Mass Labs - Streamlining Public Transit

Hello guys, my name is Marco. I am the co-founder and CEO of MES Labs, and we are trying to empower the mass transportation. Who likes to take a bus? The mass transportation is a chaos everywhere, not only in Brazil or Chile or everywhere. This is not only the company fault. This is because the current system is based on old technology hardware and have to be integrated to provide select actual information. We can use the same card to ride different means of transportation, like a ferry or a bus with the same card. So MAS is changing that. We developed a platform 100% based on software. That means more intelligent and providing real-time information so the company can make smart decisions. As a platform, it's possible to integrate city buses and ferries with the same card. The ticket validation is an app for the company. And how are we doing that? Everything is on the cloud, from the reports, financial data, or operational data. The platform is just one, but many endpoints for each model. So it's providing more and more information to create big data for smart cities. And how we make money off this? We charge $40 per company per device. So, eh, endpoint of sales. The market in Brazil is very, very big, so we can use everything from tracking to downtown buses to long-distance buses. And why not use this same card to buy some coffee? The retail market is very huge and everywhere. In Brazil, it's $1 billion in annual revenue. Our traction shows that we are on the right path, with new companies every couple of months. Brazil have more than 30— we have more than 30 companies spread in Brazil and piloting another 14. Maybe at this end of the year we have more 14 companies. Our solution is unique across the board because we provide solutions for interstate and city buses on the same platform. Through this, uh, so for the graduation to now, we have passed through the platform more than 260 million re-ICE. This is about $9 million and 30 million tickets. The team is me and my associate Marco. We have more than 12 years of expertise in mass transportation. Marcos is one of the angel investors and our CFO, and Alex has larger expertise with product management. The first idea of the company I have called myself So this is Maslabs. We try to change how mass transportation works. Thank you so much.

All right, thank you very much, Marco. So if anybody has questions, please do put them into the chat. Obviously a very big market and a big problem that Marco is looking to solve here. So I have an initial few questions maybe to warm things up, and then people can ask questions in the chat as well. But So when you say that it's 100% software, right? So does that mean that the people that are, you know, the bus drivers, the people that are at the point of sale on the bus side, they're actually just using an app on a smartphone or something like that?

Yes. So the company just have to buy a smartphone or a point of sale that we have here on my desk to use and print the ticket to the passenger on the moment. On the city buses, we can use a cell phone in a turnstile, Bluetooth connected.

Got it. And then you have an app or something on the consumer side?

Yes, you can use the card, NFC card, that's a Flipper card that you have over there in the USA, or here in Brazil we have the Bicho Único, and you can use it just like that. It's easy.

Okay, what is the— I You had gone through your growth metrics there and your growth is great, right? Especially from year 3 to year 4, if I saw correctly, it looked like you tripled. And those first couple of years was, you know, a lower level of growth.

What was—

what do you think was the cause of, you know, in the last year for you to really kind of start that curve?

The first year of the company, we started focusing on the small companies. But small companies is very hard to get because the family side is very good to work with this kind of companies, but it's very hard to show them the actual value of this solution. So we are now targeting larger companies with 100 and more license to comply, to get more data.

Okay. And are those typically municipalities?

Like, uh, you know, our, our, our clients are the companies, the bus companies that are allowed by government to do that line.

Okay.

On city, on city, along city buses is a federation, on urban is the city.

Okay. And what is, what's the sales cycle like for those types of companies? Because I'm sure the sales cycle was shorter on the small company side, right? Um, but then you didn't get as much payoff. And now the sales cycle, you know, what does that look like for you on the, on the front end for those larger bus operators?

From 6 to 12 months.

Okay.

A lot of companies, but the contract is holding by 20 years.

Okay, so large payoff for 6 to 12 months of work.

Yes.

What's been the biggest challenge for you so far?

Changing the idea of the owner of the company that they can be transparent of the transportation on the city, on the long distance. And show the population that bus companies are not all guys who try to steal them. Like I said, it's not only their fault the system is very bad. They have very problems, buses is very costly, the very population destroy it and have a lot of problems. We try to solve each one at a time.

Okay, and Julio is asking a question here: when you were finding leads for potential clients, how important important was it to have a background in transportation? I mean, definitely on my side, right? This is whatever at the Founder Institute or myself personally, when I see a business that is, you know, focused on selling a very specific entity, right? Whether it's a government, a municipality, you know, any, any type of large company, definitely seeing that type of background is huge because a lot of you'll also see a lot of companies come into it. You know, building startups like in the government space or something, and they just have absolutely no ability or understanding of how long and how challenging it is to create those deals. But, you know, Marco, you have that background, so, you know, have you found that to be very helpful?

Yes, because we have built this along the years with the federation. NTT is the name of the organ here in Brazil, and all the cities on the fiscal side of the company. And we are— when They ask us questions we had them on the tip of the tongue. And Florianópolis, as you say, is very beautiful, it's very south of Brazil, but we are out of the normal— where the normal companies of transportation, they are, they are in São Paulo, they are in Minas Gerais, they are not here on the south. So we have to prove more that we have this information, that knowledge that can allow them to grow.

Okay. We have another question from Jorge as well. Thank you guys for asking questions. Please don't be shy. We want to make this as interactive as possible, honestly. The questions that I ask are going to be pretty general and just from a startup builder perspective, but definitely questions from the audience are super helpful and it's of great value to Marco too. He gets feedback. He doesn't want to hear me talk the whole time. Jorge, What are the benefits for companies not interested in getting the data? So I guess I would preface that with, you know, is the data really the driving force behind some of these businesses, or are they looking at it as a data problem, or is it maybe just a payment solution problem?

We have two ways to see this. We have companies on long distance, they have the collector, the driver, they're stealing. We have clients that have growth on revenue about 7 to 20%. This is about R$100,000 every month they are disappearing. And the data side now, we have a city on the east side of Santa Catarina. They have changed the points, they have changed the buses, they have changed a lot of Italian, no, my English is not very good today, sorry guys.

No problem.

So they have changed the way the city works, so they have their own 28 buses on the city, they have 20,000 people every day on the city, and just 3 people to run everything from the management to the financial and to city hall, everything, just 3 people.

Okay.

This is very good.

Right, so a very small number of people doing a very large amount of tasks.

Yeah.

Okay, and then I have— we'll take one last question here, then we'll move on. But Ruben asked, you know, just how did you come up with the idea? What was the most difficult part? Maybe we might have just covered the most difficult part, but the, you know, how did you come up with the idea? How did you see kind of this gap in in the market that you wanted to build a solution for?

Do you ever ride a bus? This is the only answer I have to you. It's very, very bad to ride the long-distance buses. But the major problem that we see is I need to have 3, 4, 5 cards on my wallet just to get to my house, to my office. And if I want to grab a coffee, I have to have another card, a Mastercard or Visa or everything. It's too much things to do one. This is the, the idea, to simplify this.