Disrupting the Rideshare Industry with Joshua Sear of Empower


 

Summary of Episode

#24: Josh joins Annaka and Ethan to share his story founding Empower, a software startup geared towards supporting rideshare drivers.  Josh walks us through the process of flipping the traditional ridesharing business model and explains how he grew a customer base inorder to quickly scale his company.

Joshua Sear is the CEO and founder of Empower, a SaaS startup working to transform the rideshare industry and taking on companies like Uber and Lyft. Prior to founding Empower, Josh worked as a lawyer and even interned at the White House.

Podcast Episode Notes

How holes in the business model for ridesharing platform like Uber and Lyft enabled Josh to create Empower [1:45]

From law school and politics to becoming a startup founder [4:35]

Josh’s tactic for reaching his target market — going to the airport and finding drivers to talk to [6:40]

Don’t ask for permission to get started and go find your target market [9:22]

Reinventing the broken ridesharing business model [14:51]

How Empower prices their products [18:29]

How to create a profitable business model [22:42]

The importance of creating a team with industry knowledge [31:05] 

When everyone benefits, it’s easier to grow and scale [32:54]

It is possible to run a profitable company that strives to be a socially responsible company [36:03]

Josh’s strategy for focusing on big picture visions and holding himself accountable [40:52]

How Empower intends on scaling in the coming months [43:11]

The factors that went into Josh’s strategy for growing markets in various cities [46:29]

“The more success you have, the more doubt people will have” [49:52]

Josh’s advice for entrepreneurs — work with people who you trust and who share your values and visions. Your company’s success depends on the team [52:31]

Full Interview Transcript

Annaka: Hey everyone. And welcome to Startup Savants. I'm Annaka.

Ethan: And I'm Ethan.

Annaka: If you're a returning listener, welcome back. And if you're new, this podcast is about the stories behind startups, the founders who run them, and the problems they're solving. Today our guest is Josh Sear, founder of Empower. Josh is taking on rideshare giants Uber and Lyft with a driver-centric approach. Previously, however, his background was in law – even working in the Obama White House.

Empower came about with the idea that improvement is possible on existing business models, the social responsibility that corporations share, and taking an empathetic approach toward their customers. 

Ethan: Alright so, we know that sometimes to be a successful founder you’ve got to be just a little scrappy. So, when we asked Josh about the things he did to find his early customers, well, I’m not going to spoil the story for you. Let’s just say that loitering down by the airport is definitely Josh’s idea of a good time. So, if you love an underdog story, keep listening because Empower is truly disrupting the disruptors in the rideshare industry. 

Annaka: 
Hey, Josh. Welcome to the show, how are you doing today? 

Joshua Sear: Good. Thank you for having me. I really appreciate it. I appreciate your interest in Empower.

Annaka: Yeah, it's an interesting concept. And I'm looking forward to digging into that a little bit more. To start off, can you take us through how Empower got started and the problem that you all are solving?

Joshua Sear: Sure. In speaking with a lot of drivers, when I was using Uber and Lyft, I realized that they were getting absolutely hammered financially, particularly those that were trying to do it for a living, they couldn't. They also felt completely voiceless. And that's a terrible feeling. And I don't think that's what Uber and Lyft intended when they went out to disrupt the taxi industry, but in their race to grow as quickly as possible, they ended up creating, they and Lyft, created a duopoly that really controls transportation as much, if not more than the taxi industry that they were setting out to disrupt. And the business model itself just doesn't work for drivers. It's unsustainable, drivers have known that for a long time and riders are also now realizing it. And in speaking with drivers, I had this aha moment and realized they're not the customer and I asked, well, what would it be like if they were the customer? What would it look like if we flipped Uber and Lyft's business model on its head, made the driver our customer, had the rider be the driver's customer?

And in thinking about it just looked like that would be a better solution for everyone and that's what we've done. And the way we've done that is we've enabled drivers to set their own rates, they get a hundred percent of the fare and they can therefore compete with Uber and Lyft. And in doing so, they're making more money, they're treated like the valued customers that they are. And at the same time, riders are able to save more. They feel better knowing that drivers are getting a hundred percent of the fare.

And at the end of the day, I think the larger vision also is just enabling drivers and gig workers generally to have the software and support services that they need to build, and run, and grow their own businesses and pursue the American dream just like anybody else. They're not allowed right now in a lot of places or they're not able really to run and build their own businesses. They don't set their own rates, they don't choose what rides they're going to accept really. And we wanted to build a platform that put the choice back in their hands, and they've demonstrated that they're more than capable of doing that when given the support and services that they need.

