‘Grind in your 20s… Hustle in your 30s… Retire in your 40s.’ Sounds like a perfect plan, right!

Founder Thesis brings you the journey of Amit Gupta, the mind behind India’s first unicorn InMobi, who in his current avatar is heading Yulu, the country’s leading shared micro-mobility service provider.

In a candid conversation with Akshay Datt, Amit harks back to his earlier days, when he aspired to start his venture at 30 and retire by 40. However, by the time he started approaching 40, he wanted to give back to society. In 2017 he founded Yulu, an IoT-based bicycle-sharing platform that rents out e-bikes for first-mile, last-mile, and short distance commutes. The mission was to reduce traffic congestion and improve air quality in urban cities.

Tune in to this episode to hear Amit speak about how Yulu is revolutionizing the way people commute by providing smart, shared, and sustainable mobility solutions.

What you must not miss!

  • Efforts to indigenize and reduce external dependencies.
  • Strategic partnership with Bajaj Auto
  • Fine-tuning the business as per the Indian market.
  • How has COVID impacted the business?

EPISODE TRANSCRIPT

00:01:57

Akshay: So when you turned 30, you quit…

00:02:02

Amit: One month prior to that. I actually started another company which was not InMobi by the way. It was a company that was into business intelligence and analytics. Although, at the same time my batchmate Naveen, thought of moving from the US to India. He came to me, he parked himself in Bangalore and how things are etc. Then he also had this idea of doing a startup and I thought that maybe it is a good idea for me to become part of the same team and that’s how InMobi happened. Rather than doing that business intelligence platform thing, I just decided to do mKhoj with them. mKhoj became InMobi as you know.

00:03:05

Akshay: When you and Naveen had the initial discussions about what you’ll do, what was the idea? How did that evolve into what finally got executed? Tell me about that go-to-market journey, if I can use that term.

00:03:23

Amit:  So it was 2006, and back then the mobile phone started becoming important. India started having hundreds of millions of people. Mobile was no longer in the hands of the craziest people, it started to be seen in the hands of maids, drivers etc.. It was very evident that India’s connectivity or communication answer is going to be this device and we’re also very fascinated with what Google was doing. Desktop to PC and they created this huge ad business. So we thought that maybe this mobile phone is also going to be the same. Because if a lot of people are using it and they’re doing more than just talking, they will be consuming time on that device and maybe there’s an opportunity. So that’s how we thought of building an ad business for mobile phones. I think back then it was actually very, very crazy again because there was no smartphone, the smartest phone which was available was Moto Razor or Blackberry, it was the smartest possible stuff.

00:04:52

Akshay: Pre iPhone basically. 

00:04:54

Amit: Yeah, pre-android. And then when we started the company, it was primarily on SMS and we thought that they will probably do a search and that’s why the company m and Khoj.

00:05:07

Akshay: M for mobile basically.

00:05:10

Amit: Correct, but very soon we realised that it’s not going to work. Because when you are doing abs uh, with respect to text, which is SMS, you’re very limited by the number of characters, the second thing, there’s no targeting and there’s no delivery because it was a one-way broadcast, so you don’t know what happens after that. So there’s no possibility, there’s no targeting, the medium itself was very limited because of the size. And then phones were also not big. They’re very small. So all you can do is basically just, and then because of A2P which is Application to Person, the SMS started becoming more spammy. So anything which gets basically a negative mindset, consumer experience perspective, you cannot do a good job with advertising. While we were running it, we also started to understand that this is not going to be a future. 

00:06:19

Akshay: But tell me how you actually got that off the ground? Did you use your own savings or did you get some angel investment and then launch it. And how did you spread the word as you know advertising business depends on the volume of users. So how are you acquiring users to actually launch mKhoj and make money from mKhoj? 

00:06:42

Amit: So very good question. So, we actually raised half a million dollars of angel capital. Mumbai Angel funded InMobi, mKhoj. We were the first for them and then shortcode. I don’t know how old you are. But…

00:07:03

Akshay: I guess we are around the same age. My graduation also ended in 2000. 

00:07:09

Amit: Nice. Well, you probably remember there was a double-A double-eight. There was a shortcode. So we all basically got triple five, 555 and anyone who was looking for some information could send some keyword to that number and in return, we’ll give you the best food or where’s a deal going on? So that was the model. This whole pull mechanism became a push mechanism where we started working with the likes of NDTV, Cricinfo where they were sending these A2P messages and we were inserting ads in that.

00:07:56

Akshay:  Help me understand A2P a little better. This is the first time I’m hearing this term.

00:08:00

Amit: A machine that is sending a message to a person. We are sending the verified message to you. This is called A2P. It is just happening at a click of a button. So this is how things are.

00:08:20

Akshay: So you essentially went through a partnerships route to acquire users like you tied up with these brands to help them send their advertising messages. That was the route? 

00:08:36

Amit: So that was the business model. But because it was not seen with positive eyes, we were feeling that it’s not worth it. This is how we basically decided to look at mobile internet rather than SMS. We also renamed the company to InMobi. So that was the background. 

00:08:58

Amit:  When did you pivot? Because this was a post iPhone launch?

00:09:07

Amit: It was actually before the iPhone. We were running the business on mobile internet. There was Nokia, Blackberry, Motorola etc.

00:09:20

Akshay: Very, very primitive browsers 

00:09:24

Amit: Yeah, after we transitioned from this to this, then we were able to get to the business model of smartphones after one year. 

00:09:38

Akshay: So what exactly did you pivot into? On the mobile internet, what were you doing? 

00:09:43

Amit: Yeah, so it’s the same thing, but rather than you trying to push an ad, the ad is more about being shown as a part of a WAP page. 

00:09:57

Akshay: Okay. You were like building WAP pages?

00:10:00

Amit: Yeah we would go to an NDTV who back then had a WAP page and then that page will have links and banners and then we add ads.

00:10:15

Akshay: Okay, so that was like the initial offering, like building the WAP pages and monetizing them through banners for brands? 

00:10:25

Amit: Yes, and then one fine day, we basically took a hard decision that we should kill this whole SMS business and then yeah, we never looked back after that. 

00:10:39

Akshay: Okay. And then how did this WAP business evolve as the landscape changed then? In a way, Google also came into the same space when they launched android. So how did the InMobi evolve to meet the changing landscape? 

00:11:00

Amit: So, see from a product perspective, it was the same product. In fact, Google ended up buying a competition of ours called AdMob. That’s how they got into this space. But the difference was that Google + AdMob were building this business in the western market, and we were building this market in Asia. So that’s how we were basically able, things were happening in parallel, so we were able to survive and that whole model of east to west worked for us. 

00:11:43

Akshay: Okay, okay. And help me understand how the revenues worked in those years, like what was like the first-year revenue and how did that grow over the next couple of years? And what was the breakup of that revenue? 

00:12:02

Amit: Difficult for me to tell you, first of all how much I remember in terms of break up because they are not public numbers. As you can imagine, the mobile internet actually grew like a wildfire and with our small base of revenue, so we actually do see 50-100 x. It’s actually kind of a wildfire. So you grow very, very fast and you’re adding countries after countries in our execution. So we started from India then we added our business to Southeast Asia, primarily Indonesia, Malaysia, Thailand, Singapore. And we added the African region, and the European region came up next. So at a country level numbers were going but we were adding because the platform was common. So we’re able to add a bunch of new countries. Every quarter we will be launching our business in one more country. That’s how the numbers were kind of moving at a much faster speed. It was an exponential rise in terms of the growth of the business.

00:13:17

Akshay: Okay. I want to kind of understand the product a little better. So like the initial business was to build WAP sites and then put banners in them? 

00:13:29

Amit: No initial business was not building WAP sites. We were working with the WAP site owners.

00:13:43

Akshay: Okay, taking space from them and…

00:13:47

Amit: So we only had the technology to provide the mats in real-time. Put a code and embed that into their site. Very, very similar to how Google Adsense works. That way we would for mobile sites we’ll put it up based on the device type, location, time. We will serve an ad, for every $100 that we make will be taking 30-35% of that share of the revenue will go into the hands of the publisher. 

00:14:24

Akshay: Okay. And then once people started launching mobile-specific sites, then you essentially started offering the same thing on mobile sites and probably on mobile apps also?

00:14:36

Amit: Correct, because our philosophy remains the same but a little bit of technicality gets changed. 

00:14:44

Akshay: Okay. So how did you acquire inventory? Was it like self sign up and like people would discover you and sign up or did you have like a team which was reaching out to places that were getting traffic and telling them that user advertising platform, like how did that work? Because I guess this is essentially inventory lead business right? Like if you have the inventory then the advertisers will automatically come.

