I have used CL rideshare perhaps 40 times for travel between northern & southern California in the past few years, and I personally am glad to see Ridejoy and other attempts at commercializing it fail. The service works fine as it is: free, informal, fast. The last thing it needs is a bunch of annoying startups invading, all crowing about "untapped markets" and how "passionate" they are to enable social this-or-that--an act which invariably strikes me as mercenary and disingenuous. In short, I can see why CL would issue the C&D.
The "anonymous and sometimes sketchy rides posted every year" line is particularly irksome as it so perfectly conveys the annoying disdain techies have for things that don't sport a slick iPhone app and/or (attempt to) make money. The truth is (confirmed over many hours of conversation with fellow riders and drivers) sketchy rides are both obvious and exceedingly rare. A few simple rules (like physically talking to the rider/driver ahead of time, meeting in a public place, etc.) are sufficient to ensure a smooth experience.
One of the Ridejoy cofounders here. Thanks for sharing your positive experiences with ridesharing. It is because of people like you that we believed so strongly in Ridejoy.
If you were willing to put up with all these hurdles of lack of any real search mechanism (some posts say "driving 9/17" and others "next Thursday"), a totally unstructured multi-step posting experience and no form of reputation or review or payment, in order share rides, then if we eliminated those hurdles for others (you might not seem them as hurdles, but other people definitely do) that we could expand the market for rideshare many fold.
We've spoken to many people who've shared rides and sketchy experiences do come up from time to time. An app cannot eliminate that completely but it can help alleviate it and kick out offenders. I believe that the system has lots of opportunity to improve and I'm sorry you don't think we were helping.
[Ridejoy] I've also used CL rideshare, and many of our users did too. CL rideshare works great for the people who keep using it (by definition). It doesn't work so well for most people-- if you feel especially vulnerable (are you male?), or if you want to share a ride without having to spend tons of time on coordination, ahead of time and day of (CL: ~50 back-and-forth SMS, Ridejoy: a few screens).
I love Couchsurfing-- and it "works fine"-- but I was also glad to see Airbnb succeed.
> I love Couchsurfing-- and it "works fine"-- but I was also glad to see Airbnb succeed.
Funny you should mention Couchsurfing. I would say that it used to work fine... several years ago... before they went for-profit and rewrote it completely. Sure the old app wasn't sexy but, like Craigslist, it solved the problem with minimal friction. The new Couchsurfing attempts to be more sophisticated but reduces global transparency and tries to take more control over the process, in the vein of Zimride or Airbnb. I can no longer be bothered with Couchsurfing, and it seems I'm not the only one: http://www.google.com/trends/explore#q=couchsurfing.org
What changed exactly? I've been couchsurfing since 2008, and hosting since 2012.
I've been hearing a lot about the changes that came with for profit management. But I haven't noticed any difference. Granted I never went to many local meetups.
I'm genuinely curious: could you be more specific about what negatives you've noticed?
1. This one I haven't experienced so much being male, but I've heard from it enough to believe it. When it was more niche, there were pretty much just travellers on the site. Now that it's quite more mainstream, there are a lot of guys just trying to pick up chicks on it. I personally don't care if two CSrs hook up, but I've heard enough stories of male hosts either being too aggressive with their female guests or just plain old kicking them out when they realize they won't sleep with them, to make me cringe. I think the landscape for single women using CS has changed.
2. The new website is absolutely horrible, less usable, lacking lots more info (they deleted the old wikis with tons of user-generated content), the groups are less useful, etc. All this is kind of funny because I used to dislike the old one. Now all I wish is they rolled back to it. I just don't know what the hell they were thinking with all these changes after they raised investment.
I actually had the opposite experience. Every time I needed a rideshare on CL, I couldn't find one. Or, when I offered a rideshare, I got no responses. And when I did get a response, it was from someone who didn't read my post and realized it was WAY past due. Perhaps it's because I live in a smaller metro area. I don't know. But, I did often commute up to the Bay Area, and I did often commute to L.A.
I think rideshares are just generally a bad idea anyways. After some thought, I think the idea of sitting with a stranger for several hours, trying to make conversation, would get tiresome in the end.
Yes, I did not like the way they were doing things. No, I don't think leaving it up to CL is the solution. I had a guy once screaming very badly at me for being 10 min late, this kind of people cannot be spotted easily, you need some kind of review system.
