"Where to next with Blablacar ?" w/ Peter Zemsky, Nicolas Brusson & Frédéric Mazzella

Thank you. Thanks for having us.

Yeah, it's really good. Good to have you back.

Hello, everyone.

Virtually on campus, at least. So I guess we'll start with you, Fred, and sort of remind us kind of where was BlaBlaCar at the end of 2016 going into 2017? What had you built in your— this is this end of the period of hypergrowth, And what were the growing pains that you left Nico to deal with?

Well, so what we had achieved by 2016 was mainly a product that works for long-distance carpooling and a product that has a business model. It was not that easy because we tried 6 different business models, as you may know. And so it was working on Wave on mobile. There was a community of about, I would say, 40 million people, maybe 50. Made of a third of drivers and two-thirds of passengers. So it was really already this kind of marketplace equilibrium. We had raised together with Nico $300 million, a bit more than $300 million. We had a team of 500 people in about 10 offices, and the service was operating in 22 countries with headquarters in Paris. And then right after that, when the CEO took over the CEO role, I focused on more innovation as well for the short-distance product in 2016, 2017, and for the commuting trips. And then Nico can do the update since 2016. Lots of things have been happening as well.

Tell us about, in terms of pride in what you built, because it was a hard road. There was a lot of years of eating pasta as you put this all in place. You wanna talk a little bit about the impact of the business? Not just, obviously you were getting some profits now, but in terms of sort of people, community, the planet?

Well, I think I did not really think too much about what we were achieving at this time. I was just like trying to build it, trying to make it happen, but not really looking at the— for me, the scale it was reaching was like kind of normal. I've always been in this state of mind that this thing should exist and it should be big. And so someday, I would say, other people realized it was big, but it was already big in my head anyway. So then the mission itself really helped to fuel the energy, I think, like the mission of making a service that would reduce CO2 emissions, that would connect more people, that would bring affordable mobility. Yeah. And so it really played this role. And then by doing so and by doing with our guts, I think we, we built a service which is now considered as an example.

Yeah.

So yeah, as you're showing here, it's 1.6 million tons of CO2 saved in a year. That's a calculation we made last year or the year before, but it's— to give you a sense of scale, it's more than the entire CO2 emissions that come out of the road traffic in Paris, including the buses and the périphérique. per year. So it begins to be quite sizable.

All right. So let's put the slides away and bring Nico into the conversation. So again, you played a huge role in building BlaBlaCar. You've done a lot of the fundraising. What was sort of the mission as you took over in 2016? And what were some of the, you know, changes that you need to make?

Yeah, no, it was, as Fred was saying, it was a very interesting phase from I call that 2012 to 2016, where essentially it was all about growth and all about international expansion. So I would say the big focus of the company was global mobile. So essentially it was about like doing everything moving into an app and everything moving global. So we went extremely fast, and the obsession was like planting flags in as many countries as we could, We raised tons of money to do that, and we went from essentially 1 country to 22 countries in about 4 years. So as you do that, you create massive growth, you also create a massive mess, right? Mm-hmm. Because you launch lots of countries at the same time, and you optimize for speed, you don't optimize for perfection. And I think we've done that, I mean, we've done those mistakes, but we've done that pretty well. So in 2016, I guess it was an interesting turning point in many ways. First, we had to do a bit of triage and cleanup in this global expansion. So there is a point where you step back and you look at where you've gone, and you realize that some countries are doing phenomenal. So we had Russia, we had LATAM doing well, we had some countries like the UK not taking off, we had some countries where it took a bit longer and the model was not perfect. So we had to do this adjustment on the existing business. We also decided, as Fred mentioned, to slightly change the dynamic actually in the founding team. So, you know, there was a point, I mean, essentially from the beginning to 2016, the founding team was kind of the board, the founders, but also the executive committee, and all of that was essentially the 3 of us running the show. We changed that a bit.

Just so people know, the CTO, someone, I guess, that you had known from before INSEAD.

Yeah, so Francis was, I mean, was, is the third co-founder. He's the guy doing the work, actually.

I had met Francis before joining INSEAD, and then he decided to join the project, but he was still working at his other company, and then he decided to come join when, actually about the same time as INSEAD, maybe it was 2007.

Anyway, but a big sort of a shift in the leadership approach.

