Interviewed by Hans Tung and Rita Yang.
Today on the show, we have Amit Gupta and RK Misra, co-founders of Yulu. Yulu is India’s ride-sharing startup launched in December 2017. It provides a network of over 10,000 shared vehicles, including bicycles and lightweight electric scooters, in Bengaluru, Pune, Mumbai, and Bhubaneswar. Yulu’s vision is to reduce traffic congestion by providing a scalable, affordable, efficient, and clean solution for the short-distance commute.
In this episode, we covered why Amit and RK decided to start Yulu after having some successful exits, how shared mobility works in urban India and working with the government to draft India’s first micro-mobility policy.
Before Yulu, Amit co-founded India’s profitable unicorn InMobi – an online mobile marketing and advertising platform. During his 12 years there, he grew the company’s business into other markets like China, US, and Western Europe. Amit has a bachelor’s degree in engineering from India’s top university India Institute of Technology, Kanpur.
Rita: Today on the show we have Amit Gupta, co-founder and CEO of Yulu. Yulu is India’s ridesharing startup launched in December 2017. It provides a network of over 10,000 shared vehicles including bicycles and lightweight electric scooters in Bengaluru, Poom, Mumbai and New Delhi. Yulu’s vision is to reduce traffic congestion by providing a scalable, affordable, efficient and clean solution for short distance commute.
Hans: Before Yulu, Amit co-founded India’s profitable unicorn InMobi, an online mobile marketing and advertising platform. During his 12 years there, he grew the company’s business into other markets like China, US and Western Europe. Amit has a bachelor’s degree in engineering from India’s top university IIT in Kanpur. Welcome to the show.
Amit: Thank you very much for having me here. Welcome to Bangalore once again.
Hans: Thank you. It’s good to be here. As always, well, first part of InMobi, from my good friend from Business School, Jessie Yang, who ran China for you. And when she joined an Indian company, I was very impressed. In your sense, you guys have done well. Can you just chat more about InMobi and how did you decide to expand into international markets so quickly?
Amit: So first of all, Jessie Yang has been one of the amazing person for InMobi, professionally, personally for me, whenever I need help, I was just being her and Jesse, this is where we need help. And I would give almost all credit to Jesse Yang for our success in China. Now coming to InMobi, we started off almost 12 years ago, back in 2007. Where there was no concept of mobile internet, there was no smartphone, the company was doing something on SMS. We had a view that the way dekstop had Google advertising, etc. Same way, something will happen on mobile.
And because there was no mobile internet, we thought that okay, it has to be an SMS thing. And that model did not work well. So after maybe 12 months, from starting, we pivoted to a small screener, the blue WML -based mobile internet site and trying to monetize that. And at the same time, big movement from Apple and Android from Google happen. And we know that mobile internet became the technology of the decade, creating trillions of dollars. So interesting part is at least co-founding team of InMobi, we were able to see that there’s a big wave coming right. And we had this belief that advertising will be a big component. And I hope you know that now mobile advertising is taken over the PC desktop based advertising already. It’s bigger than TV. So somewhere the belief of that this is going to be big. And we stuck to that actually helped us a lot.
So I played several roles within the company started from publisher side acquisition. So we were like two sided marketplace demand and supply. So I let the publisher part, who will give us a space to show the advertisement. And post that after three years company thought that this should be one accountable person for revenue, because demand and supply needs to work together. So I took a role of CIO, company’s CIO and the company’s revenue order. And fifth or sixth year in the journey, you know, we started looking at how Google and Facebook are basically becoming bigger and bigger. And if you understand what’s happening over there, the reason was they have access to more deeper data about the consumer and they have access to more share of time from the users perspective. And we started thinking about it, you know, can we make a new Google or new Facebook? The answer was absolutely no. So who else in the ecosystem you can go? And the obvious answer was the OEMs as well as the teleco, who has access to the data, as well as the screen time. With that narrative, I actually do things which was first of all, I started a new BU where we went after systematically to OEMs as well as telecos. And I also relocated to US, where we were having issues with respect to leadership team over there. So we found out that a team while the market was large, but our team was not excited about InMobi, and they thought that they are they’re not being cared, you know, because we live in India.
So we decided among the co-founding team that, you know, one of us should move there. And I decided to basically said, okay, well, I’ll do this honor. It was an interesting journey, doing a cultural transformation, where I had to let go a lot of people, hired a recruiter to rebuild a team and just for information. When I moved there, there were like, 50 member team in North America. Yeah. I had to rebuild team. Today, We are close to 400 members team in US. Across three or four offices, certainly New York, San Francisco, we’re set up in now inside media in Kansas City, and in LA. So we ended up acquiring two more companies, one from Sprint, and one other company, which was the supply side platform based out of LA. So this whole cultural transformation led us to do a bigger bet in the North America.
At the same time, my other hat going after OEM and the Telco actually led two new business entities for InMobi now. So the glance product, the new entity I was talking about, this is a lockscreen content, only one in the world, which is existing right now, because Google made that impossible for everyone to run a lockscreen content company. But why we survived because it was not just about that, okay, you create some content on lockscreen. That’s easier to understand. But the strategy of that you have to become friends with powerful people in the ecosystem. And that happen to be Xiaomi, that happened to be Samsung. They basically came on our side and our pitch was very simple that you have been creating this hardware or getting no valuation, no goodness. we can help you. And they basically understood this whole notion, we quickly went to South Korea, met with the president of Samsung at that point of time DJ Koh. And they saw the vision very clearly. They said, this Okay, this is making sense, we support you.