Annaka: We were doing a research about Empower and the mission and all of that stuff, and I was reading about it and I'm like, man, I love this entire concept because you do hear from Uber and Lyft drivers that things are a little bit tight. So, you get an A+ from me. But you started in law, I mentioned earlier, you worked in the Obama administration. Why the drastic career change and when did you know it was time to make that change?

Joshua Sear: Yeah, sure. So I went to law school in DC and I was interested in politics. I ultimately ended up taking, out of law school, a job with a legal tech startup. Spent a year with that, enjoyed that. Ended up though, going to a boutique transactional law firm, which was real small as well, enjoyed that. Got some great legal skills. And then ultimately ended up for five years at a bigger, not a huge company, but a mid-size managed network services and cyber security services company as in-house counsel. And I got to work with all the different departments, which was great. I got to see how a business was run. I've always been a business minded attorney. Always trying to get to, yes. I worked a ton with sales folks and they're always bringing contracts and they're used to a lot of attorneys telling them why they can't do stuff. And I was always trying to figure out ways, while mitigating risks, to make sure that we could move forward with the business.

I got to work with the solutions architects, the engineers, with the finance team, tax, and all the senior executives on a regular basis. And I got to a point where I had outgrown the role that I was in. And I was looking for other in-house counsel roles at other companies. And at the same time I was open to doing something totally different. And I came up with this idea and I was interviewing for other attorney roles, getting some offers, turning them down. And I realized I was turning them down, because that wasn't what I really wanted to do and this was.

Ethan: All right. Before we started recording this episode, we were doing a little bit of chatting and you mentioned this awesome story and I want to get all of the details, I want to know everything about this. One of the tactics you used early in Empower was to hang out at the airport and chat with the Uber and Lyft drivers there, that's just awesome. Can you tell us how you came up with this idea and what was it that you were trying to accomplish?

Joshua Sear: Yeah. We still do that, to sign up drivers. In fact, I was there yesterday at Dallas Airport, just yesterday. Hadn't been there in a long time, had nothing to do with this podcast, just a coincidence, but I was like, let's go check it out. See what the environment is out there. So I went down to Winston-Salem, which is where we were thinking of launching, and drove down with a friend of mine. And the night before we were using 5" × 7" poster board cards at the local print shop to create some really basic marketing that we were going to hand out to drivers last minute. We drove down and when we got down to Winston, we realized, okay, well, where are the drivers? How are we going to find them?

So of course the first thing we did is we requested an Uber and we started trying to pitch the driver about this idea. And we realized that was a little difficult because you're talking to the back of somebody's head, they're driving. Also a lot of these drivers, Uber and Lyft, they’re worried that you work for Uber and if they try anything else that you're going to tell on them, and they're going to get in trouble, and they won't get as many ride requests from Uber. So we realized that wasn't necessarily the best thing, but we asked him, "Well, where are a lot of drivers hang out?" And he goes, "Well, they're at the airport." And I go, "Okay, that makes sense. So why don't you take us to the airport?"

So, there's a specific parking lot for Uber and Lyft drivers at the Piedmont Triad International Airport. We went over there and we started talking to drivers, just going up to their windows. And they were super friendly. They really welcomed an alternative, we thought they might, and signed up. We didn't have an app, we didn't have anything. This was really just exploratory. Are there drivers that are interested in this? And we started taking their name, phone number, email, and let them know about what we were building and finding out is this something they'd be interested in and almost everyone was excited about it and saying, well, how quickly can you get here?

Ethan: Wow. So, there's so many things, there's so many possible takeaways from this, so many directions that we could even take this conversation, but there's a couple of things that I'd like to highlight. I think so many people are scared to do things like this because they feel they don't have permission to do this. And who the heck would you ask for permission to do this anyway? So the fact that you didn't wait for that permission, that literally wasn't possible to even get from anyone anyway, and just went and did it is fantastic.

And then I think the other one thing that I'd love to point out is, and this is so important for so many businesses and it's easier for some than others, but understanding where your intended users are hanging out. In this case, it's a physical location. And a lot of times it's more where do they hang out online, what magazines do they read, type of things. But you actually found where they physically were while they were doing their job and came and pitched your stuff and that's so awesome. Those early conversations, I'm assuming that they've changed over time? What were the things that didn't work that you had to edit out of those conversations and what were some things that worked like gangbusters?

Joshua Sear: To be honest, the pitch and the conversation with drivers is still pretty similar. It hearkens back to the fact that they're not making enough money with Uber and Lyft. And so an alternative platform where they can make more is obviously appealing to them. Two, they feel totally voiceless and unheard. We started this at a time, not long after where Uber had made really clear and was spending a ton of money on driverless vehicles. Basically telling the public that the future of this company is to not have any drivers, which is not particularly endearing if you're a driver. So, explaining how with Empower the driver is our customer. With Uber the rider is the customer, and so they viewed drivers I think a little bit as disposable.