00:15:11

Amit: Correct. So it was both. So we have a self-serve interface but business actually has, if not 80-20, 70-30, 30% of our publishers will be 70% of our business. So we had a BD team going to these publishers to get these deals in place.

00:15:37

Akshay: Also the first few I guess you would have personally gone out to, because I can see on LinkedIn that you were head of business development. So this team was going out acquiring publishers and this was all built by you only.

00:15:50

Amit: Correct, that was my day job.

00:15:53

Akshay: Okay okay, so how was that shift like for you from being a techie to being in a sales role in a way?

00:16:03

Amit: To start with, it was not super easy. At the same time you know you figure it out. So maybe the upbringing and then maybe the IIT system which teaches you and I will not just give undue credit to the college but you figure it out. I think when you are an entrepreneur, the only thing you know and you learn and you get better at is to figure things out. That’s how things happen with us as well and with me as well, personally. I think selling it to our partners in India to global customers, started learning that trick when you deal with folks in Indonesia and in London, in the UK, in Germany, in Japan. So yeah, you start to learn all of those things.

00:16:57

Akshay: So tell me about your learnings on how to do enterprise sales? What if someone new joined InMobi and you had to give them your wisdom of how to do enterprise sales, what would it be? 

00:17:14

Amit: I think it’s not a cookie-cutter answer because it’s different for different segments. But in our case, the value proposition was reasonably straightforward, that you know what I am going to make money for you. Some interesting thing is that unlike right now back then there were not many mobile-first or mobile-only publishers, everyone had some kind of website, they were transitioning or adding their mobile sites also. They knew this is what monetization means. You do talk about ad quality and ad formats, how much they will make, so I will not realise that it was easy at the same time. And we were the only ones, there were not many companies, we had the advantage of being the only game in town. The second thing is you’re making money for them and even from the advertiser’s perspective that’s another customer segment we were chasing. So they also were like okay I’m hearing a lot about mobile advertising, tell me what do I do? So we will consult them and they will say, okay, I will locate X percentage of my marketing budget for mobile advertising. Yeah. So the market knew what digital advertising is, this really helped us in a manner. Yeah, a lot of things you figure out. I don’t know if I answered your question.

00:16:53

Akshay: Why wouldn’t someone just sign up with Google? Why would they sign up with an InMobi? Was it because Google didn’t operate in that territory?

00:19:00

Amit: They did not have a good sales presence. It was all about ad dollars and all ad dollars were local. Publishing inventory was global, but ad dollars were local, so that you know, anyone who is doing a good job on bringing the right ad dollars would have a little bit better advantage. And also, agency business, they value touch and feel and if they can talk to someone. But that’s not the only thing and to give it to our team also, we were doing a good job on that. So from Google’s perspective, they were live in 50 countries, we’re live in like two or three countries. So over the level of execution was beating them. That being the case, if we would be doing this business in the US on day one, we certainly would have been killed. We would have inferior products and also not go for great length and breadth of our relationships with both sides. 

00:20:17

Akshay: Okay. And I can see that you eventually became the US Head, so like you decided to take Google head-on. 

00:20:29

Amit: Yeah I think that’s a difficult and complex statement to make. The Us was InMobi’s largest revenue region I think after China. We basically saw that our market share can actually get much better and while we were ahead of the US or North America region, but somewhere the team felt that the level of attention and love and care they needed they were not getting. Among the founders, we decided that, you know, one of us should move there so that in the stability, at least sense of stability, and also uplevel the team. Actually when I went there I had to let go of a few people who were not performing and more importantly the mindset was not right. I hired a leadership team, built a team who were passionate who wanted to give fight to Facebook and Google, you needed that energy. So I did that. And along with that I also started another product called Glance which was trying to figure out a business model with Telcos as well as with the handset manufacturers. So I was wearing two hats back then. 

00:22:04

Akshay: Tell me what Glance was, what exactly was it that you launched?

00:22:14

Amit: Certainly. So Glance is a platform for lock screens. For any android phone you know there’s a lock screen. Which on the phone you see the lock screen and then you log in and basically you put up your password, you get into that. Rather than me showing you a boring lock screen, we basically came up with this idea of putting life into that lock screen. So if you buy a Samsung or Xiaomi phone in India, it comes rebuilt with that product, you are being shown interesting news or entertainment or motivation. So it’s kind of that wallpaper but it is very contextual and it’s very feature-rich. That product also became very, very big in fact three months ago Google invested a large sum of equity money making it a unicorn. So we decided to make that product a separate company and investment happened in that company also. 

00:23:30

Akshay: Okay, okay. But how did you acquire users for this? Was it through the OEM tie-ups?

00:23:36

Amit: It was through OEM tie-ups So it would be a B2B2C model.

00:23:42

Akshay: And what made you take this bet that you need to build something like Glance like what is the insight that you were chasing here? 

00:23:52

Amit: Certainly. So it is actually not linked in with your Google problem. A point where we were like okay, Google has access to 1.5 billion people or devices. InMobi also has the same number of devices we see on our network. True publishers though but the depth. So advertising business, there are two things that actually give you or make you a winner for just that. How much is the share of time of users you control from a media consumption perspective? The second important element is how deeply you know the user. So Facebook and Google back then were taking almost 20-25 minutes of daily usage time across properties. That’s the reason they were very powerful. So the type of targeting they can allow, the type of ad formats they can do were completely different from what InMobi was doing. So you know, one path that you try to make a service which is like Facebook, Youtube etc. The second path was that you know, how do we, because making those B2C properties is not easy. You need to come up with a value proposition that may or may not happen. Unless you have the largest and very meaty depth in terms of data. So we decided you know where this data is going to be very accommodated and where you get the maximum time. So I think after some thinking it was very evident that in this entire mobile internet, value creation has actually happened for the app players as well as the OS or ecosystem providers. But these handset manufacturers, basically have been beaten down because the average selling price has only gone down and market share has only shrunk. You might have seen even Apple’s latest earnings report, their profit pool actually has now lopsided in the favour of the app store, right? Hardware has not gone up in the last 10 years. This was the learning and us going against Samsungs, Xiaomis, Oppos and Vivos. So we understood that they need to also make some value. This entire mobile internet, they don’t understand the content, they don’t understand advertising or for that matter, any form of paid and promoted media and then we came handy. So when we present that oh this is a consumable value proposition, they will be building a consumer habit. And then sometimes those content pieces can also have a commercial angle, We will ensure that the commercial angle is a secondary point. What you want to do is create value for the customer on the lock screen. They loved the idea and we built on that and we got almost every major handset manufacturer to sign up for that. 

00:27:06

Akshay: Okay, so this became a way for them to make their low-cost phones and give them a stream of revenue for years after the sale happened in a way.

00:27:18

Amit: They did not do that because as I said that you were doing that commercial intent messages only that much. For example, Amazon came up with a phone, they were selling it to you for a cheaper price. And you got a tablet where you can say that okay I will see the ads and then you will have $50 off. We have not done that at least, no one has done that in India. The primary reason is also that in India the ARPU of ad dollars is not very happy so the money you can make per user in the US and India is 1:10. It was not worth it. But they understood that there’s a value, it’s being sold as a feature, is a strong feature for all these guys. Yeah, they’re happy about it and they also make money sometimes.

00:28:22

Akshay: But the money currently is not very significant. 

00:28:26

Amit: I would say it is decent. At the same time, it is not a big enough way that the US can give you a subsidy of $50. We won’t have that level of advertising goodness at least in India. 

00:28:42

Akshay: Yeah. Okay, so this was essentially an experiment that scaled up. What were the other experiments that you would have run at InMobi? I imagine that like any other tech startup there would have been a culture of trying out a lot of things. 

00:28:58

Amit: So as a company InMobi did many things. But for me individually I led only this part because I was busy with business. And only during my last 2.5 years with the company, I owned the product agent to execution but at the company level, InMobi tried some other products. There was also a commerce discovery platform we tried. Innovation was in the DNA so we tried multiple things and some of them worked, some of them did not go as it happened.

00:30:04

Amit: So just like my 30-year promise to myself I had a 40-year promise to myself that I will be retiring. Although when I started turning 40, I realised that that’s not something I will actually enjoy doing. At the same time, I did ask myself and some of my mentors and I realised that I want to do something for the social impact. And this itch led me to think about Yulu because InMobi actually was a very different set-up. We did have an opportunity to make something that had a social impact but it would be done out of CSR, not as a company’s vision. Yeah, I thought about it. I thought if I don’t do it and if then maybe I’ll regret it when I turn 50. So this was the thinking, so that led me to think about Yulu and then I was very lucky and fortunate to get a very amazing co-founding team. So kind of believed in that vision. We came together. 

