 I'm delighted to have Marcus Villig, a founder of Bolt here, and we're going to try a little interactive conversation. And as you all probably know about Bolt, you've been working on it for six years. You dropped out of college to work on it. I'm a little bit skeptical of college dropouts, but we'll allow it. And Marx is very authentic. He does not have a driver's license. How much he believes in the new mobility future. But I thought maybe, and obviously Bolt itself is now a billion-dollar company and really the most successful Estonian startup, but I thought a good place to start would be, maybe you could tell us about the time that you sued Usain Bolt. So this is a great lesson for all the startups out there, which is that competition can be extremely creative. And fast-moving. And fast-moving. So when we rebranded earlier this year, there was actually a number of companies that did not like it. And the most creative approach we saw they took was that they literally hired Usain Bolt and then they tried to go after our trademark, which we successfully managed to defend this time. But just watch out, competition has a lot of ideas. And obviously, as part of your strategy, you've been expanding very quickly internationally. And especially, expanding quickly internationally to emerging markets, maybe more so than other ride-sharing companies. And so what's that been like and how do you pick, you know, how do you decide to go to Ligos, for example, which you're in, or 25 cities, is it, in South Africa? So for us, the right paybook was that actually the first two years we only concentrated on getting the business model right in one country. So we were extremely focused on making the business work really well in Tallinn, understand fundamentally how do we compete with the big co-lifes of the world like Uber, despite them having significantly more funding than us. And only once we figured out how to do it, we very quickly started to expand. And for us, the framework was that we realized that ride-hailing is not the monopoly market. It's not the winner-take-all market where the first player who comes in is going to dominate forever. But actually, it's more similar to e-commerce, where you can actually still be a second player in, but if you're better, you can beat them. So that's why we took a more slow approach in terms of picking cities more carefully, working with regulators, and now six years in, it's paying off extremely well. So that's in a way quite contrarian in that if you listen to most investors, you know, pontificating about ride-sharing or something like that, they'll say it's winner-takes-all, where you all figured out a different approach. And in particular, it seems like you have a real focus on having a cost advantage. Exactly. Well, I think there's probably a hundred investors in the room who I've pitched over the last six years who all bought into the idea that Uber is going to be a monopoly because ride-sharing has this obvious network effects, and that's why it's like all the other internet industries with the winner-take-all dynamic, which we realized very early on was not the case. Because when you actually look at it, it's a city by city business, and whenever the leading player pushes margins to be too high, starts really abusing their position with drivers, it actually creates an opening for other players to come in. So we designed the company exactly to take advantage of that. So we would be the most cost-efficient, the most frugal company that you can operate in ride-sharing, and now we've proven that this is actually the right approach. And when you look at the public markets the last six months, I think investors now are finally realizing this as well, that even though you can invest 20 billion in a company, it does not mean they're going to win if they're too bloated and they're not using that resource effectively. So you feel like you've always had this philosophy around the fixed costs being really important in ride-sharing, and maybe now the rest of the world is catching up to that? Exactly, that's how we see it. And when we look at now the 35 countries we're in, the vast majority of them were the second mover. So it wasn't like we had the first mover advantage, but now in most of these countries we're the leading player. So it's actually very clear this is a wholly different space than many others that have come before. And I mean, at Stripe obviously we're now in, we support businesses in 34 markets, we spend a lot of time going international. And so speaking from experience, I know that going international is really, really complicated. And it's somewhat complicated when you're going into markets like Estonia or something like this. It feels to me that it must be even more complicated for you with the set of emerging markets you're going into. Is that the case? Exactly, I think we were lucky enough to actually start in some pretty complicated Eastern European markets which had similar problems that we then later had to face in Africa as well. For example, around safety, both with passengers and drivers, vast majority of payments being in cash, people not having credit cards and so on. So luckily we started off in this tricky environment and that really scaled well to Africa while I think for other sort of competitors who came from US, which is in many ways an easier market, it was very, very hard for them to adapt to this environment. Anything surprising in your international expansion? I think when you start