Same thing happened with Xiaomi, where we went basically to Beijing. We spoke about our vision, and they said, okay, this is making sense. And good part was that Xiaomi at least back part of time was familiar with the idea of showing content on the lockscreen. Although they were able to do that in China, but for India, they did not have any partner. So they also accepted JIO came, a bunch of companies came. So this whole effort of me not doing anything for InMobi from a core business perspective, but focusing on a new business initiative, actually led result to glance, which actually has raised for, you know, a very significant amount of moneyrecently, from Peter Thiel’s fund in the US.
And then the second thing I did was respect to Telco, there we ended up acquiring the company with sprint called inside media. And that has been now you know, converted into a new entity called Cofactor early days for us, but we are able to monetize Telco data in the context of advertising and a bunch of business models around that. So I feel good that I was able to contribute to InMobi’s new value creation exercises, also did the cultural transformation, which is helpful for their core business of advertising. And then, you know, the whole thought, you know, becoming 40 I thought that when I was 30, wherever 20 years old, getting into college, I thought that I should be an entrepreneur at the age of 30. I ticked that box. I was 30, and I thought I should be retiring at the age of 40. And I was about to turn 40 I realized that it’s not something which I can do, I will enjoy, what is somewhere the joy of or the fun of giving back to the society that came into my mind that, you know, that’s probably the happiness reason.
And I started thinking about what problem I can pick. And there was kind of several problems in India, as you know, everything is broken, everything is an opportunity. But what made traffic and pollution, the number one choice for me, because it is impacting me as an individual. So in the spirit of your class, grief, financial status, color religion, you have to deal with these two problems. And I thought that let me pick that because it’s very complicated problem. And soon after that thought was clear in my mind, I actually approached my longtime friend, RK Misra, who I’ve known for almost 15 years. He’s my brother, a college senior, another respected person in the country, and then anything related to infrastructure, mobility, he’s kind of Guru. So I went to him when I was starting InMobi also, so it’s a long journey.
Hans: Did he enjoy InMobi?
Amit: He was actually transitioning out and he wanted to serve the country. And I let him talk about his own journey. So he actually came to public life, work with our Prime Minister Modi BJP for five years, an amazing journey,you know, I think let him do the honor. But interestingly, he was my first port of call when it came to urban mobility infrastructure. I went to him you know, having this feeling, you retired when you were 40. I also had this feeling but you never retired actually, you were working on this site. I am also having this feeling what should I do? And then he said, you know, why don’t you do that? He asked me some interesting questions. Are you financially stable? I said, yeah, he gave me some money. So I started.
Okay, to do this, this is a difficult problem. And we realized that this is not an easy one and then he said okay, I will help you. So, next week, he took me to the head of Metro network. After two days later, he took me to the city head of municipal cooperation. And I was very clear that his is the big boss. And he also started enjoying that maybe you know, this is looking good. And he actually, I remembered he made an interesting statement that you know, he was having the booze with his own class of people like who are old 50 years, he lives in a very nice community, has got a lot of friends like him. And he was like I’m gonna live for another 20,30 years and have a lot of time and energy, I should utilize it properly.
So then he and I spoke, he should get deeper, I said “deeper, sir, means co-founding, we become partner in crime”. So he came on board, and I will still calling my other two co-founders, one is my college batchmates, he was living in the US, he moved to India. And another one, the 4% is my childhood friend. He was living in Amsterdam. I pulled him in. So four of us, September 2017, came under the same roof, started building Yulu. And we thought that problem is very difficult. But we think we believed that it can be solved. And I’ll share more details as you get on. So but January 2018, we were live with our first product and that the onward and today we have made a lot of interesting developments, have got lots of ups and downs, everything was hunky dory. But the good part, we stayed on goals, we knew this problem is real. So someone has to figure out a solution, and we had some interesting approach in solving for that.
Rita: As Amit has hinted, also joining us today is the co-founder Yulu. RK MIsra. RK is a serial entrepreneur, also a public figure known for his expertise in the nation’s urban planning policy.
He is an undergraduate from IIT with master’s degree from Tokyo University, also an alum of Harvard Kennedy School of Government. Welcome to the show, RK. Now tell us your side of the story.
RK: So I think Amit actually described what the problem our country’s facing. And I had the opportunity, I could retire early at 40. I had a couple of successful businesses, and I decided to do something to contribute to the country. By education, I’m a urban planner and transport expert. I did my masters. So I’m senior from IIT Kanpur, and masters from Tokyo University, where I did a master in urban planning and transport and the first smart city which was developed in Tokyo. I was involved in that, including their driverless train system and all that. So I had a deep desire to do something meaningful for India as well. So I went to Tokyo University and my lab was the one who got conceived that.
Hans: So when I first saw that, I thought that’s what China looks like, this is good model for almost all emerging more.
RK: Absolutely, absolutely. So that was fantastic. So then I was kind of roped in by the top office in the country to help them. So I designed the Smart City Mission for this country. So now we have hundred Smart Cities being developed. So I was the key architect for that. And that became a policy. And, of course, our cities, actually, India is a country which is very high on talent but very poor infrastructure. Now, data infrastructure can match and country can go forward. Only if the infrastructure keeps pace or goes head of talent? China did. I mean, you build infrastructure, as they say, build the road, they will come. India somehow missed that boat. And I was able to convince our top leadership that this is needed, and they could have bought the narrative that the government can only do the policy, government can do the major interest such a relevant.
So, I don’t know if you came to in that 15 years ago, you could not go from say, Bangalore to Chennai or Delhi to Mumbai, it take two days. Today you can go very fast. So, our intercity connectivity has become very good between bigger cities. Now our trains have become better. Airports are lousy. Our airports are not world class. Now, what is not done is intracity connectivity, because cities have grown like crazy. I came back to India in 95, Bangalore was just 4 million. Now it is 13 to 14 million million, from 4 million to 13 million in 20 years is crazy growth like every other city, because jobs are in cities, And people come from all over places, infrastructure is not, so I think the idea is really something which time has come. It’s not an easy problem to solve. Now, that’s why not everybody can do it.
