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How Bolt bounced back from a spectacular public London failure

In the summer of 2013, 19-year-old Markus Villig walked to every taxi rank in his home city of Tallinn, Estonia, trying to convince hundreds of drivers to sign up to an on-demand app service that he created in his bedroom. Five years later, his company, Bolt, is valued at £1 billion and is competing against Uber in over 100 cities around the world.

Getting people to take him seriously was the first (and perhaps biggest) battle for the business. Most of the taxi drivers had been doing the same job “since the Soviet era”, Villig laughs. The majority told him to go away and not waste their time. “It was extremely tough. But I think just persistence of doing it was the reason it became a success,” he says. After hundreds of these meetings, eventually he found the 30 drivers who were interested enough to be the starting point for the company.

With €5,000 from his parents – who Villig recruited to do customer support outside of their regular working hours – he hired a developer to help him launch the business, then called mTakso. After six months of convincing drivers, his business took off – but the lack of available funding in Estonia for his business, due to lack of investor interest in the transport market, meant that Villig’s extremely young team had to find small markets in Europe (such as Latvia and Lithuania) and replicate the process by starting all over again for each.

“You have a lot of confidence because you don’t really know what can go wrong,” Villig explains. That optimism, however misguided, allowed him to be ambitious where entrepreneurs with more experience would have baulked, he says.

If Villig had listened to some of the investors that he met with, Bolt would have never taken off in the first place. Many investors bet on a first mover advantage – which was completely incompatible with Bolt’s plan to take on Uber in many of its more profitable markets. “It's very hard to change their mindset,” Villig says. “Sure, you can be the biggest player in the US, that doesn't mean you're going to win Europe. It was very clear that a lot of investors were not even able to think about this.”

Seven years later, Villig’s company is operating in over 150 cities in Europe, Africa, West Asia, North America and Australia, and counts Japanese conglomerate SoftBank among its investors. It has rebranded twice – first to Taxify, and in 2018 to Bolt – and is recovering from a major setback in London that saw it ejected from the city for over a year.

In 2017, Transport for London banned Taxify over safety concerns after just three days, stating that the company lacked the proper private hire licences to operate in the city. It had bought minicab company City Drive Services and thought that it could use the same licence to operate in London to avoid the application process entirely. It was bad legal advice, Villig claims.

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“It was a really big shock. At the time, we just weren’t prepared for it,” he explains. “We hadn’t had a single setback. We just didn’t have the proper investment of people and safety and product. We underestimated the challenge.”

This experience caused him to change the company’ approach to safety, governance and co-operation entirely. London proved to be a watershed moment for Taxify, which had never encountered problems moving into markets before. Its race to gain market share as quickly as possible had set it back months and handed major competitor Uber a year-long advantage. But it also caused Villig to learn a valuable lesson.

“We were moving too fast in some cities,” Villig admits. Taxify initially dedicated only two (rather inexperienced) people to man the launch, which he concedes was a crucial mistake. Now, there are 40. “There are some areas where you need to have really experienced people from the get-go,” he says.

“It doesn't matter whether we're a few months late in one city or another. What matters is who's going to be the best best in ten years. What kind of value can you provide to customers and drivers? The one who offers the best value is going to win at the end of the day.”

Villig believes that, in the end, Bolt can win against Uber because it offers a better deal to drivers. “If we provide low commissions and good earnings for drivers, then they’re happy to stick with us. Back then [when the company started], we were using this strategy against taxi companies. Nowadays, we’re doing that versus Uber.”

The Bolt playbook

Always question your own business model: When you’re thinking about growing a business, you should constantly question whether your business model makes sense, Villig says. “When we started off, we were very clear that we should only do something if we can bring some unique value to people. And if not, then what's the point?”

Don’t be afraid to change your company’s name: In the space of just six years, mTakso turned into Taxify, and most recently into Bolt. This could be seen as a confusing and risky move for a consumer-facing business. But both changes made sense, Villig maintains. The first rebrand was to make the name more linked to the taxi service, the second, to reflect the company expanding to food delivery and mobility. Even though many other businesses call themselves Bolt, Villig doesn’t care. “They came after us, so we don’t see that as a problem.”

Learn from your mistakes: It was only after Transport for London banned the ride-hailing app from the biggest taxi market in Europe that Villig realised the company was trying to grow too fast, too quickly. “We were disappointed,” he concedes. This move lost them around a year in London, but caused them to overhaul the way they structured launches in new jurisdictions.

This article was originally published by WIRED UK

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