to look at the data, it's actually pretty obvious that right-sharing has a much bigger potential, especially in Africa, because on one hand you have huge unemployment and therefore you have millions of people looking for job opportunities. While on the other hand, you have very lacking public transportation and massive amount of demand. So looking back, it sort of seems obvious that it worked really well there, but actually before we entered, no player in the world was very focused on Africa as a continent for right-sharing. Got it. So the unsurprising, big surprise is that maybe cities without developed public transit infrastructure right-sharing has really strong product market fit. Exactly, because you're solving a much bigger problem there than you are, for example, in Helsinki, where the public transport and other alternatives, how to move around, are pretty well established. Yeah, yeah. And that, sorry, is everyone going to sit? No, so that's pretty much the biggest learning we've had that why increasingly we're now looking at Africa as a big expansion and growth area for us because we're just solving much bigger problems there. Yeah, that maybe gets us on to the topic of what rate should businesses be going international and how quickly do you want to expand? I mean, you've all taken a very fast-moving approach here, but I think there is this interesting open question on, say, startups in this audience, do they want to be getting one country right and then waiting, or do they want to be going international as quickly as possible? Especially in regulated markets, the trade-off we've come to realize is the most crucial, is that when you do have an industry where the winner takes all or first mover strong advantages, then on one hand, you can't let your competition launch there six months sooner. Otherwise, it's extremely hard to catch up. While on the other hand, if the regulation is sort of gray area, you don't know whether you can operate, then it's a very tricky call to make. Are you going to be the first one? And then if it goes well, you win that market or you might actually be shut down and you're completely blocked out from that. So in our case, we made the choice that we want to be in this for the long term and we rather partner with cities, take our time versus launch, take the risk and potentially get shut down. Yeah, the thing we've noticed also is that it depends somewhat on how different or similar the markets are and that one thing that really strikes us is that we're all talking about the European single digital markets and yes, I mean, that mostly hasn't happened yet in that cross-border commerce in Europe is 23% of totally e-commerce in Europe and so despite the fact that we, collectively, Europe have had this vision of the digital single market for a long time, it hasn't actually necessarily happened yet in a big way and that's partly driven by all the local differences in each market. Exactly, but in case of Stripe, so how do you pick which countries to go to first and how do you think about whether it makes sense to get it perfect in one country or very quickly expand to dozens and then try to build all of these in parallel? Yeah, I mean, I think the thing that's a little bit different about Stripe is, correct me if I'm wrong, but with Bolt, when you go to Lagos, you're mostly serving people in that market and you have a little bit of crossover between them but fundamentally you're expanding linearly to new markets. With Stripe, the product that we're building is a, we call it our global payments and treasury network, but this idea that you want a payment system that can kind of seamlessly operate all over the world and it's kind of crazy when you think about it that it wasn't easy before something like Stripe to just, you're a business, I mean, you're very familiar with this problem, you're a business, you wanna accept money around the world and so that's, we chat in Alipay in China and direct debits in Europe and cards in various places and things like that and so we started in the United States as the first market we launched in 2011 but then as we expand, we're kind of adding more product localization which is why we've actually, as we've expanded internationally, we've had to spin up new engineering offices in various places we go, so we have a lot of engineering in Dublin now, a lot of engineering in Singapore because the product actually changes as we go international in a meaningful way. The product that a European business wants to accept money has to be quite different from an American business but then as we expand and so in the Netherlands, people really want to pay with ideal or in Germany, things like Sephora and Klarna are very popular, but then the advantage is we can go back to that American business and say Stripe is now a much stronger value proposition for you because it can help you be a much more international business and so I think that's the really interesting thing we found in our international expansion is we go to new markets, we hire engineering in the region, we localize very deeply but then people all over the world benefit from that because it's kind of a global network. Sure, but still a tricky part is which mark is to start from? Yeah, I mean we started with the easy ones, right? We started with the United States, Canada, the Western European markets and things like that and we are now going to some of the harder ones where we're in Southeast Asia, we started in Singapore and