The Magic of Zapmoto
An outline of what makes Zapmoto special and unique
Zapmoto is in rarified territory. We are one of the few startups started in 2020/2021 that has revenue right now. Over the last year revenue has grown at an average month over month rate of 30%. Annualized, that is an almost 1,600% growth rate. Astronomical. Not only that, but we have the tech in place to maintain that growth rate for the foreseeable future with minimal additional operations overhead hires and are growing that every day.
In this post I want to talk about the culture and combination of people we have at Zapmoto that makes us special and positions us uniquely to tackle the established inefficiencies of the incumbent auto industry.
If you look at the tech companies that have tried/are trying to establish themselves in the auto industry most fall into two categories, tech companies parading as auto companies or auto companies parading as tech companies. Examples of tech companies parading as auto companies include:
Carvana
Nikola Motors
A graveyard of startups without any brand recognition because they didn’t get far enough for you to have heard of them
Examples of auto companies parading as tech companies include a long list of companies currently successful, but ripe for disruption. I am very familiar with these companies, but you may not be. A few examples of these companies include:
CDK,
XTime
Fortellis
As I am writing this, I am getting new tires on my car. I set an appointment on the company’s website, but upon showing up this morning, I didn’t have an appointment because in the words of the associate helping me: “our software sucks”. As a software person talking to a mostly tech native audience, I think it is baffling that anyone would put up with garbage software in 2023. As I’ve talked about in some of my other posts, the cost of building quality software has fallen precipitously in the last 20 years. I ask myself this all the time, why has no one who understands tech come in and disrupted this space, offering software that just works?
The conclusion I have come to is that the people who understand tech don’t understand the established processes and people of the car industry. Carvana in my opinion has failed because they failed to recognize the strength of the incumbent car dealerships. Nikola failed because they were led by a liar and frankly scum of a human being (nothing to do with what I am talking about here, but still noteworthy).
When I started at Zapmoto I went to talk with a VC in my network just to catch up with him. He told me about a company they invested in that did something with towing vehicles. They were going to build a singular app like Uber that if you broke down, you could just get the closest towing vehicle delivered to you (or something like that). The TLDR of the company is that they failed because each towing company had their own unique processes and software. Building APIs to handle all the different edge cases of the disparate towing companies proved impossible and the company ran out of money before reaching product market fit.
I think most of the companies that compete more closely with Zapmoto have failed because they underestimate the challenges in selling to dealerships. Zapmoto’s strategy is to partner with dealerships. We have chosen to align our success to the success of the dealership knowing and understanding the power of the incumbent dealerships to control the money flows in the car industry. Not only that, but Zapmoto understands the philosophy of these incumbent dealer types because our CEO is an incumbent dealer type.
He understands the way the dealerships think about software in a way a tech person like myself does not understand. That to me is the magic of Zapmoto. There is a humility at the company from incumbent dealer types to understand the power of good software, and a humility from our tech types to understand that we don’t really understand the way the car industry works. That to me is why we have seen such prolific success so far and are poised to continue to see success at Zapmoto.