20VC Lime CEO Brad Bao on How Lime Assess The MicroMobility Landscape and Competition Today, What It Takes To Launch and Win A New City & Why Lime Have Spent $0 on Marketing To Date

Abstract

Abstract

In this episode of "20 Minutes VC," host Harry Stebbings interviews Brad Bao, co-founder and CEO of Lime, a micromobility startup revolutionizing urban transportation with shared scooters, bikes, and transit vehicles. Lime, which has raised over $775 million from top-tier investors, aims to alleviate reliance on personal automobiles for short-distance travel. Bao discusses Lime's growth, the competitive landscape, and the importance of customer loyalty and quality service. He elaborates on the challenges of rapidly scaling a physical asset business, the company's approach to innovation, and Lime's mission-driven culture. Bao's vision for Lime includes expanding the use of alternative transportation in cities and achieving a significant reduction in traffic congestion and pollution.

Summary Notes

Introduction to Episode and Guest

  • Harry Stebbings introduces the episode of "20 minutes vc" and his excitement for the interview.
  • Brad Bao, co-founder and CEO of Lime, is the guest.
  • Lime is a micromobility startup aiming to reduce reliance on personal vehicles for short distances.
  • Lime has raised significant funding from various prominent investors.
  • Brad Bao has a background with Tencent and Kinsen Capital.
  • Thanks are given to Sarah Smith and Brenda Mollis for question suggestions.
  • Harry promotes Front, an email platform for team collaboration, and Culture Amp, a platform for employee performance development.

20 minutes vc here with me, Harry Stebbings. I would love to see you behind the scenes on Instagram at H Stepbings 90 96 with two b's. But diving straight into today's episode, I've been so looking forward to this one for a long time.

Harry Stebbings expresses his anticipation for the episode, inviting listeners to follow him on Instagram.

Lime's Background and Funding

  • Lime is a startup focused on micromobility, offering shared scooters, bikes, and transit vehicles.
  • The company's goal is to reduce the dependence on personal automobiles for short trips.
  • Lime has raised over $775 million in funding from notable venture capital firms.

You might remember a month or so ago we had Sarah Smith at Bain on the show and she discussed her thesis for the series D investment in Lime.

Harry refers to a previous episode where Sarah Smith from Bain Capital discussed investing in Lime, providing context on the investor perspective.

Brad Bao's Background

  • Brad Bao was a managing partner at Kinsen Capital before founding Lime.
  • He spent eight years at Tencent in various roles, including VP of Business Development for Tencent Games.
  • He was responsible for Tencent's U.S. operations as General Manager.

As for Brad, prior to founding Lyme he was managing partner at Kinsen Capital for close to six years, and before that spent an incredible eight years at Tencent in numerous different roles, including vp of business development for Tencent games and general manager for Tencent's us branch, where he was responsible for Tencent's us operations.

Harry provides a brief overview of Brad Bao's professional history, emphasizing his significant experience before founding Lime.

The Entrepreneurial Journey to Lime

  • Brad Bao's passion is building companies, teams, cultures, and impactful things.
  • He was the first employee of Tencent outside China, developing international strategies.
  • Lime was born out of a desire to use technology for a positive real-world impact.
  • The "aha moment" for Lime came when they realized the product saved time, money, and brought joy to a wide range of users.

Yeah, I think throughout my life that I found my biggest passion is to build things, build companies, build team, build culture and build things that matters and make an impact.

Brad expresses his lifelong passion for creating and impacting through building companies and teams.

Tencent's Influence on Lime

  • Tencent's focus on user experience deeply influenced Brad.
  • Lime, like Tencent, does not spend money on user acquisition, relying on product quality for marketing.
  • Brad emphasizes the emotional experience of users, not just the utility of the product.

So Tencent is still one of the most respectful technology company in the world. In my mind. There are many companies in the world, there are not many that have achieved so far, as well as building a really positive culture and impact.

Brad speaks to Tencent's global respect and success, which has influenced his approach to building Lime's culture and product.

Micromobility Landscape and Product Focus

  • The micromobility landscape is crowded and has been a topic of discussion in recent headlines.
  • Brad believes in the power of a good product to sell itself without the need for paid marketing.
  • Lime's product is designed to provide a positive and enjoyable user experience.

I do want to dive into the kind of the product and the landscape that the product sits in. Today though, as we've seen from the headlines over the past twelve months, it's been a crowded landscape.

Harry transitions the conversation to discuss the competitive micromobility landscape and Lime's positioning within it.

