Rollercoaster on a Bike: Zagster CEO Tim Ericson (Part 3)

Tim Ericson: We were working with Irvine branches of JLL and CBRE and rolling out much broadly through their portfolio versus looking at each individual property. 

Sramana Mitra: Talk to me about your go-to market strategy. It sounds like in the beginning it was people coming to you and it was a bit random. At what point in your evolution did you come up with a systematic go-to-market strategy and what was it? What segment did you go after? How did you go about selling?

Tim Ericson: At the end of 2011, we realized that we were onto something with the bike-sharing program. We knew we needed help to grow it, so we packed our bags, got a U-haul truck, and went to Boston because the next TechStars program was going to be held.

We needed to get an accelerator to help us get to that next level. We moved up there without even applying and felt we had a better opportunity if we could build a network and talk with people. We were one of the twelve companies chosen for the TechStars program at the beginning of 2012. 

Sramana Mitra: By the time you went to TechStars, were you already a revenue-generating company with a product that people were buying?

Tim Ericson: Yes, it was very early, but we just had one apartment complex. We had people pay us money for a product that we were going to market with. By the time we went there, we had spent about a year trying to go through that journey and figure things out. 

Sramana Mitra: This was in 2012?

Tim Ericson: Yes. We moved to Boston in 2011 and in December we found out that we got into TechStars. We got in the TechStars program in January of 2021. 

Sramana Mitra: TechStars is three months long. What did you come away with from that experience?

Tim Ericson: We came away with a focus on the markets that we were going after. Originally, when we started everyone was looking at how to bring it to big cities like New York City, San Francisco, and Boston.

All these companies were starting to come up with these overpriced products, station-based bike-share, and selling them to cities. TechStars helped us look at how we could expand from having one apartment complex to a broader audience like largest cities in the US – targeting places like Albuquerque, New Mexico, Rochester, New York, university campuses, corporate campuses, and everybody else in the country.

We spent the first month refining the product and messaging. In the second month, we went out and started conversations with everybody that would listen to us in those segments. In the third month, we were preparing for demo day and getting our package together, and ultimately fundraise. 

Sramana Mitra: Did you fundraise at the end of TechStars?

Tim Ericson: By October of 2012, we closed our $1 million seed round which included Launch Capital in Boston. This included Fontinalis Partners, which is Bill Ford’s venture arm based out of Detroit and a whole bunch of angel investors.

Sramana Mitra: In 2012, you are closing off $1 million in funding. What happens in 2013?

Tim Ericson: We struggled with how to scale in 2013 and 2014. I was doing most of the sales. We tried hiring some experienced sales leaders, but he wasn’t ready to roll up his sleeves and do the work.

We went with some super young and ambitious sales leaders, but they didn’t have the right skillset to put practices in place. During this time, I tried to keep the boat moving forward on the sales front. I was doing it myself while we were trying to find the right leader. On top of that, because of the cost and the types of customers we were selling to, the sales cycles were anywhere from 6 months to 18 months.

We spent a lot of time for post-seed round building our pipeline and relationships. Through that time, we closed some big names like Yale University and a handful of small universities across the country. We started getting traction in all the different verticals, real estate, universities, and city markets. 

This segment is part 3 in the series : Rollercoaster on a Bike: Zagster CEO Tim Ericson
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