Nicolas Brusson is the co-founder of BlaBlaCar, a platform that connects drivers with empty seats and paying passengers. Before starting BlaBlaCar, Nicolas made his name in Silicon Valley where he resided for seven years, and after as a venture capitalist with Amadeus Capital Partners focusing on consumer internet and telecommunication investments.
I caught up with Nicolas earlier this week to discuss how the idea for BlaBlaCar came about, raising money, and advices for any young entrepreneur.
Hi Nicolas, Thanks for doing this. How are you doing today?
I’m doing well thanks, and thanks to YHP for the opportunity, I think the site is great!
Can you give us some background information about yourself?
I’m an engineer by background and started my career during the dot-com & telecom boom in Silicon Valley in 2000. I sort of stumbled into the start-up scene and loved it so much I never left. After seven years in Silicon Valley, I moved back to Europe, spent some time as a venture capitalist in London and then went back to entrepreneurship with BlaBlaCar.
Tell me how you initially got into business?
I met Frederic Mazzella while doing an MBA at INSEAD. He had developed a site (covoiturage.fr) to connect drivers and people looking for a ride. We dug further into the idea and decided to pitch it at the school’s start-up competition. It was the first time we really considered a potential business model and started to think there could be a market opportunity. We had a slow initial trial phase lasting several years, and in 2009 we hired the first employee and started to look for funding.
How did the idea for BlaBlaCar come about?
Frederic was looking for ways to get back to his family on the other side of France for Christmas, but could not find a reasonably priced train ticket. He thought of a service to allow drivers to "rent" their spare seats to passengers going the same way and started to code a simple site, allowing drivers and passengers to post ads and find one another.
The idea matured, and we imagined that it could one day be a trusted market place with a transactional business model. Not many people saw it happening back then, but we had a pretty clear vision of where we wanted to take it. Today we have a large team of some of the best developers in Europe. We’ve pioneered features focused on trust, ease and reliability such as member-to-member ratings and private messaging. And we also have mobile apps.
Tell me about the early days, what was the hardest part of starting the business?
The hardest part with the BlaBlaCar community, or any marketplace, is to reach liquidity. For our service to become useful we need lots of passengers and lots of drivers and that's a massive challenge. When we started, we did not have enough drivers or passengers for them to always be able to find one another and share journeys. It was a hard problem to crack, and took a long time.
What is BlaBlaCar and what are you trying to solve with it?
BlaBlaCar connects drivers with empty seats and paying passengers. A driver can go on the site and offer their seat in their car for a journey they plan to make, say from London to Manchester on Friday evening. They fix a price per passenger, which is basically a fuel contribution that we provide guidelines on. For a London to Manchester trip it’s £15. Passengers use the site very much like a travel site, searching for trips, choosing drivers and checking the driver’s profile, ratings etc., and then get in touch with the driver to book a seat in their car.
Our mission is to solve a massive inefficiency: cars driving with empty seats. Today the average car occupancy in Europe is around 1.5, while in the BlaBlaCar community it is around 2.7. Single occupancy vehicles are a real social issue; they take a heavy environmental toll, block up our roads and cost drivers a fortune. Car sharing is a simple, scalable, sustainable solution, reducing congestion and helping people save money.
How have you been able to fund it?
For more than three years we funded the business with our own savings. When the community started to take off in 2009, we raised an "angel" round of €600k which allowed us to hire the first employees and work on our product to continue our growth. We then raised €1.25m from ISAI, a well know early stage French VC, which allowed us to kick-off our expansion. More recently, in January 2012, we raised $10m from Accel Partners to accelerate our European rollout.
How were you able to convince such amazing investors to invest in your company?
We developed good relationships before they invested and kept them informed of what we were doing. They did not jump in right away, they watched us work; they saw that we executed well and when they began to see our market’s potential they decided to back us. But I also know we were incredibly lucky: both Jean-David Chamboredon (ISAI) and Philippe Botteri (Accel) shared our vision before our business model was established and before our ability to scale in different European countries was proven. They believed it was possible.
What advices can you give to start-up founders looking to raise money for their companies?
First, do as much as you can to gather evidence that your concept has potential. Even if you are not able to offer the full vision of your product, because you have limited resources, whittle the idea down to its bare bones so you can test it in the market. Get your first customers as soon as possible, find out how much they need what you offer them. This will be proof for investors. It will validate what’s called market need.
Second, and especially if this is your first business, try to get as far into this process as you can without raising too much money. Think "capital efficiency” rather than "raising capital".
The more you have been able to prove your concept the higher your chances of raising money from the right people.
Of course, you will probably need capital at some point down the line, so, build relationship with angels and VCs early on. Discussions are always easier when you are not (yet) negotiating.
About the first few months, how excited were you, tell us about how those months felt, what happened?
Building a company is an adventure every single day, for me the beginning was not more or less exciting than the months after. It’s always exciting, that’s what I love about it.
How did you initially get traction?
Time, hard work, luck and lots of experimentation.
What are the most crucial things that you have done to grow your business?
Building trust between our members was one of the early keys to growing our business. We continue to invest a lot in engineering community features: members have trusted online profiles with verifications and there’s a rating system that allows the community to self-regulate.
Also, we started our European expansion very early, before we even had proven our business model. We now have 2.5 million members in nine European countries, so that was the right thing to do.
What would you say has been the highlight of your entrepreneurial journey so far?
I had tons of fun moments but one of the best was when Frederic and I were driving back from the French Riviera to Paris in July 2007. The service had not really taken off back then. But as we were already on the road driving back, we decided to use our smartphones to post our trip on BlaBlaCar, just to see what happened. (Keep in mind this was pre-iphone, pre "apps" etc.)
Given the small size of the community, and the fact we offered a ride for "right now", we never thought anyone would contact us. Five minutes later a guy called us. He joined us and contributed €15! It was awesome. In many ways, this was a glimpse of the future: real-time, mobile, ride-sharing. Today, many people are just starting businesses to do this, but we saw the potential of what we were building back in 2007!
What should we be expecting from yourself and BlaBlaCar for next year?
The community will continue to grow fast thanks to very strong word of mouth and highly favourable exogenous factors like rising fuel costs and expensive train fares. A new member signs up every 23.5 seconds now, it’s phenomenal!
BlaBlaCar is gradually deploying an online booking service across markets, making car sharing a really reliable, mass market, money-saving travel option.
We will continue to build an amazing website, but, this year, we’ll also be investing heavily in mobile services,. Nineteen percent of all rides are already organised by smartphone.
Lastly, what three pieces of advice would you offer entrepreneurs starting out today?
1. Start with a team, not alone.
2. Stay frugal: capital efficiency is key.
3. With point 2 in mind, expand your footprint quickly. Open new countries before your business model is proven and visible to your competitors.