now Malaysia and expanding to India and Indonesia and places like that and one of the things, the classic business school case study way to do this would be to look at e-commerce size of markets in various countries in ease of doing business and that's certainly a factor that we look at but we try not to solely look at that because obviously the thing at Stripe is that it's a circular equation, right? If people like Stripe always say, oh there's not enough e-commerce there or digital payments is not big yet, then you'll never see development and so there are certain markets where we look at, we have these posters around the opposite Stripe that show how big GDP will be in various countries in the year 2030 because you don't want people to be over-indexed on the way things work right now, you want them to be kind of living in the future a bit and projecting out and so we often factor in how much growth do we think there can be in the digital economy in a certain country if Stripe is there and you have to almost do it on a pro-forma basis and so concretely what that means is you will over-index in countries with small and Indonesia is a good example here, countries with small digital economies right now but with all the demographic ingredients with fast-growing population, digital smartphone penetration, fast-growing economy, lots of new startups starting out, I think you'll tend to over-index on those countries which I think is right. But when you now add the competitors as a variable into that as well, then how would you think about it that way? So if you have multiple companies like Stripe starting up, like which were the markets that you would then focus on in order to sort of be the first mover and the winner? As in how do we think of competitors in these markets where we go? Exactly, sure. Well, again, this gets back to is it a local market or is this a global market? And I think in something like ride-sharing these are very clearly local markets for as we expanded, we recently launched in your home country, we recently launched in Estonia and the Estonian startups that we're serving, yeah, some of them are focused on the Estonian market but I mean, how many people are there in Estonia? 1.3 million. Yeah, there's 1.3 million people in Estonia. Even in Ireland, which is five million people, these are relatively small domestic markets and so I think as you get to smaller countries, you find that at least with our customers which are forward-thinking technology businesses, they're startups, they tend to be pretty outward looking and so I think one of the challenges that kind of small local competitors tend to have is that the businesses don't think of themselves as serving kind of the Estonian market. This is a new thing, I mean it only exists as of the last 10, 20 years and I think business has not fully caught up the idea that now if you're a startup founder in Estonia, honestly you might not even want to start with the Estonian market, you might start with the American market or something like that because it's so big and you see kind of a lot of the, I mean Spotify is the perfect example of this where they're a global company. Exactly. So when you think about then the regulatory aspect of how much is it harder to do business in a very regulated industry versus one which isn't and which ones do you now favor for and where do you think there's a bigger opportunity? Yeah, you know it's funny I was thinking about this because I mean we're both operating in highly regulated industries in a way where with obviously right-sharing you deal with this in kind of cities around the world and same with I mean the financial world has always historically been, people are talking now especially in America should tech be regulated, it's like well in our world it's been very highly regulated for a long time and also what's interesting is you can compare and contrast different regions and so you can look at the regulatory frameworks in the United States versus Europe versus Singapore and other markets where we operate and I think the good news for, and I'd be curious to ask you about kind of what Bolt's experience has been but I think the good news for us is there actually is a very important role for regulators in the payment worlds in essentially standard setting and so you have a coordinate, it's kind of like when they were first rolling out railways and everyone was operating on a different gauge and so all these different railways were not interoperable and it's not like any particular gauge, the width of track was better or worse, it's just like we need to decide how far apart the tracks are and then once we just pick a number we can all go with that. There's a little bit of that with payments where you need all the systems to be interoperable and you need everyone to decide this is how different banks, different entities are going to work together and one thing that I've noticed and appreciated is that the Europeans and the European regulatory framework tend to be much more active in standard setting than in certain other places around the world and it kind of makes sense because Europe comes from a history of a bunch of companies joining together but if you look at something like in payments we had this with SEPA which is the Pan-European Bank Transfer Method and PSD2, the Payment Services Directive but even most recently Open Banking which I think we still, sometimes there are these platform shifts and you get a new platform or regulation or