So when Amit came, I love his passion and his pedigree of, I know he’s very hardworking. I remember when we discuss about him joining InMobi, and we saw the journey of InMobi, and I also been an entrepreneur, I understand what it takes to be an entrepreneur. And these guys did something which was very difficult to do. especially from a country like India. We just said we are not a market. So from the day one they created something which was highly global. So they had the experience and this business the market is in India, but you have to have global experience, because some technology will come from outside, some product may come from outside. And this problem are very close to my heart. And I’ve been entrepreneur twice over, so when he came and asked for it, I said, Well, I think looks like a big enough problem solve and if we solve it, would have done a good job. That’s what my reason to be part of the team.
Hans: Got it. And can you take a few sentences to describe Yulu and how it is different from several other micro mobility companies that are also exist in India today?
Amit: Sure. So from a problem statement perspective, we are going after short distance mobility and enough more data and research report says that the short distance mobility, which is typically five to seven kilometer, they account for two thirds of the trips in any big city, and they are the one who will congest your downtowns, they will be the one where people moving around, and if you can solve that problem, this will in general decongest your city. So, that was a formula and if you look at India, we have very limited road space. And you have seen that what happens here. Answer was not to create roads after roads because population will keep on adding, the answer was to do something dramatically different and that physics says that you move people from this big cars, they can be their own cars or they can be 1% of the back in a shared hitting taxis etc, for example, right?
So we said that if you are alone going four to three kilometer distance, you don’t need to be in a car. You can do that with smaller eco-friendly vehicles. So that was a template and luckily, it became a global phenomena. I will not take the credit for the Yulu team, Mobike, OfO. They started the wave, I think micro mobility and a concept perspective where someone can build a large business on technology and make it really work. I think the inspiration did come from China. Having said that, we also started seeing the issues with OfO and Mobike. We also saw the same narrative going to US where earlier thinking was that OfO and Mobile themselves will basically take up the market, but that was not the case.
Why? Because mobility is a very local phenomenon. Not only that, you cannot take one country stamp late to other country, reason being the cultural context is different, infrastructure is different, and a set of relationships you need to know. We understood that abstraction very well. We said, okay, this looks like you know, a good problem to have. Good part is we have some things to play with. We don’t have to start from scratch. At the same time, we were wise enough to not copy paste. So we will never ever say that we are going for mobike of India, never, we are Yulu of India, very clearly. And with that thesis, we started things from first principle. And our idea was that rather than we solving for all of the use cases and the spectrum, can we look at our two-kilometer distance in the context of some city like Bangalore, we were based here.
And we were able to fast track some other things because of that focused approach. You’re not trying to boil the ocean for the country, not for 10 kilometer distance, two kilometer distance with Bangalore cities could better went to China, as always have been going there for like every quarter from last five years. And were able to get the IoT device which we did not have to worry about, thanks to Ofo and Mobike, they were like 10 companies were trying to sell us the lock and then we got IoT here, but the same time the bicycle we design in India, we realized that if we bring it here, people will not like it. So we took the pain of designing them here getting them made in India, the supply chain is easy. So the big thing we did, which probably other companies did not do, we were much more first principle based. And we were able to narrow our focus to a very, you know, focused area, with okay, this is what we are solving, and then take business from that Lego block to another with a much more extended approach in terms of the service. So when we basically saw the use cases of bicycles, people were using it for two kilometer they were using in certain clusters.
And if we had to increase the use case, the motorized vehicle was a way to go. We looked at some of the petrol makers, which some of our other friends were happily working on. And we also saw what Lime and Bird doing in the context of the US, and when we abstracted this whole point, we realized that this is not going to work in India. For example, the scooters which Lime and Bird using, two issues, India culturally people don’t know how to ride a scooter standing. The second problem is the scooters are breaking in two months, company will be bankrupt next week. We cannot build a business model because our app was available.
When we look at the petrol, two things came, there’s a software aspect that as a company also worrying about the environment. But that was not the only reason when should take a decision or not take a decision. There was a professional in our head that okay, even if you do petrol, can we make a business model work? And after doing some of back the envelope numbers, because we had experience of running cycle business for almost six to nine months, we were very clear that we will not do patrol because the unit economics will never make sense. And as a result, you know, we will clear off that we are not having a formal, I don’t care whether someone is doing better or not, Yulu is not doing it. And that’s where we started working on our own EV template.
And after some iteration, what we basically got, again, the inspiration comes from China, where I go, I will see millions of people riding those lightweight, low speed two-wheelers, electronic two-wheelers. And everyone is so cool with that. And I come to India, I said, wait a minute, I don’t see this product here. What is wrong? This is something which is an information asymmetry with someone has not tried. That’s why they’re not doing it. Or there’s something more to that. And what we did, we basically brought some vehicles from China, gave it to people. Hey, what do you think about it? And people like, wow, this is so small, but so powerful. This is so convenient. We got probably our answer right that if you have to get a business a product, which needs to be done in a shared mobility, the necessary EV will be maintenance, rebalancing. They need to be practical.
And if you get hundred 50 kilogram bulky scooter, even if it is EV, it’s not going to cut it. So we basically got this product we call Yulu Miracle, which is a 45 kilogram product build for one person runs on a lithium battery swappable so that the scooter is not being lifted, the battery is moving. And we brought it to India. And we took some calculated risks that what if people still say the larger piece you know, personal people say oh, this is a toy. But no, people absolutely loved it. If you go to Instagram, if you go to Twitter, if you go to any public forum, search Yulu Miracle, you will see the love that people have about the product.