00:31:23

Akshay: So you wanted to do social impact, why did you narrow down specifically like a short distance commute? 

00:31:32

Amit: Yeah. So the pain point I wanted to or we wanted to solve was to reduce traffic congestion and improve air quality. And the solution part of that became what we are doing within the path to solve that problem or two problems. Why did I choose mobility? The primary reason was that these two problems impacted me and my friends and my family. It cuts across gender, age, financial status, religion, irrespective you will get stuck in the traffic no matter how fancy your car is. You breathe the same air no matter whatever you are. So there are problems in India which you can skirt, you can have your way but there are problems which you have to be part of. So I pick up something which is, as I said, impacting me and my friends and family so that I am reminded of that vision every day. 

00:32:47

Akshay: Okay and did you have global examples which you saw and then decided this is how you should do it. What helped you form your product vision? 

00:33:02

Amit: Yeah. So luckily there was some work happening in China and also in the US. So there was some early, you know, built out of your own thinking that this is how the solution will look like. However, the copy-paste did not work or has not worked generally in India. So you have to figure out something for India and this is what happened with us as well. We did start with using pedal bicycles where there was an IoT, where you can locate the bike and open it via an app. But this was only solving for limited use cases and we had this ambition of moving millions of people to sustainable mobility, cities like Delhi, Bombay, every city where the weather condition is not on your side, even Bangalore or like after two km a person who’s commuting for work, they were not willing to peddle. This was more of a use case for healthcare or fitness on the weekend. They were not fascinated with reducing calories. We were fascinated with reducing pollution and traffic congestion. So we needed them to use Yulu for daily commute and that’s where we started working on the electric mobility part which was also taking out of the boxes. So instead of peddling, you know you have a small battery giving you all the power to move forward. The product that we have chosen is also legally a bicycle. So it is a very simple product, which does not require a driving licence or any complexity. Anyone was able to ride and the claim to fame is that anyone who has done any two wheels in their lifetime can ride that product in less than 30 seconds. It doesn’t matter in what stage of life you were able to balance two wheels and you can ride. A super cool, super easy product, good for women, good for even senior citizens, youngsters really love it. So you know they have no-hassle experience so they find it in front of their college, offices, homes, and metros.  So wherever you think people are moving, we were able to create our parking spots, we call them Yulu zones. They can pick our bike from those places using our new app and then start to drop it back at one of our network parking areas; typically it is close to their destination.

00:36:04

Akshay: Okay, so I have multiple questions to understand this better. So InMobi was a tech play where you probably did not need to bother with things like government liasoning and permission and stuff like that. With this, I imagine even if you want to launch with simple cycles, there must have been a lot of government hurdles to cross. How did you cross those hurdles? Did you need some sort of permission to offer cycles on rent? And also the parking spaces, how did you acquire those parking spaces? Like how did you get this off the ground? 

00:36:43

Amit: Sure. So the technical answer is because of bicycles, there is technically no requirement for you to take any permission. Remember in your childhood, I don’t know if you’ve rented as basically. I did. That’s how I learned to ride my bicycle. Okay. You did not need to have permission from the city authorities. But what we realised is that working with the government is very, very important. They are the ones who are going to support you. Give you spaces for parking and they will also help you with the awareness creation. This is when one of our co-founders whose name is RK Misra, he’s actually a pro in this policy-making, working with the government. So that’s how we basically started building all of that. We went to the cities Bangalore and Pune and said that this is what we want to do, this is what we have done in terms of our own product. We got a lot of encouragement and support from the city authorities and that’s how we started.

00:38:11

Akshay: To get this off the ground, did you first take permissions and get the government relationships in place or did you just start building up, get some cycles and launch it in one city? Tell me about that. 

00:38:32

Amit: So we actually chose the second part, the only difference was that we were not launching at the city level, we launched it at a section of a pin code. Yeah, in Bellandur, in EcoSpace and Eco World, we basically put 100 bikes in that area on day one, we got permissions from RMZ. So they were supportive and gave us the spaces and then people who were working there saw those blue bikes. They started scanning the QR code and everything was very simple and easy. After maybe a month or so, we were already in touch with the city authorities and by then we also got invited from the city of Pune. There was a very dynamic and progressive officer who was responsible for the overall mobility of the city. In Pune, unlike Bangalore, we got permission on day one and then we started. In Bangalore, we started because everything was happening in parallel to be very honest. Bangalore, we took maybe another month or so to figure things out. So the business plan, how it should work. But, I must say that we were very fortunate to get all the support from the city authorities.

00:40:02

Akshay: And the parking spaces provided by the city authorities. 

00:40:06

Amit: So it’s a combination. There are spaces provided by the city authorities, provided by the metro, your real estate developers who will give you spaces in front of their tech park.

00:40:19

Akshay: And these are paid by you or it’s like infrastructure for them to offer mobility to their users. 

00:40:29

Amit: You can say that a large portion of that, they don’t charge any money. The reason is that they also see that it is their role or it is their contribution to make our city better.

00:40:46

Akshay: Okay. And how did you fund this, because you would have had to purchase the bikes? And this is fairly asset-heavy, unlike Uber which doesn’t need to purchase any cars. Here, all of these bikes were purchased by you only I guess. 

00:41:01

Amit: Yeah. So we actually raised venture capital money. We raised approximately 7 million dollars in our seed funding and we were able to buy these assets. The good part is while we have to pay money for the asset, the customer acquisition cost for us has been zero. So like Uber and Ola are asset-light, but they have to spend a bomb on building this marketplace. They have to offer discounts and acquire customers, they cost a bomb. Choice of the business model A versus B. Yeah, you do need to raise some capital to build the business. 

00:41:53

Akshay: Okay. What is the unit economics of this? Like how much does a bike cost you and how much do you earn from a bike over its lifetime and what is the lifetime of a bike? Can you talk about stuff like that? 

00:42:08

Amit: Some of the numbers for sure. In terms of the bike cost currently, we are spending approximately Rs 50,000 per bike that is inclusive of the batteries, extra batteries, we use swappable battery technology where a bunch of batteries are always under the charging operation. The infrastructure which we have been using for charging stations. We believe that this pricing will come down to around Rs 30,000 a piece within a couple of years. The primary reason is that we have a strategic tie-up with Bajaj, who is trying to make everything in India. So currently we have to import some components. Actually a lot of the components from outside of India 

00:42:57

Akshay: Especially batteries I guess.

00:43:01

Amit: Batteries are also from India. The supply comes from outside of India, in Japan. There are basically a lot of external dependencies. We think that in the next two years as a country we’ve been at a very very good stage to indigenize all of this. The cost will come down to below Rs 30,000. That is one part of the question. And then we are currently charging our customers on the basis of time. So we charge Rs 5 to start and then depending on the city, per minute charge of Rs 1.5 to 2.  These bikes actually are good for three and a half to four years in the usage condition in the form of shared mobility. 

00:44:04

Akshay: Okay, got it. Okay. What is the number of bikes you have out on the road right now? And how has that grown over the last one or two years? 

00:44:14

Amit: Certainly. So our journey with respect to electric mobility is now close to two years, a little bit more than two years. And we have 10,000 electric vehicles that make us the largest electric mobility company in India. And this number has grown. So if I talk about pre-corona, back in February 2020, we had 4000 assets and by the September timeframe, we had 10000 of them. 

00:44:50

Akshay: So you actually grew during the lockdown. 

00:44:53

Amit: Yes, we grew in terms of the fleet and in terms of the revenue. So our revenue grew 2.5x. Profitability grew 3x. A good portion of basically leveraging our business comes from the density. As we were growing, we were also growing denser. Density basically got our profitability also to jump to 3x from our pre-corona numbers. The only company that was showing growth and improvement in our metrics.

00:45:28

Akshay: That sounds a little counter-intuitive. I would have guessed that the people would not be travelling due to the lockdown and the numbers would have come down. So what is the reason for this? 

00:45:41

Amit: Yeah. So, what happened was that, while the cities were under a lockdown or there were some opened up or locked down both, there was always someone or the other who was on the road. Yeah, and the problem was that not everyone in India has a vehicle. In fact, 50% of the people in India don’t have any vehicle and they need to use some public mode of transportation. And Yulu became the safest mode to commute because there was no co-passenger or driver.

00:46:20

Akshay: Right. Social distancing is built in. 

00:46:23

Amit: Yeah. So we got a significant amount of market share from people who were earlier using group mobility in some shape or form. And while the top of the funnel shrunk, the movement that we got from other buckets of mobility, that actually compensated. 

