P2P ride-sharing service Voiturelib.com : an outsourcing success story

Jun 14, 2012
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In today’s article, we’re taking a look at a French startup called Voiturelib.com – a P2P car sharing service. Founder and CEO Paulin Dementhon tells a fascinating tale on how he started Voiturelib and how he successfully outsourced his web development as a business guy by himself.

Paulin Dementhon, a 33 year old HEC graduate, spent 6 years at a shipping company before doing his own startup. He saw a lot of the world, being, er, shipped, all over the place by the company, including places like Brazil and Hong Kong, and had a lot of time to think about what he really wanted to do.

Being in transport, his original startup idea was to do a ride-sharing marketplace, much like his good friends and investors at Covoiturage. So when he finally did start, he first painstakingly learned everything he could about the web universe, and then tried to find out more about the French startup scene. But this being 3 years ago and in Marseilles, he really didn’t find anything at all!

He did figure out early, that the critical component in his startup’s success was finding a technical co-founder. He talks about it now in a relaxed way, but his search was quite extensive, and in the beginning, painful and, without any result.

To outsource or not to outsource as a biz guy alone?

His conclusion, after being unable to find a technical co-founder, was that his startup was simply not sexy enough (he calls it a ‘Powerpoint startup’ – the crowded field of startups that only exist as Powerpoint slides). So he decided to make his startup sexier, and the best way to do that is to build product! So he raised €30k from some angel investors, and outsourced the development.

Successful development outsourcing – here’s how

He found himself a Romanian development company. The Romanian company, a supplier to mostly web agencies, was used to the traditional ‘big-spec’ method of development (it’s called ‘waterfall process’, officially). Having read about Agile development, Extreme Programming, and SCRUM, he decided that for startups, this was the correct methodology, as it matches the build-measure-learn cycle that a startup needs, and it supports early client development. It took him a while to convince his supplier that in fact, he wanted to pay a monthly fee for a developer, instead of fixed-price for a big spec!

He then set out to form a relationship with the Romanian developer he was assigned that is quite similar to the one you would have with an employee that sits next to you. And so they iterated over his earliest versions, building an MVP (Minimum Viable Product) that he launched, and got extremely valuable feedback on from his earliest clients.

How did he find his technical co-founder? By being sexy!

After launching his product, the search for a technical co-founder became a lot easier – there was a product to look at, and the perception of being a ‘Powerpoint startup’ was gone. Not only did it enable him to find his technical co-founder, it also helped him raise his second round of funding, another €50k, from a bunch of angel investors and some love money.

The Voiturelib.com solution – carsharing between individuals

So what do they do? They allow any individual to rent out their car. Voiturelib acts as a marketplace, taking a 30% commission on the transaction, and provide several critical services in return. First of all, insurance. The type of insurance you need to get paid as an individual for renting out your car didn’t exist at all! Paulin talked to a lot of insurance companies, until he found one that would take on this critical task, without any solid risk models in place, since it’s a brand new market. The insurance is collective (Voiturelib has one policy that covers all their users), and is included in the 30% commission. The other critical service you get is that they act as a safe intermediary for payment – they hold on to the money until the buyer returns the vehicle unharmed.

In Paris, the availability of cars for rent is so high, that around any given subway station, there’s several cars within 5 minutes walk. That’s pretty convenient if you need a car for a weekend! Prices are around €25/day, which is highly competitive with traditional car rental companies.

But, after talking to their clients extensively, they find that the number one reason people use their service is convenience, not cost. After all, what’s more convenient than picking up a car a few blocks away from your home, and dealing with a human being for the key pickup, compared to the long lines, bad service and remote locations of car rental agencies? Anyone living in Paris can testify to that – on a busy holiday weekend, car rental agencies shamelessly jack up their rates, overbook, and make their customers wait for ages in long lines.

Competition? What competition?

When I asked about the competition, I brought up Autolib’ (Paris’ short term car rental service with an all-electric fleet).  They love Autolib’, in fact, because it only encourages more people not to own a car outright! Their real competition is car ownership, in fact, and the traditional car rental agencies. At last count, there are now 9(!) other companies – among them Zilok, Zip Car founder Robin Chase’s Buzzcar, Livop, Cityzencar, and many more –  in France doing exactly the same as him. Does that worry them? Not at all! Being the first, they have by far the largest share of the market, and they intend to hold on to it.

Future

Their plans are simple: more and more and more customers! Like eBay, it’s all about critical mass. And with 40,000 registered users in France, they figure there’s a lot more potential in this market. They are funded at €350k, and will probably start shopping for VC money soon. When I asked them about international plans, there was no clear answer, but Germany and the UK were high on the list.

Conclusion

Voiturelib.com has taken idea execution to an art form. By leveraging development outsourcing the smart way, the biggest challenge, finding a technical co-founder, was met. Then, using agile development, they executed well, fast, and listened to their clients. These guys are on their way to world domination!