And why it was very natural thing for me to accept that because of my, China being my third home, from last five years, I’ve been seeing so many people loving that product. Why the hell even not like that product in India? There’s no reason for me. But for others, they probably were still struggling that oh, there’s no EV, or there is no battery charging network. How will I do it? And we were like, don’t worry, in China, it has been working. we will figure it out. And that’s what we did. We got the product. You know, there were design inputs, clearly made for India market. So we worked on a product which was being used in China market and shared mobility for last two and a half years. So we did not take an absolute risk. You said okay, we’ll take some risk. Certainly the platform was using shared mobility. Yes, in China, but can we transform to India and still get a good life? And luckily, we had this wisdom of what all things will go wrong in India. So knocked off some of the parts, made certain changes and brought to India, and it was a unique, successful hit.
We don’t manufacture them. Right now we design them, by the way, we had a design input in that, we got them made by a company called Ailing, which is China’s second largest electric scooter maker, very professional hands. And then we bring them to India, where we assemble them with the help of a local partner.And the idea is that with, you know, this approach is working for us for short to matter. In mid to long term, we’ll try to indigenized whatever we can from a supply chain perspective. Yeah, so this is basically our plan for electric mobility. And why we are different, unlike other friends, we were not worried about next month or next quarter. We’re looking things from long term perspective. We were spending our bandwidth of our time and our resources on things which are futurity. All of us know that petrol is not a future. We know that EV is a future, look at what new government or Modi is doing. So EV, not only is future ready, also, there’s an opportunity, you know, from a P&L perspective, we are generating a very healthy unit economics. And I’ll show you, you know, offline, I cannot share the details with you, but our numbers on unit economics are better than our global peers. So Lime and Bird, Chinese company, you’d be surprised to see what we have done with our business here.
Hans: At an intellectual level, you mentioned that India has lower ARPU. And then you have quite lower cost base with very good product you seems. Even with the local supply, a local sourcing can you get a cost way down, though have a superior product and last longer?
Amit: Yeah. So that’s a belief, even current product, it is designed for more than three years of life. And we have OEM warranties to back this up. And we’ll actually show you when we get chance. And the old products, how it has been used and how it is looking even right now. So we have a belief that this product what we are using will have more than three years, at least in the base case model. Now, yes you’re right our ARPU is low. We like make like 60-70 cents on a trip, unlike US where you make $2, but our opex are one tenth of US number, so when you do the maths, our unit economics looks amazingly well. And unlike we using basically those kick scooter with the life is only three months, we have a product which is 36 months. So the amortized cost per month actually comes into the economics and make the overall math very very exciting.
Hans: With both services, do you have the ownership?
Amit: So, right now, it is actually at least owned by us. And the reason why it was owned by us because we were figuring things out. There was no one who will give you or buy anything on their books, but now we are very strong in economics in place. In fact, we have closed a deal with a very large group to give us the same bikes close to 50,000 of them on lease. So we are actually have sorted that way. So this is looking good.
Hans: You just mentioned a bunch of our portfolio companies. My partner Jixun led our investment in Hello in China, bigger than OfO and Mobike. He also led our investment in Grab in Southeast Asia. And I invested in Lime in the US, as well as Grow in Latin America. So it’s been very interesting to see micro mobility revolution happening in all regions.
Amit: So just for your additional information, our template is very similar to Hellobike and Lime where we have not called ourself as a secular scooter company, we basically are a multi asset. So from our product positioning perspective, we are a platform where we can basically have different types of SKUs. Having said that will not try to make 50, we will kill herself in maintaining them, we try to keep three or four different SKUs, so that we are a problem first company where we think there’s a need of a bicycle maybe for one kilometer distance in a campus, take it no problem, or a kick scooter where my corporate campuses are seeing that I am using golf carts. Can you give me something which is fancier than cycle? No problem, this bird type of kick scooter, I’ll give it to you. Because in the campus you have a good road, no problem. But on the road, we have this product like miracle where it is our hero product, very simple to use does not require any helmet, license, no traffic cop. I don’t know if I’ve been hearing some horror stories in India, where people have been fined for $2,000. Our product will never have any traffic fine. Zero. So this is how we basically have built things very differently from others.
Hans: Next time coming to China, you should check out our portfolio company NIU, they have the best lifestyle brand.
Amit: I’m a big fan, by the way, the CEO visited us last month. So I don’t know, if you remember from very early on is like, Okay, look at this, this is a coolest product. And I took a lot of pictures at NIU showroom, trying to use their product, it’s like, brilliant, brilliant. Yes. very interesting company.
Amit: So you invested in them as well?
Hans: My partner, Jenny, led series A and on the board and helped it go public.
Amit: Very good. So it’s actually pretty interesting company and they export their products to so many countries. And probably they will do, they should do something in India. That’s what I hope.
Rita: So this particular challenge you guys wanted to solve is actually inherently a universal urban problems. And with your background in the government, I believe you work quite closely with the government, correct?
RK: I think you’re right. As I said, solving a problem of infrastructure, we’re connecting to big cities is one problem. Because that problem is easily solved. we acquire the land, build the role, you’re done. But cities are very, very complex, alive entities, correct? Here, everything is done and built. You can’t ask people oh, suddenly, I’m going to build those a building, correct? Expansion of roads is not possible. So city is more of a management challenge or infrastructure challenge. You can build a very good road, but it still can’t move. Because the road is too narrow. As buildings have already been built, so then you cannot destroy those buildings, especially in a country like ours where everybody can go to pour their, you know, I’m not saying anything else.
Urban challenge is not a money or infrastructure challenge. It’s a management challenge, managing the expectations of the people and the aspiration of the people. And I think that was something which is very, very interesting for me to work with. So, my contribution to urban revival in India had been and I have told my political leadership in the country that if India has to become a 5 trillion economy as Mr. Modi is telling, you have to focus on cities, you win elections from villages, but you make money from cities, cities are economic growth engines of this country.