Yeah, so shift in leadership approach back in early 2017, late 2016, but also, and probably more importantly, it was about like opening a new chapter. And we thought together like, okay, what do we do next? So we've been doing global expansion, we've been demonstrating that we can scale that model in many countries. What's next for BlaBlaCar? And it became pretty obvious to us that the next chapter would not be mostly about geo-expansion, it would be about product expansion. And essentially we had built something pretty unique which was this community of travelers that have like a very rich profile which you don't do on an airline site or an OTA. I mean, you don't tend to have like a full profile and rating and all the information you gather, which meant that people came to the platform essentially for free. We had very sticky traffic, very high NPS, Net Promoter Score, around 60 to 70 depending on countries. And essentially we only offered carpooling to people and we could offer much more because actually we saw that they expressed lots of travel needs and essentially we don't fulfill all these needs. So essentially we decided to expand the product offering going into short-distance carpooling as Fred mentioned briefly, but also pretty much anything on the road. So we started to aggregate buses, we started to acquire a company called Ouibus in France, a company called Bus4, in Russia, which by the way, if you think of it, is more or less the same scaling model we apply to the geo expansion, we apply to the product expansion. You know, a mix of building and buying and going fast. So today, over the last 3 years, I would say, we've been sort of like building that new journey and also redefining, and that's important maybe to mention that, redefining the mission of BlaBlaCar. As now we talk about the go-to marketplace for shared travel, not just carpooling. Obviously, carpooling is the rock bed of that, that's the DNA, but the mission is now broader than that. We tend to talk about zero empty seats as an obsession in the mission, like how do we optimize transport with the car being the centerpiece, but also buses and trains and all of that.

Let me dig in, and Fred, you can jump in on this. Let me push you a little on the geo-expansion. Because clearly your idea was to get out there and experiment. But what did you learn about where the model works well or less well? I mean, because obviously you could make an argument that it's not by accident that this came out of Europe with high cost of driving and a certain network of cities and things. So what— I think part of it— yeah, what did you learn about where the model works well?

Yeah, that's interesting. I mean, first of all, I think you— When you go through this geo-expansion, you need to be pretty humble. And I used to joke about that actually internally when people ask like, how do we select a country to launch BlaBlaCar in? And I was saying like, if it's more or less big and square, we just go in and then we find out. And jokes aside, I mean, sometimes it's almost as basic as that. If you realize you have a car and it's a pretty universal product, you get to try. What we found is, and that was interesting because it was almost a handicap in the early story of BlaBlaCar, is that it never took off in the US. And it probably never took off in the US because you have a bit of a trust-building issue, at least at the beginning, you had a trust-building issue between, like, you're connecting with strangers. But you also had, like, some economic aspect, which is, like, it's pretty cheap to drive in the US, relatively, if you look at, like, disposable income over cost of motoring. Actually, the US is an outlier where it's still pretty cheap to drive, so the economic incentive is pretty weak. And you have a fundamental first-mile-last-mile problem in most cities in the US, and essentially it meant like we would have requested the driver to taxi in Los Angeles or the Bay Area or wherever to pick up 2 or 3 passengers. So, you know, we have not launched the US. We would have— I mean, we both lived in California, we'd have loved essentially to make a play in the US. But essentially, US never worked. As a side note, actually, Lyft, that most people know, so the Uber competitor, started as a company called Zimride. And I remember I met them back in 2010, John and Logan, in Palo Alto, and we thought like, if one day we compete, we've done well because we evangelized the world to carpooling. And we never did, but we both did well. And that was interesting because I also took that as a proxy that 2 pretty smart guys tried, failed, decided to pivot, became successful.

So I want to actually dig in on the first part though. So that's very helpful to understand, but again, what you also talked about at the very beginning is I think the fact the US is such a reference for tech, the fact that your model didn't fit the US, did that make it then more challenging to go global, do you think? Fred, I'll push you on that one.

Yeah, so maybe to kick it off, to because I was mostly doing that at the very beginning. For fundraising, it was a real handicap at the beginning because the European VC mentality was that essentially if it does not exist in the US, it's not gonna exist in Europe. And Europe was just like essentially a time lag to US innovation. Turned out to be a huge advantage as we scaled because we became like something unique and we're not some kind of copycat of anything.

A little bit earlier. Yeah, it's true.

Each time we were in the US at this time, we had to explain what we were doing and then they were like, oh, so you're like Uber? Like, no, we're not like Uber. So, oh, you're like Lyft? No, no, no, we're not like Lyft. And so then we were sort of an animal that did not exist in the US and so we were not on the map. And so we had to explain what we were doing. It was pure C2C carpooling and not with professional drivers or whatever. And so, this was both a handicap, as you say, because we could not really scale our service in the US for the reasons Nicolas mentioned. But also, it was kind of an advantage because we didn't have a big American actor coming and trying to expand in our countries. So, that's the way we were able to actually also grow with this unicity, which actually may reflect, as you were mentioning, possibly a European way of seeing the sharing and the trust that we've been able to build as well. All the trust system we've built is, I would say, totally linked to the culture. You know, one day when we made our values for— we really gathered the entire company to settle what were our values, but like the main core values, we came up with 3 words. Which are freedom, fairness, and fraternity. And then we tried to translate them in France, and we're like, okay, so freedom is like liberté, fairness is fraternité maybe, and well, fairness is égalité, or like maybe some other words. And then fraternity is fraternité. Okay, liberté, égalité, fraternité. Does that ring any bell, guys? We remember that actually in our DNA, by doing as we felt, we had built a company which was totally linked with the culture we originated

from. Okay, so again, but in many ways you did have both this European element and again all of these, I'd say, tech startup culture that you brought from California. The things like let's try and learn fast and get all those Kind of elements. But then I want to just probe slightly on the bus move. Were there— when you teamed up with your arch competitor, the state rail system, and bought their bus company, a lot of debates there? How's that working out? Any comments on that part of the bus move?

