How Bolt Survived An 85% Revenue Crash And Became Europe's Ride-Hailing Champion (Markus Villig, Founder & CEO)

[00:00] It was 2020. The company was already fairly big. Suddenly, you started seeing this news where there was a virus spreading. And then in a couple of weeks, it got so bad that the business declined 85%. That isn't an easy position to be in. We very quickly pivoted to food delivery. We launched suddenly in about 15 countries across Europe and Africa with a food product. We were very lucky in the timings. It actually worked out really well. [00:21] You've read Lord of the Rings five times. Why that book and why so many times?

Lord of the Rings somehow stuck with me. Sort of the narrative arc of how you can have people come from all sorts of small places and make something great in the world. Coming from a small village in Estonia really resonated with me as well. We operate in 50 countries. We have more than 200,000 vehicles in more than 200 cities. And we custom design them. We have our own team in China for the manufacturing. We're profitable for the last two years. We have a tech team of 800 people. We have taken a lot of effort to make sure that we design the best hardware we can.

[00:51] representation, R&D culture, I think starting to pay off. [01:00] - In 2013, a 19-year-old from a tiny Estonian island town borrows 5,000 euros from his parents [01:07] and decides to take on Uber. [01:09] Just over 12 years later, [01:11] and Bolt now operates in more than 50 countries, generates nearly 2 billion euros in revenue, [01:16] and is one of the only European startups competing at a genuinely global scale. [01:21] Markus Willig is the CEO [01:23] And he's still only 32. [01:25] Today, [01:26] Marcus and I talk about his philosophy of [01:28] Culture market fit?

[01:30] How to fix Europe's ambition problem [01:33] the economics and impact of autonomous cars, [01:37] and lessons from Marcus's favorite series, Lord of the Rings. [01:41] I'm Mario. [01:42] And this is The Generalist. [01:44] - I'm really excited about today's sponsor, Granola. Simply put, Granola is the AI notepad for people in back-to-back meetings. I've been using Granola for over a year now, and honestly, it's a tool that has transformed the way I work. [01:58] Granola takes meeting notes for you without any intrusive bots joining your calls. You can jot down rough notes like you always do, [02:05] And in the background, Granola transcribes and turns those notes into clear, useful notes when the meeting ends.

[02:12] You can also chat with your notes, which is one of my favorite features. [02:16] If someone says something on the call that you didn't quite catch or want to learn more about, [02:21] Granola can help you out. [02:22] It's an amazing way to be better informed during a conversation without having to interrupt everyone else's flow. [02:28] You can also have Granola review all your recent conversations [02:32] to pull out to-dos, write a weekly recap, or surface interesting ideas you might have forgotten. Another thing I love. To get started with Granola, head to

ai slash mario. [02:43] And for new users, you can get three months free with the code Mario. So go to ai slash Mario and use code Mario for three months free. [02:53] This episode is brought to you by Brex. If you're a founder, the hardest part isn't the idea. It's scaling fast without getting buried in back office work. That's where Brex comes in. Brex is the intelligent finance platform for founders. [03:08] With Brex, you get high limit corporate cards, easy banking, and high yield treasury. [03:12] plus a team of AI agents [03:14] that handle manual finance tasks for you.

[03:17] They take care of things like expenses, all according to your rules, so you can move faster while staying in full control. One in three startups in the S. already runs on Brex. You can too at com slash mario. [03:33] I'd love to start with [03:35] a little bit about [03:38] your mind and understanding how you think. One of the things that when I was researching you came up is that you've read Lord of the Rings five times. Why that book and why so many times? [03:49] I was growing up in a tiny village in Estonia.

So I spent many, many days of my childhood just reading books, everything I could find. And I remember fantasy and Lord of the Rings was always top of the list, but I was heavily into everything from science fiction, reading encyclopedias and so on. But yeah, Lord of the Rings somehow stuck with me, this sort of fight between good and evil, and sort of the narrative arc of how you can have people come from all sorts of small places and make something great in the world. [04:18] coming from a small village in Estonia really resonated with me as well.

You grew up on an island of like 10,000 people, right? Yeah, so the city is 10,[redacted address] actually to grow up as a kid. It was very safe. You could just wander around the city as a six-year-old. We didn't even need to lock our doors. So, I mean, growing up, I thought that's a good way to grow up, but I realized later on it's obviously very unusual. That's not the upbringing of most people. I don't know if you saw, but there was a really great... [04:45] sort of discussion where Paul Merlucky was talking about Lord of the Rings and what it meant to him.

I imagine there's some of that valence to it, too. You talked about the, you know, the good and evil piece, but, you know, [04:56] even when we're talking about it on a geopolitical scale or on a company-wide scale? Like, is that a text that you end up sort of coming back to a lot for its lessons? I think that a lot of it, um, obviously resonated with me as a kid and then still to this day at [05:09] My view of the world still in some ways is maybe more black and white than I think has become the norm over the last couple of decades.

And probably that's heavily shaped by the fact that [05:18] My parents were growing up and lived most of their life under the Russian occupation in Estonia. So very clearly they understood that there was this iron curtain on one side of it. Everything was horrible and you were living under this oppression. [05:31] Even to the point where entrepreneurship was banned. And if you said anything wrong about the government, you know, you were going to be sent to a prison. And then on the other side of that to the west were all these sort of light values of democracy and so on.

And I think we sort of always were growing up, me and my siblings with that type of attitude that, hey, like let's make Estonia a great country that belongs to the west. And like, we don't ever want to fall back under this regime again. Mm-hmm. [05:53] In the history of Bolt, who have been like the biggest... [05:58] sort of baddies, the Saurons that you've had to fight most? Like, is it [06:02] a concept? Is it like entropy? Is it, you know, a competitor like Uber? Like, how do you sort of think about that?

