We spoke to Guillermo Cornejo of Riders Share about motorcycle rental and COVID-19.
First of all, how are you and your family doing in these COVID-19 times?
Guillermo Cornejo: I am doing fine, young and not in the at-risk population. My parents, on the other hand, have been stuck in an apartment in Lima, Peru, for months (that’s where I am from). They weren’t even allowed to drive their own cars there for a while. They have exhausted Netflix! There is a chance this will be the first Christmas I can’t spend with them as the Lima airport remains closed to most countries.
At least I don’t have to try hard to stay away from them like most other people…
Tell us about you, your career, how you founded Riders Share.
Guillermo Cornejo: Before Riders Share, I worked in the auto industry for about 7 years. I did data analytics for Hyundai Capital, GM and Nissan, in roles ranging from the marketing of used cars to pricing subprime auto loans and optimizing call centres. These roles gave me familiarity with car-sharing, as well as industry best practices for risk management, among others.
Around 2013, I lived in Texas and missed surfing in Peru, so I got a motorcycle license to get that adrenaline feeling. After 2 months of learning to ride on a sports bike, I got too confident and crashed at 80mph. I was stuck with hospital bills and couldn’t afford to buy a new bike, so once I had the courage to ride again, I decided to rent instead. After all, the bike was a toy I used mostly on weekends. It turns out renting a bike costs roughly $200 a day, so that’s how I got the idea for starting Riders Share. There had to be a better way to rent motorcycles.
How does Riders Share innovate?
Guillermo Cornejo: Quite frankly, our company is innovative within the motorcycle industry, but really what we are doing is getting the industry caught up with technology that is prevalent in other industries. We use the peer to peer rental model to drastically cut the cost of renting a motorcycle; we use machine learning to mitigate the cost of insuring motorcycles, and we use a software platform to bring it all together.
We are using the same tactics that tech companies use to unglue you from your screen and into a real-world adventure, instead of keeping you glued to one.
How the coronavirus pandemic affects your business, and how are you coping?
Guillermo Cornejo: The pandemic hit us really hard because most of our customers are travelers. At one point, our revenues were down 90% YoY. We were growing 400% to 500% before COVID happened, so it was very disheartening. Luckily, things bounced back a bit, and we are now again growing, however not nearly as fast as before.
We tried lowering prices for scooter rentals as a cost-effective and fuel-efficient alternative for delivery drivers, however, at this time big services like Postmates or UberEats do not have a supply problem, so we were unable to land a partnership with them. Every car rental company is trying to cater to that market as well, so prices are really low. We remain focused on our bread and butter, which are street legal motorcycles – think Harley Davidson, Ducati, and BMW.
Did you have to make difficult choices, and what are the lessons learned?
Guillermo Cornejo: We were extremely lucky that we closed around right before COVID happened. We laid off a couple of people, but it wasn’t as bad as other companies in the travel sector. The biggest lesson we learned is not to discard the pessimistic scenarios from our corporate planning, even if things are going fantastic!
How do you deal with stress and anxiety, how do you project yourself and Riders Share in the future?
Guillermo Cornejo: I’ve failed twice before. I tried to launch this company in 2015 and 2016 but wasted thousands of my own dollars due to lack of experience. We’ve been targeted by identity fraudsters, who caused thousands in damages when we had only 10 weeks in runway left. We had a freak 0.0001% probability accident that wiped all motorcycle image data from our cloud servers, and we put them back up one by one. I had $40,000 in credit card debt at some point and 2 weeks of the runway in 2018. Again in 2020, I had $300k in debt and a few weeks of the runway before closing our latest round.
So I’ve been through some things most Americans consider stressful: the prospect of bankruptcy, failure, losing money.
It’s all about perspective. When everything seems to be going badly, remember there still are humans struggling to gain access to water, food and shelter. Our first world problems are mild by comparison and should be treated as such. A failing startup is a privileged problem to have, don’t kill yourself over it.
We think we have the talent, advisers and decision making to take over all the riding aspects of the motorcycle experience, if not the entire Powersports industry.
Who are your competitors? And how do you plan to stay in the game?
Guillermo Cornejo: Our largest competitors are brick and mortar motorcycle rental shops, but they are also potentially our largest partners: nothing is impeding them from using our platform to offer rentals and replace their insurance partners. There are several smaller motorcycle sharing platforms out there too, but they are all significantly smaller and far behind ours. Execution is a lot harder than coming up with an idea!
To stay ahead in the game, we have a few advantages:
· Software. We picked a modern tech stack and brought software development in-house from the beginning, so our platform is far ahead of the pack and has the tools to stay there; we are very caught up with car-sharing industry leaders in terms of features despite having the only 1/5th of the years of development.
· Funding. We have raised over $3 million to date, maybe 2-3 times more than all other motorcycle sharing platforms combined. More importantly, LiveOak Venture Partners have excellent contacts in the sharing economy and have surrounded us with advisers to help us implement best practices and leave our competitors in the dust.
· Scale. To date, 75% of our growth has been via word of mouth. Over 12,000 motorcycles have been listed on our site, and we are on track to have 100,000 registered users in early 2021. This kind of tractions allows you to obtain analytics to optimize everything from your search engine algorithm to your risk management. In the case of motorcycles, insurance risk management is the key to success and also a very important moat. We are years ahead of any other company in the world when it comes to our understanding of usage-based risk for motorcycles.
We are launching the ability to deliver motorcycles to you this year. We are also expecting to launch mobile apps, tours and experiences, and many other features in 2021. Our end goal is to provide a cost-effective way not just to rent motorcycles, but also find friends that ride and rides to go with them, and also provide paths to learn how to ride all the way to becoming an expert motorcycle rider.
Your final thoughts?
Guillermo Cornejo: Riding a motorcycle shouldn’t be an intimidating experience. At Riders Share, we are working hard to build an inclusive community, with inclusive pricing and with the ability to connect with other riders of a similar mindset. If you have a motorcycle license or know someone that does, I recommend that you give us a try. I personally read every support email, and if you are unhappy with any aspect of the product, I will work hard to make it better.
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