Robin Chase: Zipcar’s founder finds a new gear
Like a lot of Entrepreneurs, Robin Chase got the idea for a business from personal experience. In the case of Zipcar (ZIP), which she launched 12 years ago, Chase, now 54, needed a second car for her family — but only on occasion. The result? Her Boston startup has become the world’s leading car-sharing network, with annual revenue of $242 million in 2011. Chase, who stepped down as CEO in 2003, is now behind Buzzcar, a service that lets car owners rent out their own vehicles in France. While she declines to reveal numbers, her co-investor in Buzzcar is Mobivia, a French company that supports sustainable transportation practices. Her story:
My father was an American diplomat, so I have lived in different countries. I grew up primarily in Swaziland and have a global view of the world. My mother was incredibly entrepreneurial. She started a number of cottage industries in several countries, ranging from handicrafts to clothing design.
I started college in Paris, then graduated from Wellesley College with a liberal arts degree in 1980. After that, I went to work for JSI in Boston, which handled large USAID [U.S. Agency for International Development] contracts in public health. I saw how programs were being run by people who had no knowledge of finance, so I decided to go to business school.
When I graduated from the MIT Sloan School of Management in 1986, I was both ambitious and raising babies. I had three children — three years apart — and from the time I finished business school to the time I founded Zipcar, I worked full-time, part-time, or no time, depending on how old the children were, and my husband’s job. My husband [Roy Russell] is an electrical engineer who worked with tech teams on speech recognition.
In September 1999, I was talking with Antje Danielson, whose child was then best friends with my 6-year-old. Antje was German and had seen car sharing in Berlin. I’d just taken a year off from working and was looking to do a startup.
My husband and I were living in Cambridge, Mass., with one car. There was no way I wanted a second car because I drove so infrequently. Instead, I wanted a car that I could rent by the hour or the day and that I didn’t have to own, so the idea of car sharing instantly appealed to me.
In 1999 it was the peak of the dotcom boom. Fifty percent of the population had Internet access at work, and 25% had cellphones. Wireless was the buzz of the entrepreneurial community. As Antje and I talked, I thought, Car sharing is what the Internet was meant for — sharing specific resources among large groups of people — and Zipcar would be a great application for wireless.
Here’s how Zipcar works. You make a car reservation online or by phone for a specific car at a specific time. That information gets sent to the car wirelessly. The Zipcar member uses his card to open the car. After driving it, he returns it and locks it, and the billing is done. The rental transaction takes 30 seconds, and the car opens only to the renter. So it’s self-service, autonomous, and takes only a few seconds.
With that idea, we decided to form a company. Antje’s job was to deal with vehicle technology and get hold of the car leases. I did the fundraising, building the website, marketing, designing a payment system, and everything else.
After I wrote a business plan, we went to see Glen Urban, who was the dean at MIT’s Sloan School in December 1999. He had worked in marketing with car manufacturers and said Zipcar was a brilliant idea. He told us we’d need to raise twice as much money, move twice as fast, and get right on it.
I wandered around the house for the next three days thinking, Do I really want to do this? My 12-year-old daughter asked, “What’s going on?” She and I had been talking about Unicef, and I said I needed to decide whether I want to devote time to this company on a big scale, which would mean less time with the family. She asked, “So does this mean you could become rich and could give more money to Unicef and save lots of children’s lives?” I said yes. She said, “Do it.”
So in January 2000 we incorporated. I had raised $75,000 by the day we launched with four cars in June 2000. The first $50,000 came from Jean Hammond, a Sloan classmate (founder of Quarry Technologies and AXON Networks), who was the first millionaire among us.
The remaining $25,000 came at the last minute from an angel investor I’d been working on. Three days before launch, we had $67 in the bank and one car we had bought — with my house as a down payment — to use as a beta-test car. Out of the blue, the leasing company wanted a $7,000 down payment for each of the three other cars in the fleet. I was at a startup launch party, and Juan Enriquez (now managing director of Excel Medical Ventures) came up to me and said, “What can I do for you?” I said, “I need $25,000 by tomorrow morning,” and he said, “Done.”