We don't have that perspective. Our revenue comes from drivers. And I think one of the things in talking to drivers that we still say is we think it's super important to treat drivers with respect, and to empower them, and just to treat people well generally. But you don't have to trust us on that. We don't make a penny off of riders, we get zero from riders. We get all of our revenue from a subscription that drivers pay us. And so if we're not providing drivers with a level of service that they're willing to pay for, they're not going to continue to be our customers.

So, they don't need to trust us. If we don't do the things that we need to do to make them happy, we're going to go out of business. And that message, I think, has very much resonated with drivers. Because they've been burned, I think a lot and been told, trust us. Trust us about this, trust us about that. And they don't, and that's totally understandable. I do think they were building that trust with them, but I think that's built on the fact that they're the customer more than anything else.

Annaka: Yeah. And so you're building these relationships with these drivers and then the drivers go on to build relationships with their riders, how do you foster that relationship? How do you empower, I'm sorry I'm going to have to come up with a different word, empower your drivers to then take care of their riders?

Joshua Sear: Yeah. So there are features within the app that I think ultimately incentivize drivers to provide the highest level of service possible to riders, to their customers. Obviously riders can tip but also riders at the end of a ride can rate a driver, thumbs up, thumbs down. If they give a thumbs up, they have the ability to favor the driver. And in the rider app you can turn on a filter that says I only want rides from my favorite drivers. And ultimately as we get more and more data and grow, the drivers who have more riders who have favor them or have higher ratings, will likely be able to set their rates a bit higher and still get just as many rides, assuming people are willing to pay a little bit more for their favorite drivers or for higher rated drivers.

And we think that people are willing to do that. And we think there's a lot of money that's being left on the sidelines that's not going into the pockets of drivers or the companies that are building platforms that drivers may be using. And that riders are willing and want certain better levels of service and are willing to pay for that. And that's not being captured right now. And so everybody's worse off and everyone's better off when that does happen.

Annaka: Yeah. It's like having a favorite server at your neighborhood diner. You're like, I'm still going to tip you 10 bucks when I get two eggs but I know that you're going to refill my coffee every time you see me. You get used to that level of service. Love it. Uber and Lyft are household names, what gave you the confidence to be like, I'm going to go after them? Not go after them, but I'm going to go join the competition.

Joshua Sear: Yeah. And it's a great question. I think that back when I came up with this idea, at the end of 2018, early 2019, everyone assumed that Uber was the next Amazon. That they could push a button and they were going to be profitable. That they were choosing growth over profitability. I didn't believe that. I didn't think that Uber and Lyft, which were fully scaled and owned virtually a hundred percent of the market and were, in the case of Uber, all over the world, that they weren't big enough. That that was the problem as to why they weren't making money. I didn't think that they were spending 10 years and they had a secret plan to make money that they weren't telling anybody about. And so I viewed then that their business model was broken, and I think it's still broken. And they haven't disproved that yet.

In fact, I think there are a lot more people now that think it's broken. And so, that was one big piece of it. The other thing was their principle thing that they built in many ways was building this big group of drivers, but they did nothing to protect it whatsoever, or foster, or encourage loyalty amongst those drivers. In fact, because of certain issues with labor laws, they were really concerned about making sure that the drivers weren't actually too loyal. And so there was no switching cost whatsoever. They don't care whether or not they get their next ride from Uber or from Lyft. And there's nothing preventing those drivers from using a different platform. And so it's rare where you have a business that's grown to the size of Uber or Lyft that really has absolutely no moat. Nothing protecting what it's built other than the fact that they raised a ton of money. And ultimately that's not sustainable. And that's the view that I've had then and still have now.

Annaka: Yeah. And speaking of growth, how fast is Empower growing?

Joshua Sear: Pretty fast. We launched in DC, which is our principal market, in October of 2020, and now drivers last month earned nearly two and a half million dollars in gross bookings. Provided 140,000 rides in the DC Metro area in the month of May to over 25,000 riders. And we recently went live in New York city as well. We have a market down in Winston-Salem, that was where we launched. We actually ended up launching a week before the pandemic hit. So, we ended up halting our growth down there, not really trying to push that market and pivoted to launching in DC. But that market we kept open and we are actually now starting to do more down there and trying to grow that market as well.

Annaka: Yeah. And congrats on New York city. That's a big market up there. And in perusing things, we took a look at some pricing and your pricing in North Carolina versus Washington DC, for example, are vastly different. How do you determine those fees? And how do you set those?

