Founder of AutoShare Kevin McLaughlin is a serial entrepreneur and pioneer in urban mobility and sustainable living. Having already founded Modo car co-op and Evergreen.ca he started Toronto’s AutoShare in 1998.
Today AutoShare has a $6-million annual revenue and over 12,500 members.
Since the launch of AutoShare Toronto has opened it’s doors to more than one car sharing company (Car2Go, Zipcar) but competition in this case in a way helps the business by opening up the market.
I asked Kevin to think back to the first two years of the business, to look back at the best and the worst days, here’s what he had to say:
“We started with some very structural issues to overcome – insurance, parking – and the typical big issue, financing (for vehicles). A bad day meant that we hit some sort of structural road block, or made a presentation after weeks of trying to get through the door and preparing, only to be made to feel like we got a “D” on a high school project.
“From a marketing perspective, our first year was very challenging. It wasn’t just about “Pepsi tastes better than Coke”, but “what the heck’s a ‘cola’?!”
We were inventing a whole new category, and people had a lot of misconceptions about what car ‘sharing’ meant
“The good days were when we made a break through with a major vendor, financing and especially when we received media coverage, which helped explain our service and gave us legitimacy (which was very important for a start-up that asked for a $500 deposit from customers, because our technology was so basic that we couldn’t charge them as they drove and needed the security.) And in the first year(s), each and every new customer counted. We knew them by name as they joined, and as they used the service. They were so tangible.
“In my very first start-up, 8 years earlier, I still remember the sound of the fax machine ringing for the first time: “Someone is contacting us!”
“By the second year, the financing challenges were growing as fast as we were, but so was the sense that we had a service people actually wanted. Our budgets and ‘plans’ were being revised constantly, and the cash we needed to grow was being used up quickly, but the growth of the customer base, awareness, and incredible customer feedback gave us the energy to power onwards (and find more to borrow). In the early days we were very environmentally ‘green’, but slowly recognized that “It’s good for you” was not the reason people were joining. “Tastes great” was what we were being told, so we slowly began to look at how to rebrand.
But even after being in business with AutoShare for nearly 16 years McLaughlin still has a hard time busking in the feeling of “making it” because in the competitive business the challenges never stop coming:
“Every time it has felt like “we’ve made it” some wave has come and nearly sunk us.
“A major legal battle with my original partner pushed us to the edge of bankruptcy (for lack of a shotgun clause). My ex-partner’s launch of our first competitor became an emotional distraction for our whole office. And than there was the arrival of a much bigger competitor (Zipcar) and the “marketing arms race / land rush” that ensued for a few years. [Let’s not forget the economic] collapse that dried up most of our financing vendors in a highly capital intensive business, and finally, there was the arrival of a market disruptor (car2go) with a new type of service.
“A focus on what we can do well – a local brand, great customer service, smart spending – kept us growing and a major part of our market. Somewhere after 12 years, the industry and our slice of it became big enough that we had value to others – giving us the “safe out” we’d never had before and the confidence to continue forward into the rapidly evolving post-car urban future.”
The challenges AutoShare faced (financing and competition) are very common. But within this wide open field of common issues it is important to find your own big picture and by doing that AutoShare is able to maintain their strong place in the car-sharing market while continuing to innovate.