Also, regular travelers can't organize well on CL. What's, say, 10-15 dollars a year to get a decent platform? Yet, I know, nobody wants to pay for that, chicken and egg, etc., but the market is there, of course it's there, people are moving all the time...
CL Rideshare is funny because like you say, it works for 18-50 year old males that are willing to research the "few simple rules" perfectly fine, so about half a million people. There's no way that half a million people, out of 330 million Americans, is the full market of people that would be willing to do a rideshare. I think there's a case to be made that Craigslist is keeping that number from growing by not improving the level of trust they add, and have made it difficult for others to innovate in the space by (justifiably or not) keeping it a walled garden.
In France this sector is working very well (covoiturage.fr), has been for several years, to the point that friends consider checking out rideshare site like that and price-checking with trains and planes.
I have a suspicion that the fact that a lot of rides are either Paris-X or X-Paris probably helps (a lot of parisian students end up getting schools outside and go home during vacation/weekends). And students here don't always have cars.
Let me just do a wild stab in the dark here: none of these French sites are VC backed start-ups looking to get rich quick or conquer the world, but just ordinary companies happy to be making a profit.
Well this would be my comment too. Many VC backed companies kill lifestyle businesses which could be profitable. this would give joy to the owners of the business and their users.
But these VC backed companies kill these small businesses AND they later when it's not profitable enough let down their uses my closing down the shop.
Let's build a community also expects input from a community which is left in the cold. Wouldn't this make it harder and harder to form communities in the long run?
We're talking about this like it was a failure. This doesn't look like a failure to me. Look at what they write:
> we believed by building a far superior product, and being creative about signing up users, we could turn long-distance carpooling from a niche activity to a modern mode of transportation.
> we did succeed at growing steadily (25-30%/mo), creating an Apple-featured iPhone app, building a userbase of 30k+
> we’re able to leave the Ridejoy website and iPhone app up and running for a while, until it starts declining in usage or requires too much maintenance
They set out to make carpooling great. They did it, and shipped the greatness to thirty thousand people. The service is still running.
They didn't make a fortune (or make their investors a fortune) doing it. So what? It is only in the utterly demented Silly Valley startup mindset that this is a failure.
The problem is the opportunity cost of time. If a talented technical founder could make $200K per year working somewhere else, then the opportunity cost of building that company (after 2.5 years and with 3 founders) is $1.5M.
It may not be a failure from the ecosystem / societal perspective because a new idea was tested and discovered to have some value to the world, but the company ended up being worth $0. The founders are now saddled with a bunch of debt.
It's like you go all-in on a poker hand, and then lose to a better hand. Did you lose? Yes. What if you had fun playing? It's still a loss.
That's results-oriented, both in poker and in start-ups.
How did your hand fare against your opponent's range (and not just the hand they turned over)? If it fared well, you likely had good expected value on the hand.
Same principle applies to startups.
In poker, though, the stakes are smaller and you get to play many, many more hands to ease out the variance.
What debt do you think the founders took on? Their company took investment, but that's not debt, and it's certainly not individual debt.
With your attitude, nobody would learn to play poker, because nobody ever wins the early hands. These guys clearly learned a hell of a lot, and that was likely worth more to them than whatever net profit they could have turned on working a different job. That's how I've always felt about my failures, anyhow.
Re sources of debt: there's the incurred costs from bootstrapping. I quit my job to start a company in August 2010, and didn't start paying myself a salary until June 2011 after we completed our angel round (though we charged expenses to the company from Jan - Jun 2011). I think my co received funding a lot faster than most other YC founders who bootstrapped for longer before getting into YC or raising an angel round.
I appreciate the vote of confidence and of course we all choose our own definitions of success and failure. As a "venture backed company", the expectation is that we would build a business that will ultimately return 10x the investment. That seems like a lot but the investors also know that many of these ventures will ultimately be worth nothing.
Our goal was to build a large, thriving and sustainable business that profitably served lots of people, and eventually have some kind of exit event for our investors. Similarly we wanted to offer our employees an opportunity to build this business together.
We weren't able to do that and it's not Silicon Valley, but the expectations of the people who made a bet on us either with their money or their hard work that we feel we've let down, even as we know that most startups do not achieve this goal.