I think internally, we've always viewed ourselves in that way as the underdogs and then probably the rebels versus the Darth Vader out there. And I think their branding helps with that as well. Exactly. So very clearly, we've seen ourselves as coming from Europe, trying to have more sort of human values of making sure that the drivers and partners are better taken care of as [06:32] needs that you can make, but we understand that we're actually a physical service at the end of the day, working with real people. And we want to have these drivers on the platform for many, many years.

So if you piss them off in the short term, like you're not going to have a great business long-term as well. And that's something that I think to our advantage, it doesn't come that naturally to many of these US companies, headquartered in SF. And they see Europe as a peripheral second tier market for them. Yeah. There's been so much of your story that has been sort of like finding these markets that other people have overlooked and winning in them. [07:02] we sort of talk more about that maybe. When someone says they read Lord of the Rings five times, it sparked something in my brain and I went down a bit of a Tolkien rabbit hole where I was like, okay, what does this say about you?

What does it maybe say about the world? And one thing that came to me is apparently Tolkien invented a word called eucatastrophe, eucatastrophe, [07:24] And the idea is sort of like right at the edge of catastrophe, something great happens. And so I was curious, when you think about Bolt, like what have been the moments where you've gotten closest to catastrophe and then something fantastic came out of it? There's been many stories like that. First one that comes to mind, this is during COVID. [07:42] So, [07:43] I mean, it was 2020.

The company was already very big. We were probably doing 100 million in revenue. We probably had about a thousand employees and already quite a wide presence in about the... [07:55] like 30 countries or so. And then suddenly you started seeing this news where there's a virus spreading and some cities were going to be shutting down and not allowing people to move. And then in a couple of weeks, it got so bad that the business declined 85%. [08:09] We're thinking like, wow, okay, that isn't an easy position to win. You can't raise money in that type of a condition.

Obviously, you're losing all your revenue. What are you going to do with the thousand employees you have? What are you doing with the hundreds of thousands of drivers who are counting on you as well to make a living? So... [08:24] I think a lot of the people in the company obviously got for right reasons, very panicky about what we're going to do. But then we thought that, hey, let's keep our cool, figure out what are we going to do in this situation to make the most of it. And then we very quickly pivoted to food delivery.

[08:39] So we had just launched the first prototype version of food delivery just coincidentally a couple of months before. But then we were very lucky in the timing. So we were like, hey, let's use all these people we have who can't work on ridehailing at the moment. Let's just push them into food. And we launched suddenly in about 15 countries. [08:55] across Europe and Africa with the food product. And it actually worked out really well. So it was able to compensate for quite a bit of the loss we were making on the ride-hailing side.

Maybe this sort of, yeah, resembles one of these Tolkien sort of catastrophe scenarios as well. What did it take to go from, hey, we've prototyped this and we have sort of the first version running to like production mode? Like I can imagine there's obviously huge operational things. Were there regulatory things that you had to sort of get over technical things? A lot because you can imagine [09:25] by now is it's quite a complex problem to solve, both in terms of technology and operations. So first of all, you have to sign up thousands of restaurants or merchants to get on the platform.

So we repurposed all the people we could, where possible, they went on the streets and just signed up merchants offline. But wherever possible, we just online were asking them to, hey, send us your menus. We're going to digitize them, put them in the app. [09:48] So you can imagine doing that at rapid speed in a matter of days is quite a complex undertaking across nearly 20 countries. [09:55] with very different levels of technology sophistication as well. [09:58] all the way from places like Portugal to Nigeria to Poland. So yeah, it was quite a mess.

And then at the same time, how do you scale up the technology so that it actually makes all of this easy to administer as well? So you can actually report your local taxes correctly, the logistics run smoothly, how do you localize the app to just work in such so many languages and so on. So it was quite an intense hackathon effectively for the whole company for a couple of months. You mentioned that you're the European sort of underdog that has been fighting against [10:28] the Sauron, the Darth Vader. How much of Bolt's culture do you feel like is an Estonian culture fundamentally?

Because in some ways that it's also like the Estonian story of like this small company, this small country that really outcompetes on a relative basis in tech. [10:45] Absolutely. I think that those three being Estonia's culture and history and my own and the companies, I think they all have a lot of overlap. And that's quite natural. I think obviously if you start the company and you run it for 12 years. [11:00] At the end of the day, it's going to be reflecting the values and your own behaviors to a large extent.

And I think similarly, Estonia, as I mentioned, I mean, we have this very unique history where we've only now had a re-independence for the last 30 years. And in that time, Estonia has gone from one of the lowest GDP countries in the world even to one of the fastest growing in Europe. Living standards now are better than in most European countries. We have more startups than almost any place in the world. Yes. Maybe Israel is the only one above it, right? [11:30] Estonia is even ahead. Really? And in terms of unicorns, similarly.

So clearly in terms of any metric you look at, Estonia is doing really well in tech and in general. And I think we've always tried to take that enthusiasm and those values into Bolt as well. And... [11:45] We don't care that we're from a small country. We've always had the view that [11:49] If we work harder and we do smarter decisions, we can beat [11:52] whoever company in the world, regardless of how big they are. [11:55] Something that I've heard from other entrepreneurs, some sort of Scandinavian entrepreneurs, which has, you know, a good tech ecosystem could always be better, of course.

But folks from that region, folks maybe from Central Europe, is that, you know, a lot of times they're sort of... [12:12] a sense of tall poppy syndrome where even in you know their culture [12:16] And it's not you don't want to dream too big in some sense. And there's parts of that that are keeping people back. Like, does Estonia have its version of that? Or is that sort of different given the fact that. [12:27] You know, it has this history of great, great technology companies. [12:30] I think that, um, uh, what's quite unique about this Estonian situation is that like, um, again, until the nineties, uh, entrepreneurship was banned.

So I think we had this huge, uh, pent up demand of people who wanted to build a business, but they couldn't. Yeah. And then in the nineties, once we had our independence again, it was such a common thing. Everybody wanted to start businesses. So there was so much hope and enthusiasm that we can build something great. And then, so I think most people had completely unbounded ambition because they were just naive. [13:00] And I think that optimism and naivety to some extent has been serving us really well. [13:06] And then what further boosted that was that in 2003 Skype was founded, and the core team members and the core R&D center was in Estonia.