Lime's Rapid Growth and Market Position

  • Lime has experienced significant growth, operating in over 25 countries and 100 markets in just over two years.
  • The company has seen fast revenue and trip generation without spending on marketing, relying on organic growth.
  • Lime is proud of its product iterations and the positive user response, as well as their contribution to reducing pollution and traffic congestion.

"Yeah, I think for any industry that given how fast lime grows as the global leader in the scooter share and bike share business, that we are a company that's two year and five month old, but we're already operating in 25 plus countries and over 100 markets across the world."

This quote highlights Lime's rapid expansion and its position as a global leader in the scooter and bike-sharing industry despite being a relatively young company.

"And the revenue and trips that we're generating, probably one of the fast ever in terms of like a company. Plus, on top of that, as I mentioned, that we don't spend marketing dollars, it's all organic growth."

Lime's revenue and trip numbers are emphasized, along with the fact that this growth has been achieved without marketing spend, indicating efficient and organic user acquisition.

"The product iterations we've done, the users positive reaction to it, and the pollutions and traffic congestions that we reduce."

This quote points to Lime's focus on product development, user satisfaction, and the environmental benefits of their services.

Market Potential and Strategy

  • The market for alternative transportation is vast, with less than 1% penetration in cities, while 50% of urban trips are less than 2 miles.
  • Lime aims to increase the use of alternative transportation from 1% to 50%, looking to cities like Copenhagen and Amsterdam as examples.
  • The company believes in making the market bigger rather than focusing on competition.
  • Education, innovation, and better regulations and infrastructure are necessary to grow the market.

"It's really about how we're making the pie bigger."

Brad Bao stresses the importance of expanding the market for alternative transportation rather than competing for a small existing market share.

"We're together educate the user about the new options for them and the benefit of it."

The quote emphasizes the need for educating users about the benefits of alternative transportation to increase adoption rates.

Customer Loyalty and Market Dynamics

  • Customer loyalty exists even in non-differentiated products, and Lime sees loyalty based on product quality, service, and safety.
  • Lime has observed that in markets where they have half the fleet, they often see more than half the market share.
  • The presence of other providers is seen as beneficial for times when Lime scooters are unavailable, contributing to industry growth.

"There are many markets that we are half of the fleet, that we have way more than half of the market share that representing it."

Brad Bao indicates that Lime experiences customer loyalty, as evidenced by their market share in certain locations.

Global Expansion and Local Market Strategy

  • Launching in new cities involves regulatory, logistical, and training challenges.
  • Being a global brand with a network effect and data from over 100 markets helps Lime provide better services.
  • Service level is the most important factor for users, regardless of company size or location.

"That accessibility, the network effect wherever you go, is one of the key thing for a mobility service."

Brad Bao discusses the advantages of Lime's global brand and network effect in launching new cities and winning local markets.

Industry Consolidation and Survival

  • It's too early to predict consolidation in the scooter and bike-share industry.
  • Smaller companies may struggle to survive due to the complexity of the business.

"It's too early in the industry to say that what could happen, but I would say though, some of the learning we have from the history that there might be some form of consolidation, but majority of them, that it will be just smaller ones, will be having a hard time to even survive."

Brad Bao suggests that consolidation may occur, but it's more likely that smaller players will find the industry challenging.

Lime's Path to Profitability

  • Lime has already achieved profitability in dozens of markets.
  • Profitability is enhanced through improvements in hardware, software, and operations.
  • Factors determining a city's profitability include maturity, density, infrastructure, culture, and tourism.
  • Profitability can be achieved quickly with the right conditions, with a record time of two weeks to profitability.

"First of all, we already have dozens of markets of profitable. So it's not how we, or whether it's already so that I could give you the good picture."

Brad Bao confirms that Lime has already reached profitability in several markets and is working on enhancing profitability further.

Hardware Innovation and Evolution

  • Lime has built a hardware team and pursued vertical integration from day one.
  • The company has released four major versions of vehicles in the last twelve months, improving hardware based on feedback.
  • Lime's focus on hardware innovation is a key differentiator from competitors.

"One of the things we are doing very different from our peers is that we started building our hardware team and doing the vertical integration starting day one."

Brad Bao explains Lime's strategic approach to hardware development and how it sets them apart from competitors.