Joshua Sear: Sure. We're super transparent with drivers about the price of the subscription. We let them know it's going to go up if we're successful, because it means you're successful. We're setting the subscription fee basically based off of as drivers are able to earn more and more relative to what they would be earning if those same rides were being delivered through Uber or Lyft, we're able to increase the price of the subscription. So for example, if you're a driver and you're doing $5,000 a month in gross bookings on the platform. If you were doing that with Uber or Lyft, you're taking home only about $3,000. With Empower you're taking home $5,000. So we're charging right now, 220 bucks a month in the DC market, we let drivers know that.

And that started at $10. We went from 10, to 20, to 50, to 100, to 200, to 220 over the course of I guess, 18 months or so. And while doing so we increased the number of subscribers and that's just because drivers are able to make more and more money and they're getting more and more value out of the product. But we've also made really, really clear to them that we are never going to set the subscription at a price that is anywhere close to what effectively Uber and Lyft are taking in the form of their commissions. Because if we did, then that would disincentivize the drivers from doing this in the first place. So there needs to be value creation there for the driver. And the reason why the price is so low in Winston, for example, we did just recently increase it to 20 bucks a month. But it's because it's a smaller market. The average driver on that platform in Winston isn't doing as much with respect to monthly gross bookings. But as it grows, we'll be able to over time increase the price of that subscription as well.

Annaka: Yeah. But that increases with the driver essentially what they can make. $20 even, I can afford that and I feel I would make that back pretty quickly. So, you all are well on your way to building trust and loyalty with your drivers. And have you experienced any roadblocks in the overall adoption of Empower so far?

Joshua Sear: Well, COVID, didn't help. Literally we launched February 27th, 2020 in Winston and a week later the earth basically stopped rotating and everything came to a halt. And we're selling software that's used to move people from point A to point B. So when everyone's locked in their houses, that is a bit of an obstacle. And frankly the different resurgences when they've popped up have, have impacted things, but we've managed to grow throughout that. It certainly helps obviously that we were starting at zero and growing. If we were fully scaled like Uber is in a market, I have no doubt that we would've been hit much more negatively than we otherwise were. We were somewhat fortunate in that at least the timing that we were still small enough that we were able to grow through it. But that's probably been one of the biggest obstacles.

We tried to go live in New York city a week after Thanksgiving of 2021, which was a week before Omicron shut New York down for a second time. So, we've had good timing twice now. And so that slowed things down there, but things are starting to pick up there, which is good.

Ethan: So I want to jump to a topic that I've been thinking about ever since I started doing research on Empower and let me make sure that I set this up. Uber is not a profitable company. In fact, they've never had a profitable year. Lyft just had their first profitable year in 2021, which good for them. Super glad. That all being said, Empower is built on the premise that drivers get to keep 100% of their ride fare. So, what's the secret sauce here? How are you thinking about sustainable profitability when you are taking in less revenue per ride than the big names?

Joshua Sear: Yeah. So one, I'm going to risk arguing with you just a little bit and say that Lyft is not profitable. If you want to use some weird accounting adjusted EBITDA metric, perhaps.

Ethan: I'll take your word for it.

Joshua Sear: More cash goes out the door by a lot than comes in the door. And that's true for Uber as well. But your question is a great question. So there's a lot of things that go into it. One is that first of all, our acquisition cost for drivers and for riders is a fraction of what it is for Uber and Lyft. In part because Uber and Lyft exist. So we don't need to go find a driver who's never driven before and convince them that they should become a driver. We just need to go out to the airport parking lot or onto an online Facebook group where drivers are self identifying either they have stickers on their car or they're in a group that says they don't like Uber, and offer them an alternative to a company where they are very dissatisfied.

And then on the rider front, well, I think the dissatisfaction is not quite as high as it is with drivers. There's not a lot of brand loyalty. And Uber and Lyft have already spent billions of dollars convincing people to get into the back of strangers' cars. And so we don't need to do that. Again, we just need to target riders who are already using Uber and Lyft and say, hey, here's an option where drivers make more. Where you've got greater choice and where the fares are a little bit less expensive because the drivers are getting a hundred percent of the fare. And so that reduces our cost dramatically. I think another aspect is that while we're exploring other subscription options, the monthly subscription option as it increases in price, it's appealing to your full-time and your near full-time drivers. And people don't realize that about over half of all the rides are provided by full-time or near full-time drivers.