[13:15] And of course, that over time became one of the most successful internet businesses of all time with hundreds of millions of customers. It was actually the biggest exit of that time at all in the internet world, not just in Europe, but around the world. And I think that just further boosted it where people are saying, OK, like we can build something from our home and build a world class product and then conquer the world. And I think that's just carried through to the next generation of entrepreneurs as well. [13:45] the need for Europe to sort of step up into a bigger role on the tech landscape.

Uh, [13:51] I think you had a tweet that said, you know, Europe has zero of the top 25 companies in the world that got a lot of attention. Why do you think like they're. [13:59] those sorts of messages capture so much attention? What does it say about like the state of Europe today and maybe what needs to happen? Well, I'd say that when you follow what's going on on X or Twitter, right, then I think the zeitgeist is very much that, oh, Europe is falling behind and we're regulating bottle caps and we haven't done anything meaningful in the technology space in a long time.

And partially, of course, objectively, when you look at it, it's also true. Yes. The biggest technology companies we have are still 30 times smaller than the biggest US ones. Just when you [14:29] benchmark versus revenue or market cap. [14:31] So clearly, like there's still a massive way to go. However, when you look at the last 20 years, the progress is astonishing. So when you look at it, the exponential curve keeps on getting better. Every year, there's more founders, more funding coming in, better companies being built. But just the problem is that that curve is like 20 years behind the US.

[14:47] So question is, how do we accelerate that? [14:49] And to some extent, I think having this sort of hopefully helpful criticism and these jokes about Europe is also raising awareness that, hey, there are structural problems and we got to address them. So in that sense, I think this criticism is not always bad. What are the biggest sort of self-owns that Europe does that, you know, if you could just get in there and fix it tomorrow would make the biggest difference? There's so many things and they're interconnected, right? So first of all, I think it's a cultural thing, which I observe more actually in Western Europe than Eastern Europe.

[15:19] As you mentioned, it's about ambition. [15:21] So it's not very common to see that you have these young entrepreneurs coming up from Western Europe who want to build the biggest company in the world and are willing to say it out publicly that they have that level of ambition and take on more ambitious projects. So it's gradually starting to happen, but it's still, I think, one tenth of what it could be. [15:38] And oddly enough, actually, then when you start to zoom in, like who is building this? [15:43] bigger success stories, I mean, even in Western European countries like the UK, generally not local people.

So, I mean, you look at the biggest tech companies in London, you know, Revolut, Wise, etc. It's generally done by people from Eastern Europe, oftentimes. [15:55] So, so actually it's quite odd that like, for some reason, like just this sort of ambition, the sort of work ethic of just grinding it really hard in the first couple of years, getting it done. Like how do we just manifest more of that in Europe? I think that's the first cultural block we need to solve. [16:09] How do you start to decode or debug rather like those aspects of European culture?

Because, you know, I've sort of split my life rather evenly between the S. and America, half American, half Italian. The things that I would point to is that like it seems very fundamentally uncool in Europe to work too hard, whereas in America it's almost performative in the other way where you want to be the most hardcore one. Like, I don't know, what would you point to as the things that make the biggest difference there? [16:39] and they want to enjoy their lifestyle and not work hard. And okay, it's hard to change that.

But then I think that for a lot of people, they are willing to work much harder if they see that there's value attached to that. So if they see that their hard work is making a difference. So they see career progression, they see they're changing the world, it's having a meaningful impact on their financial status. Then I think people are willing to put in a lot more hours. And unfortunately, many parts of the European economy do not offer that. Yeah. So if you work as an engineer in Volkswagen, [17:09] I mean, it's quite capped what you can achieve there.

Yes. So I don't think you're sort of feeling the same level of ownership as an engineer would have in Tesla or, you know, maybe like more meritocratic, faster moving company. So I do think that we have this great talent. [17:21] They're smart. They have the willingness to work hard, but you just got to put them in the right structure. Some of the things that you'd like to talk about with regards to Europe are also sort of related to the defense side of the equation. And, you know, we are currently in a period of history where things are shifting very intensely.

And it seems like Europe is going to... [17:39] have to, you know, take sort of more responsibility in that respect. What would you like to see happen? And how did that interest originate in you as a sort of natural given your history? And of course, the invasion of Ukraine, but yeah, would love to hear sort of how that came together. [17:54] Well, actually, I'm not going to do that. [17:57] did not want to get involved in defense, uh, in the first place, because I was thinking, I'm going to stick to my lane and build a vault and I'll, you know, contribute to Estonia and then Europe that way economically.

But then actually, um, uh, a few people from the Estonian defense forces reached out about the year into the war. And, um, they were quite concerned because they said that, Hey, we were expecting there's going to be an influx of new talent who will want to build these new generation defense companies that we desperately need. But that hasn't really happened. [18:25] So maybe you can come and advise and give us some input effectively, like what should we do? And then we devised a plan of a couple of steps and then we just executed on that in about six months in Estonia.

And I think that's a good blueprint for most other countries to follow. So effectively what we did was that first of all, we realized there was a big funding bottleneck. [18:43] So there's on paper [18:45] plenty of easy money in Europe, but then you look at what fraction of that can actually go into building any type of lethal products in terms of rockets or, you know, modern armaments that are needed. It's almost zero. There's basically no capital available. At least that was the case for years ago. So we went to the Stonian government and we asked that, hey, let's set up a hundred million defense tech fund that exclusively does these type of investments that most other funds can't do.

And we think that's going to be obviously great for building up this new defense ecosystem. [19:15] investment opportunity here as well, because it's sort of an underappreciated sector. [19:20] So we actually got the Estonian PM to say yes to that after two meetings. We set it up, that fund is active, we're deploying money for the last couple of years, and that fund is actually now rapidly growing in size. [19:30] So that was the first thing we did. [19:32] The other thing was that we realized that defense is such a peculiar sector that most people in tech have no idea what to do there.

