When I think of sharing, a successful business plan doesn’t come to mind. Robin Chase has been apart of many sharing based business models. She is what you would call a philanthropist entrepreneur, an entrepreneur who starts a company to make the world a better place—not to make money.
Chase co-founded Zipcar, an hourly rental car service based in metropolitan areas; Goloco, a online carpooling service; and most recently Buzzcar, a peer-to-peer car rental service. Serial entrepreneurs often stay in the same industry or similar industries when they leave one company and start another. In Chase’s case each of these businesses she has been a part of had these two things in common:
- They dealt with transportation problems.
- They required people to share modes of transportation.
Looking at each of her business models and some of her experiences I picked up these three tips for any entrepreneur:
1. You probably shouldn’t launch your company over night.
It’s easy to come up with a product or service that solves a problem but, it’s difficult to make a business plan that allows your company to survive. It’s no secret there are a lot of costs involved when starting and running a company. That’s why investors and lenders are concerned with overhead and margins before forking up the cash.
Chase even admits that when Zipcar first launched she made a huge mistake by making the price of their rentals too cheap. They were about six months after launch with twelve to fifteen cars and four hundred members. She ended up having to write an apology email to all her members explaining they had to raise the price of the rental in order to stay open. (Read more about this story at Inc.com)
Pilot testing services or products before a massive launch can save you from headaches and tears later on.
2. Don’t start a company just to get rich.
Starting a company just to get rich is a bad idea. There is a difference between making a living doing what you are passionate about and getting filthy rich. You will begin thinking like a board member, only caring about profit instead of company growth in the right direction. Only caring about profit leads to short-term decisions striving for more money instead of the long-term decisions, which are best for your business.
You might be shaking you head in disagreement saying, “You need profit in order to keep your company alive.” This is correct, but sometimes you have to make investments and decisions that do not have immediate payouts.
Chase gave a TED Talk in July 2012 explaining why peer-to-peer companies work. During this talk she tells why Buzzcar has been a successful business model. One of the things she points out is: “What Zipcar really did was made sharing the norm…” She continues relating this to Buzzcar by explaining, “Instead of investing in a car we invest in the community.”
There are many reasons why you started your company. What is the main reason? Hopefully that reason doesn’t make you continually worry about profits.
3. You don’t have to the first to market.
Buzzcar wasn’t the first peer-to-peer rental car company. While Chase was still negotiating investments other companies were popping up. She comments on RelayRides launching before Buzzcar, “I had to watch them launch in my own back yard…” (xconomy.com), but she said she wasn’t worried.
Chase was able to keep her cool because of her confidence in her teams experience compared to their competitors. This experience made Buzzcar more popular because they streamlined the process of renting a car and registering your car to be rented, how quick, easily, and simple their process of signing up to rent your car or signing up to rent a car is. Their competitors sign up and registration process wasn’t as quick, easy, and simple as Buzzcars.
Being the first to the market provides advantages of gaining loyal customers who are willing to be guinea pigs with your product/service. This will allow a grace period of time where you don’t have to worry about competitors and control the market. However, over time competitors will find ways to mimic or make the product or service better with even a lower price point. This will take away from your customers who are not loyal yet and are exploring options to solve their problem.
Robin Chase has been a pioneer in the business of sharing. The companies she has been a part of and helped grow have changed the way that corporations look at building communities.
No matter your business plan, you have to work hard to make your business successful. Chase even comments on how exhausting being an entrepreneur can be saying, “As an entrepreneur, you are constantly in sales mode–you are selling to customers, investors, the people who work for you. But you have to be honest when things aren’t going right, and you have to fix them as quickly as you can. These were key issues for us that we had to solve or die…” (Inc. Magazine)
Is your business stepping into new territories for business opportunities? I would love to hear about it! Comment below and tell me about what your company is about and what you are doing to break into a new market.