Yeah, I mean, maybe—

Carefully.

I think you have 2 parts to that, right? You have one, that was a fundamental conviction that I think we developed over time and that became mature in 2016, '17 in our head was what I was describing earlier. Like, we have to become multimodal, we have to leverage this large community to do more than carpooling, and we have to use the car as universal connector in transport. So the long-term vision that we have not reached yet is we need to offer buses and train and connect all of that and become this, you know, go-to marketplace. That's an obvious move for many passengers book, you know, whatever gets them from A to B in mid-long distance. So that was pretty clear. Then there is the how you get there, right? So suddenly you realize, okay, how do we get buses on the platform?

And buses were in play at that point, so there's lots of innovation coming around Europe, right? It's not— you can't sit around and do it slowly.

Well, exactly. It was a moving world, and essentially it's a world you could split in 2. There was Europe, which strangely enough discovered long-distance coach, at least continental Europe like France, Germany, Italy, and so on, with the deregulation of transport in 2015. I mean, it was between '14 and '16, I don't remember exactly. So that was one side of the market. And then you had the rest of the world, mostly countries where we operate carpooling like Russia, Ukraine, LATAM in general, India, where essentially those are huge markets, highly fragmented, mostly booked offline. And to tell the truth, I get at this point a lot more excited about the rest of the world because you realize that's kind of a rare play where you look at this, like, you know, tens of billions of dollars of bus booking, highly fragmented, not sophisticated, all booked offline, and it will— the question is how, by who, and when, but it will go online. Digitalizing this entire world was interesting. In Europe specifically, it was a different play because you had essentially a few people moving in, creating this new market, and not fragmented, and not offline, directly online. Essentially, the only fast track was an acquisition. It's true that back in '16 or '17, if you had told me, hey, maybe you're gonna go and acquire a subsidiary from SNCF and transform it to accelerate that journey, I think we would have both laughed a bit, right? But, you know, over time, we had good contact with SNCF. We were never in like direct fierce competition, actually. We always saw that as complements. And it turned out that their strategy was to divest from non-train business. Our strategy was to become this multimodal play. And yes, it became this sort of like, you know, strange M&A where it's the startup acquiring a subsidiary from the large national rail company.

But it was more like the path to get to the goal. Yeah, we followed an overall strategy. We had 2 choices mainly, I would say, in 2016, which were either to go on— we had 2 assets. We had the community, which was already big and growing, in all the countries. And we had this possibility to address transport needs of the people and then propose them several means of transport, which is the one we chose. We could have— we really had this fork in our path. We could have gone fully on community and proposed other services that people can help each other, on which, like, you could think of all the Classified models that you modernize with transactional models. Like everything that people are doing when they help each other could have gone in this direction, including an Airbnb-like service or something like that. Or we could go the multimodal way, and we saw that in the multimodal way, we would exploit our 2 main assets, the community and the fact that we were labeled like a transport solution, which would— which was making and is still making Our legitimacy in offering several means of transport.

The strategy professor in me is loving this. These are exactly the kind of big strategic questions we love to teach about. Now, of course, we know execution is always a little bit interesting. So as you guys moved into buses in the different markets, as Fred, you tried and did some interesting things around short-distance carpooling, were there any particular surprises, things that you, you know, that either positive or negative that popped up before COVID We'll go to COVID in a second, but in 2019, what was interesting?

So I would say 2 things. I don't know if they're surprises, but it's 2 things that have been pretty interesting to me. I mean, one, you know, I would say one very positive on strategies. The whole idea was to create 2 very complementary networks. So one thing we have not mentioned is carpooling is extremely good at doing point-to-point and we've been working— so we changed a bit the product paradigm in 2017 and we decided, okay, we need to push carpooling not to compete with buses and trains, but actually to map out the rest of the network that's dominated by cars. So the real enemy, I would say, of carpooling is not trains and buses, it's actually people driving their car alone. So it's actually like empty seats in cars, and that's what we fight against. And we found that, you know, as we integrated buses in France, same thing in Russia, now we're doing it in Brazil, it's highly complementary. There is very little cannibalization. So essentially, we increase the pie and we don't cannibalize any of these 2 modes of transport because the topology of the network is highly complementary. Then from a pure, I would say, culture point of view, It's interesting because it's more challenging. So in a sense that when you start integrating a company that was a subsidiary of SNCF, and that was a pretty big team, that was 150 people. Back then we were roughly 500 people, I mean, even a bit less. So it's a big mass in proportion of your company and your culture. And it came from a different culture that was a lot less of a digital marketplace type culture, but more an operator culture. So those sort of post-merger integration take a lot of time, a lot of smart people, and even if you have the right theory on strategy, which I hope we do, we'll find out, I guess, in a few years, you can screw it up actually if you do like these very fast M&A buildup. And remember, like, we acquired 2 companies, one in Russia with 100 people plus, one in France with 150 people. So we've done 2 very bold moves. within 2019, and the challenge was, okay, how do you digest that and take the juice of that?

