In this WMS 2021 panel discussion we invited top mobility experts to talk about their experience when navigating new markets. Though this can be a challenge, each operator finds their way to approach the topic. See what Oliver Mackprang, CEO of MILES Mobility GmbH, Agustin Guilisasti, CEO of Human Forest and Kasper Zwetsloot, COO of felyx have to say.
Deciding where to operate
1. Choose the path of least resistance
Operators try to opt for the path of least resistance. The city where the regulatory environment is amicable, the demographics are favorable, where there is customer acceptance, where the total addressable market is high, and where there is available data regarding a new opportunity. Miles Mobility’s strategy focuses on larger fleets in fewer cities:
“Currently the parameter would be within Germany. Simply because the complexity of going to a new country is too much. (…) So with us is the path of least resistance.” Oliver Mackprang, CEO at MILES Mobility GmbH
“Let’s go for the least resistance and the opportunity to enter a new city. It is very important for us to make a dent in the market and show that we’ve entered and that is why we are very happy to have chosen Berlin as one of our options and happy to see the results so far.” Kasper Zwetsloot, COO at felyx
2. Take smaller cities into account
“We’re operating in smaller cities in the Netherlands, with 80-100k inhabitants and quite a big student population. Those students don’t want to own a car so they are more pro-active in studying the phenomena of micromobility.” Kasper Zwetsloot, COO at felyx
3. See the opportunity in different countries
“I totally agree on the path of least resistance in a city by city approach, I think that’s a very fair statement to make and I think it’s how our industry grows. On a country level it’s a bit different in my perspective.” Kasper Zwetsloot, COO at felyx
Zwetsloot is very positive about their entry into the German market because of its depth and potential in comparison to the Netherlands, where they already operate. Germany is still an emerging market, where growth opportunities are everywhere.
“We chose Germany over others because of the regulatory landscape, the user adoption, culture, climate all those feed into it.” Kasper Zwetsloot, COO at felyx
How to identify potential users
1. Do your homework
It’s important to do your homework. Study the age range of your demographic, if they have drivers licenses, what percentage of the population owns a private vehicle, etc. Using data and considering factors such as these can all help when deciding whether a location is a good fit.
2. Learn from experience
But theories and studies will only get you so far. Sometimes it’s important to evaluate how you will operate in a city based on your own experiences:
“Traditionally cities around the world, like Hamburg, work like this: the entire outskirts of the city go to Jungfernstieg, Hafencity, downtown, in the morning and then kind of go out post work. But if you look at Berlin, for example, (…) people live and work in the same quarter so people from the east go to the west and from the west go to the east north and south so the city is basically moving at all times and it’s anti-cyclical. And we map this.” Oliver Mackprang, CEO at MILES Mobility GmbH
“Inherently you’re not always right. There is a very basic theory that you can’t be right in all the dimensions that you foresaw so that’s something that we definitely are mindful of. A good example is us going to the Brussels market in Belgium. We initially went there with a big fleet in a very focused surface area and we understood that the density parameter in Belgium is very different from what we saw in the Netherlands.” Kasper Zwetsloot, COO at felyx
3. Consider the outskirts
“Expansion is not only planting a flag in a city and saying we’re here. If you look at us in Berlin, we have a business district of over 300 square kilometers.” Oliver Mackprang, CEO at MILES Mobility GmbH
In order to transform brand awareness into user adoption, it is necessary to be as convenient as possible to the user. The strongest competition to sharing operators is the private car and their services need to be easy to use, reliable and available as possible. To name a couple, aspects that guarantee availability is density of vehicles in the streets and presence on other platforms.
4. Identify a need
Many times the logic is simpler than you think. You might be identifying a need of your own and the target user is someone like yourself. That’s how Guilisasti came up with the idea of starting his business in London:
“I did a master’s in data science and I was studying in London and I needed to go to the uni everyday and there were no micromobility options two years ago. And I was quite in shock. I mean in London, a big city.” Agustin Guilisasti, CEO at Human Forest
How to gain and retain users
1. There is a benefit in competition
If shared micromobility is already a well known concept in the city you intend to operate in, the acquisition of users will be easier. Although this naturally entails more competition, your competitors might have already familiarized potential users about the concept of your business.
“When we were going to Germany we were initially very conscious of going to cities where the phenomenon was out there. Moped sharing is already a reality so we have a benefit to some extent from others launching prior to us and getting our familiarity to a high level. That’s not to say we are limiting ourselves to these cities in the long run but for the initial phase I think it was a very important step to take.” Kasper Zwetsloot, COO at felyx
2. Convenience is key
In order to transform brand awareness into user adoption, it is necessary to be as convenient as possible to the user. The strongest competition to sharing operators is the private car and their services need to be as cost effective, easy to use, reliable and available as possible. To name a few, two aspects that guarantee availability is density of vehicles in the streets and presence on other platforms.
“We partner with public authorities in every city we operate in (…) here in Hamburg, we’re also on the Free Now platform. So we’re really trying to just push this convenience aspect as much as possible.” Oliver Mackprang, CEO at MILES Mobility GmbH
“It is really important that we have good service and it is super hard to know how many vehicles are allowed in each borough in London. So we use something called low factor. That means how busy the bike is during the day. If it’s above, for example 20%, it means that we need to put more bikes in that area.” Agustin Guilisasti, CEO at Human Forest
3. Trust organic marketing
“We don’t spend on offline marketing because we don’t think it is the channel right now. We use a bit of digital marketing but again, what we’re trying to do, our vision as a company, helps us to get 80% of organic users.” Agustin Guilisasti, CEO at Human Forest
Human Forest has the vision of helping people move in a more sustainable and affordable way. Due to the commitment to sustainability in the core of their brand, they benefit from a lot of organic marketing. Density of vehicles on the streets is also another way to boost visiblity.
“We do collaborate especially in the scale up phase, but we have the ambition to own up a lot of the activities ourselves long term. Also, the seasonality which is inherent in our product for instance is something we are mindful of so we do work with partners to serve us on overflow of periods.” Kasper Zwetsloot, COO at felyx
“A big percentage of our income comes from our partners so we’re working super close with Whole Foods, for example. They give discounts inside of our platform related to sustainability. So in the end we are creating this community with all of our partners and I think it is working.” Agustin Guilisasti, CEO at Human Forest
1. Taxation of private cars
“They [cars] are just there. And the roads that are paved for them and the parking that’s given to them, it’s paid by the taxpayer. Penalization is just extremely unpopular but the solution is clearly to tax them (…) There is no economic growth and flourishing without people cutting back to some degree so they need to either regulate it or tax it or somehow make it less attractive or less free to pollute the city with private cars.” Oliver Mackprang, CEO at MILES Mobility GmbH
2. New regulations in smaller cities
“Not in big urban city areas where everybody wants to play but going out there (into smaller cities) does require a responsibility on the side of the policy makers that goes beyond what big cities do (…) We are in big cities but we see the potential also in a medium sized city like Hannover. It should be able to have a moped sharing surface one day but it requires a lot of work to get there and it takes two to tango.” Kasper Zwetsloot, COO at felyx