> the expectations of the people who made a bet on us either with their money or their hard work that we feel we've let down, even as we know that most startups do not achieve this goal.
I'm sorry to hear that you feel like you've let people down. That's a terrible way to feel and live your life. Investors and advisors back you early on because they believe in you. Embracing that philosophy is liberating, and actually, allows you to take more risks and become more success (and happy) from my experience.
I'm sure they'll be supportive of your next venture.
Thank you for sharing your experience with everyone. I'm sure this wasn't an easy blog post to write.
I think it's healthy to worry that you've let people down after something like this. However much you give people the warning about risk, you all want the thing to succeed, and you're all disappointed when it doesn't work.
I agree it would be bad to worry about this indefinitely, but early on I think it's normal and reasonable. If I were one of their employees, I'd certainly want to see them express that, so that a) I know they're decent human beings, and b) I can absolve them of their guilt on my account. Their being concerned allows me to be generous, which helps both of us.
I'm not sure on your specifics (when and how much your raised) but early stage VC's are hoping for more like 100x. Series B and C maybe 10x and 3x respectively. Anyway, your point is taken. It sounds like you discovered a potential lifestyle business as a funded company.
Yes they definitely built something cool that a good number of people found useful. So I assume the problem was revenue? What was the revenue model in the first place? Not sure the revenue is there on either side when the average ridejoy user is probably pretty price sensitive and also has a good enough free CL alternative. Hindsight is always 20/20 though
Congrats on the success you did have. This was a really refreshing and honest deadpool email. This type of post-mortem is so helpful for entrepreneurs in general.
I hope we see more of this type of communication from startups. This and the writeup of Everpix were very insightful.
What is the west coast bus situation? The premium bus market on the east coast seems to be booming. The NJ turnpike outside of New York which connects NYC/DC/Philly/etc is full of passenger buses.
Recently (last year?) Megabus started offering rides among 6-8 destinations (the 4 bigger cities and a few convenient suburbs, plus Reno). I live across from one of the stops, and I always see the buses nearly full, and it's refreshing to see them cruising down the freeway. Otherwise, urban buses work fine in the bigger cities (LA as well, mind the convention), but most people live in suburbia, which is not conducive to good service. Luckily, the younger generations are moving downtown, hopefully a long lasting trend.
One of the Ridejoy founders here. I think the reason why rideshare was more popular on the West Coast is in part because there wasn't a bus system. In turn, the bus system was tough because the West Coast is spread out: even if you land in a station in LA, you still need to get a ride to your actual destination because LA is huge. I guess they are starting to find ways to make this work.
What is nice about buses is a set, affordable price and guaranteed ride that meets a minimum standard.
Yeah, do they have the same "Chinatown bus" setup as the East Coast? That seems like what spurred the whole new bus popularity, with very cheap buses between a very limited number of stops. Because if you only run the profitable routes, it's a lot easier to make a profit.
Vamoose bus is genius. They line up people on regular streets (where there are no restrictions on idling) and the bus pulls up and picks them up. There's no expensive terminal rent to maintain or coordinate, so the only costs are the driver, bus costs and maintenance and gas.
It's growing fast too. Every day the lines I see for it in NYC are more full.
Getting accross town and getting into a terminal also adds a sort of stealth time tax (like an airport, but sketchier). The Jitney benefits from this heading east also, it seems.
Vamoose seems kind of interesting but they don't do NYC/Philly which is what I would need. It would probably be cheeper then Amtrak which would be awesome.
We allowed our users to cross-post to CL if they chose to (it was opt-in, not the default, and they had to sign into CL themselves to do so... so not automatic) and many people did. If they cross-posted to CL, there was all the basic logistical info in the post, plus a small link to their ride on Ridejoy at the bottom of the post (which the user could remove).
Ridejoy cross-posted adverts to Craigslist automatically.
Quite a few compete-with-craigslist companies seem to post to or scrape craigslist as part of their effort to capture CL's userbase - padmapper for instance. Craigslist doesn't seem to like this.
I think this is a good attitude in a general sense, but I don't think failure needs to be sugar-coated. If you have a goal, set out to achieve it, and you don't, then you failed. If you learned some valuable lessons along the way, that's great. If you deny failure, I think that's being dishonest with yourself so you don't feel so bad. Failure should feel bad as much as success should feel good.