I want to see, we've got lots of questions, we've got a big audience out there and a lot of questions coming in. So Blanca, even though I said that you'd come in later, do you want to just shoot in a couple of the questions following up on this conversation before we go on to the pandemic? Blanca, here she comes. Welcome.

Hi. Hi, Peter. Hi, Nicolas and Frederic, and thank you so much for your time. Indeed, we have very interesting questions popping up. I think one here by Martha Gretsch is really interesting, probably addressed to Frederic. Frederic mentioned that BlaBlaCar tested 6 different business models. Could you develop this further? What have you learned along the way? And how did you manage to transfer the business model change to the customers?

Okay, so it's a very good question. I'll try to have a very good answer. Um, the— what we've done with the 6 business models is really trying out what we thought could work. So we tried a B2B business model, we tried an advertising business model, a business model as well where you simply put people in contact through a phone line and then you take a cut on this. We tried also platforms for companies, of course, but also for concerts or events. And then we tried the transactional business model that we have today, which is a very simple commission business model where you take a cut on each transaction. So what I've learned during those years is that when a business model works, you see it. If you don't see it and you're questioning yourself and you're wondering if it works, it means it doesn't. It means it's just like in the middle. And so, of course, sometimes you try the business model and it clearly doesn't work, then it's easy, you say, okay, fail, move on. The worst case is when you have a business model which seems to work or wants to work, but it, it's not really bringing you all satisfaction, it means actually it doesn't work. It means you need to look further until you find the right one, because when you find the right one, there's no doubt.

So one, one thing to remember everyone is although that transaction business model for sharing economy is kind of known now, these guys were pioneers and it wasn't so obvious at the time. One thing that's interesting though, in the second part of the question, is oftentimes you launch free and then you add the transactional model. What have you learned about introducing that business model into new markets?

Well, I've learned we— you shouldn't do it in a big bang way. You should go slowly for many reasons. The first reason is that you want to test out first if this business model is really adding some value to the service and to the community. So the first users will tell you if it does or not, if they think that you're asking them to pay but they don't see the value, or what would they like to see if they pay, or if they pay more. And so we were also lucky because we were transitioning from a model which was not totally free, which means people were already participating in the fees of the ride. I mean, what happens is that when you go from Paris to Rennes, let's say, what happened before was that the passengers would give, let's say, €20 to the driver, and then that was happening in cash. But then when we transitioned to a commission-based model, maybe it would go from €20 to €22, but it's not like as if it was going from €0 to €22. So that's also very important to mention.

That's very clear. Bianca, why don't— Bianca, another question.

I see a very interesting question here from Jan Kuyerza from Rwanda, which is, BlaBlaCar seems to have gone into most of emerging markets but stayed out of Africa. Any specific reason, or is it that you see no opportunity there?

No, I would say it's not yet. So the fact, you know, in 2016 we decided to international expansion. And as I said, we moved to a product-type expansion, and now we're building that carpool plus bus offering plus train in markets where it's relevant, in most markets. So in France, we're going to do bus, train, carpool. In markets like Brazil, there are no trains, so it's going to be bus plus carpool. The ambition, and I hope— I mean, we'll talk about the COVID context, which might slow down that type of ambition by a year or two, we'll see. But the ambition is to go back with that multimodal model in other countries, and clearly there are lots of countries we have not done yet. Africa is an obvious place where we could and should go at some point. Some countries in Asia are also untouched territory. So we'd probably go back to international expansion, but not the same way we've done it in the past. In the past, it was Okay, we need to create that carpooling community because we have a good product and we want to scale that in as many countries as possible. Here we'll probably go back with that multimodal offer and say, okay, now we have this new playbook and new recipe, let's go and apply that to more markets. So

basically, we didn't go on one foot, but we may go back with 2 feet or more.

Yeah, we'll come back with something better.

Thanks for popping in, we'll come back to you in a second. We're going to go and do some COVID. There's no— we can't avoid the pandemic any longer, gentlemen. And I think here, just to kick us off, here are 2 slides. So this one, quickly, this just shows like what you'd achieved, say, in France by 2019, right? You built this incredible multimodal network and then boom. Okay, so I guess Nicolas, you got to manage through this. Tell us a little bit. about how bad COVID hit, what were some of the challenges, and I guess what people are particularly interested, what are you seeing today and looking forward?