Hardware Innovation Cycle

  • The hardware innovation cycle ranges from two to five years.
  • Digital feedback loops have revolutionized design, manufacturing, and testing processes.
  • This innovation provides a competitive edge that is difficult for peers to match.
  • The company anticipates a long list of product features that will take time to develop.
  • Drawing a parallel to the automobile industry, which took centuries to perfect, similar expectations are set for scooters, bikes, and e-bikes.

"Hardware innovation cycle is two to five years. And we have changed the entire way of how we using digital feedback loop and design and also manufacture and testing them. And that give us a really competitive edge and we'll keep on doing that for however it takes."

This quote emphasizes the innovation in the hardware cycle and the strategic use of digital feedback loops to gain a competitive edge. It suggests a commitment to continuous improvement and innovation over a prolonged period, drawing a comparison to the long-term development seen in the automobile industry.

Balancing Innovation Drivers

  • The primary driver for innovation is not limited to cost reduction or efficiency improvements.
  • The hardware business often requires a trade-off between advanced features, durability, and low cost.
  • Lime aims to address all three aspects simultaneously, posing a challenge in product and supply chain management.

"Actually, it's more than that. In the hardware business, there's always a saying, right? That you can have all the advanced features and better user experience, or you can have the longest durability in terms of how long did it last, or you can have lowest cost, but you cannot have three at a time. You can have two."

This quote outlines the typical trade-offs in the hardware business between features, durability, and cost. It highlights Lime's ambition to tackle all three aspects, which is a complex challenge in product management.

Team Assembly and Values

  • Vision and values are central to attracting and retaining a world-class executive team.
  • Lime's mission-driven approach appeals to individuals seeking impact beyond financial compensation.
  • The executive team is motivated by the prospect of creating cleaner, greener, healthier cities.
  • The team operates on higher levels of Maslow's hierarchy of needs, focusing on societal impact.

"Vision and value, that is the key thing when we look at the world class players, that they have a lot of options, right? They have achieved a lot in their career and life."

This quote highlights the importance of sharing a common vision and values when assembling a high-caliber team. It suggests that the most talented individuals are drawn to companies with a strong mission and the potential for significant impact.

Timing for Assembling an Executive Team

  • For a company, the earlier an executive team is assembled, the better.
  • Startups must be ready to offer a clear platform, ownership, and scope to attract talent.
  • Executives should be brought on board early enough to benefit from their experience but not before the company is ready to support them.
  • A balance is found by hiring executives approximately twelve months before they would manage a team.

"For the company is the earlier the better. So you bring in the very unique set of experience as well as opinions. That's very valuable."

This quote advises that bringing in executives early can be beneficial for a company due to the unique experiences and perspectives they provide. However, the timing must align with the company's readiness to attract and accommodate such talent.

Cultural and Organizational Scaling

  • Scaling involves aligning a diverse team with varying backgrounds and opinions.
  • The challenge lies in fostering cohesion among strong individuals with differing preferences and egos.
  • Lime focuses on alignment rather than reaching breaking points in organizational scaling.

"It's really not about breaking point that we're talking about, it's more about alignment."

The quote emphasizes the importance of alignment over the concept of breaking points in scaling a company. It suggests that ensuring a cohesive team is a continuous process rather than a one-time fix.

Co-Founder Relationship

  • A long history of trust and shared values underpins successful co-founder relationships.
  • Trust is essential to avoid second-guessing and holdbacks in partnerships.
  • Meaningful connections and shared experiences further strengthen co-founder bonds.

"The trust relationship we built over the course of like eight, nine years before we start a company. That really, really helps."

This quote underlines the significance of trust and shared history in forming a strong co-founder relationship, suggesting that these elements are foundational to a successful partnership.

Quickfire Round: Personal Insights

  • "Good to Great" is recommended for its principles on building great companies.
  • The most challenging element of the role is not specified in the transcript.

"Good to great. Really lay out the fundamental principles how and why a great company will be built."

The quote shares a personal recommendation for a book that provides insights into the principles of building a successful company, indicating its influence on the speaker's business philosophy.

Aligning Team Interests and Goals

  • Aligning interests and goals among different teams within a company is crucial.
  • The focus is on driving the teams towards a unified objective.

Today is to align the interest and kind of like drive and also goals for different teams in the company.

This quote outlines the primary objective of ensuring that all teams within the company share the same interests and are working towards common goals.

A Day in the Life of Brad Bao

  • Brad Bao's day usually begins at 8 a.m. with checking emails.
  • His schedule includes a mix of 60-70% internal meetings and 20-30% external engagements.
  • Internal meetings focus on setting goals and aligning the team.
  • The workday extends into late evening, including coordination with teams in China and the APAC region.
  • Brad Bao has maintained this routine for 15-20 years.