And that message has gone really well. So, India is building now Metro in 20 cities and planning to build in 50 cities, India will have around 50,000 kilometers Metro by 2030. Now, what happens unlike Tokyo or Shanghai for example, but Metro can reach within one kilometer half a kilometer of your house, India will take 50 years reached there, but what happens in between? So, New Delhi has 250 kilometers metro, 250 stations but still you need two or three or four kilometers. So, when New Delhi Metro had met me, in fact not only Delhi Metro head, all India Metro head, the Government of India Secretary, he told me our K, and I told him daily every splinter is impossible to live, pollution is so crazy. Why are we not doing something about it? He said we have to look at the metro, so, nothing is happening as it because nobody can reach Metro, Metro is at least two to four kilometer away, and everybody in cities income is not a problem. I can afford a bike, I can afford a car.
So if you don’t bring public transport to me, I will not take public transport. So the first and last mile connectivity becomes the key issue. So then he said can you do something? I said yes, we can do. So I told him come to Bangalore, in Bangalore, we have done. So he came to Bangalore. He also had to Bangalore Metro, and he came and he saw Bangalore where every metro station we have our Yulu miracle, he said are you gonna do it in Delhi? I said yes. And that’s why we launch you know. So here what is happening is other micro mobility players they were not reached. They were not because they are doing the plain vanilla, buy some scooters and rent them. We are solving problems. And we are solving problems in the context of our country’s growth. We are solving problem in the context of urban renewal. And the government has understood that cities are economic growth engines, if the cities don’t fire, country won’t go.
So, look at Mumbai is building 12 metro lines simultaneously. Bangalore is building hundred-kilometer Metro as we talked by 2020, they’ll be 200-kilometer Metro here, Delhi is looking at additional 250 kilometer Metro, 26 are building. So, if all these metros come on, you don’t have a first and last mile connectivity, I think you will have no benefit. Metro will lose money, But most of the Metros are being built by the loan, how the Metro pay the loan. So I told him, you have to bring from the government of balance sheet of the Government of India. So I think that message is gone very well. So being with the government, I have realized one thing. They understand the problem, they need help to find solution. And the help cannot come just by policy. The policy needs execute, who will execute? And the very few people who understand the global context, and the people like us who have been globally traveled and businesses abroad, we understand what’s happening. How to solve it? And we still have this streak in us that we want to solve for my country. So this is I think what well understood we are not crazy capitalist. We are compassionate capitalists. So we want to make money by doing good. And you still can make money, lot of money by doing good.
Hans: That’s kind of Jack Ma’s philosophy.
RK: I think I agree with that. I mean, you’re solving a problem in the process of making money but be mindful of.
Hans: Grow the pie for everybody else. And that’s kind of GGV’s approach as well. We’ve been fortunate to be investor in Alibaba since 2003, and when we invest, we always look for hey, can we fund companies that doing country building? If country gets bigger, everybody gets bigger.
RK: I mean, we are here in 2019 when China was 2005, and you grew like crazy. I don’t think that we can grow at that speed.
Hans: But doesn’t need to. But you can still have a lot of room for growth.
RK: Exactly, but you’re like $10,000 per capita. We are $3,000 per capita. But if we reach $6000
Hans: Yeah. As you know, in 2005, China was $3000 per capita, that’s when I moved to China, so I remember.
RK: I know that, you move from Silicon Valley to Shanghai office, now if 2005, China was there $3000, by the way, India’s purchasing power PPP is very high. We don’t have to be $50,000 per capita economy to be able to buy what Americans can buy. At $8000, $10,000, we will be much richer than any other countries in the world. So hence, India doesn’t need 20 years to do that, I think we have 10 years. And hopefully, we’ll reach there.
Hans: Make a lot of sense. And part of reason why bike sharing can work in China is because the subway system is so pervasive. And you need every time you go between two stations or from home station to work, having a bike sharing makes a huge difference. Like you said, bring public transportation to the users. On that note, I know this that India was working with Japan on high speed rail over three years ago. Haven’t seen much yet.
RK: I love to talk about because I’ve been part of that.
Hans: Would India decide to work with China in the future and be able to build that out or is something that’s more local here that’s preventing high speed rail?
RK: So that’s a very interesting question. So high speed rail again, as I said, will connect two big cities, is right now being done within Mumbai and Ahmedabad, Mumbai and Delhi, Mumbai and Chennai is being done by one of the Chinese companies. So when there is a first time, first there was ideological debate. If we can’t feed our people, do I need bullet train? That debate doesn’t happen in a country where you don’t have democracy? Unfortunately, India, that’s a very big debate. Do any bullet train? We still have bullet cars. So we took three years to get over bullet cars and bullet trains.
Now, once we did that, then it’s a matter of after your land, correct? And sorry, doesn’t matter how much money you gave? And you can do nothing about it. Of course, it’ll be a two year process of court. Now, we have done that. So now actually, almost nine months ago, all the land acquisition was clear. So now you’ll see Metro running before this term. I mean, the bullet train running back before the term of the Prime Minister expires in 2024. Actually the bullet train, because I have huge connect with Japan, and I am working at the government level also. To get a lot of people, Japan is a very cheap money you know, there is plenty of money don’t know what to do with it. India has plenty of money has plenty to do with it. So we are looking at the cheap finance, infrastructure is a lot of finance. So I think you’ll see that. But those kind of mega projects are difficult, but look at Metro, Metro is going very fast. So that’s difference, and Metro is going mostly underground. If you don’t give the land I’ll go underground, land belongs to me, which is the government. So I think from that point of view, yes, I’m sure you will ride Metro but not at the speed as in China because I don’t think India can afford.
Hans: Sure, it is expensive.
RK: It is expensive first, and then our airlines are very efficient. Our airline fares are almost now as compared to our military fares. Now if the bullet train, of course only thing you don’t have to go an hour early and wait at the airport. So I think bullet train will compete with airlines and it’ll be economy to decide, economics of the bullet train, not the politics of it.