Yeah, and maybe just before we jump into that specifically on the impact of COVID I think that's a good reminder of what I call the unknown unknowns. Like, that's the thing that was not on the business plan, that's on no business plan, no investment memo, that there would be a global pandemic and that's gonna stop the world, and that's a risk for your business. I think no one could foresee that. And that's interesting because those type of events happen actually more often than we think. Like, if I look at my 20-ish year career, well, there was 9/11 and the dot-com crash in Silicon Valley. I was there. Then I had the great idea to go into venture capital in 2007. Boom, 2008, 2009, this massive financial crisis. But it happens more often than we think that you have these massive externalities completely changing the game, more so than any competitor fundraising and sort of like normal incremental operation. So anyway, so that's what happened, like big tsunami in the world and specifically in the transport industry. And essentially in Q2, we were shut down, like no one was traveling pretty much on a global scale, and we went back to volume of activity that Fred and I would see back at INSEAD kind of thing. It was back to square one in terms of volume on the platform. Now, clearly, if we take the overall context, there are less people traveling right now. We are in a world where demand for shared travel has lowered for sure. How long it's gonna stay, we don't know. But we're also in a world of highly unpredictable demand. So I would say beyond the fact it's lower, it's highly unpredictable. And when you say that, it becomes interesting because if you look at this C2C model, like very marketplace C2C model, it's actually really good at taking shocks because essentially it shuts down on itself and it restarts on itself, and you have no fixed cost. You don't need to buy planes, trains, buses, you don't need to contract operators, you don't need to prepay, essentially, you don't need to take risk on inventory. So from a, I would say, from a P&L point of view, we absorb, and the cash point of view, we absorb the shock really well. And as you can see on the graph you're showing, I don't know if people see the slide, but you see a very fast rebound in activity post-COVID because people came back and people started to share again and travel again. So I would say that the fact that we are a community, that we don't have fixed costs, that fundamentally we're driven by domestic trips, not international trips, we're driven by leisure, not business trips, so you don't Zoom to see your girlfriend, boyfriend, or parents, you need to move, and we tend to be in a pretty young price-sensitive audience. If you put all of that together, actually we rebounded much faster than any alternative. So today, in absolute terms, we're doing less than we thought we would do clearly in 2020, given the context. Interestingly, in relative terms, we gained market share in every market. And I'll add actually one interesting element, actually, in specifically non-European markets where we aggregate buses. Actually, we see this activity still grow on a year-on-year basis. Why? Not because people are traveling more, they're traveling less, but because the other story of COVID is offline to online acceleration. Like, lots of people, I mean, online payment is exploding, online e-commerce, and all these things have been exploded in those markets. So actually, the proportion of people booking their trips, their bus journey online, in markets like Brazil, Russia, and Ukraine has increased faster than the overall I would say tide has gone down. So in relative terms, we're doing pretty well. Maybe just to finish on that, also culturally, I think we absorbed that pretty well by keeping essentially all the engineers, all the product staff— I mean, we have not used, at least for this part of the company, all the unemployment benefits and different schemes you have available in Europe. we decided to innovate. So we launched actually a couple of new products during the lockdown. One of them is called BlaBlaHelp, and essentially what we've done is essentially leveraging the trust in the community so that people actually can connect to their neighbors and help them do groceries during the lockdown. And we've seen, and we launched that on a global scale as a free product, and that's a way to stay engaged with your community. So I think part of the rebound is also those type of things, like when you keep on communicating about, like, you essentially, you doing good and you being proactive during that type of crisis and offering the community something they need, actually, probably also helped actually get people back in cars and sharing their cars in June and July and today.

Fred, I want to bring you in on that also, COVID, but also particularly on that question about To what extent is it accelerating digital? So now you spend, you know, a lot of your time heading up France Digitale, really representing the tech and startup whole, you know, community in France. So you have a vision on what's going on. How's that community doing overall in the current crisis?

Well, it's been accelerating. I mean, it's no— it's not a scoop, but What we've seen is that, for example, if you take companies like Doctolib, they had 1,000 views, like teleconsultation, video consultation per day. They do like remote consultations for doctors. Now they are more than 100,000 per day. So it's like it's been multiplied by 100. So you have other examples where the e-commerce has been doubled, where remote working has been multiplied by 10. This kind of numbers is just totally crazy. Just like we had not scheduled in advance for such a crisis which could hit the businesses, we had not planned for such a crisis which could like multiply the businesses of some of the companies so far. So I would say, and as President Macron said the other day, like 3 weeks ago at the Élysée, he said that actually digital was COVID-proof. Sort of a way to mention that the digital interaction is something which is compatible with remote interactions. So when we can't see each other, we have communication means to do things remotely, and overall the digital really benefited from that. So of course you have exceptions, and so I would say we're in the middle. You have companies which only work for creating events or in the international tourism, who of course are really severely hit. But in companies like us, we're in the middle and some others really rocketed. And we've seen that in France as well. And the ecosystem has resisted very, very well because it's been helped as well by the government. So we've got 82% of the startups which took out a state-guaranteed loan, which we call the GPE. So the The PGE, the prêt garanti par l'État, and we have 52% of the companies which benefited from short-time working during lockdown, which also helped companies go through this period, including digital companies. So it's kind of resisted, it's been resisting very well.