[19:38] So they have no idea how to get going. What are the problems? How does the procurement work? And so on. So what we did was we created this defense technology meetup. At first we thought, let's see how popular it's going to be. We just threw it out there. Wanted to invite investors, entrepreneurs, engineers, people from the defense base. And it was so popular. The first time it was immediately oversubscribed. So we could fit a couple of hundred people into the room, but we couldn't take half. [20:04] And now that's become a recurring monthly event.

And it's grown into quite a big, effectively, conference by now, where every month we're getting people on the eastern flank together. We're hosting them in Estonia and other countries as well. And then that's great. So we're just building this sort of new ecosystem of connecting people across these different disciplines. And then when you bundle that with the funding, it works really well. [20:26] And then maybe the third last small thing we did was that we realized that at the end of the day, all the innovation is happening in Ukraine. [20:32] Because they have the biggest pain, of course, it's closest to the front line.

So they can have this rapid development cycles of building something that day, sending it to the front line the next day. And obviously, if you're a Western company building somewhere in a lab, you don't have any connection to reality. You're going to be left far behind. So what we did was, was try to get as many of these Ukrainian companies to set up in Estonia as possible. And now we've been able to get dozens of them to register there, set the bump in Estonia, and then they can start to sell those products into other NATO allies as well.

[21:02] I'd recommend more European countries to look into that as well. [21:05] Yeah, that last piece is something that, at least from an observer's perspective, talking to some of the founders of these different companies, you do see, I think, a really tangible difference when I've talked to folks that have been deploying stuff on the front lines versus those who are in more of a lab environment where often it's the, you know, the ones that are building in a lab that can attract the most money and, you know, get the most buzz and people can be really great with the narratives.

[21:35] folks I've spoken to, and so sort of bridging that, [21:38] That is sort of pivotal, right? Absolutely. And I've personally been to Ukraine to meet some of these teams. And I mean, the resourcefulness these people have is off the charts. [21:49] What they're able to do with just a couple of million of funding is build extremely advanced technology, whether it's drones or, or counter drone technology and so on. And that's extremely impressive. And then at the same time, you look at some of these Western companies who are raising tens of millions, hundreds of millions.

[22:03] And the hype is great. But then you look at like actual real world effectiveness. There's there's it's not proportional. So I do think that we got to go where the actual best companies are. And today they are in Ukraine. We are learn from them. You, you know, are clearly so interested in this and obviously see the importance of it. Is there a version of Bolt in the future that like has a very different. [22:26] aspect to it that is more about Western security, more about defense in some capacity, because you've often said, you know, we're only 1% done.

I could imagine the 99% could have many, many different form factors. I'd say that, I mean, even though it's a passionate area for me, and I think it's extremely important for Europe, just frankly, I don't think we should do everything through the vehicle of Bolt. [22:56] advising, investing in these companies. And, you know, one day, who knows? I mean, maybe there's going to be a great opportunity to build a new company in the defense space. But yes, for the time being, I see that my time is probably best spent in this role.

Yes, that makes sense. You've also talked a decent amount before about sort of the need for capital market reform in Europe. [23:15] You know, that's not a space that I'm as familiar with, certainly. What are the structures that need to change there? You know, how would you like to see that start to play out? Well, we can start off just from the outputs at first, right? So purely, if you look at retail trading activity, regular people, the difference between how much US retail people are buying stocks versus Europe, the delta is more than 10x.

Wow, really? It's absolutely massive in terms of net new inflows of how much capital is coming in, how much people are trading. It is uncomparable. [23:45] And obviously that has trickle effects down the line, right? So if you have more money coming in, the cost of capital is much lower, there's much more liquidity in these markets, and that's great for the local ecosystem. So you have more companies benefiting from this and then more entrepreneurship. [23:59] And also it's actually better for the investor because alternatively, if you don't do that, then your money is just sitting in savings accounts, which is the case in Europe.

[24:06] you actually end up making way lower yields. So you typically make like a 2% or 3% yield on that money versus something much greater in the stock market. [24:14] So I think in Europe today we're in a lose-lose situation. [24:17] It's bad for our people and it's bad for the companies. And unlike some of these other things, I think this is actually one of the easiest things to get fixed. It's like not that controversial that we should be adjusting these rules. [24:30] And we've been studying which European countries are doing it the best.

And actually, I think Sweden is top of the list. [24:36] Sweden has actually done these reforms over the last decade. And with those reforms, they've boosted their activity to a similar level as the US. [24:43] So clearly it is doable if you do the right reforms. In fact, what they did was they just made it extremely easy for anybody to buy stock. [24:51] So they cut all the red tape and they reduce the tax burden massively. So it's very affordable for people to do these stock trades. [24:57] And clearly it works.

There's now many, many years of evidence of this, and we should just replicate that all around Europe and get [25:03] 10 trillion of money to be invested into public markets and technology and entrepreneurship. And I think that would completely revolutionize the landscape we see in Europe today. [25:13] That's fascinating. Let's talk a little bit about Bolton and the history of this company, because it is a fascinating business. And, uh, [25:20] It's one that [25:22] I think is very unique. I can't imagine there are many stories quite like this that start in Estonia and really go globally.

They're obviously precursors, but you're doing it in a very different way. In studying your story, you began with a €5,000 loan from your parents. Is that right? What was the pitch like to your parents for Bolt? I went to them. I said, hey, I have this idea. I think that there's a fantastic opportunity to build an app that aggregates all the taxes in [25:52] quality pickup times. [25:55] They had no idea what I'm talking about because back then they didn't even have a smartphone. So the pitch wasn't the easiest. But after some debate they said: "Hey, we're fine to give you 5,000 of your university funds."