something like that and it enables a lot of new companies. I think Open Banking is still very new and we haven't seen a lot of the benefits that will come from it but basically it was part of PSD2, that directive where they said now all banks need to open up APIs. There need to be standardized ways that you can kind of read from a bank account, read the transaction data with permission of the customer and then initiate payments and things like that. I think that's a good example of places where European regulators tend to lead the way because again, there's this view of the role of standard setting, deciding how all the banks and entities should work together that we see more here than in other places and so despite the fact that again our world is highly regulated, we're regulated by the Financial Conduct Authority in the UK and the Central Bank of Ireland and places like that, our experience has probably been pretty good. I mean, how about you? Well, I think the difference with transportation is that it's a completely city by city regulatory work. So we have some markets like in Estonia where the government realized very early on that the right sharing is the future so that there's no going back to the old school tax system we had and it's better to open up and embrace it and actually put guidelines in place of what are the safety requirements that actually are fit to this day and age with the technology that's now out there. So we see some great progress with cities and countries like that but then on the other hand, we have some really big economies like Germany that are just very much afraid of change and when you look at the taxi industry there, it's sort of the same that it was there 10 years ago which is resulting in very poor availability for customers, the highest taxi prices in the world and... Germany is the highest taxi prices in the world. And when you really start to think about it, that doesn't make sense. Like why should you restrict the supply and therefore have these artificially high prices which doesn't make sense. So that's something that's a long journey for us to educate and bring these examples from other cities of why this is actually a good thing and just it's a multi-year effort for us. As you think on kind of a 10-year, 15-year horizon, are you optimistic about somewhere like Germany that they'll come around and the power of the taxi lobby and the car lobby will weaken and they'll embrace ride sharing and scooters and things like this or are you a bit cynical? Well, actually, our optimism has increased over the past couple of years. I think it's largely because cities are realizing there's just not enough room to add more and more cars to cities. So instead of every individual owning a car, which is when you would actually start to design this from scratch, it's sort of the worst... It's called the American approach, by the way. Exactly, so it's sort of in many ways like the worst way how you would design how people get around is that everybody buys a big car and it's much more economical that you have a mix of public transportation, micro-mobility with shared bikes and scooters, shared cars that makes a lot more sense for everyone. Is there anything you can do when a city is somewhat recalcitrant or is pushing back on ride sharing and saying no, taxis work fine or do you have to just wait it out a little bit? So this comes back to this earlier point that what do you do if you're in this sort of a hard trade-off situation where on one hand, you do see there's some first-mover advantages, but on the other hand, the regulation is not yet clear. And in our case, we had these good American friends who just happened to bulldoze into all these cities and they didn't care about the regulation and they figured they're going to be able to gather enough customer demand and then convert that into political will as well and then just basically shovel these regulations through, which didn't really work in Europe. So we were wise enough to take the other approach which is to wait it out, to work with cities and actually this is now paying off for us. One thing I was curious to move on to is kind of the difference between obviously Stripe is headquartered in San Francisco, though now actually most of our people are outside the Bay Area, we have lots of offices around the world. Bolt is headquartered in Tallinn and I feel like this question comes up a lot of building technical teams in the US versus Europe and so first maybe get some facts. So how many engineers is Bolt now? So today our product and engineering is approaching 300 people out of a company 1.4 thousand. So for us engineering is a growing percent but I think the uniqueness in our cases that we have a much more asset heavy business in a sense that we need to deal with operations, we have 35 offices. So each of the countries we're in there's actually a local operational center as well. So that creates a lot more complexity where you first need to build out this big operational network and then you can later start to optimize it. Okay, so you have 300 engineers and you were saying that you import a lot of engineers. You presumably get them to come interview in the summer rather than the winter. So for us the bigger difference is that Estonia is such a small market with just 1.3 million people that you pretty quickly run out of local talent. So what we started to focus on three years ago was that how do we make this an attractive place for other people to move to and