This is the startup story of two founders who applied knowledge transfer from a very different industry to dynamic shared rides and who have done very well in their process. In fact, if you’ve been to a major city lately, there’s a good chance you have come across the logo of their company.
In an exclusive interview for the DealMakers Podcast, I had the chance to interview Daniel Ramot, cofounder of Via. During the interview he shared the lessons learned from competing in a crowded space as well as raising over $450 million from top tier investors (listen to the full episode here).
Knowledge Transfer: Data, Drugs & Driving
Originally from Israel, Daniel Ramot came to the U.S. for graduate school. He was interested in studying neuroscience and got into Stanford.
Previously, he studied physics and math and spent six years working for the Israeli Air Force developing avionics systems, first for F15s and then for F16s.
Then, working as an engineer and a product manager for several years, he developed an interest in studying the brain and trying to understand how the brain works. He got his PhD.
Daniel says, “One of the great things that you learn getting a PhD is how to deal with data and how to be very critical and analytical in thinking about data, and in collecting it and organizing it.” That ultimately transferred to his startup Via, which has been solving problems that have a lot to do with traffic and traffic systems, and interactions between people, road systems and traffic, thinking about that in a structured, analytical way. Thinking about how to distill a complex system like that into some simple equations.
It’s not too unlike Elon Musk jumping from FinTech and applying some of the knowledge to Space or some of that knowledge to electric cars.
Daniel also worked at D.E. Shaw Research. A firm famous for being one of the first hedge funds to trade using computers and computational algorithms, and was one of the leaders in the field of quantitative trading– and still is.
D.E. Shaw then took that method from finance and applied it to pharmaceutical drug discovery. So, Daniel Ramot began using algorithms, computational techniques and computers to discover new pharmaceutical drugs. The main product he focused on was a very large, custom-designed supercomputer that was being built to accelerate a certain class of biological simulations called molecular dynamics.
During this time, Daniel was also able to learn a lot about how to run a company and think about recruiting.
At Via, Daniel says data has continued to be a crucial piece that feeds back into the algorithm and has really driven the technology to be dramatically improved year over year.
That really paid off in 2018, when they really saw massive growth. They finished the year with nearly 50 different partners. They’re continuing to sign up cities and transit agencies, and now corporate partners for corporate shuttles and university campuses at a very, very high rate.
Today, they have nearly 70 cities in which they operate. They are in Europe, London, Amsterdam, Berlin, Milton Keynes, New York, Chicago and D.C. Together, they are completing well over 2 million rides a month at this point and are seeing very rapid growth across all of these metrics, and have delivered over 50 million rides.
Burning the Boats
Making the leap to start your own business can be mentally challenging. Especially if you’ve got a nice corporate job that is really interesting and you love it.
Daniel says, “It wasn’t easy to make that transition, so one thing that I remember consciously trying to do was to tell all of my friends that I was going to do this, so that I would create an environment for myself that would be very difficult to back out of.”
He just always had this desire to start a company of his own. In particular, with his co-founder, Oren Shoval.
One day, Oren called with what would become the idea for Via. He had been trying to get from one place to another in Israel using a class of transport called the “sherut” or shared taxi. It’s a fleet of vans that run on fixed routes but without set stops– riders can get on and off wherever they like along each route.
Inspired by the sherut system, it occurred to Oren that a dynamic, on-demand shared ride service available through a mobile app would be a much more efficient way to utilize this type of transportation, allowing riders to book a seat, track their ride and hail the vehicle in a convenient way.
The Most Important Factor in Picking Founders
We hear so much about having a great founding team and the value of picking cofounders with complimentary not similar skill sets. Oren and Daniel have found quite a different approach works.
Ramot says, “I think what’s much more important between founders is that you have a common understanding and you get along really well, and that you work together well. That you are just compatible in that way that you’re going to be successful together solving really hard problems. Because you’re going to run into a lot of really hard problems.”
Then it is a product that you’re very passionate about, and that you really believe in and want to build because. Otherwise it’s difficult to be successful at it. If you have that passion and those product instincts, that’s where you can be successful. The business piece you can learn.
Finding The Gap and Making the Leap
As many intelligent entrepreneurs do, Daniel tried to de-risk by working into it slowly.
He went to his boss and said, “Listen. I want to try to pursue this idea with my good friend, Oren. I just wanted to let you know I’m not leaving right away, but I’ll be spending weekends working on this.” He wanted to give them a lot of notice. Then, after 6 months of working on Via with Oren on the weekends and hiring a team to help build the algorithms to power their vision, he decided it was time focus on Via completely.
At the time, one area that was poorly served by public transportation in New York was the Upper East Side of Manhattan. Daniel spent a lot of time in the area speaking to strangers and asking them to participate in a survey aimed at understanding if they would be interested in using a platform like this, including what features they would expect or would like it to provide.
Daniel and Oren began fundraising early to make sure the capital would also be there. By the time they had launched the company, they had nearly a million dollars in commitments from early backers. They assumed that only about half of the investors would actually give the money. It turned out that that was close. In the end, they received about $700,000 out of the initial million. They have now raised $450 million dollars for Via. That includes capital from Pitango, Daimler, Kapor Capital, 83 North and Hearst Ventures.
It turned out that they were a popular service with everyone. So, a lot of investors started taking the service, including VCs from Hearst Ventures and other private investors. Then they started reaching out, and saying, “Can we talk? We’re using your service. We love it.” They received quite a lot of investment from users.
Positioning: The Key to Winning without First Mover Advantages
Daniel says they benefited from the fact that Uber had already launched their service in New York.
However, since the very beginning, Via decided that they were going to be very collaborative with the city and with regulators. They went to talk to them, and found ways to work within the law, instead of trying to fight it. That approach of working together with cities, together with regulators, or partnering with them, has been very beneficial. They’ve even moved to help cities improve their public transportation systems.
They also knew if they were to call what they were doing ‘ridesharing’, which they thought was the right term, they were worried that it would be misunderstood. They decided what they were actually doing was providing these ‘dynamic shared rides’. That’s where they had this first-mover advantage. That was very important in fundraising and in building the brand.
Daniel says the one piece of advice he would give to other founders is to move really quickly. They took about six months, if not longer, to really prove that it was a great idea in some sense, before they left their jobs. In retrospect, he says, “I think we wasted a lot of time, frankly, writing a very detailed business plan and business model.”
When talking to aspiring entrepreneurs today his question is, “Why haven’t you already launched? What’s stopping you from launching tomorrow? Can you really not just start tomorrow? Why haven’t you done it yet?”
Listen in to the full podcast episode for all the details, as well as how to contact him directly with your ideas and questions (listen to the full episode here).