Innovate don't hibernate!
Most entrepreneurs around the world, at least the early stage ones, have certainly been reading some of the same posts I have about the doom and gloom of operating startups in the middle of a recession or global pandemic (or possible both). One of the posts making the rounds for all entrepreneurs is the Sequoia post referring to Covid-19 as the Black Swan of 2020.
It is a good one and I read it and shared it many times to my Techstars alumni friends and other colleagues. In a nutshell they tell us that funding will dry up, we need to hoard cash, not hire anyone new, sales will be slower, BUT don’t fret too much since many of today’s tech giants were born and bred during crisis and recessions.
There is a lot of truth to everything they have to say. I can speak from experience that investors have slowed down their decision making process as three of the investors we were in active conversation with for our late seed round informed us last week they are holding off on making decisions for a few months or more and one mentioned the need to protect their portfolio companies for the Siberian winter. Fair enough.
But what if instead of hibernating for the long winter, we take the opportunity to innovate in the time of crisis? And instead of slowing down, we could even speed up in some regard, whether that be product development, new products or even securing funding, perhaps even in service of humanity during the crisis?
My company, Iomob, is based in Barcelona, Spain. All our staff and executives are in quarantine. As a “deep tech” company full of mostly software engineers, working remotely is more doable than hardware startups or service companies of course. We are adapting. Over the weekend, after reading Sequioa’s black swan I was reflecting on Iomob will survive an extended survival of the fittest marathon when I came across an interest urgent call for startups in Europe with solutions that could somehow address the spread or impact of Covid-19.
This is a prominent regional government program (H2002 SME Phase 2) that offers up to 2.5mn euros in grant funding or even more in blended grant and equity for European-based startups with something unique to offer the region. But with a twist. The call came out on Friday and initially had a deadline of Wednesday, March 18th. That is an insanely short window to respond to a 25 page+ quite rigorous call for proposals. Furthermore, on the surface, there was not a clear expressed need for what Iomob offers. We offer an enterprise software solution to public and private transportation players (rail and bus operators, public transit authorities, airlines, etc) who want to offer a seamless Mobility as a Service (MaaS) experience to their users. That is supporting inter/multimodal mobility experiences. We have our own proprietary intermodal algorithms and we recruit and then deeply integrate public and private mobility services (taxis, ridehailing, micromobility, rail, etc) so that users can go from A to B with one app combining different services and pay for them inside our client’s app.
But we have been observing around Europe how the need to enforce “social distancing” rules to reduce the spread of the virus was having a big impact on how people move around cities, with a significant drop, for example, in public transit use. It ocurred to me, why not leverage our technology to enable intermodal journeys that facilitate social distancing for those who need to move for one reason or another (e.g. healthcare and emergency service workers, people needing to seek basic necesities like food or medication, etc)? While one of my founders at first thought I was pushing it as surely the EU was not thinking of this kind of solution for that call (I think he is absolutely right) another co-founder (both have PhDs in computer science) reinforced the need to think about mobility in a Covid-19 world.
So on Monday, as a company we decided we were going to go for it. 48 hours to develop a rigorous proposal to present a compelling reason why EU should invest taxpayer money to enable Iomob to expand our core solution faster around Europe while also integrating new “social distance” functionality such as journeys which support in app-payments so users do not have to transact with drivers, etc (we already do this), filter results for servcies that have a higher social distance quotient (e.g. micromobility) and create a new crowdsourcing feature so that other app users can rate how crowded different mass transit vehicles are in real-time to influence which public transit services are “safe”.
To pull this off in 48 hours we needed help. We turned to our colleagues at Factual Consulting who are very adept at assembling and winning European grant proposals in the mobility sector. To my surprise they agreed to find slack resources they didn’t have to accompany us on this adventure. Then three executives from Iomob, Scott Shepard (our Chief Business Officer who is based in Lisbon and also in quarantine), Josep Sanjuas (CTO and co-founder) and I, decided to postpone other internal and external commitments to get out the best proposal we could possible pull off in 48 hours. Scott and I focused on recruiting regional and global actors to support the proposal and, with the help of other team members, focus the aspects of the proposal we could drive whilie Josep led the technical work packages.
Collectively we managed to recruit huge players in our field like MaaS Global (the largest B2C MaaS player in the market), UITP (the International Association of Public Transit), POLIS, and the World Business Council for Sustainable Development among many others while creating what we hope will be a winning proposal. We were left exhausted but proud of how we came together with our partners at Factual and after 2 very long days we completed the task and delivered the full proposal 15 minutes before the deadline. Only to find out right at the end they extended the deadline 2 more days :).
I hope there is a lesson in here for other entrepreneurs struggling with quarantine or facing difficulties closing client contracts or investment. One great outcome of this project could be if we win, we obtain 2 million euros in non-reimbursable. That is similar money we have been raising but non-dilutive! We believe if we win this proposal not only can we accelerate our prior roadmap and grow our market reach, but also increase the value our solution brings to society by reducing the spread of the disease and growing the piece of mind for those who do have to move around their cities during a pandemic like Covid-19. And naturally we believe the expanded capabilities we will build will add value not just to our sales to transportation players but to end users even in “normal” times such as for users who have weak immune systems, or those who need to travel when they have other illnesses but want to keep their social distance to avoid infecting others, or perhaps even helping claustrophobic people or others seeking to avoid crowded places for safety reasons.
On one item from Sequioa’s piece I fully support is this passage here:
Could you turn a challenging situation into an opportunity to set yourself up for enduring success? Many of the most iconic companies were forged and shaped during difficult times. We partnered with Cisco shortly after Black Monday in 1987. Google and PayPal soldiered through the aftermath of the dot-com bust. More recently, Airbnb, Square, and Stripe were founded in the midst of the Global Financial Crisis. Constraints focus the mind and provide fertile ground for creativity.
Keep up the good fight my fellow entrepreneurs!
Iomob, which stands for the Internet of Mobility, headquartered in Barcelona, Spain, has built a white label Mobility as a Service solution which combines proprietary algorithms enabling multimodal combinations of public and private services and an SDK that allows end users to discover mobility services, receive multimodal combinations for their journeys, book and pay for a range of mobility services via our client’s own apps. Iomob has won numerous open innovation challenge awards from organisations like Ford Motors, Renfe and Sweden’s Sustainable Mobility Challenge. Iomob has also participated in prestigious startup accelerators such as Techstars and Wayra and in 2020 won the TravelTech Europe startup first prize (London), 2019 Best Mobility Startup of 2019 at the South Summit, The Public Choice Award from ERTICO in 2019, Top Mobility Startup in the Federation of International Automobiles (FiA) Startup Challenge and selected Top 100 Smart Cities Partners by Newsweek.
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