And that number is significantly higher in your really highly densely urban areas like New York and DC. And by targeting those drivers, we've got a much higher, long term value of the customer. The churn rate for drivers is much lower for Empower than it is for Uber and Lyft, which means we don't need to constantly be getting more new drivers all the time. Also the engagement rate for riders is considerably higher on Empower despite the fact that we're a new company than it is for Uber and Lyft, because riders are consistently seeing that the price is a bit lower. And for those riders who are price sensitive, which is a lot of people, and particularly for riders who might be using it every day to go to and from work, they stop splitting their bookings. They're not opening now Uber, Lyft and Empower and seeing which is the least expensive. They're just opening Empower. And with Uber and Lyft they're just going with whichever one is less expensive most of the time. So that's a big piece of it.

Ethan: So, I want to go back to that acquisition cost. And I'm sure there are other acquisition strategies that you have other than sending folks out to the airport, but do you think that these costs are going to stay the same as you scale up? Or are you just going to hire a whole force of sales people to go hang out in airport sale lots, or is it that this acquisition cost is going to get higher after the lowest hanging fruits have already been picked?

Joshua Sear: That's a great question. So I think it's a curve. I think probably the acquisition cost is actually going to continue to go down for a while until we get to the point where we can't easily convert an existing Uber or Lyft driver or rider to using Empower. And there are a lot of those individuals. And so, I think that for a while, the acquisition cost will go down as a result of, if nothing else, just greater brand recognition. And also, as the platform grows in any one market, wait times go down. And the number of rides that drivers are getting goes up. And those network effects, they exist within a given market. Uber used to always talk about how they had this network effect.

I think it's somewhat limited city to city. A driver in Chicago doesn't really care how many riders you have in Houston, Texas. And a rider in Houston, Texas doesn't really care how many drivers you have in Chicago. There's obviously some business travel there. But there are network effects within any given city, within any given geo zone. And so as the market grows, the value provided to both drivers and riders in that market goes up. And so the cost to acquire them goes down.

Ethan: So, let's talk about software for a second. You mentioned earlier in a very nice way, that your software gets people from point A to point B. That's awesome on the surface and I'm sure that your engineers are like, oh my God. It's so much more complicated than that. So let's talk about the beginning when there was no software and you had to have something created. From what I hear, you're an attorney, not necessarily an engineer. Do you have a technical background?

Joshua Sear: Probably the only function that I have not performed at the company is coding. I'm very involved with the product and I'm effectively the chief product officer, but I cannot code.

Ethan: So, how did you go from, I have an idea for an app to, I have a working app? What were the steps that it took to get you from A to B?

Joshua Sear: Yeah. So first of all, you are correct. The software is complicated. In scope it's broad but it is in many ways more complicated than what Uber and Lyft have built because we're not just matching the closest rider to the closest driver, there are a lot of other factors that take place. And allowing drivers to set their own rates adds additional complexity. Having the amount that a driver is setting their rate at impact which riders or which driver, the matching process, adds additional complexity. But in terms of getting there, you're right. I'm a lawyer. And I knew that I was going to need to raise some money. And I like to think that I'm a reasonably bright guy and that it's a good idea, but I assume that a question would be asked is, well, what are you doing as a lawyer trying to start a tech company, a software company, that's also trying to compete with Uber and Lyft?

And so, I knew it would be super important to have some really high quality engineers that had experience doing this. And I was fortunate we were able to get some engineers who were involved in building Lyft's initial iPhone app from scratch. Also had an engineer who built Uber's initial Android driver app from scratch and managed that team. I got fortunate that a high school classmate of my wife's was a super smart engineer and he joined the team. And so in the beginning, I made sure that we had some really senior and smart experienced with industry knowledge join the team to help build the initial version of the product.

Ethan: So did you have a good understanding of how to manage an engineer or did you bring on somebody who could basically do that for you? Is this somebody who you have to-

Joshua Sear: Neither.

Ethan: Neither? Okay. I got to get your story. How did you go from zero to one?

Joshua Sear: Yeah. So I had no experience managing engineers. I didn't frankly have a lot of experience managing people. To be quite honest, it wasn't, and I'd still say isn't, my biggest strength. I have learned a tremendous amount about doing it, particularly with respect to engineers. I like to think that I've gotten better at it, but I was starting at a very low base. So, no, we have senior engineers who manage other engineers, but the team is still small enough that I'm very involved in that process and have been from the beginning and still am. So, I will say this, that it is a position that we need to fill and are looking to do so at some point in the not too distant future.

Ethan: Let's talk real quick about network effects. How do you think about incentivizing your users or creating structures in your product that will help you to build that network effect more quickly?

Joshua Sear: Sure. So first of all, the product itself is just better than the alternative and the incumbents, so that helps. On the rider's side, rides are on average about 20% less expensive. And on the driver's side, the drivers are making on average about 20% more. So that helps. And also just the brand itself is helpful. Riders, we've done surveys. And I was hoping this would be the case but I wasn't certain, but 50%, the number two reason why riders are using the platform is because they like the drivers get a hundred percent of the fare. They feel better about using this service as opposed to the alternatives. And so that in and of itself is a good starting point.