Hans: But as you know, there are 37 million people that takes up the High Speed Rail bullet train into Tokyo every day. It means that most people don’t have to live in Tokyo, and still work in Tokyo, which obviously lessen the burden of managing a city like Tokyo size.
RK: I live in Tokyo for eight or 10 years. And let me assure you, any country or any city in the world, if they have learned for transportation, they should learn from Tokyo, Japan. And here the first line was not between Delhi and Mumbai. But between Delhi and Ahmedabad. There are these diamond traders, who travel like hundreds of them every day from Ahmedabad to Mumbai, so the idea it cannot be politically expedient to build a bullet train, it should be economically viable. And that’s how they read so they’re looking at economically viable corridors. So like Bangalore and Chennai is one, now Mumbai, Delhi, the halfway they have done, Ahmedabad, the next train. So I think we are being very prudent about it because you can’t build something is a loan, the 30 year 1% loan, but it’s a money, somebody is putting the money to pay back, how do they pay back? So I think India is being sensible about it, and once we see the first bullet and many people asked for it.
Hans: China already had rail when China decided to do high speed rail another debate, why do we need to pay a lot more for that, but now you can live in Shanghai working Hangzhou and vice versa, and it changed people’s lives, changed the concept of space. Now you don’t have to live in the big city, you can live further away and still go back home while working in the big city, and that makes a realization happened on much more level playing field rather than just too many super big cities.
RK: Actually there’s a better land utilization in urban planning. Either you can fill sit people in hundred storey buildings, and are you spread them hundred kilometer and make them come in two kilometers. That’s how we decide. So you look Yokohama, Chiba and also cities nearby. Even people from Nagoyaka come right? You know, so this is something great about Tokyo. Well, I hope I wish in my lifetime, but I’m sure it will develop differently.
Hans: When I saw Tokyo subway map and high speed rail system in 2007. Shanghai had two lines and Beijing had one line, but you look at that map, subway map was the only way you know, top 100 cities in China can develop, you will be using this model. This is the most efficient way to manage cities. Move people and goods around.
Amit: I think I also from a quality of life perspective. Otherwise, your life is very miserable if you live in the city. That’s why you can travel 50 minutes more, but you have a same life.
RK: And despite having almost 40 million in credit, Tokyo area is still one of the most pleasant city. Fantastic network.
Hans: So it’s just fascinating if you’re willing to be more global minded and see models around the world, you just know that that’s how things needs to be.
RK: By the way just to let you know, I have proposed Tokyo government to put Yulu for the Olympics next year. Foreigners will go crazy for paying for those taxies and there’re not enough taxies, it’s too expensive. And they cannot read and write Japanese so they will not know how to go around. But you know map, I said I don’t care Yamaha, I don’t care. But had this and their head oh this is too fantastic. Or they’re struggling with this. I still have some great friends within the government there. And they said this is a fantastic idea, but you know, we are very slow people. I said Olympic can speed things up.
Hans: Yeah, that was just amazing thing for Beijing in 2008, obviously.
Rita: So when you’re solving this big problem in India, what are the most challenging part of it?
Amit: So when we started in Jan 2018, this whole thing was absolutely absent. We did not have infrastructure for parking, forget for writing, there was no infrastructure for charging. There was no policy framework in place. There was no product, which you can say that this is for shared mobility. And last but not least, you will never see anyone using these kinds of vehicle for commute. And as I said, that problem was so big that you waiting for a taxi for half an hour, this guy canceling, and you spending one hour on the road for two kilometer and paying five x bump. We understood that if we get something reasonable, we will basically just get enough and more people for our size and scale.
So the first problem which we had to solve was the infrastructure for parking itself. And this is an unique thing we did within our country’s context. So unlike China, where the cities are reasonably modelled, the city created those spaces for parking of the bicycle next to every landmark. In our case, it was not there. So what we did, we went to the real estate developers, the corporates, and our pitch to them was that hey, your guys, they basically are spending two hours on the road. It’s not productive. You agree? Absolutely agree. Do you think you should do something about it? Absolutely. Yes, I feel pain. What can you do? You know, we are like we have a solution. Okay. What can you do? Give us this visitor car park area.
So they basically gave us his spaces in their tech parks, their commercial buildings to make what we call Yulu Zone. These Yulu Zones become the parking and the operational hubs for our service. Same companies sent an email, put up posters to their employees saying that, hey, you need not to bring your car. You can use Yulu. They downloaded our app. And they started using it. Same guys will go to their apartment. They will send a request that can we have Yulu? And then that’s how we seeded the creation of the infrastructure for parking. And as RK was mentioning the city, the government there are a lot of priorities. They started seeing that what is this blue collar thing? They started reading about us in the blog, in coverage media. And he being friendly, they called hey RK you know, how can we help? I said, okay, very easy. You help us by giving us spaces next to Metro Station, bus station, you help us with police. And also you make these dedicated corridors, the way you see in Europe, in China. And the good part was we basically we were able to create this infrastructure, which was non-existing in a matter of six to seven months, and this we believe and we call by the way is a 3C approach citizens, corporates and cities to create infrastructure which was missing in our country.
And trust me No one will give you even a one square inch space in our country. But because the problem was so big, because our intention that we were building it was so unique and novel. Everyone said, okay you take it. You won’t believe in Bangalore, we have 1000 such stations, only in five neighborhoods. By the way, we are not the city level. We are only a neighborhood level. And I’ll talk about that in a moment. These 1000, only three or four places we are paying parking fees, everything else is free. And you may ask you must be crazy guy to do that. But if I tell you the narrative, okay is your guy. He works for you, will you take money from him, extra money for pocket. No, I will not do that, or this is your problem. I’m solving it. You don’t take money from me. Suddenly, the problem became the solution where we said, okay, each one of us basically come together and build this ecosystem together. And the good thing we did from a corporate perspective, we have basically MLU. But from a city perspective, we got a policy made. So we basically co-drafted our country’s first micro mobility policy. Our business never needed any legal clearance. But we saw what happened in Paris, in Singapore, in San Francisco. They did not have any policy. But the city said you know what, you have been pain in my neck. Tomorrow, I have a policy and take the shirt off.
