It’s 2012. Nir Erez is sitting on a bus from Herzlia to Ness Ziona, his third bus line in the transit back to the Moovit office. He is returning from the first in a series of fundraising meetings in the Herzlia area, where most Israeli investors are based.
Today, he left his car at home, thinking that it’s just not right to fundraise for a public transit app while driving around in one’s own car. Moovit is still a young company at this time, bootstrapped and without funding. Once back at the office, he tells his co-founder and CTO, Roy Bick, that he believes they will make it. The Moovit app works!
Moovit was founded 2012 by Roy Bick and Yaron Evron. Yaron, an expert on the public transportation industry, and Roy, a computer graduate and technical prodigy, had just founded the company with the idea that public transportation data should belong to the public rather than the local governments. They believed that through this data, they could greatly improve the experience of commuting in cities. Looking back, although it seemed like a big goal at the time, this vision now seems narrow compared to what the company has grown to become.
Finding the missing piece in the founding team
Yaron and Roy knew they had the industry expertise and technical talent needed to deliver on their vision. However, they also understood that they needed advice on how to build a business. So Yaron contacted an old friend, Nir Erez, to get some advice.
At the time, Nir, a serial entrepreneur, had just sold a company that he had founded and grown, and was performing due diligence on Waze for an angel investment. When he heard about Moovit, a new small company in the transportation sector, he became interested.
The three met up, and the chemistry was immediate. Roy and Yaron felt comfortable sharing information about Moovit with Nir, and Nir gave them valuable guidance, challenging their mindset from a business point of view. They saw that Nir was the kind of person they needed to lead the company, so they asked him to join as a third co-founder and Moovit’s CEO.
Betting high to overcome multiple growth barriers
Moovit faced two large challenges in their ability to grow. The first challenge was compiling the data. When Moovit started compiling public transit data, only about 20-25% of the cities in the world had digital data on public transit, and most of them were reluctant to provide access to this data. Moovit’s founders could not agree with the idea that public transit data should be the sole property of cities or governments; they thought it should belong to the people as well. But it was a struggle to get public transit data from city governments, and the alternative, building the datasets from scratch, was a huge barrier from a resource perspective.
The other problem was not directly related but coincided – they were suffering from bad app ratings. Due to the way the app store was configured, users had to open the app at the country level. Opening it at the city level was not possible. This meant that a Spanish user in Barcelona would download the app and only then discover that there was no transit data available for Barcelona yet, only data for Madrid. This caused app rankings to plummet fast.
In addition, the founders had an ongoing strategic debate about whether the company should aim to go broad and add as many cities as possible, or go narrow and focus on just a few cities. Most of their competitors were taking the narrow route, so this wasn’t a tempting alternative. On the other hand, how could they go broad without having to build a new dataset for each city, when the cities were reluctant to cooperate?
NE: “We had to solve this problem from both directions. So, we asked ourselves two questions: ‘How can we scale transit data?’ and ‘How can we stop the bad ratings?’ Eventually, Roy came with an idea to say to our users, ‘Sorry, we don’t have data for your city, but if you volunteer to help us, we can build it together.’ The thought was that by involving our users, not only could we use crowdsourcing to get the necessary data, we could hopefully improve the app ratings at the same time. We figured that even if only 1% of our users said, ‘Yes, I am willing to help,’ it would result in a large number of people contributing. To be honest, I was very skeptical about the idea. But we tried it and it worked!”
Roy, who was a professional Olympic athlete in his former life, and won his first national championship in Judo at the age of twelve, drew from what he had learned in sports.
RB: “It was a judo tactic; we used the frustration of our users to bring the momentum back to them. It created excitement; people started to build communities and engage with our system. We saw that if people were this passionate about it in Barcelona (one of the first cities we tried), they would probably be just as passionate in other cities. But for this to work, I had to build a custom system completely tailored for these volunteers, almost like another app. The interface had to be extremely easy to use anywhere in the world to enable people to effortlessly add in data. We also trained volunteers to become community members, and provided self-learning solutions for inputting, reviewing and validating the data in a way that would support a self-sustaining environment. We ended up with one million people around the world volunteering, and today, we have almost 350,000 qualified editors! Having an impact on the local community proved to be something that people are passionate about.”