00:46:45

Amit: What do you mean by this statement? Sorry, can you just elaborate?

00:46:48

Akshay: So for example, 300 people were on the road. But because of corona, people started working from home, 100 became 30. Earlier, out of 100 people who were on the road, five people were using us. But when it became 35 than that, five, you know, out of that 35% of them. So we were basically having seven or eight people using us. We got a net addition of users significantly high. Our per user per month went up by 40%. Our monthly ARPU also shot up by almost 40%. We were basically a net gain from this situation. We’re not the only company but the only company in India, basically in the world. A lot of global peers, what Yulu has got also such a similar amount of goodness in their respective businesses. This concept of self-driven, electric two-wheeler, which you can use for moving around the city became a global phenomena, successful phenomena during the pandemic time.

00:48:12

Akshay: Okay, how much do you currently earn per bike? If you are at liberty to share that.

00:48:18

Amit: I told you my pricing equation. So one of our trips will give us close to 35-40 bucks. And then we made multiple trips per bike.

00:48:31

Akshay: And help me understand the competitive landscape. Bounce and Vogo are your competitors here. So what is the difference between you and Bounce and Vogo? If you can help our listeners understand that landscape. 

00:48:50

Amit: Certainly. So first of all, we actually don’t see either Bounce or Vogo as our competition. So we are a category on its own. I think we compete probably more with an auto-rickshaw or walking, rather than Bounce and Vogo.

00:49:06

Akshay: Why is that?

00:49:07

Amit: The reason is, for example, when you look at say a 4-wheeler space, you count Meru and that the typical taxi and Uber with the same lens? 

00:49:22

Akshay: No. Basically, Meru is a fleet operator in a way, 

00:49:30

Amit: Even through the business model, but also the customer segment, they are targeting different. Firstly, Vogo, they have petrol scooters which have been taken up by people who are gig workers. They go to a Vogo station, they pull up a scooter and they deliver food or they deliver something. So, that’s what 80-90% of their TG look like. Bounce is a mixed bag, there are portions of their vehicles that will be used just like Vogo, but also there will be people who are skipping the mid-mile. So someone who would have taken, let’s say a bus or something else, would have taken Bounce. Yulu, at the same time, we basically are, first of all, pure electric. The second thing, our solution set is more optimised for short distances. Our average distance, for example, in Bangalore is around four kilometres. The same thing for Bounce is eight or nine, for Vogo it is around 12-13 km. All of us are using two-wheelers as a form factor but the business model and the TG are very different. Then there will be some overlap, so don’t get me wrong. There will be some 10-15% overlap with everyone.  But at the core, we are the solution for first-mile, last-mile where someone has to go for a short distance. We are very specific, so if you look at the mobility landscape, it’s called multimodal transportation or multimodal mobility of a city. So we work with public transportation. We complement their journeys rather than fighting with them or competing with them.

00:51:29

Akshay: Like, where the metro ends, is where someone can pick up. 

00:51:34

Amit: That’s the reason we have been given spaces at the metro stations, bus stations. They see us as a part of the solution and that’s what has been accomplished. That’s the vision we have got. We have no plans of replacing metro rides or bus rides. We want more and more people to take public transportation so that the city can get decongested. That’s our vision.

00:52:06

Akshay: Okay. Why did you choose a dock approach? Like you know that people pick up from a dock and drop it off at the dock. 

00:52:14

Amit: A couple of reasons. First of all, when you are letting people drop it anywhere, they will actually leave it at random places which not only increases the theft and vandalism but also operationally it is supremely difficult to manage. And last but not least, the citizens also do not like it because then someone will leave it at my gate or at my parking lot. So there’s a huge backlash across the globe where this kind of model did not work. In China which was known to be the pioneer of this dockless concept even now, they are basically moving towards the concept of these designated zone areas. You are basically allowed to park the vehicles there. I don’t know if you have been to China but in many places, you can see a board that shared bikes are not allowed because again parking problems, it’s a menace. 

00:53:18

Akshay: Okay so what do you think are the tech drivers for this going ahead? Are you looking at like you know bringing in self-driving into this? What are you focusing on as the key tech drivers to make the product experience and the customer experience better?

00:53:38

Amit: All right. So you know our product is self-driving. So not cool because humans are driving but I think that will answer with our cultural aspects as well as infrastructure. But as far as technology is concerned, you know we look at technology not by the zero and one, which is coding. For us, a great vehicle is also an engineering marvel. So you have a lot of work going on in making sure that the vehicle itself is basically very safe, comfortable, durable. Lots of work happens on that, we work on the hardware side with IoT. So the unit that makes a smart vehicle is also done by Yulu, we have the IP. Our stalls for example is also one unique part we have created at a mom and pop store, where we built up our own private charging network which is one of its own kind in the world that just requires a power plug. So that is our own innovation and their own work. The work we have been doing on the software stack side, they are very high-quality deep tech work happening using ML and AI for operational efficiency purposes. So our business model is to make sure that we have the bike at the right time at the right place and to make that happen, you leverage technology, and when you say placement is one thing that okay this bike is that Yulu zone but does it have a charged battery? Is it in good shape to use? There’s a lot of operations that happen under the hood where you as a customer come out of your building, you move with a high degree of predictability that they will be Yulu waiting for me if they will work. So all that happens in the background it’s all driven through technology and there is a serious amount of AI and ML and efficiency excellence that happens under the hood.

00:56:07

Akshay: So you actually move bikes around every night like to the places which would be optimum in terms of the demand to pick up and so on? 

00:56:17

Amit: First of all we don’t have to move and push every bike because of your natural movement. Yes, so on a given day we will be moving maybe 10% of our asset to maximise our yield, we will place where there’s a lot of demand but supply position is low and vice-versa. We basically have a way to move them. And it happens 24×7, not just at night time. 

00:56:43

Akshay: Okay. Your AI and ML tools should also tell you about predictive maintenance like when something needs to be maintained or needs to be moved. 

00:56:55

Amit: So they tell me that these many bikes need to be moved from this spot to that spot. They tell me that this vehicle is going to run out of charge and that requires this preventive maintenance. The reactive maintenance because the customer will flag it. So yeah, all this is via machines. What route to take to do these 10 tasks and in what sequence? If those have been done or not, all these interesting pieces are being done through technology. 

00:57:32

Akshay: Super interesting. And how responsible are customers, you know, do you face vandalism issues or theft issues? India is like a low trust economy, low trust country. So does that happen a lot and like what percentage do you see that? 

00:57:50

Amit: Yeah. So our theft and vandalism rate is 0.6%, the lowest in the world. The worl average is 3. We actually have cracked this problem by a very unique India-centred playbook. 

00:58:03

Akshay: What is that? 

00:58:05

Amit: A large portion of that is actually driven because of the fact that it is dock-to-dock. That is one very important point. And then we have our own ways to manage the situation. We have our own private bike marshals, we have our own private police. Some interesting stuff on that. Now, from a customer vandalism or misuse perspective, the best non-compliance is that they actually leave vehicles at non-Yulu zones but they will be leaving it away. But 80-90% of the time, it is actually not by intention, it is not intentional. The reason being that, particularly in Bangalore where other company decided to do dock less, they were there with the thought that I can leave this anywhere. Okay. Only the new guys do that. The portion of new guys, sometimes they do it, then you basically give them a warning. After that we start putting penalties, so they basically get on the right track. We’re learning and evolving rather than having bad intent. Sometimes it does happen from people who are not our users. Sometimes they will kick the bike, they will do some damage, but instances of that are actually a handful, you can count on fingers. Yulu zones are in visible places. So they also know that if they do something wrong with the bike, we will actually know somehow, like we have a way that they will be in trouble and if they may do that, they are in trouble. So as a company, uh, we have done an amazing job in compliance. So there will be consequences of you doing something wrong with us.

01:00:15

Akshay: Okay. Amazing. Have you had cases where the customers have just taken the bike home?

01:00:21

Amit: Yeah, many times. 

01:00:23

Akshay: Okay. Then your IoT would track the bike and you will have to send somebody.

01:00:30

Amit: Yeah, many times. By intention and sometimes not by intention. They don’t know what they need to do because it’s a new service. If you ask me, do we have a problem with customers’ intentions? That will be the last thing in our bucket. 

01:00:52

Akshay: Okay. So what is your plan to retire now? Do you have a timeframe that at this stage I will actually retire or you will never retire? 

01:01:05

Amit: I will fail on that promise so I don’t want to promise. 

01:01:14

Akshay: Okay!

So that was Amit Gupta telling us about Yulu bike. If you like to know more about this venture, please log onto www.yulu.bike

‘Grind in your 20s… Hustle in your 30s… Retire in your 40s.’ Sounds like a perfect plan, right!