So Fred, I'm curious, you mentioned government a few times, how things are shifting in Europe. So even before COVID You had the new EU Commission that was starting to make a lot of noise about supporting digital. Obviously, Macron from the beginning had targeted this sector. Do you find that the Europeans are somehow getting more focused on their digital ecosystem with COVID

Actually, yeah, there are 2 main tendencies. One of the tendencies is really to make things more sustainable and to go towards I would say, a world which is aware of the fact that climate is evolving and we need to do something. But not only climate, it is also about inequalities and some sort of other sectors in which we have strong values in Europe. We have values of responsibility and social help and solidarity and all these things which we put forward when we create businesses as well. So the tendencies have been both, I would say, on responsibility and on digital. And it is reflected by all the plans we see, the plans for, like, relaunching the economy, both in France and at the European scale. So today, really, the message that is being sent by France and Europe is that we have 2 legs going forward. One is on responsibility. And the other one is under tech more broadly than digital.

I'll bring Nico in on this as well, but first I thought it would be useful for you, Fred, as president of France Digital. We'll do some quick polls of the INSEAD audience on some related topics. So let's— we're gonna actually— maybe let me pull up, say what my first poll is gonna be here. Well, okay, let's just open it up. Is that poll open? Yes. So it's really around how active should governments get. So should they really— and then you start to hear this talk about digital sovereignty. You look at Thierry Breton, who's the EU commissioner from France. And so certainly, I think, Fred, if you thought we'd had this conversation a decade ago, I think we would have been much more free market. Let's see where the INSEAD community comes out on this. So you guys have 10 more seconds to make up your mind and say—

Do we know where everybody's from?

Oh, I don't know. It's an INSEAD audience, so it's pretty global. But again, with time, it's a lot of Europeans. You can imagine a good number of Europeans here. So here we go. All right, 5 more seconds. We've got a good sample. We're well over 300 people who answered already, 350. All right, folks, I think we've got enough to show Fred. Here we go. So only 9% are sort of still, this is a bad idea. So 15% neutral. The most common response now is limited support. Governments should actively be developing their local ecosystems. And still over 25% think actually maybe you should be constraining foreign competition, which typically means big tech coming out of US or China. I don't know how you guys— I mean, how do you want to take— has your shifting on this issue changed, or the people in the tech community, is it shifting?

Well, I would say it's very interesting. We should actually have the same poll like 10 years ago. If you had that, that would be very interesting because I think what's been happening and with the rise of the tech giants, we've seen also what's happening now. Everybody's using the solutions which are global solutions and we've been creating also companies which are super big. You know, like, the other day, a statistic appeared, like, the GAFAM, like, so the 5 biggest tech companies in the US, represent actually 5 times more in valuation than the entire CAC 40 of France, which is the 40 top companies. So we see that there is some kind of a world domination, and 10 years ago, actually, those same GAFAMs represented 10% of the CAC 40. So it's been an acceleration, which is incredible, which also creates some problems that we see, because of course those companies are very well equipped to not only become more aggressive and investing a lot more in taking up some remaining markets they may not have, because they have lots of money to do so, but also they are also trying to optimize their taxes everywhere, and we see the problems it creates because they get— lots of revenues from areas where they don't always pay all the taxes they should. So this is creating lots of tension. And so there's one thing which I had heard a lot during, like, all the years we were saying, like, we should have a free market and everything, is that monopolies should be broken and regulated. And so I think we are at a stage where we now see why and we need to act. And also in Europe, we've been playing a part, I would say, and we've been playing like just like in music, you know, we've maybe we've been playing a part which we can be very proud of, like opening everything and be free about everything and have an open market. But maybe we should revise a bit that part because when we see that, of course, other areas tend to favor a bit more their own solutions. We see that it's a strategy which is—

When you say other areas, you mean US and China perhaps?

Yeah, yeah. Well, we see that the US— I have statistics that the US public ordering, you know, for solutions, that among the top 200 companies who answered and got the markets for the— in 2019 in the US, you have 89.5% of those companies which were American. So we see that the public American government is buying American. In China, they're buying China. And in Europe, we buy European and Chinese, but we also need to buy European possibly to really create the momentum we want to see.

