Zimride COO 'In The Studio'

We're in the TechCrunch studio today with John Zimmer, who's the COO and co-founder of Zimride. John, welcome to the studio.

Thanks for having me.

So, John, you're here kind of at an interesting time. You're a former Wall Street banker converted over to Silicon Valley founder of a growing internet company. And I think it's just a couple of weeks ago, there was a— the New York Times editorial, you know, "Why I Left Goldman Sachs" was spreading across the internet and definitely struck a chord with a lot of people. Why did you leave Wall Street?

I left because the feelings I had around what I wanted to do and kind of what was important to me didn't match up with the culture in Wall Street. And so there was a focus on money, there was a focus on what people were wearing, and things that didn't seem to lead to productivity. And when I came out here, it was the opposite of that, and that got me really excited.

And so, but how did you get to Wall Street in the first place? Like what drew you in when you were in college and you were getting recruited and you were going to all these events? What was it that you said, yeah, I want to sign up for that?

I think it started back from when I grew up in Greenwich, Connecticut. And so seeing people all around me that worked on Wall Street, that did banking, and that talked about it in this aspirational way made me think that's what I was supposed to do. Then when I went to Cornell, similar thing happened. You know, people talked about consulting, people talked about finance as if it was the thing that someone with my background in business and finance was supposed to do.

But when you were, when you were at school, you were focusing on hotel management, right? And planning and these types of disciplines. How did you convert over from looking at the hotel business to looking at, you know, the world of stock and bonds?

So, so I was, yeah, I was in the hotel school at Cornell.

Okay.

40% of hotel students actually go into finance now. And so it's kind of been a, a whole trend that the whole school has faced where 40% go into hotel or restaurant operations, um, 40% also go into finance, so real estate finance.

So what drew you into the Hotel School originally though?

Originally it was this entrepreneurial feeling, this, um, uh, really tight network of people that wanted to create, uh, really amazing service experiences. Through their own businesses.

But did you think you were gonna go work at a hotel or start a hotel chain or do something like that?

I thought I was going to get potentially into hospitality but do something on my own.

Okay, and so eventually you take the job. Which bank did you work at?

I worked at Lehman Brothers.

And this was during what year?

I graduated from school in 2006.

Okay, so you were there— were you there when the bank actually went bankrupt?

I left 3 months before Lehman went bankrupt.

Okay, so what did you do there on a daily basis and what was it like? And what I'm most interested in is when did you start to think like, oh, I need to do something else?

Yeah, so I graduated 2006, got there, dressed up in a suit and tie every day, went to work, did almost this, like a lot of the same things every day. I was in Excel almost all the time creating models. I would sometimes— I was in real estate finance, so sometimes I would go to the property and then interact with lawyers, appraisers of the property, but then back into Excel doing models to see if the loans we were going to make on those property would be good loans. And this was commercial, not, not subprime residential.

Okay, and that was your only job while you were at Lehman Brothers?

That's correct.

Okay, and so when when did the thought enter your mind that it was time to start to think about moving on?

I even went into it with a little bit of hesitance, I'd say, wondering, you know, thinking, I need to almost get this out of my system, is kind of how I felt. That because I'd been told for so long this is kind of what I was supposed to do, or the culture around me was kind of doing that, I went into it with that almost, okay, I'm gonna do this for a few years, but I'm not gonna get caught up in it. And then I had other friends saying, well, be careful.

Did a lot of your friends also go to Wall Street from school?

Uh, yeah, I'd say, yeah, quite a few did, both from high school in Greenwich, Connecticut, as well as Cornell.

Okay.

Yeah.

And so what— now, the company that you founded, co-founded, Zimride, right?

Yeah.

You actually started working on it while you were at Lehman Brothers.

Yeah.

So let's, let's talk about that because That's a kind of interesting thing, right? I mean, maybe someone isn't sure that they want to quit Wall Street or quit the world of finance or private equity, and they maybe have an idea, right? How did you decide that actually you're going to stay there, think about starting to leave, but actually start experimenting with ideas?

Yeah, so I realized, like you said, I could do both. You know, I could maintain my job at Lehman, and then I could go home, and it started creeping into my work hours. I started working on Zimride. And this was also about the time that Lehman started to be doing worse. And so I was able to make time to do both at the same time.

And did you get any advice from people as you were starting to— your friends and your family must have known that you were starting to get into this idea, but you have this day job. Like, how do you manage that?

Yeah, it was difficult. I wasn't sleeping much. And I remember clearly, a mother of a friend of mine was also working in the same building as me. She was at a different finance firm. And she sat me down one day because I told her, I'm thinking I'm just going to leave and do this full-time. And she said, she said, John, how could you leave a sure thing like Lehman Brothers to go do some crazy carpool startup in California? And that was actually, I think, the moment where I said, I was like, you know, screw this, I'm really gonna leave because, you know, now looking back in hindsight, it's easy to say that now Lehman is no longer around and she was wrong and now our company is doing well. But it really actually, it kind of pissed me off that that was kind of representative of the whole culture there. Don't do something different. And there's kind of this groupthink. And so it was at that moment I kind of— it was the voice I needed to kind of start planning my exit.

So let's talk about founding of Zimride. You're a carpool sharing startup. You've got a lot of users. I want to get into that in a second. How did you meet your co-founder, Logan?

Yeah, so after about 12 months at Lehman, getting restless, wanting to do something else, I had been kind of going through a journal I kept a lot of ideas when I was in college. One of them was this idea to take advantage of the fact that 80% of seats on our highways are empty. And create a ridesharing startup. And I was online one night after work, and I see on a mutual friend's Facebook page that someone posts a link and says, "Check out this new site I'm building called Zimride." Now, my last name is Zimmer.

