Cambridge-based Zipcar filed to go public this morning (here's the press release, and the SEC document). The three biggest shareholders are ex-AOL CEO Steve Case's Revolution investment arm, Benchmark Capital in California, and Greylock Partners. Zipcar CEO Scott Griffith holds 3.92 percent of the company, about 2.4 million shares.
I went back into the archives to pull out the column I wrote in 2003, a few months after Griffith joined Zipcar as its CEO, replacing co-founder Robin Chase; Chase's husband Roy Russell was still serving as Zipcar's VP of technology. (Both have since moved on.)
My May 26, 2003 @large column, "New chairman, CEO shift gears at Zipcar":
Zipcar is one of the most promising start-ups in Boston.
The question: can a new chairman and a new CEO from the world of high-tech steer it in the right direction and step on the gas?
The Cambridge company, which operates a car-sharing network in Boston, Washington, and New York, was veering off course last year. It was losing money, and didn’t have enough left in the bank to reach profitability. It needed to attract more funding, but the willing investors insisted on replacing the old board of directors and bringing in a new CEO to take over from Zipcar founder Robin Chase.
Enter Scott Griffith, who joined as CEO in February. Griffith had been CEO of Digital Goods, which made software that prevented e-books from being copied. Jonathan Seelig, a co-founder of Akamai Technologies and one of the early investors in Zipcar, took over as chairman. (Chase remains in a business development role, and still serves on the board.)
Standing in a parking lot behind the post office in Central Square, Griffith demonstrates how Zipcar works. In his office nearby, we’d used the company’s Web site to reserve a banana-hued Mini Cooper for a few hours. Using this particular car costs Zipcar members $7 an hour, plus forty cents a mile. Gas is included. Making the reservation took about two minutes.
A few seconds after we made the reservation online, Zipcar’s system beamed a message to the Mini via Verizon’s two-way paging network. The message told a small computer hidden in the car who had reserved it, and for how long.
In the parking lot, where the City of Cambridge donates a free spot to Zipcar, Griffith takes out his Zipcar membership card and holds it over a special reader installed under the car’s windshield. The car recognizes him as the person with the reservation, and the doors unlock automatically. The ignition key is inside, tethered to the dash so that you can’t accidentally take it with you at the end of your reservation. (Break-in artists beware: even if you got into a Zipcar, the engine wouldn’t start unless a reservation had been made and you’d swiped your membership card.)
Members love Zipcar because it’s easier to use than a traditional car rental service, and for short rentals, like a quick trip to Home Depot, it’s cheaper. (Renting from Zipcar can get expensive if you need the car for a weekend getaway.) Many of Zipcar’s members are students and young professionals who only need a car occasionally; others are urban couples who may own one car and occasionally need to use a second. Monthly membership fees start at $30, all of which can be applied to car usage.
“Our goal is to make using a Zipcar as easy as walking out to your driveway, getting in the car, and turning the key,” Griffith says. “If it’s not easy and hassle-free, people will join, but they’ll drift away after a few months.”
Griffith says the company now has about 7000 members sharing 240 cars spread across Boston, Washington, New York, and a small operation in Denver. While Zipcar started out with mostly Volkswagen Beetles and Honda Civics in its fleet, now members tool around in trendy Mini Coopers, electric-powered Toyota RAV4 sport utility vehicles, and even a Mazda Miata convertible.
Peak usage time is on weekends and weekday evenings, but Griffith says it’s rare for a member to try to reserve a car and not find one available. The company is trying to add cars in Beacon Hill and Back Bay, where usage is high, but parking spaces for the Zipcars are hard to come by. They’re also considering adding cars in Arlington, Roslindale, and East Boston, and are working with real estate developers to park Zipcars in new condo developments.
Late last year, when the company’s investors booted the old board of directors and began the CEO search, they put an additional $5 million into the company, on top of $1 million raised earlier. Griffith will have to do three things with the money. First is getting the company to profitability in its current markets. (Boston is already there, but New York and Washington aren’t.) Second is intelligently expanding to other markets. Finally, the board expects him to build a business around licensing Zipcar’s car reservation technology to customers who operate large fleets of vehicles.
“We want Scott [Griffith] to think not just about what cities we should go to next, but how can we leverage this technology that we have,” says Zipcar chairman Seelig, who is also entrepreneur-in-residence at Polaris Venture Partners. “We’ve filed some patents on it, and we’ve had interest in a number of government organizations and big companies for something like this that would help them more efficiently manage their fleets.”
The idea is that employees would reserve a company car on an internal Web site and use a card to check it out, just like Zipcar customers do. Managers would be able to review car usage and expenses. Zipcar is already in discussions with the Commonwealth of Massachusetts and the City of New York. Griffith believes that the Zipcar system could allow them to cut fleet costs by 10-15 percent, by scheduling and administering fewer cars more efficiently.
But can Zipcar simultaneously build a business around licensing its technology, while continuing to grow its urban car-sharing network?
It sure won’t be a Sunday drive. But already, Zipcar has done a lot with very little money and a small team of eighteen employees. And the corporate culture is incredibly…adaptive.
A story: last November, one of the company’s Volkswagen Jettas disappeared from Manhattan. A new member had checked it out, and simply didn’t return it. Zipcar discovered he’d used a stolen credit card to open his account. The cars aren’t equipped with a Lo-Jack recovery system, since theft hasn’t been a problem. But from Cambridge, the company’s engineers improvised a solution of their own.
First, VP of technology Roy Russell sent the car a signal that disabled the starter, so that no one could drive it. Then, he remotely reprogrammed the computer in the car so that it would tell the engineers which specific radio tower it was communicating with. Russell drove down to Long Island with another engineer, and, using a directional antenna tuned in to the car’s frequency, they zeroed in on it. The Jetta had been abandoned in a Long Island Rail Road parking lot.
Insurance would have covered the theft. But Russell says, “We just didn’t like being scammed.”
The Jetta is now back in the fleet.
About Scott Kirsner
Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.
Subscribe via e-mail
More from Scott
December 9: Web Innovators Group
Demos of new mobile apps and web ventures at the Royal Sonesta Hotel in Cambridge. Free admission; cash bar.
December 10: Fintech Demo Day
Short demos from startups in the financial technology realm.
December 11: Unpitch
Entrepreneurs and investors sit down for lunch, advice, and feedback. Entrepreneurs must apply to participate.