Markus Village founded Bolt, a passenger transport company in Tallinn in 2013 when he was 19. Seven years later, his company was valued at 1.7 billion euros.
It was not a smooth ride. Villig launched the app with a budget of €5,000 and kept going when investors asked him to surrender, like Uber collect billions of dollars. He says launching a passenger services company “was probably the hardest six months I’ve ever had”.
The company survived in the early months because its team “had a lot of conviction that we were doing something unique and better,” Villig says over a Zoom call from Tallinn. Bolt, which also provides e-scooters and e-bikes, and food and parcel delivery, has weathered another uncertain period – the pandemic. During the first shutdown last year, business fell 85 percent overnight.
Village co-founded the company with his older brother, who already had experience working in the tech industry. Despite this, Markus Village was still in high school and had to work hard to convince taxi drivers in Tallinn to sign up for his application.
He saw a gap in the transport market in the Estonian capital (where Uber was slow to go), because the city’s taxi services “were horrible”. The consumer case for starting Taxify, as it was known prior to the 2019 rebranding, was clear. The taxi drivers had dirty cars and “took a long time to arrive,” Village says. In the spring of 2013, after a period of after-school research, he was approaching drivers at taxi stands to see how things worked.
According to Village, drivers were stuck in old taxi companies, often had to pay high monthly fees and didn’t get much in return. But Village stopped short of persuading drivers to entrust themselves to a 19-year-old who didn’t yet have a fully functional app. “When . . . you kind of pitch them an idea, 90 percent of them will tell you F-off,” he laughs.
Meanwhile, he persuaded an independent developer to build a prototype of a platform, but it would have cost 5,000 euros. Village spent months persuading his parents to lend him the money.
Over time, he collected about 100 drivers who were ready to take risks. But when it launched in August 2013, they didn’t all come online when I needed them, and I realize many had given wrong contact details. “I actually only had a few dozen,” he says.
He started by going to taxi stands and taking car rides: “So I kind of went there, and I rode [their] signed phone [them] click right away. . . And it was like, look, every time you come to work you just open this app.”
By that winter, he had a few hundred drivers and was providing an efficient service. After about nine months, he collected 70 thousand euros. Six months later, he raised another 1.4 million euros, mostly from local investors. By 2014, “we had good traction, and we had a product that worked well in Estonia,” he says.
Villig then had to think about how to expand into other markets, but in 2015 and 2016, “Uber became this overwhelming force in raising more money than any tech company,” he says. “It was unprecedented. Nobody had raised these kinds of sums. Not Google, not Facebook, nobody.”
In May 2016, for example, Uber raised $5.6 billion, giving it a valuation of $66 billionN (although it now has a market capitalization of $91 billion after its 2019 initial public offering).
The result: “Not a single capital will touch us,” adds Village. “The next two years were very difficult for us because you can imagine that we have very limited resources and resources going against the company with billions of dollars. It was not a really fair fight,” he says.
He responded by running a startup that is as simple as possible and believes “these two or three years really made us.” With such limited resources, Bolt spent the money very cautiously. This culture continues, and Villig says it gives the company an edge.
When I explained to him that the transportation business model appears capital-intensive, he noted that while Bolt last year raised the most funding he’s had to date, “it’s still significantly less than most of our peers, yet the business model is still viable and the company It is operating and growing at a rate that we are more than happy with.”
He cites a disapproval of Silicon Valley’s start-up tendency to “scale fast” – raising large sums of money and then spending what it takes to “win the market”. As this theory says, “When you win the market, you have a monopoly and you will always make that money.”
While he admits to generalizing an American trend, he contrasts with what he feels is a cautious approach in Europe. “It makes sense to take your time, build things on a proper foundation and in the long run, that’s the way to win, not just to spend on everyone in the early years,” he says.
Caution paid off. Investors returned to Bolt once it proved its strategy was effective and “there was room for multiple winners in the transportation industry,” he adds.
While the investment may have returned, Village says “we remain very cautious.” Bolt might spend less on marketing, for example, and instead lower drivers’ commission rates so they can make more money.
The lean approach of the company – that has more than 50 million customers and 1.5 million drivers In 40 countries, mostly in Europe and Africa – it was a preparation for the coronavirus pandemic. While business has fallen significantly, Village felt it necessary to approach the crisis from a long-term perspective. How can you cut costs without creating problems in the future?
He decided not to cut any of Bolt’s 2,000 employees. “We saw no point in letting people go who we would need to re-hire in six months,” says Village. Instead, “We asked who was willing to take a 30 per cent pay cut — and to me, shockingly — a large number of people were happy to receive [it]. It really helped us get through the tough times.”
In a recent report by Oxford universityHowever, Bolt has been ranked as one of the worst working conditions it provides for workers of the temporary job economy. But she did not want to comment on the results.
Three Questions for Marcus Village
Who is your champion?
I don’t think there is any individual. But what I’ve tried to do over the years is study all the great CEOs that have gone before me – as well as Jeff Bezos, Bill Gates, Elon Musk and so on. But what I try to do is take the best things from them and practice those things in my daily life. There is not a single idol.
What was the first driving lesson you learned?
This clarity is everything. What I often see is that people get into this over-thinking situation where they come in in very complex ways [with] How to motivate people, goals and what they should do. After all, humans are very simple creatures – the more you can simplify things, the better they will do. So whenever we have any goals, we boil them down to just a few sentences. As a novice leader it is easier to do sometimes [it would be for] great leader.
What would you do if you weren’t a founder?
Another career path I had in mind as a kid was going into science, so maybe I’d do something in physics or math. I’ve always been very excited about these. In high school I went to the Olympics [competitions] and so on and so on. But unfortunately I didn’t have time to deal with it [those] Emotions over the past decade.
Bolt’s revenue was 148 million euros in 2019. In May 2020, it announced a file 100 million euros capital increase, in the form of a convertible bond, the company said at the time that it would allow it to continue to expand Increasing its activity in passenger transport, mini-mobility and food delivery in Europe and Africa.
The money came from one investor, Naya Capital Management, who was also a significant investor in the company in a $67 million Series C funding round in July 2019. Bolt raised 150 million additional euros in December and received 20 million euros in March from International Finance Corporation, part of the World Bank.
Last summer, as cities started to move again, Village said, “the acceleration was faster than we expected.” Growth in micro-mobility and food delivery services has accelerated due to the pandemic. “We have quickly exceeded our goal of offering scooter sharing in 45 cities, and we now have plans to be the largest micro-mobility operator in Europe in 2021,” says Villig.
Bolt currently operates 130,000 electric scooters in more than 100 cities in 15 countries.
He wasn’t always a fan of e-scooters, acknowledging that economics makes “difficult business.” He thinks Bolt has a unique approach, in that they produce their own hardware, which allows scooters to be repaired faster and cheaper to repair, says Village. By offering scooters, transportation and food delivery services, technology and marketing costs are shared and savings are passed on to customers.
He had come a long way with his company for someone who wanted to “get into the tech world”, but had no idea how to start a company. “I practically started by searching on Google for ‘how to start a startup,'” says Village.