what we realized is that especially in Eastern Europe there haven't been that many attractive tech companies to work for. So if you actually are an engineer, you want to work on a company with very high caliber people operating with millions of customers, real-time systems then Bolt in many ways is now the best place where to go. That makes sense and if I'm an engineer considering joining Bolt, why should I join? What do I get to work on? So when you think about the right sharing service itself then despite us building this for seven years as an industry and specifically in Bolt's case we're now into this about six years then there are still so many unsolved challenges. For example pooling of how do you actually build high capacity vehicles where you can put multiple passengers to share the route. It's an extremely hard problem to solve from mapping point of view and then all dispatching and there's so many segments there which still isn't solved. So if somebody is excited by big real-time problems like that, that not only have a sort of virtual impact but they literally change how people around you move then for some people that's very exciting. Well one thing I think a lot about is if you are starting a business in you know Tallinn or in some part of Europe you presumably want to be very strategic about what are the, because you know everyone starts from the point of view of like you know I often get asked kind of can you start a major tech company in Europe or something like that. Whereas instead I think you want to be thinking what are the major advantages that you have starting a company here rather than if you were in the Bay Area or something like that. And so in your case you were talking about some of the cost advantage you have. I think part of that's almost like a mindset thing and how people think about things in San Francisco versus somewhere like Tallinn. Part of it is of course that somewhere like San Francisco is much more expensive and so you have an advantage like that. You know I'm often always reminding people that say if you're starting an e-commerce business I mean the European e-commerce market is just the largest e-commerce market in the world and so getting to start in that largest market and be native to it as opposed to be trying to retrofit it onto an American product that's a huge advantage that a number of people have had. But I'm curious what you think of this that you know for startups out there in the audience if you're starting a startup today in Helsinki or in Warsaw or wherever it is how should you be thinking about the advantage that you have as a European technology company? The biggest advantage that we have seen at least is that the talent stays with you significantly longer. So when you look at Silicon Valley it's nowadays so competitive that people will not stay with you on average more than two years. While in Estonia we have an expectation that most people who join us will stick around for five years or more. So you can just substantially better plan for the organization. You have a much bigger incentive as a company to invest in people and I think just it's a very different mindset and it's less transactional in some ways as well. And the other part again is the cost efficiency. So clearly with Silicon Valley being sort of the one of the highest cost of livings in the world then you need to ask yourself do you actually get more output for that as well? Because when we look at the quality of engineering we have in Europe in many ways it's even better. So the question is that why would you have this twice as high cost base if you can just build the same quality product in a much cheaper environment which will make sense in some industries? We've noticed the exact phenomenon that you mentioned I mean our European offices are in our headquarters is Dublin but we're also of London and Paris and Berlin and places like that and we've been hiring a lot and it's exactly as you say because the retention is longer you can invest very significantly in training because someone can join and they're extremely talented but they don't have maybe any familiarity with the industry or kind of with the problem domain or something like that but you have the opportunity to train them up and so I find that exciting. So one of the topics leading into that is like when you start to compare the values and especially you coming from Europe what do you see are the biggest differences in company building between US and Europe? Do you see some philosophical differences there as well? Yeah, like I said I think the... Okay I'm from Ireland and one thing I noticed with Irish companies in particular is that they tend to be much more outward looking as a result of the smaller domestic markets and I think that's actually a really important thing to train early on in that when I see European companies they're either launch in multiple markets or they're internationalizing really quickly as opposed to America, it's a single country with 300 million people and it's a giant economy and it's like a little bit inward I mean Americans really like America as you probably know if you've ever met one and so as a result oftentimes those companies can really get to scale in the US before internationalizing and so I think that internationalization mindset really helps companies, that's thing one and then the second thing is I think there is more focus I think it's not a coincidence that the companies built in Europe tend to be profitable at an