[Ridejoy] She said: "One day ridesharing will be commonplace in the US, but I don't think we are at that day yet. Here is my rationale:
1. We didn't see any desire even when all the right pieces were in place (origin, destination, timing match, long distance + high cost of parking, compatible and networked ridesharers -- they still couldn't be bothered).
2. In Europe, where ridesharing is catching on, it competes with bus and train travel which is expensive, not car travel. In the US, ridesharing is competing with going in your own car (or nothing) and it isn't very competitive. The costs of car travel are not significant enough (yes yes I know that it is 18% of household income and $8k per year -- remember, I spent lots of money and a couple of years on this business).
3. For short trips, it'll never work because the cost of any minutes of delay just aren't worth the reduced cost of travel to the driver.
4. As I'm sure you are thinking about dynamic real-time ridesharing -- everyone is -- answer this when you set about building your network: Robin driver posts her trip once, twice, four times (?), maybe keeps an open trip pending and gets no response. She stops posting and doesn't tell anyone about what a great service/app/method you are running. Ditto passengers. When you move to real time, you have reduced the likelihood of getting a match because now the window of opportunity is 5-10 minutes (if we couldn't find a match when we said any time you ever go to NYC email me, why would you find one if I said anyone wanna go in the next 5 minutes?)
5. Look at all the past efforts, and figure out honestly why your idea is different. Everyone so far has failed. Smart phone apps, social network connections, through employers, on narrow corridors, etc etc.
Driving is still too cheap in the US. People still aren't willing to make the effort in adequate numbers to make it work.
Sorry to be such a downer but I get asked this all the time. So many people starting and thinking about this space."
Note that she's using rideshare in the traditional sense, before Lyft/etc. took over the word within the tech community. (Lyft is awesome! Just different, for now.) So for short trips, using pseudo-hired drivers on shifts a la Lyft, it obviously works well, just like taxis work well.
The discussion about the costs of car travel are interesting -particularly in light of some of the topics circulating recently about how the private car is a terrible model.
It's not so much that the cost of a car is so cheap - cars do cost us significant chunks of income - it's the fact that the value (or cost/benefit, if you want to get technical) is so high.
Time is precious to everyone with a busy life. Cars save time, above and beyond their cost to maintain. Even if you are stuck in traffic and can't believe you are wasting your time, you're still saving time compared to the guy who had to wait for a bus, hail a cab or organise a rideshare and is still stuck in traffic.
Show me someone who doesn't need/want a car, and I'll show you someone who either has billions/trillions worth of infrastructure at their door, or someone who doesn't value their time highly.
Anyway, thanks for sharing. The decision to close down before the cash ran out is certainly brave and should be encouraged. Posting the lessons learned is even better.
It's worth noting that Germany's 'Mitfahrgelegenheit' service [1] is highly successful, and includes many of the same features that Ridejoy built. I've used it a few times to travel between cities (large and small) in Germany... it's primary advantage is price-- approximately 50% of the price of a rail ticket (cheaper for the passenger) and takes the edge off the $8/gallon gasoline prices for the driver. While price may be a motivating factor, there are numerous systemic differences that come to mind when comparing ridesharing in the US and in Germany, such as the shorter distance between all major cities (though perhaps similar to NE USA), as well as Germany's love for the cars and the autobahn.
One other note: on one of the drives, I learned that the system nearly broke down due to "professional" drivers renting large vans and overselling tickets for each ride to ensure that the vans were full. Then, when enough passengers had arrived, the van left, leaving the remaining passengers hosed. Since you only pay at the end of the ride, passengers started overbooking themselves, hosing other drivers. In the end this was rectified by putting the cost of the trip into escrow from the time of booking to the end of the trip.
Congratulations on a good run. I was fortunate to meet Kalvin, Randy, and Suelyn near the beginning of Ridejoy, just after they were funded, and I thought it was a great service.
It's a shame that the planets didn't align this time for them, but they're all wildly talented and creative individuals who are certain to go on to greater successes.
Thanks for providing the wrap-up at the end of the journey. These kind of stories are very inspirational as well.
By the way, did you guys consider package delivery, instead of just people? I did a b-school project on that concept, ie RideJoy but for package delivery. My test route was going to be I-95.
Delivering a package for a random stranger has all sorts of risks. If the package contains a kilo of heroin and you get pulled over by the cops, it will be rather hard to explain to them that you knew nothing about it. That's a risk that a UPS or Fedex driver doesn't have, since they're not the ones who accepted the package.
