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Markus Villig founded Bolt, the Tallinn-based company, in 2013, when he was 19 years old. Seven years later, his company is worth 1.7 billion euros.
It has not been a smooth journey. Villig launched the app with a budget of 5,000 euros and went ahead when investors told him to resign, as was Uber billions of dollars. He says getting the travel company off the ground “was probably the hardest six months I’ve had.”
The company survived the first few months because its team “had so much conviction that we were doing something unique and better,” Villig says during a Zoom call from Tallinn. Bolt, which also provides e-scooters and electronic bicycles, and food and parcels, has just survived another uncertain period: the pandemic. During the first close of last year, business fell 85% overnight.
Villig co-founded the company with his older brother, who already had experience working in the technology industry. Markus Villig, however, was still in high school and had to work hard to convince Tallinn taxi drivers to sign up for his application.
He saw a gap in the transport market of the Estonian capital (where Uber was slow because the city’s taxi services “were terrible.” The case of the consumer to start Taxify, as it was known before a 2019 brand change, was obvious. Taxi drivers, Villig says, had dirty cars and “took a long time to get there.” In the spring of 2013, after a period of research conducted after school, he went to the taxi drivers to find out how things work.
According to Villig, drivers were stuck in old taxi companies, often had to pay high monthly fees and didn’t get much in return. But in Villig his job was reduced to convincing drivers to trust a 19-year-old who did not yet have a fully functional app. “When … you’re just giving them an idea, 90% of them will just tell you in F-off,” he laughs.
Meanwhile, he convinced a freelance developer to build a platform prototype, but it would cost 5,000 euros. Villig spent months persuading his parents to lend him the money.
Over time he gathered about 100 drivers ready to take risks. But when it was launched in August 2013, not everyone went online when I needed them and realized that many had given false contact details. “I actually only had a few dozen,” he says.
He started going to taxi ranks and getting in cars: “So I went there, I took [their] telephone, signed [them] towards the work. . . and it was like, look, every time you come to work, you open this app. ”
That winter it had a few hundred drivers and offered a service that worked. About nine months later he raised 70,000 euros. Six months after that, it raised an additional 1.4 million euros, mainly from local investors. In 2014, “we had good traction and we had a product that worked well in Estonia,” he says.
At the time, Villig had to consider how to scale to other markets, but in 2015 and 2016, “Uber became this opportunity to raise more money than any tech company,” he says. “It simply came to our notice then. No one had collected such amounts. No Google, no Facebook, no one.
In May 2016, for example, Uber rose $ 5.6 billion, which gives it a valuation of $ 66 billionn (although its market capitalization is $ 91 billion after its initial public offering in 2019).
The result: “Not a VC would even touch us,” Villig adds. “The next two years were extremely difficult for us, as you can imagine that we have such limited funding and resources against the company with billions. It really wasn’t a fair fight, “he said.
He responded by making a start-up as weak as possible and believes that “those two or three years really made us.” With these limited resources, Bolt spent money with extreme caution. This culture endures and Villig says it gives advantages to the company.
When I told him that the transportation business model appears to be capital-intensive, he noted that while Bolt raised the most funding it has had so far last year, “it’s still a lot less than most of our colleagues and yet the business model is still viable and the company operates and grows at a rate of which we are more than happy ”.
He disapproves of the tendency of Silicon Valley’s emerging companies to “blitz” – where they raise large sums of money and then spend what it takes to “win the market.” According to this theory, “when you win the market, you are a monopoly and you will always return that money.”
While he admits he generalizes an American trend, he contrasts it with what he considers a prudent approach to Europe. “It’s logical to take your time, build things on a proper foundation and in the long run, that’s the way to earn, not just spend everyone in the early years,” he says.
Caution has paid off. Investors returned to Bolt once they proved that their strategy was effective and “there was room for several winners in the transportation industry,” he adds.
While the investment may have returned, Villig says “we’re still very careful.” Bolt can invest less in marketing, for example, and instead reduce commission rates for drivers so they can make more money.
Bolt operates electronic bicycles in five cities and 130,000 electric scooters in more than 100 cities in 15 countries © Jose Sena Goulao / EPA-EFE
The thin focus of the company, which has more than 50 million customers and 1.5 million drivers in 40 countries, mainly in Europe and Africa, they also served as a preparation for the coronavirus pandemic. Although business fell sharply, Villig considered it essential to deal with the crisis with a long-term perspective. How do you reduce costs without creating problems later?
He decided not to cut any of Bolt’s 2,000 employees. “We didn’t see the point in letting go of the people we would have to re-hire in six months,” Villig says. Instead, “we asked who was willing to get a 30% pay cut and, to me, surprisingly, a lot of people were happy to take [it]. That really helped us through the hard times. “
By contrast, Uber has almost shrunk 6,700 employees – About 23 percent of its staff.
In a recent report by Oxford UniversityHowever, Bolt was considered one of the worst because of the working conditions it offers to workers in the concerted economy. But he declined to comment on the findings.
Three questions for Markus Villig
Who is your leadership hero?
I don’t think there is any individual. But what I’ve tried to do over the years is study all the great CEOs who have come before me, so that Jeff Bezos, Bill Gates and Elon Musk, and so on. But what I try to do is take out the best pieces and practice them in my daily life. There is not a single idol.
What was the first leadership lesson you learned?
Is that clarity is everything. What I often see is that people access this mode of rethinking, where very complex ways are posed. [with] how to incentivize people and goals and what they should do. Ultimately, humans are pretty simple creatures: the more you can simplify things, the better they work. So whenever we have a goal, we reduce it to a couple of sentences. As a junior leader, sometimes it’s easier to do that [it would be for] a senior leader.
What would you do if you weren’t a founder?
My other professional career that I was considering as a child was dedicated to science, so I probably would have done something in physics or math. I have always been very passionate about it. In high school I went to the Olympics [competitions] etc. But unfortunately, I haven’t had time to deal with it [those] passions of the last decade.
Bolt’s revenue in 2019 was 148 million euros. In May 2020 he announced a Capital increase of 100 million euros, in the form of a convertible note, which the company said at the time would allow it keep climbing increases its companies of reduced mobility, micromobility and food distribution in Europe and Africa.
The money came from a single investor, Naya Capital Management, which was also a significant investor in the company in a $ 67 million C-Series financing round in July 2019. Bolt earned a plus 150 million euros in December and received about € 20 million in March from International Financial Corporation, which is part of the world bank.
Last summer, when cities began to move again, Villig said that “acceleration was faster than we expected.” And the growth of micromobility and food delivery services accelerated due to the pandemic. “We quickly surpassed our goal of offering scooter sharing in 45 cities and now plan to be the largest micromobility operator in Europe in 2021,” says Villig.
Bolt currently operates 130,000 electric scooters in more than 100 cities in 15 countries.
He hasn’t always been a fan of electronic skateboards, admitting that the economy makes him “a real hard-to-hit company”. He believes Bolt has a unique approach, as it produces its own hardware, which allows a scooter that, according to Villig, is faster and cheaper to repair. And by offering scooter services, vehicle delivery services and food delivery, technology and marketing costs are shared and savings are passed on to customers.
He has brought his company a long way to go for someone who wanted to “get into technology,” but had no idea how to start a business. “I literally started searching on google‘ how to start a startup, ’” says Villig.
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