[26:08] If you're going to go for it, that's at your own risk. You're going to then cover your own rent. [26:12] because we didn't come from that wealthy of a family. And then looking back, I mean, I realized, like, why were they even willing to take this risk in the first place was because by that time, I had probably five years of some type of entrepreneurial experience already. Ah, I see. So I think they'd seen from the sidelines how I was building websites, learning to code, trying to do some e-commerce and so on.

So they sort of already saw that I wasn't just a regular teenager who had no idea what I was talking about. So what were the first entrepreneurial things that you were doing? And what was the first, I don't know, [26:42] if you'll forgive me, was a euro at that time. What was the first euro you made over the internet? Actually, the very first one was the most plain. We were just building websites for local companies. [26:52] So somehow I got some first inbounds of people telling me, hey, my cousin is doing a restaurant, he needs a website.

I heard you can do that. [27:01] So that's how it got going. And then at some point, it was extremely lucrative because the small companies in Estonia had no idea how to do that. They were paying me maybe 500 or 1,000 euros per page. So for me as a teenager, that was a lot of money. Totally. And then at some point, they recruited a couple of my classmates to do the websites. And then I was even sort of just sort of trying to bring in the customers. So it became this sort of small agency.

You were the manager at that point. [27:31] figure out how to produce a great experience. [27:34] So yeah, and I always knew this was just a stepping stone and the way for me to learn, because I always at heart know I wanted to be a tech entrepreneur and then build a product. Not that many children know I want to be a tech entrepreneur. You know, I went from [27:46] My first one was zookeeper, then a trader in the stock market. So there were some jumps in there. But where did that come from for you?

Why was that even a tangible goal? For me, it's always been crystal clear. I started thinking that I wanted to be a scientist when I was probably five years old. I was so passionate about technology, reading all these sci-fi books and encyclopedias and so on. And then when I was about 10, I flipped. I was like, OK, I can be a good scientist. [28:16] something commercial around that as well. [28:18] So not just invent the technology, but make sure you commercialize it and productize it. And that vision has never shifted.

I mean, now I've been on that path for about 20 years. [28:26] You're clearly a very competitive person. Where did that sort of first manifest for you as a kid? You know, I think your father was like a very serious athlete. Were you, you know, a serious athlete yourself? Like, where did that show up first? Actually, for me, it's quite a contrast because I only apply this competitiveness in business. [28:43] So I actually try to, in the rest of the time, actually be relatively chill and sort of decompress and then take the stress off.

Oh, really? Usually in sports or personal life, I'm not that competitive at all. But anytime it gets to anything related to Bolt, then I'm all in. Wow, it's amazing that you can sort of switch it off. I imagine there must be always a temptation, but clearly you've figured it out for yourself. And I think overall, I mean, you've got to find what's the right balance for you. So you sort of keep yourself sane and then high energy. [29:13] obsessing too much over being my best at sports, then, uh, you know, it doesn't really give the sort of anti-stress and health benefits that I would be expecting to get from it.

So. Yes. That makes sense. Yeah. You're, you're optimizing for performance in a specific lane rather than, you know, that that's at the end of the day, what gives me the most joy. And then, uh, I sort of see sports more as a means to an end. So that keeps me healthy. It's obviously sometimes fun, but I don't see that as something that sort of defines me and I want to be at my [29:43] experience at Skype. And so you had seen maybe some of that. What were the pieces that maybe you took from him or learned from him?

What were the pieces that maybe you were like, yeah, you keep telling me about this is how Skype did it, but I don't care. I'm going to do it my way. We actually have an interesting dynamic with my brother and co-founder Martin. So he's 15 years older. [30:00] So we didn't have this typical sibling relationship of growing up together because by the time I was free, he already moved out. Yeah. So in that sense, we actually sort of got together again after he had already been at Skype and a number of other tech companies.

And then we started both together. But it was very clear that. [30:15] uh he said hey i've already been through this many many times um i'm gonna be an advisor and do the roles we need but again this is your show you need to make the decisions you need to drive the ship and then uh it was sort of very good um actually like not combative relationship at all because like he was giving me advice but it was always clear that at the end of the day i had to be the one to make the decision hmm that's amazing um i imagine there would be another brother who would try and you know try and enforce his will more or something like that one of the the obviously

[30:45] in the Bolt story is Oliver, and you often talk about how he sort of built the first prototype in something like, I don't know, 48 hours. What is it that makes him... [30:54] so special and so unusual. [30:57] There's a couple of elements that make him just an absolutely exceptional co-founder to have. First of all, he just found us completely randomly based on a post we made in a small developer forum in Estonia. And based on that, he was willing to do the meeting and then listen to this 19 year old kid who was pitching this idea with little to show.

[31:18] And he got so excited about it that literally he went home and built this prototype in a couple of days and then came back and showed, hey, I have a customer app and the driver app and here's how it works. And obviously keep in mind this was pre-vibe coding. So like he actually did it all. So it was really, really impressive. And then... [31:35] I told him, Hey, I mean, I'd love to have you as a co-founder to join the company, but I don't have any money. Like we haven't raised anything other than 5,000 for my parents.

So you got to take a risk that we might not be willing or like able or willing to raise money for a year. And we're just going to bootstrap this. And, um, he was fine. Let's do it as a 19 year old kid. I didn't think too much about it, but like now thinking back, you know, had a wife and a small kid. And, uh, so he was willing to take a lot of risk on a 19 year old kid. [31:59] Um, while being an absolutely exceptional coder, like one of the best I've ever seen, and could have easily worked in any other big tech company and taken much less risk.

Why do you think he did that? He's told me this many times. I mean, he actually always wanted to, um, build a product where he sees that he can make a massive impact on the world and he could actually just have autonomy to build what he wants to build and not be told by somebody, uh, you know, that needs to fall under some corporate process. And we were just able to give him that environment that he had been waiting for, for a long time. You have many competitors in some sense, right?

