Whisk - the Open Table of Car Ride Services

Part of an Entrepreneur Q&A Series [see past Q&As here: GLTYR]

Whisk (http://www.whisk.me) is a startup currently based in New York City that aims to change the way transportation providers offer, and customers use, car ride services. It has a few competitors such as Uber, Lyft, Sidecar, and Hailo although their business models are different. Whisk was founded by three people - Michael Ibrahim (CEO), Ram Trichur (President), and Vivek Chandran (CTO). Ram happens to be a close relative - so I did a Q&A with him about what he and his team are trying to do with Whisk.

Yottapoint: What is Whisk?

Ram: We are an on-demand ride service. Customers can request a ride through their smart phone and control the entire ride experience through the Whisk App. We are also quickly becoming the go-to technology platform for the industry, transforming the way in which current car service operators run their business.

Yottapoint: Why did you pick this name? I noticed there are a number of other small companies with the same name [Whisk (NYC), Whisk (SF), SF Whisk] - do you think this might make it difficult for people to reach you or learn more about your services?

Ram: We had a healthy debate about that! A couple of things influenced our decision. In the context of moving people, the name intuitively conveys taking someone to their destination quickly. We were also able acquire a nice domain (http://whisk.me) which builds on that sentiment. We also felt that a discoverable brand is less important for a mobile only service ...once someone has the App on the phone, it becomes a habit, and a majority of new customer acquisition comes from existing customer referrals and press mentions (vs. Googling for something generic like "car service"). There was of course the downside that searching for Whisk on the app store will be a tough fight for relevance ....we are happy that after just a few months now we are the top result on the Apple app-store and the second result on Google-play store if you type in Whisk.

Yottapoint: How/why did you come up with the idea for Whisk?

Ram: The co-founders of Whisk are New Yorkers. Though we have a good public transportation system, getting a cab in NYC is difficult especially if the weather is bad, you have young kids or it is the notorious "shift change time" for taxis. Going in a taxi is also not a very pleasant experience always. You are cramped for room, some drivers are just rude, and if you have a problem - all you can do is call 311. My colleague and I at McKinsey discussed this in late 2012. We realized that there were other well-funded players in the market - but after much research, we concluded that the market was still nascent and there was a tremendous opportunity to partner with the industry to build something really big.

Yottapoint: Do you operate only in NYC right now? If so, any plans to expand to other cities?

Ram: NYC is 40% of the ground transportation market in the US. We are well on our way to establishing a solid base here. In the next several months we will be expanding to a few other metros.

Yottapoint: You seem to have several competitors – Uber being the big one, but also Lyft, Sidecar, Hailo. Can you help us understand the key differences between Whisk and these other services?

Ram: From an outsider's perspective, these companies are different ...

• Uber has a network of professional limo/black-car/taxi drivers
• Lyft, Sidecar are "ride-sharing" apps for private car owners to make a little extra money
• Hailo is the champion of the taxi industry

If you look close enough however, all these companies have some fundamental things in common -

• They have to (at great expense) recruit customers and drivers one-by-one to join their platform. [For example] It costs Uber ~$1000 per driver recruited in NYC [Ram offered these links to substantiate, adding 'Bottom line - driver recruitment is a large budget item that investors pay for to essentially "transfer demand from one supply source to another"...'], Lyft similarly advertises aggressively for drivers to join them. All of them spend a great deal of marketing $ to recruit customers [Ram offered this link on Uber's customer acquisition costs]
• They need to raise a lot of money to meet that expense and out-bid each other for these drivers/customers
• They have very good technology that current industry players just don't have the money or skills to build (a nice App, automatic fare calculation/billing, driver/customer feedback on each other, etc.)
• Their stated goal is to disrupt the industry and replace the existing industry players

If you take away the technology and the money, they are all nothing but a car-service company - with far fewer controls than the regulated taxi/limo industry. To use a restaurant analogy, they are each a Chinese restaurant (without all the necessary licenses) that has recruited a world renowned chef, built an awesome website for ordering food and spends a lot of money on marketing.

Whisk, on the other hand, acts like the Seamless Web or Open Table for ground transportation, i.e., we work through a large affiliate network that gives us more scale. Our industry partners not only give us several hundred drivers each they also on-board their significant customer base on to our platform. They do this because we help them grow their business, help them retain their identity with their customers, and provide on-par on-demand service technology for their customers. Let me give you a very practical example of how this translates into a scalable model. We signed on a small player (by NYC standards) in Brooklyn recently. 110 cars. They do over 1000 rides a day from their existing customer base. For virtually no incremental cost, we signed up 110 cars and solicitation of 1000 customers a day to join our platform. Uber would have spent $110,000 to get those drivers - and I don't even want to guess the marketing $ to solicit such a qualified target list of customers daily!

