. It’s a win for our consumers, and I think it’s a win for GM.
Matthew: Who are your co-founders? How did you meet? What qualities were you looking for?
Shelby: I founded RelayRides in late 2008. I was at the end of my first semester of MBA at Harvard Business School. When I first started to think about the idea, the two biggest things that I thought we needed to get right were technology and insurance. So, how do you create a really easy, convenient, easy to use technology platform that will seamlessly get people into the cars? Then, how do you insure, how do you create an insurance product that would work to make sure that our car owners were kept safe?
The insurance part of it was very difficult. It took a year-and-a-half to get right. Basically, I had to invent a new insurance product, which is really tricky because insurance companies are by definition risk adverse. Nobody wants to take it.
We found a classmate that was really strong in technology and a classmate who had a background in insurance. Looking back, I think I could have found people that were just generally, naturally more excited about start-ups. We’re really passionate about creating something from scratch. Maybe, they wouldn’t have been so functionally strong, but to find people who had a startup drive is really important because in less than a year both of the co-founders sort of bailed.
The person who had a really strong background in insurance, essentially said, “Look, you’re never going to get the insurance product, it’s not worth doing, it’s not worth continuing the effort here.” Then, the person who is really strong in technology he decided he wanted a safe job, so he took a job at McKenzie and sort of left me high and dry.
I really felt like I founded this company alone. They provided a little bit of support early on, and that was important to help get some momentum behind the idea, but in terms of actually building the company I really felt alone a lot of times, which was really tough. Before I started the company, I heard a lot about the emotional roller coaster of startups. I heard what people said and I guess you really don’t understand it until you go through it. The highs are higher than you might think and the lows are lower than you might think and the velocity with which you go between one to the other is shocking.
It was a tough road the first couple of years. It was a good year and a half before we had a really strong team. Even then it was a couple, two other people. I think if I were to do it again, I think I probably would have looked for people who were super passionate about creating something and hopefully we had some complimentary skill sets.
Matthew: Are there any unique metrics or social proof about RelayRides that you’d like to share with the audience?
Shelby: I guess what I’m most excited about RelayRides is the strength of the community that has emerged. I think it’s a really interesting and novel community in that it’s sort of creating connections among neighbors that really didn’t connect before. What’s interesting is that you talk to the members. You get this concept of neighbors helping neighbors and car owners starting to help borrowers find a new way to get around. And borrowers helping owners by providing income. Almost like supporting local business. They love the fact that their money is going right back into the local economy as opposed to being sent all the way across the country.
You have this really interesting concept of neighbors helping neighbors and creating this symbiotic community and it’s been really exciting to see and I feel that as we continue to grow the strength of our community will be the single greatest resource that we have.