Founder Thesis brings you the journey of Amit Gupta, the mind behind India’s first unicorn InMobi, who in his current avatar is heading Yulu, the country’s leading shared micro-mobility service provider.

In a candid conversation with Akshay Datt, Amit harks back to his earlier days, when he aspired to start his venture at 30 and retire by 40. However, by the time he started approaching 40, he wanted to give back to society. In 2017 he founded Yulu, an IoT-based bicycle-sharing platform that rents out e-bikes for first-mile, last-mile, and short distance commutes. The mission was to reduce traffic congestion and improve air quality in urban cities.

Tune in to this episode to hear Amit speak about how Yulu is revolutionizing the way people commute by providing smart, shared, and sustainable mobility solutions.

What you must not miss!

  • Efforts to indigenize and reduce external dependencies.
  • Strategic partnership with Bajaj Auto
  • Fine-tuning the business as per the Indian market.
  • How has COVID impacted the business?

EPISODE TRANSCRIPT

00:01:57

Akshay: So when you turned 30, you quit…

00:02:02

Amit: One month prior to that. I actually started another company which was not InMobi by the way. It was a company that was into business intelligence and analytics. Although, at the same time my batchmate Naveen, thought of moving from the US to India. He came to me, he parked himself in Bangalore and how things are etc. Then he also had this idea of doing a startup and I thought that maybe it is a good idea for me to become part of the same team and that’s how InMobi happened. Rather than doing that business intelligence platform thing, I just decided to do mKhoj with them. mKhoj became InMobi as you know.

00:03:05

Akshay: When you and Naveen had the initial discussions about what you’ll do, what was the idea? How did that evolve into what finally got executed? Tell me about that go-to-market journey, if I can use that term.

00:03:23

Amit:  So it was 2006, and back then the mobile phone started becoming important. India started having hundreds of millions of people. Mobile was no longer in the hands of the craziest people, it started to be seen in the hands of maids, drivers etc.. It was very evident that India’s connectivity or communication answer is going to be this device and we’re also very fascinated with what Google was doing. Desktop to PC and they created this huge ad business. So we thought that maybe this mobile phone is also going to be the same. Because if a lot of people are using it and they’re doing more than just talking, they will be consuming time on that device and maybe there’s an opportunity. So that’s how we thought of building an ad business for mobile phones. I think back then it was actually very, very crazy again because there was no smartphone, the smartest phone which was available was Moto Razor or Blackberry, it was the smartest possible stuff.

00:04:52

Akshay: Pre iPhone basically. 

00:04:54

Amit: Yeah, pre-android. And then when we started the company, it was primarily on SMS and we thought that they will probably do a search and that’s why the company m and Khoj.

00:05:07

Akshay: M for mobile basically.

00:05:10

Amit: Correct, but very soon we realised that it’s not going to work. Because when you are doing abs uh, with respect to text, which is SMS, you’re very limited by the number of characters, the second thing, there’s no targeting and there’s no delivery because it was a one-way broadcast, so you don’t know what happens after that. So there’s no possibility, there’s no targeting, the medium itself was very limited because of the size. And then phones were also not big. They’re very small. So all you can do is basically just, and then because of A2P which is Application to Person, the SMS started becoming more spammy. So anything which gets basically a negative mindset, consumer experience perspective, you cannot do a good job with advertising. While we were running it, we also started to understand that this is not going to be a future. 

00:06:19

Akshay: But tell me how you actually got that off the ground? Did you use your own savings or did you get some angel investment and then launch it. And how did you spread the word as you know advertising business depends on the volume of users. So how are you acquiring users to actually launch mKhoj and make money from mKhoj? 

00:06:42

Amit: So very good question. So, we actually raised half a million dollars of angel capital. Mumbai Angel funded InMobi, mKhoj. We were the first for them and then shortcode. I don’t know how old you are. But…

00:07:03

Akshay: I guess we are around the same age. My graduation also ended in 2000. 

00:07:09

Amit: Nice. Well, you probably remember there was a double-A double-eight. There was a shortcode. So we all basically got triple five, 555 and anyone who was looking for some information could send some keyword to that number and in return, we’ll give you the best food or where’s a deal going on? So that was the model. This whole pull mechanism became a push mechanism where we started working with the likes of NDTV, Cricinfo where they were sending these A2P messages and we were inserting ads in that.

00:07:56

Akshay:  Help me understand A2P a little better. This is the first time I’m hearing this term.

00:08:00

Amit: A machine that is sending a message to a person. We are sending the verified message to you. This is called A2P. It is just happening at a click of a button. So this is how things are.

00:08:20

Akshay: So you essentially went through a partnerships route to acquire users like you tied up with these brands to help them send their advertising messages. That was the route? 

00:08:36

Amit: So that was the business model. But because it was not seen with positive eyes, we were feeling that it’s not worth it. This is how we basically decided to look at mobile internet rather than SMS. We also renamed the company to InMobi. So that was the background. 

00:08:58

Amit:  When did you pivot? Because this was a post iPhone launch?

00:09:07

Amit: It was actually before the iPhone. We were running the business on mobile internet. There was Nokia, Blackberry, Motorola etc.

00:09:20

Akshay: Very, very primitive browsers 

00:09:24

Amit: Yeah, after we transitioned from this to this, then we were able to get to the business model of smartphones after one year. 

00:09:38

Akshay: So what exactly did you pivot into? On the mobile internet, what were you doing? 

00:09:43

Amit: Yeah, so it’s the same thing, but rather than you trying to push an ad, the ad is more about being shown as a part of a WAP page. 

00:09:57

Akshay: Okay. You were like building WAP pages?

00:10:00

Amit: Yeah we would go to an NDTV who back then had a WAP page and then that page will have links and banners and then we add ads.

00:10:15

Akshay: Okay, so that was like the initial offering, like building the WAP pages and monetizing them through banners for brands? 

00:10:25

Amit: Yes, and then one fine day, we basically took a hard decision that we should kill this whole SMS business and then yeah, we never looked back after that. 

00:10:39

Akshay: Okay. And then how did this WAP business evolve as the landscape changed then? In a way, Google also came into the same space when they launched android. So how did the InMobi evolve to meet the changing landscape? 

00:11:00

Amit: So, see from a product perspective, it was the same product. In fact, Google ended up buying a competition of ours called AdMob. That’s how they got into this space. But the difference was that Google + AdMob were building this business in the western market, and we were building this market in Asia. So that’s how we were basically able, things were happening in parallel, so we were able to survive and that whole model of east to west worked for us. 

00:11:43

Akshay: Okay, okay. And help me understand how the revenues worked in those years, like what was like the first-year revenue and how did that grow over the next couple of years? And what was the breakup of that revenue? 

00:12:02

Amit: Difficult for me to tell you, first of all how much I remember in terms of break up because they are not public numbers. As you can imagine, the mobile internet actually grew like a wildfire and with our small base of revenue, so we actually do see 50-100 x. It’s actually kind of a wildfire. So you grow very, very fast and you’re adding countries after countries in our execution. So we started from India then we added our business to Southeast Asia, primarily Indonesia, Malaysia, Thailand, Singapore. And we added the African region, and the European region came up next. So at a country level numbers were going but we were adding because the platform was common. So we’re able to add a bunch of new countries. Every quarter we will be launching our business in one more country. That’s how the numbers were kind of moving at a much faster speed. It was an exponential rise in terms of the growth of the business.

00:13:17

Akshay: Okay. I want to kind of understand the product a little better. So like the initial business was to build WAP sites and then put banners in them? 

00:13:29

Amit: No initial business was not building WAP sites. We were working with the WAP site owners.

00:13:43

Akshay: Okay, taking space from them and…

00:13:47

Amit: So we only had the technology to provide the mats in real-time. Put a code and embed that into their site. Very, very similar to how Google Adsense works. That way we would for mobile sites we’ll put it up based on the device type, location, time. We will serve an ad, for every $100 that we make will be taking 30-35% of that share of the revenue will go into the hands of the publisher. 

00:14:24

Akshay: Okay. And then once people started launching mobile-specific sites, then you essentially started offering the same thing on mobile sites and probably on mobile apps also?

00:14:36

Amit: Correct, because our philosophy remains the same but a little bit of technicality gets changed. 

00:14:44

Akshay: Okay. So how did you acquire inventory? Was it like self sign up and like people would discover you and sign up or did you have like a team which was reaching out to places that were getting traffic and telling them that user advertising platform, like how did that work? Because I guess this is essentially inventory lead business right? Like if you have the inventory then the advertisers will automatically come.