earlier stage and that makes them more resilient to the cycles of ups and downturns in the funding environment or things like that I think that's really a position of strength. But is that because of a necessity that there's a lack of funding in Europe for what is leading to this profitability earlier? I think it's probably a historical memory of a time when there was a lack of funding in Europe I mean we've looked at these numbers at Stripe and for both early stage and late stage startups funding has quadrupled in the last three years which I think probably matches kind of you're in my experience it's really interesting to see kind of investors in Europe really waking up and realizing that they're kind of massive companies being built here and so I think people still have the mindset of funding is hard to get despite the fact that as a result of so many of the successful companies again you look at the Spotify's and TransferWise's and Bolts and everyone like this people are realizing oh we should be investing a lot here maybe the last difference in that bridges us to something I want to talk about is carbon I've been excited to see there's so much more awareness of the need to do something on carbon there's much more awareness of that here in Europe than there is in the United States and even in places like San Francisco in the United States which are the more progressive parts and I was actually just looking at the easy jets announcement this week that they're going to offset all their flights which is a huge deal for an airline I mean especially a budget airline in a very competitive industry but you know Stripe is carbon neutral Bolt is carbon neutral and I'm curious to get into that a little bit and some of the work we've been doing I mean firstly that's a big step you know making Bolt carbon neutral given that I mean you operate in the right sharing space where you have a real footprint here and it's a highly competitive space what led you to do that? For us it was in some ways a personal idea as well from the beginning so when I just started to look at what are the biggest threats to overall humanity over the next decades and when global warming is the top one and you don't really see much effort actually going into solving it from the sort of corporate sector then you start to wonder why is that and I think that us as tech companies should in some ways take the lead on that and act as this example that actually more companies should follow suit so when we started to run the numbers and we were thinking that it's going to cost us about 10 million to offset all these millions and millions of rides we do but it could actually have a trickle down effect of impacting a much wider industry so we figured that even though it's a lot of money for us as a relatively small tech company it still is probably worth the impact 10 million you said with the figure? Yeah, over the next couple of years so it's a pretty substantial investment for us but what we already see from the initial interaction from customers is that because we're pretty unique in doing this it's actually a very attractive value proposition as well so I think increasingly it's not only the right thing to do for the environment but it's actually for many companies becoming sort of a commercially sort of minimum requirement as well because if all other companies opt in to do this and you don't then you start to stand out in that like, okay, why are you not doing anything? And they're starting to be more consumer pressure as well Exactly, so I think over time this is going to be transitioning pretty quickly now to the other spectrum Yeah, yeah, what's next in this domain do you think? Well, I think first of all the standard is that just more companies will start to do carbon offsetting which just seems like a pretty logical first step but the other thing is you fundamentally need to be environmentally friendly so we realize as well that you can't do all the trips in a city with gasoline cars it just doesn't make sense even if your carbon offset all of it so that's why we're working on including scooters, electric bikes and etc other vehicles that are just more friendly Yeah, the other technology that feels like it will become important is Stripe recently announced and we're getting quite excited about the space of carbon capture and storage or carbon sequestration and so one thing is starting to reduce emissions through things like offsets but the technology for actually capturing carbon from the atmosphere and storing it somewhere is still very early and so we announced recently that we're going to start spending one million dollars a year on carbon capture technology which is not yet economical anywhere close to economical compared to offsetting offsetting is vastly cheaper but part of our bet was that as there starts to be a market for this if you look at the history of a lot of technologies as volumes go up in the technology then the unit cost comes down and so we're trying to rope in a handful of companies to work with us on buying some of their carbon not in the form of offsets but in the form of actually carbon capture so we actually start to create a market for that so you might find us knocking on your door shirt looking forward to that yeah I think we probably have to leave it there keeping an eye on the clock but listen Marcus thank you so much for joining us I can't wait to see where bulk goes next and what markets you're going to and thank you for doing this thank you