Zipcar CEO details company's slow start
By Susan Salk
Before they were zipping down the main streets of the world’s largest cities, they were lumbering along on flatbeds, their arrival heralded through bullhorns.
At the time, there wasn’t much of a marketing budget for Zipcar, which has now grown into the world’s largest car-sharing company.
“Our marketing campaign started off as a grassroots effort. One time we smashed up a gas-guzzler SUV with hammers, and we got some TV coverage on Fox. We also used to load the cars up on flatbeds and drive them around the city with bullhorns,” said Zipcar’s chief executive officer, Scott Griffith, speaking to Northeastern’s quarterly CEO Breakfast, at 60 State St.
“We also held an event at Ikea where we stuffed frozen meatballs into a Mini Cooper and held a contest to guess how many. Of course there was some guy from Harvard who stood there for about two-and-a-half hours figuring it out.”
As that Harvard guy was applying a mathematical calculation to the meatball question, Zipcar was figuring out its own solutions. “We learned not to go too fast into new markets, but to do really well in a few,” he said. “After we were successful there, we put the turbo engines on.”
The car-sharing company, whose premise of “wheels when you want them” has been embraced by 90,000 users, and operates in 14 North American states as well London, has the green light to expand into 50 cities worldwide, he said.
Business wasn’t always so zippy. Early on, shortly after the Sept. 11, 2001 attacks, the company faced some financial roadblocks and decided to put the brakes on any expansion plans, he recalled.
Rather than race toward the rapid creation of outlets, it focused on getting it right in the cities they currently operated in, including Boston and Chicago. “Unfortunately, the company was losing money on the bottom line, and we learned we were almost too focused on the concept of changing the world,” Griffith said.
Griffith noted the early, valuable lesson Zipcar learned: “We found we needed to go out and make money before we could change the world.”
Since its first cars hit the pavement in 2000, the company has experienced 100-percent customer base growth, and is closing in on a number of business milestones. In November 2006, it closed a $25 million round of equity funding, led by Greylock Partners, and has joined existing lead investor, Benchmark Capital, in a new round of funding.
The car-sharing company, which offers the use of a range of automobiles for approximately $9 a day, boasts that its vehicle access is “as convenient as an ATM.”
Although consumer satisfaction, largely based on cost and convenience, is driving the growing popularity of the company, Griffith noted that the current world attention on environmental health is helpful.
“The new focus on sustainability has helped us,” he said. “Our research has shown that for every single car we put on the road, about 20 vehicles come off” as automobile owners opt to rent as they go.
On a personal note, Griffith, a longtime car enthusiast, said the best road to a happy professional life is finding a way to incorporate a loved hobby into one’s vocation. Said Griffith, “If you can find a way to incorporate your personal passion into the job you do every day, you’ll be happy.”