00:15:11

Amit: Correct. So it was both. So we have a self-serve interface but business actually has, if not 80-20, 70-30, 30% of our publishers will be 70% of our business. So we had a BD team going to these publishers to get these deals in place.

00:15:37

Akshay: Also the first few I guess you would have personally gone out to, because I can see on LinkedIn that you were head of business development. So this team was going out acquiring publishers and this was all built by you only.

00:15:50

Amit: Correct, that was my day job.

00:15:53

Akshay: Okay okay, so how was that shift like for you from being a techie to being in a sales role in a way?

00:16:03

Amit: To start with, it was not super easy. At the same time you know you figure it out. So maybe the upbringing and then maybe the IIT system which teaches you and I will not just give undue credit to the college but you figure it out. I think when you are an entrepreneur, the only thing you know and you learn and you get better at is to figure things out. That’s how things happen with us as well and with me as well, personally. I think selling it to our partners in India to global customers, started learning that trick when you deal with folks in Indonesia and in London, in the UK, in Germany, in Japan. So yeah, you start to learn all of those things.

00:16:57

Akshay: So tell me about your learnings on how to do enterprise sales? What if someone new joined InMobi and you had to give them your wisdom of how to do enterprise sales, what would it be? 

00:17:14

Amit: I think it’s not a cookie-cutter answer because it’s different for different segments. But in our case, the value proposition was reasonably straightforward, that you know what I am going to make money for you. Some interesting thing is that unlike right now back then there were not many mobile-first or mobile-only publishers, everyone had some kind of website, they were transitioning or adding their mobile sites also. They knew this is what monetization means. You do talk about ad quality and ad formats, how much they will make, so I will not realise that it was easy at the same time. And we were the only ones, there were not many companies, we had the advantage of being the only game in town. The second thing is you’re making money for them and even from the advertiser’s perspective that’s another customer segment we were chasing. So they also were like okay I’m hearing a lot about mobile advertising, tell me what do I do? So we will consult them and they will say, okay, I will locate X percentage of my marketing budget for mobile advertising. Yeah. So the market knew what digital advertising is, this really helped us in a manner. Yeah, a lot of things you figure out. I don’t know if I answered your question.

00:16:53

Akshay: Why wouldn’t someone just sign up with Google? Why would they sign up with an InMobi? Was it because Google didn’t operate in that territory?

00:19:00

Amit: They did not have a good sales presence. It was all about ad dollars and all ad dollars were local. Publishing inventory was global, but ad dollars were local, so that you know, anyone who is doing a good job on bringing the right ad dollars would have a little bit better advantage. And also, agency business, they value touch and feel and if they can talk to someone. But that’s not the only thing and to give it to our team also, we were doing a good job on that. So from Google’s perspective, they were live in 50 countries, we’re live in like two or three countries. So over the level of execution was beating them. That being the case, if we would be doing this business in the US on day one, we certainly would have been killed. We would have inferior products and also not go for great length and breadth of our relationships with both sides. 

00:20:17

Akshay: Okay. And I can see that you eventually became the US Head, so like you decided to take Google head-on. 

00:20:29

Amit: Yeah I think that’s a difficult and complex statement to make. The Us was InMobi’s largest revenue region I think after China. We basically saw that our market share can actually get much better and while we were ahead of the US or North America region, but somewhere the team felt that the level of attention and love and care they needed they were not getting. Among the founders, we decided that, you know, one of us should move there so that in the stability, at least sense of stability, and also uplevel the team. Actually when I went there I had to let go of a few people who were not performing and more importantly the mindset was not right. I hired a leadership team, built a team who were passionate who wanted to give fight to Facebook and Google, you needed that energy. So I did that. And along with that I also started another product called Glance which was trying to figure out a business model with Telcos as well as with the handset manufacturers. So I was wearing two hats back then. 

00:22:04

Akshay: Tell me what Glance was, what exactly was it that you launched?

00:22:14

Amit: Certainly. So Glance is a platform for lock screens. For any android phone you know there’s a lock screen. Which on the phone you see the lock screen and then you log in and basically you put up your password, you get into that. Rather than me showing you a boring lock screen, we basically came up with this idea of putting life into that lock screen. So if you buy a Samsung or Xiaomi phone in India, it comes rebuilt with that product, you are being shown interesting news or entertainment or motivation. So it’s kind of that wallpaper but it is very contextual and it’s very feature-rich. That product also became very, very big in fact three months ago Google invested a large sum of equity money making it a unicorn. So we decided to make that product a separate company and investment happened in that company also. 

00:23:30

Akshay: Okay, okay. But how did you acquire users for this? Was it through the OEM tie-ups?

00:23:36

Amit: It was through OEM tie-ups So it would be a B2B2C model.

00:23:42

Akshay: And what made you take this bet that you need to build something like Glance like what is the insight that you were chasing here? 

00:23:52

Amit: Certainly. So it is actually not linked in with your Google problem. A point where we were like okay, Google has access to 1.5 billion people or devices. InMobi also has the same number of devices we see on our network. True publishers though but the depth. So advertising business, there are two things that actually give you or make you a winner for just that. How much is the share of time of users you control from a media consumption perspective? The second important element is how deeply you know the user. So Facebook and Google back then were taking almost 20-25 minutes of daily usage time across properties. That’s the reason they were very powerful. So the type of targeting they can allow, the type of ad formats they can do were completely different from what InMobi was doing. So you know, one path that you try to make a service which is like Facebook, Youtube etc. The second path was that you know, how do we, because making those B2C properties is not easy. You need to come up with a value proposition that may or may not happen. Unless you have the largest and very meaty depth in terms of data. So we decided you know where this data is going to be very accommodated and where you get the maximum time. So I think after some thinking it was very evident that in this entire mobile internet, value creation has actually happened for the app players as well as the OS or ecosystem providers. But these handset manufacturers, basically have been beaten down because the average selling price has only gone down and market share has only shrunk. You might have seen even Apple’s latest earnings report, their profit pool actually has now lopsided in the favour of the app store, right? Hardware has not gone up in the last 10 years. This was the learning and us going against Samsungs, Xiaomis, Oppos and Vivos. So we understood that they need to also make some value. This entire mobile internet, they don’t understand the content, they don’t understand advertising or for that matter, any form of paid and promoted media and then we came handy. So when we present that oh this is a consumable value proposition, they will be building a consumer habit. And then sometimes those content pieces can also have a commercial angle, We will ensure that the commercial angle is a secondary point. What you want to do is create value for the customer on the lock screen. They loved the idea and we built on that and we got almost every major handset manufacturer to sign up for that. 

00:27:06

Akshay: Okay, so this became a way for them to make their low-cost phones and give them a stream of revenue for years after the sale happened in a way.

00:27:18

Amit: They did not do that because as I said that you were doing that commercial intent messages only that much. For example, Amazon came up with a phone, they were selling it to you for a cheaper price. And you got a tablet where you can say that okay I will see the ads and then you will have $50 off. We have not done that at least, no one has done that in India. The primary reason is also that in India the ARPU of ad dollars is not very happy so the money you can make per user in the US and India is 1:10. It was not worth it. But they understood that there’s a value, it’s being sold as a feature, is a strong feature for all these guys. Yeah, they’re happy about it and they also make money sometimes.

00:28:22

Akshay: But the money currently is not very significant. 

00:28:26

Amit: I would say it is decent. At the same time, it is not a big enough way that the US can give you a subsidy of $50. We won’t have that level of advertising goodness at least in India. 

00:28:42

Akshay: Yeah. Okay, so this was essentially an experiment that scaled up. What were the other experiments that you would have run at InMobi? I imagine that like any other tech startup there would have been a culture of trying out a lot of things. 

00:28:58

Amit: So as a company InMobi did many things. But for me individually I led only this part because I was busy with business. And only during my last 2.5 years with the company, I owned the product agent to execution but at the company level, InMobi tried some other products. There was also a commerce discovery platform we tried. Innovation was in the DNA so we tried multiple things and some of them worked, some of them did not go as it happened.

00:30:04

Amit: So just like my 30-year promise to myself I had a 40-year promise to myself that I will be retiring. Although when I started turning 40, I realised that that’s not something I will actually enjoy doing. At the same time, I did ask myself and some of my mentors and I realised that I want to do something for the social impact. And this itch led me to think about Yulu because InMobi actually was a very different set-up. We did have an opportunity to make something that had a social impact but it would be done out of CSR, not as a company’s vision. Yeah, I thought about it. I thought if I don’t do it and if then maybe I’ll regret it when I turn 50. So this was the thinking, so that led me to think about Yulu and then I was very lucky and fortunate to get a very amazing co-founding team. So kind of believed in that vision. We came together. 