[32:29] Obviously, Lyft is not really in Europe, except through sort of FreeNow a little bit now, right? But there has been... [32:36] folks who have been bigger, more public, like. [32:40] How do you balance learning the lessons from someone like Uber and also sort of running your own race to a certain extent? And how has that changed over the years? Like in the early years, were you... [32:51] queuing more to what you thought their playbook was or maybe less. [32:54] So, funny enough, when we started a business in 2013, there was more than 50 ride-hailing companies in Europe.

[33:02] In Europe? Yeah. It was absolutely insane. I think even in Estonia, we just had two more competitors other than us starting in the same year. No kidding. So I think it obviously wasn't sort of the unique idea that like only us or a few companies were pursuing. I think it became very obvious in 2012 and 2013 that you can build a smartphone connected logistic system and apply that to so many aspects of life. Yeah. Whether that's ride hailing or food delivery or many others. So clearly this was happening all around the world.

[33:32] kid from Estonia with 5,000 wins and be the only one left in Europe after a decade. And I think the characteristics that made us quite special was a few things. [33:41] So one was that we were one of the first ones to really look at these network effects in a more deep, more scientific manner. [33:48] I think everybody else just plainly had a very simplistic view in their mind that the network effect is a binary thing. Either you have it or you don't. And I think the investor mindset was, hey, if it's a network effect business, then that means it's automatically a winner take all.

And there's no room for anybody else. [34:03] But I was coming from a math background and I was thinking about this problem and I was like, hey, I mean, but you can very easily plot out like how many drivers you need in a city. How is that going to impact the pickup times? Model this out. And, you know, when you plug in all the numbers, you realize quite quickly that like, I mean, the steady state of this is most likely not going to be a monopoly. [34:22] Because just the barriers to entry are high, but they're not that high.

And like once you hit the sufficient critical mass, you can actually start to compete on the merits of having enough network density. And so that was sort of one thing we had in mind. So we were always very sort of analytically monitoring this in every city. What exactly is our market share? Pickup times? How do they compare? And I think that gave us a very robust approach. [34:42] uh framework of how to think about market expansion and where to invest our money [34:46] And we realized that actually most companies, I think about that, [34:49] the right way at all.

And they were just constantly wasting their money on actually cities where they shouldn't have been investing at that time. Interesting. So that was one factor. Um, and then the other thing that when you start to again, plot out this sort of, you make a mathematical model, basically this, you realize that the other thing that matters, of course, is price sensitivity. [35:04] And I think we actually mainly focused on Amazon and then like what was their paybook and how they scaled and what was the model there. And we applied that to us and we realized very quickly that [35:15] Sure, we're not going to have as good pickup times at first, because by definition, we're starting in many of the cities later.

[35:21] But what we can do is we can compensate that by having better economic value. [35:25] So we can offer more value per trip to drivers, we can offer cheaper prices to customers. And then we effectively modeled out that okay, but how much discount do you need to give in order to compensate for these worse pickup times? [35:37] So we had like over time a very good model of how to think about the price sensitivity versus time sensitivity. I think most of us just completely missed that. And they've been just misallocating capital for 10 years.

And that's how we out executed them. One of the reasons Bolt has one, you know, apart from just the execution is that sort of price difference and the commission difference you take, you know, less than than Uber does, for instance. And I always sort of wondered, OK, you know, why isn't the terminal state like not 15 percent, but 1 percent or what you know, you could just. [36:07] you don't need to go past a 15% because it actually doesn't move the needle. Is that right? So effectively, you can model out what's the price sensitivity in that market, what is the time sensitivity people have, and then you can plot out what is the diminishing return of it, or what's the optimal price to have for the driver, for the customer, and then eventually it's usually going to settle on an equilibrium with two OO networks surviving.

And [36:29] Typically, the third one over time just gets wiped out. I mean, it's extremely hard to have an economic equilibrium with free, sustainable ride hailing players in one city. A big part of your culture has also been frugality. And I imagine a large part of that comes just like from the way this company was was born. How do you maintain that level of of discipline when you're going from, you know, a few people to 100 to 1000 and so on? So that's the thing where this operational excellence really comes into play.

And. [36:58] My view of the world has always been that we need to build this company in a way that's great at software, but also great at physical real-world operations. [37:06] I think that's quite different to how most Silicon Valley companies are built. Where they generally obsess over software. It's the only thing that matters and. [37:14] I mean, for sure, they're great at that, best in the world, but most of them are not really, really, it's like European type companies who are able to also manage physical assets with high level of rigor and sort of operational excellence.

So we started off the company with that premise already in mind and designed it very frugally. So. [37:30] How do you run your annual meetings, quarterly meetings, monthly reviews, weekly reviews? So, you know, you build up this sort of system and you really optimize it over time to be as effective as possible in terms of how do you onboard drivers? How do you look at pickup times? How do you allocate capital across these markets? How do you run your marketing? So it's all sort of this one integrated system over time that you just got to iterate on and improve every cycle.

It's very hard. I mean, running that for 12 years on a, you know, week by week, high discipline basis is not easy. [37:59] And I think that's the reason most of these companies just over time couldn't compete. [38:02] Because these advantages also compound. And if you already start to lose market share in a city, you start to get into this negative spiral, right? [38:10] So you have less cars, worse pickup times, customers leave, you know, then more cars leave. And if you don't manage this vicious spiral and you don't have the right operational rigor to get on this very quickly, [38:22] It's just going to be a disaster.

Your business will be wiped out. You have this sort of amazing way of describing the system and all the different pieces. When you look at the system and the way it runs today, like where are the pieces where you're like, ah, there's still too much friction here or, you know, I need to figure out something to do on this part. Oh, everywhere. Everywhere. Everywhere. I think that especially now we have three and a half thousand people. We have. [38:41] six business lines, you know, they're all at very different stages of maturity.