I was working out of our spare bedroom doing 100-hour workweeks, but it was a joy. In September 2000, my husband quit his job as director of software development for Lernout & Hauspie, and became the company’s CTO. He was on Zipcar’s payroll only half-time, and we reversed roles. He became the primary child caretaker, and while I paid him half-time, he actually worked full-time. For the first year of Zipcar, I didn’t pay myself. Antje had a child that fall, and after coming back to work, she decided to leave in January 2001.
We broke even our first year. From the beginning, Zipcar grew month-over-month, between 7% and 12%. The decision to expand to other cities came after we closed $1.3 million in Series A financing. Investors said having a successful company in Boston didn’t prove that Zipcar was a successful concept.
So I raised $2 million on a convertible note in the fall of 2001, and we launched next in Washington, D.C., because there was a group of citizens who wanted car sharing there. When we closed the books for September 2001, the entire travel industry had come to a halt because of 9/11, but Zipcar continued to grow month over month. We proved that we weren’t a luxury, discretionary spend. We were a utility, and in February 2002 we launched in New York City.
Along the way, we opened in a number of university towns. Zipcar is targeted at people who don’t need a car to get to work, and universities are a natural fit. Early on, MIT and Harvard gave us parking spaces and helped market the company. We eliminated the need for each of them to build a parking garage on their campus because of the large number of people who shared Zipcar instead of driving and parking their own vehicles.
When I finished raising a $7 million round of financing in 2003, we were on the road to profitability. I also had a father who was dying, and a daughter who was becoming a supermodel at age 16. (Cameron Russell, now 25, models for Calvin Klein, Prada, Chanel, and many other designers.) I was a complete wreck, and decided I’d done everything I wanted to do. I stepped down as CEO in 2003, stayed on the board for two years, then left. I still hold some shares in the company.
After Zipcar, I did a Loeb fellowship at Harvard for a year and learned a lot about urban planning, transportation, and the Internet. I started a ride-sharing company called Goloco.com in 2007, but was too early with it. America’s not ready for ride sharing. It will be one day, but not now.
France is a step ahead of the U.S. in transportation practice. It had been leading with shared transportation in bikes, and I’d been consulting with the city of Paris on transportation with one-way electric-car sharing on a large scale. It launched 1,800 such cars in Paris in December last year, and I wanted to be in the mix.
So in June 2011, I started Buzzcar in France, which allows you to rent your own car to friends and neighbors. The company is 15 months in now, with 12,000 members and 1,500 cars throughout France. My co-investor is a large, privately held French transportation company named Mobivia.
It’s exciting to have a vision, to persuade people to invest in what you’re building, and a privilege to see it play out, despite many a miserable and hard day. I joke, yet believe, that transportation is at the center of our daily lives. Our outlook is colored by what it was like to get to work and home. Transportation contributes to 18% of the household budget and 30% of the world’s CO2 emissions. It’s extremely rewarding to see the social benefits that have come from the companies I have founded.
Leverage other people ‘s excess capacity. I made a partnership with MIT in which they sent an e-mail to their 35,000 staff and students about joining Zipcar. It cost them next to nothing to do and, from a marketing standpoint, would have cost me a lot to buy.
Know your weaknesses and hire to fill them. I started a car company, yet knew nothing about cars. So I hired for my vice president of operations a man who had managed Hertz’s (HTZ) North American fleet.
Be proactive, even if it hurts. Very early with Zipcar, I put too low a price point on the car rental, and had to raise it twice. People said raising the rate would put our brand at risk. But if the price didn’t work, we’d have gone under.
Stand out from the crowd. I wanted to emphasize that Zipcar was different from car rental companies, so we didn’t use any vehicle that could be found in a car rental fleet. For the beta car, I chose a newly introduced green Volkswagen Beetle, which was cute and had cachet. I put our logo on the car because I wanted to draw attention to it, and it worked as great marketing.
This story is from the December 3, 2012 issue of Fortune.