00:31:23

Akshay: So you wanted to do social impact, why did you narrow down specifically like a short distance commute? 

00:31:32

Amit: Yeah. So the pain point I wanted to or we wanted to solve was to reduce traffic congestion and improve air quality. And the solution part of that became what we are doing within the path to solve that problem or two problems. Why did I choose mobility? The primary reason was that these two problems impacted me and my friends and my family. It cuts across gender, age, financial status, religion, irrespective you will get stuck in the traffic no matter how fancy your car is. You breathe the same air no matter whatever you are. So there are problems in India which you can skirt, you can have your way but there are problems which you have to be part of. So I pick up something which is, as I said, impacting me and my friends and family so that I am reminded of that vision every day. 

00:32:47

Akshay: Okay and did you have global examples which you saw and then decided this is how you should do it. What helped you form your product vision? 

00:33:02

Amit: Yeah. So luckily there was some work happening in China and also in the US. So there was some early, you know, built out of your own thinking that this is how the solution will look like. However, the copy-paste did not work or has not worked generally in India. So you have to figure out something for India and this is what happened with us as well. We did start with using pedal bicycles where there was an IoT, where you can locate the bike and open it via an app. But this was only solving for limited use cases and we had this ambition of moving millions of people to sustainable mobility, cities like Delhi, Bombay, every city where the weather condition is not on your side, even Bangalore or like after two km a person who’s commuting for work, they were not willing to peddle. This was more of a use case for healthcare or fitness on the weekend. They were not fascinated with reducing calories. We were fascinated with reducing pollution and traffic congestion. So we needed them to use Yulu for daily commute and that’s where we started working on the electric mobility part which was also taking out of the boxes. So instead of peddling, you know you have a small battery giving you all the power to move forward. The product that we have chosen is also legally a bicycle. So it is a very simple product, which does not require a driving licence or any complexity. Anyone was able to ride and the claim to fame is that anyone who has done any two wheels in their lifetime can ride that product in less than 30 seconds. It doesn’t matter in what stage of life you were able to balance two wheels and you can ride. A super cool, super easy product, good for women, good for even senior citizens, youngsters really love it. So you know they have no-hassle experience so they find it in front of their college, offices, homes, and metros.  So wherever you think people are moving, we were able to create our parking spots, we call them Yulu zones. They can pick our bike from those places using our new app and then start to drop it back at one of our network parking areas; typically it is close to their destination.

00:36:04

Akshay: Okay, so I have multiple questions to understand this better. So InMobi was a tech play where you probably did not need to bother with things like government liasoning and permission and stuff like that. With this, I imagine even if you want to launch with simple cycles, there must have been a lot of government hurdles to cross. How did you cross those hurdles? Did you need some sort of permission to offer cycles on rent? And also the parking spaces, how did you acquire those parking spaces? Like how did you get this off the ground? 

00:36:43

Amit: Sure. So the technical answer is because of bicycles, there is technically no requirement for you to take any permission. Remember in your childhood, I don’t know if you’ve rented as basically. I did. That’s how I learned to ride my bicycle. Okay. You did not need to have permission from the city authorities. But what we realised is that working with the government is very, very important. They are the ones who are going to support you. Give you spaces for parking and they will also help you with the awareness creation. This is when one of our co-founders whose name is RK Misra, he’s actually a pro in this policy-making, working with the government. So that’s how we basically started building all of that. We went to the cities Bangalore and Pune and said that this is what we want to do, this is what we have done in terms of our own product. We got a lot of encouragement and support from the city authorities and that’s how we started.

00:38:11

Akshay: To get this off the ground, did you first take permissions and get the government relationships in place or did you just start building up, get some cycles and launch it in one city? Tell me about that. 

00:38:32

Amit: So we actually chose the second part, the only difference was that we were not launching at the city level, we launched it at a section of a pin code. Yeah, in Bellandur, in EcoSpace and Eco World, we basically put 100 bikes in that area on day one, we got permissions from RMZ. So they were supportive and gave us the spaces and then people who were working there saw those blue bikes. They started scanning the QR code and everything was very simple and easy. After maybe a month or so, we were already in touch with the city authorities and by then we also got invited from the city of Pune. There was a very dynamic and progressive officer who was responsible for the overall mobility of the city. In Pune, unlike Bangalore, we got permission on day one and then we started. In Bangalore, we started because everything was happening in parallel to be very honest. Bangalore, we took maybe another month or so to figure things out. So the business plan, how it should work. But, I must say that we were very fortunate to get all the support from the city authorities.

00:40:02

Akshay: And the parking spaces provided by the city authorities. 

00:40:06

Amit: So it’s a combination. There are spaces provided by the city authorities, provided by the metro, your real estate developers who will give you spaces in front of their tech park.

00:40:19

Akshay: And these are paid by you or it’s like infrastructure for them to offer mobility to their users. 

00:40:29

Amit: You can say that a large portion of that, they don’t charge any money. The reason is that they also see that it is their role or it is their contribution to make our city better.

00:40:46

Akshay: Okay. And how did you fund this, because you would have had to purchase the bikes? And this is fairly asset-heavy, unlike Uber which doesn’t need to purchase any cars. Here, all of these bikes were purchased by you only I guess. 

00:41:01

Amit: Yeah. So we actually raised venture capital money. We raised approximately 7 million dollars in our seed funding and we were able to buy these assets. The good part is while we have to pay money for the asset, the customer acquisition cost for us has been zero. So like Uber and Ola are asset-light, but they have to spend a bomb on building this marketplace. They have to offer discounts and acquire customers, they cost a bomb. Choice of the business model A versus B. Yeah, you do need to raise some capital to build the business. 

00:41:53

Akshay: Okay. What is the unit economics of this? Like how much does a bike cost you and how much do you earn from a bike over its lifetime and what is the lifetime of a bike? Can you talk about stuff like that? 

00:42:08

Amit: Some of the numbers for sure. In terms of the bike cost currently, we are spending approximately Rs 50,000 per bike that is inclusive of the batteries, extra batteries, we use swappable battery technology where a bunch of batteries are always under the charging operation. The infrastructure which we have been using for charging stations. We believe that this pricing will come down to around Rs 30,000 a piece within a couple of years. The primary reason is that we have a strategic tie-up with Bajaj, who is trying to make everything in India. So currently we have to import some components. Actually a lot of the components from outside of India 

00:42:57

Akshay: Especially batteries I guess.

00:43:01

Amit: Batteries are also from India. The supply comes from outside of India, in Japan. There are basically a lot of external dependencies. We think that in the next two years as a country we’ve been at a very very good stage to indigenize all of this. The cost will come down to below Rs 30,000. That is one part of the question. And then we are currently charging our customers on the basis of time. So we charge Rs 5 to start and then depending on the city, per minute charge of Rs 1.5 to 2.  These bikes actually are good for three and a half to four years in the usage condition in the form of shared mobility. 

00:44:04

Akshay: Okay, got it. Okay. What is the number of bikes you have out on the road right now? And how has that grown over the last one or two years? 

00:44:14

Amit: Certainly. So our journey with respect to electric mobility is now close to two years, a little bit more than two years. And we have 10,000 electric vehicles that make us the largest electric mobility company in India. And this number has grown. So if I talk about pre-corona, back in February 2020, we had 4000 assets and by the September timeframe, we had 10000 of them. 

00:44:50

Akshay: So you actually grew during the lockdown. 

00:44:53

Amit: Yes, we grew in terms of the fleet and in terms of the revenue. So our revenue grew 2.5x. Profitability grew 3x. A good portion of basically leveraging our business comes from the density. As we were growing, we were also growing denser. Density basically got our profitability also to jump to 3x from our pre-corona numbers. The only company that was showing growth and improvement in our metrics.

00:45:28

Akshay: That sounds a little counter-intuitive. I would have guessed that the people would not be travelling due to the lockdown and the numbers would have come down. So what is the reason for this? 

00:45:41

Amit: Yeah. So, what happened was that, while the cities were under a lockdown or there were some opened up or locked down both, there was always someone or the other who was on the road. Yeah, and the problem was that not everyone in India has a vehicle. In fact, 50% of the people in India don’t have any vehicle and they need to use some public mode of transportation. And Yulu became the safest mode to commute because there was no co-passenger or driver.

00:46:20

Akshay: Right. Social distancing is built in. 

00:46:23

Amit: Yeah. So we got a significant amount of market share from people who were earlier using group mobility in some shape or form. And while the top of the funnel shrunk, the movement that we got from other buckets of mobility, that actually compensated. 