And even in ride hailing, which we've been doing the longest, like still, there's so much to improve. How we run our pricing algorithms, how we do dispatching, figuring out which driver is the best match for that ride. [38:56] Still so much work to do. And one core aspect of this is regulation. [39:01] because it's not also trivial just to manage that. [39:05] So we operate in 50 countries. [39:07] regulators constantly change laws, what are the requirements for you to bring a new driver on board and so on. So just managing that alone of how do you automatically verify [39:17] thousands of different types of driver documents, [39:20] across the world.

So if a driver in Nigeria is signing up and they give you their car insurance, how do you know if it's a real insurance? So all these automated processes across these thousands of documents is quite hard to validate. [39:32] and [39:32] In some of these markets, the downside is massive. You let one of these issues through, you can theoretically lose your entire license to operate in the market if something bad happens. So the stakes are high and then the actually automation of this is not a trivial problem, even with current AI.

Yes. Yeah. Have you found that the application of current AI really has made a difference to that? Or is it still sort of in the early innings of figuring out how to best deploy it? Well, the first results in some of these areas have been incredibly good. [40:02] in particular document automation verification systems, you know, after three years of manually writing rules, we were able to just completely throw it out and replace with sort of a new modern LLM based solution. [40:13] At the same time, though, we're now seeing the second effect of that, which is there's more fraud happening as well.

So the drivers are figuring out that, hey, I can generate these fraudulent documents, which are so good. So it's a constant arms race of keeping the system in balance. This episode is brought to you by Persona, the B2B identity platform helping businesses verify users, fight fraud and build trust. Fraudsters are already using AI to spoof faces, voices and documents. So your defenses need to adapt just as fast. [40:41] Persona helps secure some of the Internet's largest and most trusted platforms with identity verification. If you're building a product where trust matters, identity should be a priority.

[40:51] you've probably already experienced Persona without realizing it. [40:54] verifying your LinkedIn profile, signing up for Etsy, [40:57] or renting a scooter with lime. [40:59] trusted by leading companies like Square, Brex, and Twilio, [41:03] Persona gives you the building blocks to create identity flows that adapt to your customers, risk tolerance, and locales you operate in. [41:10] Whether you're verifying age, onboarding businesses, [41:13] or automating KYC. [41:15] It's fully configurable, so you can launch in days, not quarters. [41:19] Want to see for yourself? Generalist listeners get a free year of the starter plan.

Head to com slash generalist and check it out. [41:29] Returning to the idea of the frugality, I wonder, like, you know, there's always... [41:33] whatever as a strength has a weakness in many cases, has there ever been a moment where you were too frugal and it sort of meant you missed out on a market or missed out on a person? Absolutely. First of all, on personnel, right? I mean, that, of course, makes a big difference. So if you're starting off in this extremely cash constrained environment, [41:52] with literally 100x [41:54] less funding than your competitors.

[41:56] You got to be extremely strict on every line item of the business of where you spend money. And of course, that meant we couldn't go out and hire as experienced people as we would have liked to. But at the same time, I mean, the benefit of that was we really got missionaries on board who didn't join us for the money, but they joined us because... [42:11] They really deeply cared about what we do. And of course, they hope the equity one day is going to be worth a lot. So they were willing to take that risk.

So that's one area. [42:19] The other way is that I think it also meant that in the first few years we just couldn't really take much risk in terms of innovation. [42:27] Because the product team was so small, it had so much to do. So I think we just looked at what's going on in all these other companies around the world, from e-commerce, food delivery, ride hailing, and we basically waited to see which of their ideas worked out the best. And then we're the best in the world is copying them quickly.

Yeah. Yeah. And that playbook actually, I think works completely fine. Like if you're a small company, you can keep on doing that for quite a long time and actually be very cost effective. But then over the last three, four years, obviously by now the company is, [42:55] in a completely different financial position. We're profitable for the last two years, [42:59] We have a tech team of 800 people. [43:02] Like now we've completely changed the culture and that allows us to much more experimentation and innovation, like launch new things that we don't have.

But that was an interesting transition to go through. What have been the sort of biggest dividends of taking a more experimental culture or more of a sort of R&D approach to things? Are you starting to see those things blossom yet or will they be more down the line? I think by definition, some of these things are high risk and we don't expect most of them to work out. So obviously we'll have some waste in the system. But at the same time, of course, you take more risks. [43:32] work out beautifully and then be great.

So thinking of the last few years, I mean, one topic we haven't even talked about is hardware design. So we're also one of the largest micro-mobility operators in the world. [43:43] We have more than 200,000 vehicles in more than 200 cities, and we custom design them. [43:48] So we have our own internal hardware team, we have our own team in China for the manufacturing. And yeah, that is one area where we have taken a lot of effort to make sure that we design the best hardware we can. [43:58] Um, and actually just our new generation bike came out a month ago.

I think it's the best sharing bike in the world. Um, so yeah, those are some of these bets of this sort of, um, more experimentation, R and D culture, I think starting to pay off. How do you see micromobility as part of, you know, the Bolt suite, the Bolt, you know, future super app, so to say, is it sort of more of a customer acquisition of like bringing people in the funnel and keeping, you know, them going rather than, you know, as big a revenue driver and profitability driver? [44:28] is going to evolve over the next decade.

So from first principles, I think especially in Europe, we have to use 10 times more micro-ambility as a society than what we use today. [44:37] I think cars are completely overused. [44:39] And even though popularity of bikes is growing every year, it's still very low compared to what it could be. [44:44] So in that sense, big picture, I'm very optimistic. There's going to be much more all sorts of small electric vehicle form factors going around, whether they're scooters, bikes or something else. And then of course, we want to be riding that wave and growing with it.

[44:57] At the same time though, like you look at the current market size, it's tiny. We look at the entire micro mobility market today in the Western world, [45:04] ballpark is like 2 billion. Oh, wow. Really? And you compare that to ride hailing, which is like 200 billion. I mean, it's, it's uncomparable. So in that sense, for now, it's a small market, it's hardware, it's heavily regulated, it's a very difficult business. [45:17] You can make it work at scale. And I mean, that's what we've done. But I'd say, you know, it's not something that at first, you know, seemed like this very easy business.