But then beyond that we do incentivize referrals. We incentivize drivers to refer both riders and other drivers. We incentivize riders to refer their friends and also to refer drivers. And frankly, most of our growth since we launched in DC back in October, November of 2020, has been through referrals. It's been drivers signing up riders, drivers referring other drivers, riders referring other riders. And the incentives that we provide are a fraction of what Uber and Lyft historically have provided, particularly to drivers and to riders. And part of that is drivers understand that the more drivers that are using this platform, the better it is for them. And of course the more riders that are using the platform, the better it is for them. But they also get that if there's more drivers on the platform, wait times for riders go down, the pick up distance that they need to travel to go pick up a rider goes down, and the overall platform grows.

And we share that with them. We do monthly driver appreciation events where we talk about these types of things. Talk about updates to the product, talk about ways in which they can help us. And so I think that's a big piece of how we're trying to build that network. I think we're starting to try and do a bit more press, we're here with you and get to where there was a long period of time where we were really trying to stay under the radar. And frankly, for about the first two plus years until really about six months ago, and apparently we were pretty successful at it. But now we're also trying to use the media and press, and we're just getting started doing that to get the message out there.

Annaka: Yeah. To get the name out there. So, I'm going to go out on a little bit of a limb here. There's a term that I just learned earlier this year somehow, called corporate social responsibility. And I'm getting a bit of a vibe from you. The name is Empower, you're there to take care of your drivers who then take care of your riders. How important is it to you to run a socially responsible company?

Joshua Sear: It's important. Look, I don't like to think of the company as a mission company in the sense that we're not a nonprofit. We're trying to run a profitable business, but that's not incompatible with running a business that ultimately results in a lot of social good. And that's super important to me. It's one of the reasons why I was willing to do this, to make the sacrifices financially, emotionally, time wise. I wanted to build something but it was important to me to build something that I thought could help a lot of people while at the same time being successful from your more typical standard corporate financial metrics as well. So it is very important. And I think it's important to the riders.

At the end of the day if the prices were 50% higher and the wait times were 50% higher than they were for Uber and Lyft, riders aren't going to use it. But if you can create a service that's comparably or, in our case, better priced and have comparable, or in many cases now in DC, lower wait times, at that point I think riders and consumers in general, they care about what they're using. Particularly the millennial generation, which is the target audience on the rider side for these services. And they do care about that. And they much prefer to use a platform that they feel good about as long as it's affordable and provides a service that meets their needs.

Annaka: Yeah. And here on the team side, we've had multiple conversations about, I've loved working with this company. We get a handwritten postcard from them or something. Is there a trend towards a more personalized, empathetic experience now maybe thanks to the millennial and Gen Z generations here?

Joshua Sear: Yeah. I don't know the answer to that question. I do know that it's important to frankly treat everybody with respect and try to provide the best level of service possible at an affordable price. And our focus is our customer is the driver. And so it's super important to us to provide them with that level of support and service that they need. And I think it's also important to understand where they're coming from. Because if you don't, then it's hard to provide them with what they need and what they want. And so we encourage and we solicit a ton of feedback from drivers on all fronts, with respect to the product, with respect to our communications. In fact, we also are trying to welcome hiring drivers. While we, of course, are happy to have them as our customer and stay a customer.

There are some drivers who are really good at other things. In fact, we have hired one. We have someone who's a driver engagement specialist who reaches out to drivers. He's a hybrid between customer support and sales, does both of those roles. And he was actually one of the first drivers, first customers, down in North Carolina and who better to reach out and talk to your customer than a former customer who can completely relate. And he also was able to provide the rest of the team with insight on product too. He helps test product, new features and helps liaise with other drivers who can help us test the product. Because ultimately we're building, at least the driver app, is being built for them. So it's super important, I think, to relate and empathize and understand your customer and to get their feedback and input as much as possible.

Ethan: All right. Jumping back into some more tactical thoughts. You have a monthly exercise where you like to step back and identify the two or three things that need to get done in order to move the company to the next stage. Can you tell us what that practice looks like?

Joshua Sear: Yeah. So I usually take a little sticky note. It's actually one of these. And I literally write down the three things after thinking about it for a little bit of time. Usually it doesn't take that long. It's usually pretty obvious when you take a step back and try and reflect and look at the big picture, what are the few things that need to get done to move to the next stage. I write them down and then I tape it to the desk.