00:46:45

Amit: What do you mean by this statement? Sorry, can you just elaborate?

00:46:48

Akshay: So for example, 300 people were on the road. But because of corona, people started working from home, 100 became 30. Earlier, out of 100 people who were on the road, five people were using us. But when it became 35 than that, five, you know, out of that 35% of them. So we were basically having seven or eight people using us. We got a net addition of users significantly high. Our per user per month went up by 40%. Our monthly ARPU also shot up by almost 40%. We were basically a net gain from this situation. We’re not the only company but the only company in India, basically in the world. A lot of global peers, what Yulu has got also such a similar amount of goodness in their respective businesses. This concept of self-driven, electric two-wheeler, which you can use for moving around the city became a global phenomena, successful phenomena during the pandemic time.

00:48:12

Akshay: Okay, how much do you currently earn per bike? If you are at liberty to share that.

00:48:18

Amit: I told you my pricing equation. So one of our trips will give us close to 35-40 bucks. And then we made multiple trips per bike.

00:48:31

Akshay: And help me understand the competitive landscape. Bounce and Vogo are your competitors here. So what is the difference between you and Bounce and Vogo? If you can help our listeners understand that landscape. 

00:48:50

Amit: Certainly. So first of all, we actually don’t see either Bounce or Vogo as our competition. So we are a category on its own. I think we compete probably more with an auto-rickshaw or walking, rather than Bounce and Vogo.

00:49:06

Akshay: Why is that?

00:49:07

Amit: The reason is, for example, when you look at say a 4-wheeler space, you count Meru and that the typical taxi and Uber with the same lens? 

00:49:22

Akshay: No. Basically, Meru is a fleet operator in a way, 

00:49:30

Amit: Even through the business model, but also the customer segment, they are targeting different. Firstly, Vogo, they have petrol scooters which have been taken up by people who are gig workers. They go to a Vogo station, they pull up a scooter and they deliver food or they deliver something. So, that’s what 80-90% of their TG look like. Bounce is a mixed bag, there are portions of their vehicles that will be used just like Vogo, but also there will be people who are skipping the mid-mile. So someone who would have taken, let’s say a bus or something else, would have taken Bounce. Yulu, at the same time, we basically are, first of all, pure electric. The second thing, our solution set is more optimised for short distances. Our average distance, for example, in Bangalore is around four kilometres. The same thing for Bounce is eight or nine, for Vogo it is around 12-13 km. All of us are using two-wheelers as a form factor but the business model and the TG are very different. Then there will be some overlap, so don’t get me wrong. There will be some 10-15% overlap with everyone.  But at the core, we are the solution for first-mile, last-mile where someone has to go for a short distance. We are very specific, so if you look at the mobility landscape, it’s called multimodal transportation or multimodal mobility of a city. So we work with public transportation. We complement their journeys rather than fighting with them or competing with them.

00:51:29

Akshay: Like, where the metro ends, is where someone can pick up. 

00:51:34

Amit: That’s the reason we have been given spaces at the metro stations, bus stations. They see us as a part of the solution and that’s what has been accomplished. That’s the vision we have got. We have no plans of replacing metro rides or bus rides. We want more and more people to take public transportation so that the city can get decongested. That’s our vision.

00:52:06

Akshay: Okay. Why did you choose a dock approach? Like you know that people pick up from a dock and drop it off at the dock. 

00:52:14

Amit: A couple of reasons. First of all, when you are letting people drop it anywhere, they will actually leave it at random places which not only increases the theft and vandalism but also operationally it is supremely difficult to manage. And last but not least, the citizens also do not like it because then someone will leave it at my gate or at my parking lot. So there’s a huge backlash across the globe where this kind of model did not work. In China which was known to be the pioneer of this dockless concept even now, they are basically moving towards the concept of these designated zone areas. You are basically allowed to park the vehicles there. I don’t know if you have been to China but in many places, you can see a board that shared bikes are not allowed because again parking problems, it’s a menace. 

00:53:18

Akshay: Okay so what do you think are the tech drivers for this going ahead? Are you looking at like you know bringing in self-driving into this? What are you focusing on as the key tech drivers to make the product experience and the customer experience better?

00:53:38

Amit: All right. So you know our product is self-driving. So not cool because humans are driving but I think that will answer with our cultural aspects as well as infrastructure. But as far as technology is concerned, you know we look at technology not by the zero and one, which is coding. For us, a great vehicle is also an engineering marvel. So you have a lot of work going on in making sure that the vehicle itself is basically very safe, comfortable, durable. Lots of work happens on that, we work on the hardware side with IoT. So the unit that makes a smart vehicle is also done by Yulu, we have the IP. Our stalls for example is also one unique part we have created at a mom and pop store, where we built up our own private charging network which is one of its own kind in the world that just requires a power plug. So that is our own innovation and their own work. The work we have been doing on the software stack side, they are very high-quality deep tech work happening using ML and AI for operational efficiency purposes. So our business model is to make sure that we have the bike at the right time at the right place and to make that happen, you leverage technology, and when you say placement is one thing that okay this bike is that Yulu zone but does it have a charged battery? Is it in good shape to use? There’s a lot of operations that happen under the hood where you as a customer come out of your building, you move with a high degree of predictability that they will be Yulu waiting for me if they will work. So all that happens in the background it’s all driven through technology and there is a serious amount of AI and ML and efficiency excellence that happens under the hood.

00:56:07

Akshay: So you actually move bikes around every night like to the places which would be optimum in terms of the demand to pick up and so on? 

00:56:17

Amit: First of all we don’t have to move and push every bike because of your natural movement. Yes, so on a given day we will be moving maybe 10% of our asset to maximise our yield, we will place where there’s a lot of demand but supply position is low and vice-versa. We basically have a way to move them. And it happens 24×7, not just at night time. 

00:56:43

Akshay: Okay. Your AI and ML tools should also tell you about predictive maintenance like when something needs to be maintained or needs to be moved. 

00:56:55

Amit: So they tell me that these many bikes need to be moved from this spot to that spot. They tell me that this vehicle is going to run out of charge and that requires this preventive maintenance. The reactive maintenance because the customer will flag it. So yeah, all this is via machines. What route to take to do these 10 tasks and in what sequence? If those have been done or not, all these interesting pieces are being done through technology. 

00:57:32

Akshay: Super interesting. And how responsible are customers, you know, do you face vandalism issues or theft issues? India is like a low trust economy, low trust country. So does that happen a lot and like what percentage do you see that? 

00:57:50

Amit: Yeah. So our theft and vandalism rate is 0.6%, the lowest in the world. The worl average is 3. We actually have cracked this problem by a very unique India-centred playbook. 

00:58:03

Akshay: What is that? 

00:58:05

Amit: A large portion of that is actually driven because of the fact that it is dock-to-dock. That is one very important point. And then we have our own ways to manage the situation. We have our own private bike marshals, we have our own private police. Some interesting stuff on that. Now, from a customer vandalism or misuse perspective, the best non-compliance is that they actually leave vehicles at non-Yulu zones but they will be leaving it away. But 80-90% of the time, it is actually not by intention, it is not intentional. The reason being that, particularly in Bangalore where other company decided to do dock less, they were there with the thought that I can leave this anywhere. Okay. Only the new guys do that. The portion of new guys, sometimes they do it, then you basically give them a warning. After that we start putting penalties, so they basically get on the right track. We’re learning and evolving rather than having bad intent. Sometimes it does happen from people who are not our users. Sometimes they will kick the bike, they will do some damage, but instances of that are actually a handful, you can count on fingers. Yulu zones are in visible places. So they also know that if they do something wrong with the bike, we will actually know somehow, like we have a way that they will be in trouble and if they may do that, they are in trouble. So as a company, uh, we have done an amazing job in compliance. So there will be consequences of you doing something wrong with us.

01:00:15

Akshay: Okay. Amazing. Have you had cases where the customers have just taken the bike home?

01:00:21

Amit: Yeah, many times. 

01:00:23

Akshay: Okay. Then your IoT would track the bike and you will have to send somebody.

01:00:30

Amit: Yeah, many times. By intention and sometimes not by intention. They don’t know what they need to do because it’s a new service. If you ask me, do we have a problem with customers’ intentions? That will be the last thing in our bucket. 

01:00:52

Akshay: Okay. So what is your plan to retire now? Do you have a timeframe that at this stage I will actually retire or you will never retire? 

01:01:05

Amit: I will fail on that promise so I don’t want to promise. 

01:01:14

Akshay: Okay!

So that was Amit Gupta telling us about Yulu bike. If you like to know more about this venture, please log onto www.yulu.bike

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Amit Gupta Co-founder and CEO, Yulu

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