Yeah.

And I was obsessed with this ridesharing idea.

Yeah.

And so I was like, "What the heck is this?" And reached out to that mutual friend. His name is also John. And he was best friends with my co-founder Logan Green. And so this other John connected Logan and I, and within a week or two Logan had flown out to New York and we started working together.

Wow.

He went back to LA and we started working together.

And so what were those early days like? Like, what were you doing? Okay, you're going in there doing real estate appraisals, models, and then you go home and you're online with Logan. Like, what actually are you doing in those early stages of the company formation?

We were trying to figure out a business model. We were trying to get users. There's actually a really good story of when my two worlds collided. I went on a recruiting trip for Lehman to Cornell and the event was on Monday to do recruiting. And on the weekend preceding that I went up to do— I dressed up in a frog suit on campus handing out information about Zimride to get users. And then after the recruiting event, a student came up to me and I was next to my managing director and they said, "I swear I— were you in a frog suit on Saturday?" Yeah, that's a little awkward. It was pretty awkward. Just kind of stepped away and explained it. But we were doing guerrilla marketing. We were trying to figure out are we going to go after this network approach by going university to university. We were talking about product changes. Every night after work. And I even remember talking to Scott Griffith, who's the CEO of Zipcar, to do a partnership one day at Lehman when we were kind of leaning into—

And so finally, how did you leave the bank? How did you leave Wall Street?

So I completed a 2-year program and I decided that I was gonna— going to leave. So I packed my bags, I used Zimride, and I drove across the country.

Got it. And so you move here, you meet up with Logan, Zimride's already founded, you have some users, right?

Yeah.

And so obviously you were doing a lot on the ground with Zimride and the guerrilla marketing and being really scrappy. Have you found now, you know, now you guys have raised almost $10 million, you have hundreds, you know, serving hundreds, thousands of rides, right? Were there any skills that you learned while working on Wall Street that are transferring over into your operational and executive role as a founder, co-founder, you know, of this kind of startup?

Yeah, definitely things I learned about getting efficient processes, about having nice materials, but also learned what not to do. And so I thought that there was a lot of the issues I saw at Lehman was the things they did there weren't focused on productivity. FaceTime. Being at your desk eating lunch just because your managing director might call, that didn't lead necessarily to productivity of myself. And so at Zimride, and I think at startups in general, we focus on things that really matter. So I guess what I learned is things I don't want to do at Zimride that create this bureaucracy or this hierarchy or this, you know, non-transparency. So I think it helped me in that way. But at the same time, I learned modeling that's been helpful for raising money. And so there are definitely some things that I've used.

Right. And so now I think as we transition over to Zimride, just finally, if there's someone out there watching this who's, let's say, being recruited by a bank and thinking about their options or they're already in one and they've got this thought in the back of their brain, what would you share with them concretely about how to— framework for thinking about the decisions they're going to make?

Yeah, well, one, you can do both. I did that to start. Or after a year there, I did both at the same time to a point where I could go and leave and just go all out on Zimride. But also, I think it's important to— if you're really passionate about an idea, there's no better time to go after it than now. And these banks or these types of consulting or banking jobs, those are going to be there. But the time— the economy in Silicon Valley for jobs is probably even better than it is right now in Wall Street. And so I think it's a good time to jump into this.

Right. And so what's interesting to me about you teaming up with Logan doing the ridesharing idea and obviously how you met is that actually you actually studied a little bit of this in school, right? So coming back to Zimride is a little bit of going back to some of your older interests, right? So tell us where Zimride is today. You know, what's going on and how can people use it? And how does it fit into, you know, larger things going on in terms of, you know, either urban transportation or intercity transportation?

Sure. So just to kind of start off, the general concept is the fact that 80% of seats are empty on our highways. So we have this highly underutilized asset that if we can create a marketplace for We can save people a lot of money. We can reduce the impact on the environment. And we can create community. And so what we're doing now, we have 125 universities and companies that are paying us to provide a network for them to do ridesharing. We're also, we've launched 2 promoted routes that are public. So San Francisco to Los Angeles, San Francisco to Lake Tahoe. If you're a driver, you can sell the empty seats in your car. And if you need a ride, you can buy a seat just like you buy a flight or a bus ticket.

So now the crazy question. So the two public routes that you're serving, San Francisco to LA and LA— San Francisco to Tahoe, that's probably where most people say we should just have high-speed rail there, right? And it's a big issue in California. Probably not going to happen for a while, or, you know, it's not going to be in the places we want. How does Zimride take advantage of that? —huge structural inefficiency.

Yeah, I mean, it's great to know there's this huge need and people want an easier way to get back and forth. But that's like a $100 billion project that's going to maybe happen in 30 years. And so right now, in a few weeks, we've gotten up to a critical mass along San Francisco to LA where there's now 2,000 seats that are bought and sold every month. And we plan to 10x that and 10x that. Wow. And so, that's like, what, 10 flights, airline flights going on now back and forth every week.

And are you seeing any like community or network effects come out of that, like people meeting new people or something you wouldn't have thought of, people using Zimride a lot?

Yeah, we've had girlfriends and boyfriends meeting. We've had people that have met and started their own company that we've heard of coming out of a Zimride. We've had people make life decisions, change their careers, go study abroad in a country because they met someone from Nepal, they decided to study abroad in Nepal. So that's a big part of what we're seeing.

Great, great. All right, well, thanks for coming in and thanks for sharing with us, and good luck this year.

Thanks a lot. All right, John.