And there was dozens of these companies trying to build their scooter sharing business. I think those days are long gone. Yeah. There's a handful of players remaining. So in that sense, I think that this has a big role to play for us over time, because fundamentally we want to replace people's private car. [45:40] And we got to have micro mobility for short trips. And then we will be having ride hailing, car rentals, self-driving cars for the long trips. Yes. Yeah, I definitely want to talk about self-driving cars at some point.

In terms of Bolt's sort of global span, [45:53] When I was looking at the list of companies you operate in, I mean, it's pretty... [45:56] unbelievable at this point. How did you decide where to go into and why was Africa like a bet that you wanted to make when basically no one else has wanted to make that bet? This actually starts off from sort of a general paradigm of how do founders or investors even think about what a company is. So our view was that we built something that was great technology.

We were using the product in Estonia. It clearly worked well. It had great product market fit. [46:26] So we raised a million, well, a million. [46:29] Looking back, the million seems very small. Back then we thought it's all the money we're ever going to need. So we tried to launch in about 12 cities and try out where we get traction and all of them completely flopped. Oh, wow. So we tried places from US to Netherlands, to Finland, to many, many others. We just couldn't get any traction. We couldn't get the network effect off the ground.

We were quite puzzled by it because we were thinking that, hey, I mean, the product is so good in Estonia. And then all the investors were giving us advice about like, hey, you know, just keep on iterating on the product, adjust the product until it works. [46:57] But we were thinking the product is very good. We don't want to change the product. So then let's change the market. So then we started to look at, okay, which are other places we could go that we haven't explored. [47:06] And I remember we were sitting down with the team and we made a list of top 200 or so cities in the world.

We ranked them by about 15 parameters and like population, GDP, number of taxi drivers, regulation, whatnot. [47:21] And then we tried to objectively rank it, and then the top of the list were all African cities. And we were quite puzzled by that because [47:27] We hadn't even thought of that. None of us, nobody from the team had even been to Africa in their life. So we thought, okay, well then let's give it a try. [47:33] But the problem was with [47:35] effectively spent our entire seed round on these other countries.

So we didn't have any budget left. [47:39] So we're like, okay, what's the cheapest way to validate this? So we just set up Facebook ads. [47:47] in all these markets and just saying, hey, Bolt has launched. And then we just saw where we're getting the biggest signups. [47:52] And then we resorted the list and still all the African cities were in the top. [47:57] And then we're like, okay, like clearly this is resonating with the customers there. We have product market fit. [48:01] So we quickly hired a couple of, honestly, like young people, people from university, basically kids, to go and start training the drivers.

[48:10] And we launched and, you know, six months in Johannesburg was the biggest city we had globally. It was like 30% of the business. And then it was obvious. We got to double down on this. We got to do all the emerging markets in the world. [48:21] So we launched everywhere across Africa, in Mexico, we went as far as Azerbaijan and so on. So a lot of these relatively low income countries, we saw the product market fit was great. [48:33] So now that you've sort of had the benefit of running that experiment across those 15 parameters or so, like what were the decisive ones that that actually seem to be predictive of like, this is a really good fit for this sort of a place?

Number one metric. [48:48] 80% of the value is the number of drivers. [48:50] Hmm. Number of drivers, just like the availability that you can... Very simple. And still to this day, it's by far the biggest criteria that shows whether ride hailing is going to be successful in that city or not. What we see is that generally, actually in most markets around the world, equilibrium over time trends to a level where you have more than 1%. [49:08] Of everybody in the city is a driver. [49:10] for Eidhaling. [49:11] So it's a lot of people.

[49:13] And that is quite consistent. The problem now is that in some other parts of the world, the number is one tenth of that. [49:19] And usually it has nothing to do with consumers' willingness to use ride hailing. [49:24] It usually just boils down to regulation. [49:26] And actually the European markets are some of the worst in the world. So places like Germany and Italy have [49:32] one-tenth of the size of the ride-hailing market they should have because of the taxi lobby, which has managed to basically keep these licenses capped and it's very hard for new drivers to enter.

So we actually think Europe has tremendous potential over time once these regulatory obstacles get lifted. How do you think about competing in some of the markets that historically you haven't focused on? Like, you know, the US was a place maybe you went to begin with, but then sort of were like, hey, this isn't our race right now. You know, is that something [50:02] Or not necessarily? So overall, how we think about it is that the European market can be large enough that this can sustain a company that's worth hundreds of billions of dollars.

So transportation is such a large market that we don't even need to go anywhere else than just Europe. Not to mention once you add Middle East, Africa, other places on top. So again, our view more is that we want to focus on onemia and make sure we win in as many cities as possible. We build the best product we can. [50:29] across all these transportation needs. So everything from micro mobility to ride hailing to food delivery. And then we try to build all these categories. In that sense, it's less about spreading thin and trying to go everywhere.

But really, the network effects in this business matter a lot. So you rather want to go deep than, than, than. [50:45] There are a lot of... [50:47] amazing inflection points in your story when I looked back on it, um, of, um, [50:52] near-death moments, bloody noses, and then, you know, could have been crazy wins at the different times. Well, I'd like to talk about a few of them, actually, but one of them that you tell is about... [51:02] Essentially, [51:04] trying to convince someone in the Serbian mob. I'd wonder if you can take us back to that story and...

[51:10] how you felt in that moment. And you've talked about how it changed your business, but I wonder if there was almost a sense of disappointment that you had to change your business in that circumstance. Yeah. [51:22] Absolutely. So the context is that it was, [51:25] Probably around 2014 or 15. So we were maybe one and a half years into the business. It was working really well in Estonia. And the original model was actually slightly different than how we operate today. In the sense that we, the first idea was, let's start off with just connecting individual drivers to passengers.