More on the impact
The impact was dramatic, not only on the local communities, but also on the company. What this community-driven approach allowed Moovit to do was to make the strategic decision to go broad. They are the first company providing a multi-modal transit service ever to be able to do that. Because they owned the data and were no longer reliant on cities, they could finally provide this service back to the users.
NE: “This is why today we have about 80% more coverage than, for example, Google Maps. It’s dramatic. It won market leadership for us when we were able to prove the quality and scalability of the product. At the end of the day, it gave us a jump start; we could provide immediate service in thousands of cities at once, rather than limiting our focus to just five or ten. Another side effect was the growth that came with the broad approach. Organically, there are only so many users you can add per city per day, especially if you go narrow and have only five cities. When you multiply your user growth per city by only five cities, you reach a limit quite quickly… But if you have 2,000 cities, that creates a whole new platform for growth. This added to the other aspect of our market leadership – the number of users we have. Today, a new city is added to our service every 15 hours, almost two new cities per day!”
Moovit has mapped all kinds of places, from Barbados to Paris to New Caledonia, and has coverage in cities within more than 80 countries. The company has grown from being a data provider for their users to providing a full-fledged platform that works as the operating system for how people move around in cities.
RB: “I remember when I interviewed our first graphic designer. I proudly explained to her that we had almost 2,000 active users per day, an audience as large as the local football stadium I used to go to as a kid (which was massive, from my point of view). But today, I have an app that millions of people are using every day. To think that I was so excited to have only 2,000!”
NE: “One moment I remember is from around two months after we started out. A reporter wrote an article about Moovit that appeared on the channel news in Israel. Two minutes after the article went out, the servers crashed! It was an amazing moment, a mix of good and bad feelings, where two reactions were going through my head at the same time, ‘Oh no, our servers just crashed’ and ‘Yay! Our servers had so much traffic that they just crashed!’”
Data is the new oil, fuelling growth
Moovit collects over three billion aggregated and anonymous data points per day about the people flow in cities through tracking users on their journey and their global network of volunteers mapping public transit information where it is not readily available. This program has allowed the company to compile the most comprehensive data sets about commuting in and around cities available anywhere. Not only has this data fuelled Moovit’s growth and enabled them to expand their product offering for the consumer, it has also become a main revenue stream for the company.
Today, instead of Moovit asking cities for their transit data, the tables have turned, and city planners, consultants, transport operators and construction companies are using Moovit’s data to improve infrastructure, systems and operations. Not only is Moovit serving consumers through the app, but, by aggregating, anonymizing and segmenting data has become the brain behind how our future transport systems will evolve.
The future of urban mobility
Today, Moovit has more than 200 million users, and is adding 1.1 million new users per day. The company has grown five times in just two years and covers multi-modal transit in 2,200 cities within more than 80 countries. Each day, they capture about 3 billion data points about aggregated people movement in cities. Moovit provides a free multi-modal transportation service, including transit methods beyond public transportation, such as Uber, Lyft, bikes, car-pooling and more.
Their goal is to reach one billion users by 2021, a goal they may reach as early as next year. Very few services reach that kind of mass audience, and if they do, very few provide as much value as Moovit does – insight on how to move from point A to point B with ease, whether at home or abroad; significant savings of both time and money; and the freedom to move across transport modes and geographies.
NE: “The mindset of commuters around the world is changing. The future of urban mobility will not differentiate between public and private transit. Cities will have to take a more active role managing mobility in the next few years, because both the cities and the citizens own the infrastructure, and the cities depend on providing affordable mobility to all. I am proud that this company has been a change-maker in how we look at the future of urban mobility.”