Ethan: All right. I'm a new founder. I'm running in my awesome company and I've got 30 things that I've written down. I'm pretty much out of sticky notes at this point. How do I choose which two or three that I need to pick out of that stack?

Joshua Sear: I think there's a difference. Look, I have a to-do list that's got 40 things on it also, literally. I think when I'm looking for two or three things, a bunch of the to-do items usually fall within some of the larger categories. For example, if one of the things is, well we need to launch a new market. Well, there's 30 things that are required to do to launch a new market. But if one of the things is we need to launch a new market, then I know that we got to launch a new market. If we need to raise more money, there's a lot of things that you can do to help yourself raise money, but that's one of the things. Whereas if raising money's not on that list, then that doesn't need to necessarily be the focus. And the things that go into helping you raise money shouldn't necessarily be the focus.

Ethan: Cool.

Annaka: All right Josh, we're coming back to some of the questions that we love to ask. How does a company like Empower scale? What's the next growth stage for you?

Joshua Sear: There's two aspects to scaling. One is within a given market and growing it, and then the other is adding new markets. I guess a third would also be adding new products and services as well. And our focus is on all three. Really right now, we've launched New York. So we're looking to grow that market, get it up to comparable size as DC is. Continue to grow the DC market. Also continue to grow the North Carolina market. We're constantly updating products and adding new features to the product and service. We're currently working on offering some new subscription options. For the most part, we've just been doing a monthly subscription. We're about to introduce a daily option, which we think opens the market up to some more drivers who don't necessarily drive full-time or near full-time. And so those are the areas that we're focused on. There are other complimentary services that can be sold or provided to your customer.

And there are a lot of additional complimentary services that we intend to ultimately provide to drivers. Because we're really looking to be a one stop shop for service economy workers to have all of the software and support services that they need. So far we've effectively built a demand generation platform and a platform that ultimately will enable them to maximize their earnings through a lot of data and information about consumer choices. But there are other services that they need to run their business. Tax services, backend accounting services, different insurance products, financial services, payment solutions. And we're excited about the opportunity to provide our customers with all of those services that they need to build, run, and scale their own business. That doesn't really exist for the sole proprietor today. There isn't a Salesforce, or Oracle, or an SAP for a driver, or for a plumber, or anyone else in the service economy. And I think that's the larger vision, ultimately is to provide not just demand generation and a platform where they're the customer, but also a company that provides them with the additional services and support that they need to grow their business.

Annaka: Yeah. I love the end goal. That's something that we've been missing for a while. But speaking on actual launches in new markets, how did you decide where to start and then how do you decide where to go next?

Joshua Sear: Yeah, so we initially were launched in Winston-Salem. The decision there was, I wanted to launch in a market that had between 250,000 and a million people for the Metro area that was within driving distance of where I'm at, we’re based just outside DC and in McLean, Virginia. And so those were two factors that were limiting factors and then also thought it made sense to be in a place that had some universities that we could focus the initial market really as tightly as possible geographically and then grow from there. And Winston-Salem made sense. The pandemic hit, which we were not anticipating as nobody was. And that of course made trying to grow a market remotely more difficult. Even if you could go book a hotel room to stay down there, and if you did, are you going to get stuck in the hotel room and not be able to leave because it's quarantined for three weeks? And so we ultimately decided that it made sense to launch in the DC market.

We also thought that there's mass transit here in DC with respect to our equivalent of a subway metro. And I had a feeling that COVID might reduce the willingness of people to get into tubes that are underground, that don't have any windows with people. And so we thought that some of the reasons, in fact, that made less sense to launch in a market, a market that has lots of public transportation, that those reasons now it's flipped. And so all of a sudden we're in DC, it's easier to launch locally. It's a market that the public transportation system is probably not going to be used quite as much. And also there are a lot of full-time, near full-time drivers as well in this market. And so that was what prompted us ultimately to launch DC. There are a lot of similarities with New York and DC as well with respect to that. It's a high percentage of full-time, near full-time drivers. It's a densely populated area and it's also a huge market. And we frankly want to be in some of those biggest markets first.

Annaka: Yeah. So places maybe like, I don't want to throw anything out there, large urban areas with concentrations of your users?

Joshua Sear: Yeah. It makes common sense. You're going to go where the most customers are. And I think it's important to demonstrate that your business model works first before trying to go do that because that can be expensive and a really expensive mistake if it doesn't. So again, that's part of the reason why we wanted to be in a market first that wasn't quite as large in Winston. And then we just determined that we were able to do DC and that we could do it without spending too much money.

Annaka: What is the biggest lesson you've learned as an entrepreneur?

Joshua Sear: The biggest lesson that I've learned as an entrepreneur. A few things, I guess.

