Rollercoaster on a Bike: Zagster CEO Tim Ericson (Part 6)

Sramana Mitra: Did you keep the 250 customers after generating another $10M on top of what you earned before?

Tim Ericson: Exactly. 

Sramana Mitra: COVID hits. What happens next?

Tim Ericson: We were coming off a great growth year in 2019. We had some great customers that were expanding on the fleet management front. We had a pipeline of customers including Uber that wanted us to take over their program that would have gotten it to the breakeven point.

COVID hit and everybody stopped deploying within a two-week period in March, which effectively dried off our revenue overnight. On top of the fact that we were cash strapped and going after the dockless bikes. It put us in a tough position.

The day that we were supposed to sign a deal with Uber to take over their California scooter and e-bike deployment was the day that the CEO announced that they were selling the JUMP division to the Lime app, and shutting that down. That one deal was about to change the trajectory of our company.

We would have reached a breakeven point even with our other organic growth, but this deal would have been $15 million just with the Uber deal alone. This was a pretty big blow.

We had a startup customer in Boston called Superpedestrian. They raised money from General Catalyst, Spark, and some other investors. They had developed a Copenhagen wheel, the best e-bike wheel. They spent the last year and a half developing a far superior scooter to everybody else in the space. It was better for the rider, had better unit economics, and was better in safety.

We had deployed in Florida with them before COVID hit, and luckily that was the only location that we could keep up because they didn’t shut down. They gave us an offer to buy us so that they can vertically integrate. They have a good fleet management team and a good scooter product. They can attack the market in phase two of the scooter market once COVID subsides. 

Sramana Mitra: How much did you sell the company for?

Tim Ericson: We can’t say how much we sold the company for. In general terms, it wasn’t a home run for anybody, but we did sell it for enough money to get the money back to investors. 

Sramana Mitra: You do what you have to do given what the market is dictating. 

Tim Ericson: I dedicated 13 years of my life to this, and we’ve gone through two crazy catastrophes and market shifts. We were still on this path, then COVID hits and here we are. 

Sramana Mitra: Did you have to stay with the company?

Tim Ericson: I left. I decided that after 13 years in that space, and given that their plan was to go out and compete with the scooter companies. I don’t think it’s a bad strategy, I just had a bad experience being burned with the dockless bikes.

I think my expertise and passion lies in B2B sales and go-to-market strategies around that. B2C strategies was not something that I would want to do for the next five to ten years again. 

Sramana Mitra: Are you taking a break now or have you already started something else?

Tim Ericson: I’ve taken a little bit of a break and relocated to Puerto Rico with my wife. I’ve been helping other venture-backed startups to accelerate their go-to-market strategies. I help fill in for executives and heads of sales as they are starting to go from founder-led sales to building a go-to-market team.  

Sramana Mitra: Thank you for your time.

This segment is part 6 in the series : Rollercoaster on a Bike: Zagster CEO Tim Ericson
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