Yea, those are issues that were considered including regulations...but I think ultimately those by them self would not be a reason not to give it a shot. If the business picks up then you can address those concerns. All the new ride sharing services face similar liability issues.
Potential criminal liability is not an issue you can pick up when you get bigger. It's an issue you have to deal with before you get started. Willful ignorance is not a defense to a charge of transporting drugs or other contraband.
Ridesharing is a tough business, primarily due to supply side scarcity. Long distance carpools are even tougher. It takes a team with incredible dedication to accomplish what RideJoy has been able to. I noticed that they are STILL a featured app under travel on the app store.
RideJoy and Kalvin in particular were very helpful to us at InstantCab at various stages from advice and introductions on fundraising to hiring. I am looking forward to following what each of them does next.
Doesn't seem like you failed out right, it seems you had real traction so I am a bit baffled that you didn't try harder to make it work (at least it seems that way from your post).
I am thinking you could have worked something out with CL or found a way around that?
Could this just be a matter of not having enough passion for the idea/product/service itself?
I don't understand why deadpool is better than acquihire. You would return at least the same amount of money to your investors, but also you could put this as an exit on your resume and get a significant amount of money personally.
From an investor's perspective: all small returns round to zero. No outcome other than "Company gets absolutely massive" makes a meaningful difference to my net worth. Accordingly, if one of my CEOs said they were optimizing in the 0x to 2x range to avoid letting me down I'd tell them to do right by their team/family/self and call me when they had a new company to invest in.
From a founder's perspective: If you want a job at AmaGooFaceSoft you can get one whenever you want (we're assuming you're very talented and in the current economy). If you want a house worth of money as a result of working at AmaGooFaceSoft, you can get that by getting the job and then waiting. Most people do not get into startups because they are the glide path to AmaGooFaceSoft careers. People might consider the option value of the next thing, or the certainty that the next thing will not involve a manager and HR department, higher than the (not insignificant) amount of money AmaGooFaceSoft will pay for engineers bought in quantity.
Interesting to know, thanks for sharing that. The question was coming from my personal experience when my previous company was going down and the main investor insisted on selling it for 110% of his investment. He returned his money and the rest 10% went to the founder.
[Ridejoy] The short answer is, we didn't prioritize having an exit on our resume, or making the most money possible on the way out. (Nothing wrong with that, we just had different priorities)
I think it's refreshing that they didn't sugarcoat it. Sometimes being blatantly honest can help. ("I had a 6 month sabbatical, look at the class I took" isn't as refreshing as, "The management team missed it's numbers. As head of sales I was let go. I took a technical class while I job hunted.")
> We never discovered demand in the way that VC-backed startups need to. (We now no longer believe the market exists in the US, but of course, perhaps we just couldn’t find it.)
Could you please tell us more about your opinions on the ride-sharing market? Were there any surprise difficulties or discoveries? Or is the "half a million rides per year on Craigslist" * expected revenue per ride just too small to be worth pursuing as VC-funded startup?
It would be interesting to hear from a YC partner about what they saw in Ridejoy, its founders, and what they thought when they made their investment. Its a rare opportunity when a startup publicly speaks about hitting the deadpool (something I admire ridejoy for doing) and hearing the flip-side perspective might be even rarer.
Have you thought of selling the business to some other developer? I'm not talking a big acquihire to some random bug company, but putting it on one of those sites to sell other sites to folks like you and me.
[Ridejoy] This was a frequent joke around the office (ok, mostly me.) The future of rideshare, long-distance and short-distance [UberX, Lyft, Sidecar] is absolutely in self-driving cars and "everyone" knows it. I assume all three of those companies include it in their long-term-vision slide. Just need to wait a decade...
A lot of other bigger consequences too! See Quora for a great answer on societal changes.
The "anonymous and sometimes sketchy rides posted every year" line is particularly irksome as it so perfectly conveys the annoying disdain techies have for things that don't sport a slick iPhone app and/or (attempt to) make money. The truth is (confirmed over many hours of conversation with fellow riders and drivers) sketchy rides are both obvious and exceedingly rare. A few simple rules (like physically talking to the rider/driver ahead of time, meeting in a public place, etc.) are sufficient to ensure a smooth experience.