HEY, STRANGER, CAN I PARK IN YOUR DRIVEWAY?
Shared economy sparks potentially lucrative ideas
For Tim Wootton, the light bulb came on when he was driving around a residential block trying to find parking. “I could see a lot of empty driveways, and realized something could be done with all those private parking spaces.”
That was the genesis of Rover Parking, a shared economy concept in which home and private parking lot owners can generate revenue from drivers searching for space.
Wootton is no stranger to the shared economy model. He was a driver with UberX for a short time, and has hosted his apartment on Airbnb. “I wanted to really understand the model, and see it from the standpoint of making use of underutilized space as a way of helping other people.”
While the idea for Rover was simple enough, Wootton knew it wasn’t going to be easy to get it off the ground. “I quickly understood I needed partners. It would have been crazy to do it on my own.”
The first to join him as co-founder was Andrew Holbrook, who developed the app. Next was Grant Brigden, who came with “a ton of marketing and advertising experience. He filled the gap I needed. I was more on the operations side of things,” Wootton says.
Rover Parking launched in the fall of 2014. The beta version appeared on the App Store in July 2015, and an Android version was launched in April 2016. Today Rover has more than 2,500 parking spots listed in Ontario (mostly in Toronto) and more than 50,000 downloads of the app. It is now ready to do a soft launch in Ottawa and Montreal.
As part of his overall plan, Wootton has spent time building relationships with different parties in and around the city, including Green P, City Hall, Metrolinx, GO and the TTC. “There’s a big timesupply problem in certain areas of the city; and no one wants to build new parking spaces because the land is unbelievably expensive,” he explains. “So we’re asking them to look at areas that don’t have enough supply. I can guarantee you they will find thousands of empty spots within a 10-minute walk.”
Kiel Olver, founder of Propel HQ, an online marketplace for pool facilities for swimming instructors, has long been a fan of the shared economy approach. “When it hit mainstream in a big way, I saw it as a model that could be reproduced anywhere: hotels, private pools, condos, municipal pools.”
Given the competitive landscape, Olver says it was critical to come up with something unique. “We are different because we engage in contracts with hotels and private pools to open spaces for the instructors. This gives a greater degree of control and better regulation of the marketplace.”
As the company evolves, Olver and his team are looking at other opportunities for unused tennis courts and private gym times, among other ideas. Speed in this game is of the essence, he says. “The big fear is always if you prove the model viable, and you don’t move quickly enough, it’s easy for someone to outrace you.”
A shared economy model is definitely not the easiest path to successful entrepreneurship. Competition is fierce and achieving sustainability is challenging to say the least. According to Craig Leonard, investment director at MaRS Investment Accelerator Fund in Toronto, “A lot of investors have shied away because it can be very difficult to scale and requires a lot of marketing dollars. Granted, once you get the network effect and the infrastructure laid, then you might have a compelling proposition for getting critical mass.”
Leonard offers up the following suggestions for improving your odds:
Don’t necessarily try the model ■ in the U.S. first because you may be going head to head with more players. “Maybe you can focus on owning Toronto, for example, and make a go of it there first.”
Leverage partnerships to go ■ viral. “One way is to find channel partners that can get you thousands of customers in a single swath. If you go person by person, your capital may be at risk.”
Pick a sustainable revenue model. ■ Choices may include revenue sharing, membership/subscription or per transaction
Think hard about the realities ■ of scaling. “Be realistic about the trajectory. Can it scale linearly? What will it be like at a million transactions?”
Be mindful of your marketing ■ costs
Know your key metrics and unit ■ economics (e.g. cost of serving a customer versus their lifetime value). “Your visions have to be very, very compelling and conveyed well to investors.”
Ultimately, he says, a successful shared economy model is a pure execution play. “Nothing is defensible until you get that network effect. It’s amazing if you get it.”
The big fear is always if ... you don’t move quickly enough, it’s easy for someone to outrace you.