So Nicolas, I often think about you as sort of a VC kind of guy, hard-nosed finance, a little bit. Has your thinking shifted on this? What's your view on sovereignty and digital?

Yeah, I mean, actually not really. I think it's just like now it's becoming more topical, but if anything, I think COVID has been a wake-up call for Europe that was long due, that was very long due, that suddenly we realized that yes, tech is strategic. that yes, the biggest companies in the world today are whatever we want to call that, tech, digital companies, but it's been long coming. For me, I was in Silicon Valley back in '99, 2000, and you could see that the Intel and the Cisco and the Apple of the world were building the future, and Europe was just harvesting the past. And I think we've been doing that. Way too long. So there's been this wake-up call. So in a way, I'm glad. I still think to maybe to make it in more blunt way, I still think we incredibly naive in Europe, like if you look at the way it's been managed. And now we're waking up to the fact that yes, we need to build some kind of protectionism at the European scale, and we have a hard time to organize around that. But it is time. Like, there's always been some type of protectionism, obviously, in China. Obviously in China, but even in the US, as Freddie is saying, the US government is buying from US companies, they're always protecting the market indirectly, and I think we've been pretty naive around that in Europe about tech, because it was not recognized as something important and strategic and creating jobs, because we've done that in any other industry. So now it's bound to change, and I just wanted to add something that I think the opportunity is actually thinking of not really what's been done, but what's coming next. And what's coming next is maybe some sort of industrial revolution around the environment, like we need to rethink lots of industries, and, you know, that's going to come in some shape or form. Regulators have a great role to play, and if you look at Europe, we're doing pretty well in terms of like CO2 reduction, in terms of like consumer awareness. So some of these big companies should come out of Europe. Like, Tesla should be a European company, except we didn't wake up early enough. But I think the next companies like Tesla ought to be European. So I think as founders today, I think surfing on the environmental European momentum is hopefully a good thing.

Anyway, for people in the audience, what Fred and Nico are articulating is, I think, more and more where the thinking is going in leaders in tech, at least in Europe. Blanca, come on back and why don't you fire a few questions at our guests?

Hi. We see a couple of questions coming up regarding competition that I think are interesting. The question would be, who do you think— who would you say are your competitors today? And do you fear Uber's mission to become a one-stop shop for transportation be detrimental for your business? Do you see yourself entering the Uber/Lyft core business?

So what I'm gonna ask you guys is give sort of short, punchy answers and we'll do a bunch of questions. You don't have to give the full thing, but just quick. Yeah, what do you— what's the current answer on the Uber question?

So we've been talking about Uber as competition for many, many years. I think the reality is they operate in the in-city short-distance arena, which is huge. We operate in the mid-long-distance arena. Maybe one day they're gonna cross, but short-term, I don't think there is— I mean, there are synergies, but no direct competition.

Blanca, next question.

Okay. Martha here with a very interesting question regarding data. Yes, the question would be, how does BlaBlaCar optimize data for customer experience? And also, what is your strategy? You mentioned before environmental concerns. What is your strategy for data storage regarding its environmental impact? And also, I guess, the privacy issues.

Great, yeah.

A lot of small questions.

It's hard to do one punchy answer on this one.

No, no, no, just— well, for sure, actually start with how you use data to optimize the rides. Some of the— I think that's really good.

Well, it's through machine learning and the itineraries. So mainly we try to optimize itineraries and to optimize stops. for everybody and to also optimize a bit on the prices to make sure that everything is equilibrated.

And what about, do you guys worry about your cloud footprint? And I mean, you're an environmental company. Do you worry about who's hosting your data? What electricity is being used? What do you, how do you respond on that?

Before we jump on Before we jump on this one, I think it was an important question actually, because over the last few years, essentially we transformed carpooling into a driver declaring he's going from point A to point B and wants price P, to something where essentially they just tell us when they're leaving, where they're going, and we match them at the right price on the route, and we define all this machine learning. So we've become very much like a machine learning data company, and that's something we people don't see actually because the product has not changed and we make it simple, but it's all about matching optimization.

Just to give an idea, because people sometimes ask what's the return on machine learning, do you have a sense how much extra revenue you get because you're able to better optimize the routing? Is it a 1% thing? Is it a 10% thing?

So I'll give you, because we have an interesting number on that. So 25% of the activity today, and it's growing fast, is actually generated by what we call smart stops that essentially a machine learning algorithm has calculated to better match the passenger and the driver. So it is huge, and frankly, it's going to go to more than 50% in the next couple of years for us.

Great. Okay, Fred, you're the green advocate. What are you going to say about your cloud footprint?