Annaka: I know this one's always the toughest.

Joshua Sear: I guess what surprised me the most is that, it seems backwards, but the more successful you are, the more you prove that what you're doing is working, the more doubt people will have. And really what that's a result of is fear. When you're talking to your early investors and getting them to invest, cool, it's a great idea, I hope this works. Probably won't. I'm investing money knowing that. But it could be a great big opportunity. Once they start to see the results and they realize maybe it is working and they have a possibility of a huge financial gain, they pay way more attention and they want to be heard and they have doubts and concerns. And really again, that just stems from fear of the more real the end result of a big win becomes, the more they begin to fear it not materializing.

And so that I think has been the biggest surprise I've had as an entrepreneur. Because I just think the more success we have, well, the more confidence people would have in what we're doing, not the more questions that they would have. I understand the questions in the beginning, you're a lawyer. What are you doing starting a software company? But as we've continued to grow and demonstrate that this works, that's been more of a surprise. So I think it's important for entrepreneurs to be prepared for that.

And at the same time, understand that you understand your business better than anybody, or at least you certainly should. And while it's absolutely important that you listen to feedback from others, and particularly with people who have experience in different areas that you may not have as much experience in, you've got to, at the end of the day, make the ultimate decisions and you need to have confidence in the decision that you're making. Because if you don't have confidence in the direction that you're taking, it's very difficult to execute upon it effectively, if you don't really believe wholeheartedly in the decision that you've made.

Annaka: All right. And the last one for me, what is your number one piece of advice for aspiring entrepreneurs? Let's see if we can come up with something different there.

Joshua Sear: Yeah. I think it's to work with people who you trust and who share your values is the most important thing. And also at the end of the day, any business is a group of people. And sometimes I think people with founder type personalities can sometimes lose sight of that a little bit. They're focused on building a product, or a service or a company, and you need to remember that the success of all of that is completely dependent on the people on your team and making sure that they feel invested in what you're building together. That they feel valued, and that they also have access to the support that they need, and that they feel comfortable asking questions and working with their peers. And that's not easy. That's become harder for sure.

In a world where a lot of people are working remotely, there's not as much in-person interaction. Because I remember before COVID we were in a basement of a building. There were four of us and we were spending so much time together and we could get into arguments, but there was just very collegial support and it just inspired people to work hard and work together. That's harder to maintain in an environment where people are not always together. So I would definitely also suggest if you can, have your core team, your senior people in the same place, if possible. I'll always say it's better to have someone who's great that is across the country than someone who's mediocre and not as invested and passionate right next door to you, in the office next door. But if you can find that person, who's great and they can be next door, that's certainly helpful.

Ethan: Awesome advice. Josh, this has been really great, super excited to get to share these stories with the listeners. And I'm pretty excited to see Empower maybe come to our town. But I've got one more question for you.

Joshua Sear: Sure.

Ethan: Where can people find you online and how can our listeners support Empower?

Joshua Sear: Yeah. So go to rideempower.com or driveempower.com. Both of them will take it to our website. You can go into the App Store or the Play Store and download the rider app if you are in a market where we're live or the driver app if you happen to want to drive. You can use the service, you can let others know about it. Refer your friends. If you don't happen to live in the DC, New York, or North Carolina markets but you have friends that do, let them know about what we're doing. Send them the app, download it and refer them. I think those are the main ways. And if you're interested in working with us, reach out and let us know. We're always looking to hire people and all sorts of different roles, both in operations and engineering and marketing everything.

Ethan: Cool. Thank you so very much. We're going to get all those links in the show notes, and that is going to be it for this episode of the Startup Savants Podcast. I'll wrap it up, put a pretty bow on it and send it right to your front door. Listeners, I want to have a heart to heart. So snuggle up real close for this. You guys rock, seriously. If you weren't here listening to this podcast, I'd probably be forced to spend this time doing something super boring, like working. So if you like us just as much as we like you, let us know with a rating on Apple Podcasts. We've got to keep that algorithm fed and its favorite meal is your opinions. So thank you very much to help us tame that beast. One more thing. You like internet videos? Of course you do. You're a living human being in the year 2022.

Well boy, do we have just the thing for you. Introducing, four years later, the Truic YouTube channel. The team over there puts out all sorts of useful, entertaining and actionable videos for your viewing pleasure. Why they've even buttoned up videos based on these very founder stories that you know and love. And bonus, they're way more professional than I am. So the next time you find yourself near the internet, give them a look over at youtube.com/truic. For tools, guides, videos, startup stories, and so much more head over to truic.com. That's truic.com, T-R-U-I-C.com. See you folks.

Annaka: Bye everybody. All right.

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