Overnight, scooter companies were asked to vacate the city. We basically understood that, if you’re talking about mobility is an integral part of the city, you better be friends with them. We led this whole co-creation of policy document, which was future ready. Earlier, they were thinking of going a European way of tendering. And when you have tender, there just way too many things happen in our country. It’s not fair, it’s not transparent, ugly money happens. We basically made things open, and to give it to all the friends, that point of time OfO, Mobike, Zoomcar, And Yulu, we basically were able to make the city officials believe that the open system of permit is better than a tender system. So, City of Pune got the first you know, first draft, they accepted that, same policy be transferred to Bangladesh. And then now this policy is become a gold standard for over almost 25 cities in our country,from a policy perspective, so we solve for infrastructure with the 3C approach. We solve for the policy by bringing people together and then post that because we will able to choose those areas where people were having pain.
So we were able to get even the required usage on the network, other than they waiting because we got a top of the shelf placement on those real estate buildings, where someone who used to use Uber or Ola, and wasting their life, they saw, okay, let me try Yulu, what’s how? They already have the app, and if they don’t have, they can download the app in one minute. And we started seeing usage building up. So all of those issues, basically converted into some solution, because we were so adamant that okay, this problem needs to be head on solved. And I would say that the unique approach of 3C probably is a process innovation. No company in the world has cracked something of this nature. And we are very proud, and why it happened because we went ahead with an open approach that okay, let’s fix this city with that intent.
Hans: What is the most common form of mobile payment for users to use?
Amit: So when we started Hans, Paytm used to rule the world, because everyone who has a mobile phone and has done even a single transaction, most likely it will be on Paytm. But you know that from last four years, so our country has caught up this UPI. So today, majority of our payments are happening through UPI. And we have integrated not only Paytm, who we can get Paytm wallet money, as well as UPI, but phone pay, Google pay, they basically are also being integrated and they dive much more UPI transition to us. And there are people who are kind of white collar people who would have a credit card, debit card, but that is 20%. But most of the payment is UPI.
Hans: Very similar with China.
Amit: And one more thing, which we actually did, we started the business like OfO and Mobike, where customers can pick up and drop it anywhere. So for first six months, we actually had a bit of time, there was a uniqueness in our service. Everyone was like, wow, you can drop it anywhere. How will you figure it out or you have a GPS here? But operationally, it was nightmare for us. We had like 2000 bikes spread over this mega city, and they will go into every nook and corner. My team would play treasure hunt on their phone, trying to locate my missing cycle. Oh where are you baby? Where are you baby and baby will be sitting in some, you know, some basement parking, and they spend like two hours in figuring it out.
Our theft and vandalism rate was very, very high. So 90% of assets we have lost, we lost it for six months because of that model. And then we started seeing what is happening in Singapore in all of these cities, where citizens are not happy, like what is this is like my, my parking, oh, this is a pedestrian area, you cannot do that. So then we move to a virtual dockless model, which is now popular in Singapore, where you can leave it anywhere, they have designated those areas. And that’s where our Yulu Zone strategy actually worked really well. We created those hubs. And we said to the people oh you want to use it, you’re to pick it from one of the station and drop it to one of the places in the network. And good part is, because of the pull from the market, a lot of citizens have been offering their spaces, their apartment complex, their buildings, they’re saying that within our app, we have a basically a provision, you can request for a Yulu Zone.
So now we have cracked the problem of infrastructure at scale. And this is not just one city, the same model we have been able to replicate across different cities. One more interesting thing we did, we do not see our business model in the city mode anymore. For us, our Lego block is a cluster, which is typically 20 square kilometer area, one neighborhood typically, and we basically create bunch of Yulu zones and typically 200 to 300 Yulu zones in a small neighborhood. So that the accessibility for you is never more than 150 meters. And you basically want to use Yulu service most likely in front of your building, they will be Yulu service, you take it up, and you go to destination, leave it, move on. And because we are only concentrated in that area, I don’t have to worry about the area without permission. So from a cost perspective, you know, from an opex perspective, from a manageability of the business, and not annoying our customers and other reasons, this whole discipline way of running business has actually worked very well for us. And this reflects in our opex, this reflection of the theft and vandalism rate and overall upkeep of the vehicles.
Hans: And what’s your sort of loss rate and recovery rate for vehicles?
Amit: So you will be really surprised, and I’ll tell you the number of vehicles we have lost so that you have an absolute sense as well. So from a bicycle perspective, we have right now 8000 bicycles and we have lost approximately 400 of them, and 90% of them we lost during the first six months, and then we pivoted to this Yulu Zone on to Yulu Zone, the loss rate came down dramatically low. Now, electric mobility, we are only six months old and we will not sure whether this will occur. We have been very lucky that so far we have lost only three vehicles. Only three, so we are in decimal digit number, and the reason why the number is so low, because we have done some interesting innovation here as well. First innovation is that these Yulu zones are created in commercial establishment, and in India, every commercial establishment has a security guard. 24 to 7, we don’t pay them. They watch it.
Same thing happened with residential buildings as well. Every residential building of this sort has a security guard, 24 to 7. Public places like Metro, they have some security system. A good 90% of our Yulu zones, wherever bikes will be at stations, they have some indirect supervision of asset. So that’s not the story. The story is actually something deeper.