The main answer is that we're trying hard and it's never enough. Anyway, anything we can do to reduce that footprint has to be made. There's another consideration which has to be taken into account is that anyway, by calculating our environmental footprint as a service overall in the community of nearly 100 million people, we know that the more we grow, the more we save CO2 and in a massive way. So anyway, our role is really to make sure that our service gets expanded as much as possible. And then it has some environmental impact on the digital side, but since we're a marketplace optimizing the resources, physical resources, we're like— there are several marketplaces like this. You have also Back Market, which you may know, which is a platform for refurbished electronics. You also have some other platforms in different areas which are doing this kind of optimization. The more we grow, the more we optimize. You know that if you use a refurbished phone, for example, it's 10 times less impacting on the environment than ordering a new one. So anyone who's watching this video should keep their mobile phone as long as possible. So mine is almost 4 years old, and I think I will write something on it saying, I'm old and I'm proud, but something like that. But I mean, we should keep our electronics and not like replace it every 18 or 20 months because this is a disaster.

Okay, Blanca, you got one more question. Fire away.

Okay, there's many interesting questions in the chat, but I guess because we're running out of time, my last question is actually 2, sorry. And it would be, what advice would you give to MBA graduates right now, especially those interested in entrepreneurship and tech? And also, what do you look for in an MBA

Yeah, so yeah, a lot of the job market is shifting. People are looking at scale-ups and stuff. Any advice?

My advice would be follow your guts. You have 2 brains, your reason and your heart, and we're using someone— sometimes too much the reasoning and the analytical brain. I would say you know what is good and to be done for the next decade or more in the business. And so since, especially if you want to create something new, I don't know how many people are watching who want to be or already are entrepreneurs, but when you're an entrepreneur, you're creating something that does not exist. So any analytical document or study that you may read will not give you the main passion for building what's next, and you should follow your guts and what you know inside you. Your heart is actually your best counselor.

Yeah, and I would say it's also like the best time right now. Crises tend to be the best time to start companies, and especially because now you have funding out there, you have like a very noisy world where the future is not clear. That's the best time to start companies. So I would really encourage people to start companies. As you do so, find co-founders. It's a tough journey if you're alone starting a company. It's a tough journey. So we were lucky to be 3 and to help each other.

I would say find a co-founder who wants to become the CEO as well.

That worked for you, Fred.

But it really matters. I think, you know, like solo teams today are— it's tricky. It's really tricky. And in terms of what I've always looked for when I hire people, or whether it's MBA or when I do angel investing, it's really 3 things. I often describe it this way: it's passion, because you need tons of passion to change things and create great products and so on; stamina, because that's a hell of a journey and it's not gonna go right all the time, and you get COVID and you get competition and you get naysayers and so on and so on; and something special. Like, people, they were like super analytical or artistic, so it's about passion, stamina, and something special.

All right, gentlemen, thank you very much. Blanca, great sorting through all those questions, amazing questions. Any, I don't know, some last messages, real short. What makes you guys optimistic about 2021 as we get out of this tunnel?

Do you want to start, Nico?

Nico, what next year?

But it's very— I never know how to answer those questions because I think I'm always optimistic. I always think like next year is better than the year before. So if I answer for us—

It's not going to be hard for '21.

No, no, I mean, for '21, post-COVID is going to be interesting. I think the fact that we kept on investing and that we've gained market share, I think 2021 and beyond, actually, might be a massive acceleration ramp actually for us. But, you know, in general, I'm pretty optimistic we're gonna get out of that. It's just gonna be different. We just need to acknowledge that if you expect the same in '21, '22, you'll be sad. If you expect change, you'll be happy.

Fred, any— what's exciting you?

Yeah, I would say overall what really makes me optimistic and actually happy about what's happening right now is that And finally, I would say, including with the latest declarations of the European Commission, we are positioning the entire European ecosystem on becoming more climate-friendly. It is— the signal is very, very clear. We had the Paris Accord a few years ago, but now we're going a bit further and we're putting money on the issue. And I think it's actually a very unique opportunity for Europe to attract international talent to really make this happen. And, you know, we had launched this initiative, Tech for Values, a few months ago, pre-COVID, in San Francisco, Peter. Yeah. We have— so it's techforvalues.com, actually, where we gather the companies which are acting in the right direction, and we see lots of them happening. really blossoming today, and most of them are based out of France or out of Europe, and this is very promising.

Very good. Thank you. First of all, a big— on behalf of Blanca and the whole audience, thank you so much for finding time in your busy schedules to come and share with us. I think we hugely appreciate that. And indeed, Fred will share with everyone the Tech for Value stuff and all those companies that are hiring. Indeed, it's going to be very interesting time, not only for BlaBlaCar, but for the whole tech ecosystem here in Europe and beyond. What's next for Tech Talks? Here you can see on the screen a whole set of talks that we have coming up. That'll be also detailed in a follow-up email. Thank you for everyone. Have a good rest of the week and take care out there.

Thank you so much.

Bye.

Thank you. Bye.

Thank you.