I would say that first offer. All right, we got a bunch of meetings. So my day started roughly about eight. Normally, I will check the emails in the morning to make sure that any important topics got covered. And I will have series of meetings, I would say 60, 70% internally and then 20, 30% externally. For investors, medias, all that and internal meeting is more about setting the goals and align the team.

This quote details Brad Bao's daily routine, which consists of checking emails, conducting meetings, and ensuring that the team's goals are set and aligned.

Misconceptions About Business Complexity

  • Brad Bao admits to initially underestimating the complexity of the business.
  • There is a public misconception that simply putting scooters on the street constitutes a business model.

I wish I could have known how complex and hard the business is. Everyone look at it. Just, hey, put a scooter on the street, you got a business. Well, you're wrong. And I was wrong too. It's so hard.

The quote reflects Brad Bao's realization of the complexities involved in running a business, which is far more challenging than the simplistic view of just deploying scooters.

Impact of Ride-Sharing IPOs on Lime

  • Brad Bao views the IPOs of Lyft and Uber as positive for Lime.

Positive. Absolutely positive.

The quote succinctly states Brad Bao's opinion that the public offerings of Lyft and Uber have a beneficial impact on Lime.

Common Advice and Independent Judgment

  • Brad Bao received advice to follow established formulas and focus, but he believes in independent judgment.
  • Lime chose not to follow the typical path of launching a service and then discussing with the city.
  • The company made a decision to go global within two years, which some may view as a lack of focus.
  • Brad Bao emphasizes focusing on user needs, regardless of geographical or product constraints.

There are a lot. So give two one of that, when we started company, that the proven formula, which is a uncommon, common practice to get into, you know, uber established, right? Just go to the city, you launch a service and talk about it with the city after that. And we just deliberately didn't do that.

But I think more than often that we have to make a very independent judgment that what does focus mean or what do we focus on?

These quotes address the advice Brad Bao received and his approach to making independent decisions based on what he believes is best for the company, particularly in terms of focusing on user needs rather than conforming to standard practices or geographical limitations.

Lime's Global Expansion and User Focus

  • Lime's decision to go global was obvious to Brad Bao, despite it being a contentious issue.
  • The company launched various products and expanded rapidly, which could be misconstrued as a lack of focus.
  • Brad Bao insists that Lime's true focus is on meeting user needs, which justified the global expansion.

To me it's very obvious, but to many that we as a young company, here's what we did, right, we launched the bikes and we didn't focus on that. Well, focus with a quotation mark. We didn't focus on that. We then launched the e bikes and we didn't focus on that. We didn't launch the scooters.

We focus on the user, where they are. If they are distributed globally, as we all know, that's true, then we will go global, we'll meet them there.

These quotes reveal Lime's strategy of prioritizing user needs over traditional business advice, which led to their global expansion and product diversification.

Lime's Vision and Goals for the Next Five Years

  • Brad Bao aims to measure Lime's success by the benefits it brings to users, such as time and money saved, pollution reduction, and traffic congestion alleviation.
  • Lime aspires to increase the percentage of alternative transportation in cities from 1-2% to 20-30%.
  • The company seeks to maintain its position as a leading global urban mobility brand, recognized for value, safety, and product experience.
  • Brad Bao envisions a movement where people, regardless of whether they use Lime's services, support the company's mission to make cities healthier and more livable.

So that's the way I would measure it. And on top of that, of course, that we hope that with better services and product we offer, that will be keep as the leading company globally for the urban mobility and the brand will be recognized very well in terms of the value, safeties and product experience that we represent.

The quote outlines Brad Bao's future goals for Lime, focusing on user benefits, city improvements, and maintaining a strong global brand presence.

Acknowledgements and Podcast Promotion

  • Brad Bao expresses gratitude for being invited to the podcast.
  • Harry Stebbings promotes various services and products, including Front, Culture Amp, and Hippo.
  • The services advertised are intended to improve team collaboration, employee performance, and home insurance.

Pleasure is all mine. Thank you for having me here.

And now we've nailed team collaboration and efficiency with Front. We should also talk about Culture amp, the platform that turns your company culture into your competitive advantage.

So get a quote today from Hippo in just 60 seconds@myhippo.com.

These quotes feature Brad Bao's closing remarks and Harry Stebbings' endorsements of different services aimed at enhancing business operations and personal insurance.

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