Yottapoint: Thanks, that was a helpful primer of sorts. Based on that, what do you consider the top two or three differentiating reasons why customers should pick you over Uber?

Ram: For retail users, Whisk is the everyday solution vs. the occasional splurge. Uber has a very transactional relationship with all its stakeholders - drivers and customers. It does not matter how loyal a customer you are, when supply is short - you pay the surge. We have innovative products like priority-peak, ride-pass, queue-me, etc. where frequent users always get the same rates and superior service (we got some press recently for our ridepass offer). For corporate users, we enable service from their preferred vendors at their negotiated rates - but with the superior on-demand experience.

Yottapoint: Is your eventual vision to eventually replace taxi and limo services or to operate in conjunction with them?

Ram: Our intention and goal is to work in partnership with existing industry players. We do not want to replace them.

Yottapoint: This is a new type of business for you – what are the most interesting things you’ve learnt from it?

Ram: Three things come to mind -

a) You don't have to destroy or disintermediate the existing industry players to transform an industry. Transformation can be driven from the inside-out. Our partners now are getting rid of technology from 20 years ago and adopting our dispatching platform to run their businesses. We help them to succeed and remain relevant in the age of technology, and they help us grow to become the leader in this space.

b) Recruiting great people is more challenging than I ever expected. Some candidates demonstrate commitment to the business, but lack intrinsics or domain knowledge. If you get candidates that have a great resume, they might operate with a feeling of entitlement. I have learnt now that the best hires are those who are capable of becoming passionate about the business and have great intrinsics. I care very little about domain knowledge, or previous work experience in well known companies (even if it is Google!). We end up getting passionate athletes that can be deployed against any challenge the company faces.

c) We have learnt to be very nimble with the voluminous data we get to further our business. Some examples: Stimulation campaigns are targeted to the users at a time when they are most likely to respond to them (e.g., airport offers for spring break); Loyalty offers are targeted to users who are most likely to benefit from our multi-ride packages (e.g., http://whisk.me/ridepass).

Yottapoint: What do you believe are the main challenges you will face trying to scale Whisk to a much larger customer base over the next 12 months?

Ram:
a) As much as our business model makes total sense for industry players, some of them still live in the 80s and change is hard. It is the reason I think Uber decided they have to go it alone vs. work with them. It is a big challenge, but one we have been able to surmount in NYC.

b) Even though our business is very scalable and much more capital efficient than the other business models - we still need outside capital to grow quickly in multiple metros. Our use of capital is very different than what companies like Uber and Hailo raise money for.

• We have to hire a top notch Business Development team in each metro to build out our affiliate network. We have established the BD process/framework and shown success in NYC, we now have to replicate that model in other cities
• In addition to the "App", we are building the platform for an entire industry to run their current business ...so we have some technology work that is very unique to us. We are helping move an entire industry onto a Cloud enabled platform. There are a few other players that claim to do this ...but unlike them, our technology replaces the old technology - vs. just interface with it
• While we don't spend $1000 for every driver we recruit or $40+ for every customer we recruit like some of our competition, we still have modest costs for driver enablement and customer recruitment for each metro. Our driver operations follows a model of "train the trainer", where we enable our partners to train their own drivers. Our customer recruitment efforts are tailored to helping the existing customer base of our partners getting on-boarded (through automatic text solicitations, on-premise events, company wide announcements etc.)

Yottapoint: Are you self-funded at this point or do you have venture capital?

Ram: We raised a seed round from VCs a few months ago. Our investors and corporate customers are pushing us hard to be in other markets very soon, so we will be in the market for a Series-A shortly.

Yottapoint: Can you tell me a bit about yourself and the team behind Whisk – in terms of your professional background?

Ram: The article here talks about the team and our launch. There are three us that founded the company:

• Michael Ibrahim - A physicist (Ph.D) and business guy (MBA) with degrees from MIT and Yale. He has started/sold a couple of other companies before, and worked at McKinsey for several years (which is where I worked with him)
• Vivek Chandran - A tech. guru who is part of the Whisk Cal-Tech mafia. Highly sought after engineering talent in the valley with stints at Symantec, Akamai, etc. A magnet for other engineering rockstars.
• Ram Trichur - Several years as operations and finance executive at GE, followed by an MBA from Columbia and then several years as a consultant with McKinsey advising telecom/tech companies

Yottapoint: Thanks a bunch Ram for taking the time to tell us about Whisk. Looks like a great service and I wish you the best in becoming the Open Table of the car transporation industry!