We actually understood India psyche. And the Indian psyche is that if you do a good consequence management, then people actually understand your policy really well. So in our context, we actually ended up creating bike marchals, their bouncers, ex-defense people, or police people, we get to know so this for your understanding, we cannot stop people stealing our product. But our recovery rate is 99%. Because they don’t know they got this cute little thing. It has got something and we showing up and they’re like, Oh, yeah, who are you? And then we take care of these guys really well. And we make sure that you get a message for yourself, for your friends, for your locality.
And in certain tough cases, we get police help, who will give them hospitality for a week in a sense. And then post that entire neighborhood will be sorted. So we basically have found out that fine we are doing good for the society, but the antisocial people, we are tough, like we are really, really tough. And that is actually what has given us this goodness. And then we have built a human network of informants, who are those people on mom and pop store. They basically infom my on ground team, they’re friends with them. So the way our business runs, the cluster thing I was talking about, we hire a person from that area. He knows the local people, he knows the area. And then if something wrong is happening, he will have by nature of his relationship, that okay, this guy was messing around. And then we send our bike marshals to just tell him that don’t do that. This is again, an India centric process innovation. We were like good company but for bad people, we are equally notorious, and we’ll make sure that you get the message, because of that our loss rate, why it is in decimal places, probably the best in the world.
Rita: What would be one piece of advice you would like to share with second time entrepreneurs, especially for those who already have some success under their belt?
Amit: So by the way, I am very passionate about that. Outside of Yulu, I advise a lot of entrepreneurs actually both RK and I, we get a lot of young entrepreneurs who will come to us for strategy for some time, softer aspect, etc. So it’s very close to our heart. Now, my advice at least you know, the way we have evolved, both of us have evolved. There seems to be this craziness. And you know, first of all, 10 years ago, being an entrepreneur was not easy, because we never had a seed investor, we did not have anything. But now there’s a time when people thought that being an entrepreneur is a cool thing. They will find the better house by being an entrepreneur, look sexy, right?
And that’s not the case. You know, first thing, which it is, I do know, I asked him that, hey, do you really want to do that? You have a cool life. You get money in the bank every month. Why you want to get into this mess, you know, you will not have anything, no life, like no personal life. So the real passion it has to become genuinely, you cannot do for the oh, I am an entrepreneur because looks like cool. I’m a co-founder and whatever. And this is not something which people understand, unfortunately.
So my advice to any young entrepreneur, or wannabe entrepreneur, twofold. First of all, are you really passionate about that? Do you see the reason which is related to your personal life, or someone who’s your loved one. You lost someone for example, your friend, your best friend to cancer, and doing something on like to fight that. I know that you’re here for long term. You will fight your life with that problem right?
Second thing which sometime I feel not cool with, they go after some trivial things. And that’s something pains me, especially the serial entrepreneur who have gone to the journey. My wish is that they should pick up something which is meaningful, or you’re made money, buddy you know what repetition? Why do you do that? Some other stupid, I’m not trying to by the way, frame anything. Money’s a money. But you know what? You have been a mature entrepreneur, you have seen the journey. Please put yourself on some big problem for your foot. Maybe for your country for your city. And if you do that, then at least your life will be fulfilled. You will have someone like say doing the high school and doing the high school again. That’s not cool. No, let’s do you know the next level’s thing. You beat yourself in the game again, by doing something really meaningful, so budding on entrepreneur, please understand what you’re getting into. It has to be a reason. Serial entrepreneur, my wish is that they should do something meaningful. So that’s my, by the way, two things. And at least I am happy that it is we are walking the talk, we’re not doing…
RK: More or less we believe in the same principles. That’s why we are together. But I think to serial entrepreneurs, my thing would be that you got to do good. You can do good by being an entrepreneur. And if you have had your feel of entrepreneur, you don’t have ways to keep yourself busy, rather than going to Bahamas or playing golf. Go and set this society as an NGO, or just because you’ve got free time and plenty of money in the bank. There’s no reason to do another startup. So do something good. Make good use of your time, talent and money, but it has to be meaningful.
Rita: Okay. So we’re going into the last round of quickfire question for both of you. Just say what first come to your mind. How do you go to work?
RK: I 25 kilometers away. So I use my car.
Rita: Among the cities, both of you have lived, which one is the one you go back most often and why?
Amit: It is actually Bangalore for me, out of my 19 years of professional experience, I have worked here for 14 years.
RK: For me, of course, Bangalore, I’ve lived here longest, but I go to Tokyo most often.
Amit: And by the way, if I can add, I love San Francisco, and I love Beijing. And I’m not just saying it, but I truly love the country. Like every time I go to China, I actually feel inspired that look, this is how country can change or people of country can change.
RK: I remember when I was in Tokyo in 90s. And I always saw all the I was into a company, which was into this business of construction and in urban planning and all that. So all the cranes and the big cranes of Japan are all in Shanghai and Beijing. And that’s what I told them. I said, listen, these guys, this company is going to take over, take over the big time. No Japanese believed me. But I said, I’m always good or bad for you. But it’s certainly coming.
Rita: Last question, what’s something you read recently you would recommend?
Amit: So plenty of books I’ve been reading. The most recent book I’ve read is about building the team. And not that I am new to that. But the narrative has changed. When I build a team for a movie, there was a different time. But now you are so much of pampered with a lot of startups. And you still have to find the person who is crazy about your vision, how to filter of those guys. So that’s a latest book I’ve read.
RK: I read something called Purpose of Life by Kahlil Gibran. So I’m kind of trying to make meaning of what I’m doing.
Hans: Excellent. Thank you so much. It was so much fun.
Amit: I appreciate your time and really enjoyed this interaction. Thank you for this opportunity.
RK: I love the concept. Yeah.
Hans: Thank you.
Rita: Thank you.
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