Local Motion: Exploring Decentralization at Cleantech Forum San Francisco 2014
On March 11-13, Cleantech Group is hosting the largest and longest running Cleantech forum in the world, Cleantech Forum San Francisco 2014. This annual gathering of the global cleantech innovation community offers a comprehensive development program along with exclusive opportunities to network and make deals happen. In the lead up to the Forum, we’re chatting with leaders across the resource innovation space to discuss the changes decentralization is causing across different markets, end-users, enterprises, technologies, and business models.
John Stanfield, CEO, Local Motion
Can you describe the problems Local Motion solves for its clients?
Local Motion was founded to help vehicle fleets get rid of the keys. Our clients have a huge problem with the most basic of questions: where is the key?
We solve that problem by installing a piece of hardware into the vehicle that allows the user to access the vehicle with something they already have in their pocket. You don’t need to know where the keys are, nor do you need to keep and manage keys anymore, when access to mobility is granted by the thing you bring with you to work every day… your ID badge.
From the managers side, we give them the ability to manage their fleets from anywhere in the world. Through our online portal, fleet managers have secure access to their entire fleet. They can manage users, take vehicles in and out of service, they can start and end a service event. And they can do this from anywhere in the world, on any device.
The pain point of “where is the key” is where we enter the market. The time and cost savings for managers is massive when we streamline access to and maintenance of their fleet. We’re delivering savings of 20%-30% of fleet costs in 6 months, for most of our fleet clients. It happens through streamlining access and maintenance and to providing a transparent view of fleet management data.
What was the genesis of Local Motion, and where is the company today?
Clement and I started the company based on my Masters work at the d.school at Stanford. Clement was a Masters student at Stanford as well.
We both like to climb big routes in Yosemite, and we met on the cliffs. When I founded this company, I knew who to partner with: I had already trusted Clemente with my life, so I knew he’d make the perfect business partner (not to mention that he was a wicked smart cconomics and engineering student).
At the time, I was building electric cars with the same sharing and optimization hardware that serves as the foundation of Local Motion today. I built my first prototype, non-highway, electric car while still at Stanford. We built a second prototype after graduation, including the bare bones of the Local Motion software platform and we drove it up and down Sand Hill road looking for funding. We were able to raise a small amount of seed capital, but every VC investor we met with said “this is awesome, you guys are on to something here, but come back to us when you aren’t building vehicles anymore.”
After trying to raise meaningful funding for 1.5 years with the car, we realized that what we had built was a strong platform for existing infrastructure. We made a strong pivot, dropped the car from our solution, pulled the access and data hardware out of the vehicle, and focused on existing fleets.
One thing that did was dramatically increase the size of our market. At that point, it was off to the races. Just 2 months after the pivot, we were able to raise an extended Seed round. We used that capital to refine our product/market fit, and now, just 3 months ago, we raised an A round with Andreessen Horowitz.
The direction we are running now is focused on leveraging existing infrastructure to unlock cost savings, efficiencies, and the best user experience possible. Our ethos here is that car sharing, in general, can never succeed on a large scale until the experience of sharing mobility is better than the experience of owning. Without users, you have a pile of cars. This is the situation we have today. Recognizing this, Local Motion is obsessed with fostering amazing user experiences.
The theme for Cleantech Forum San Francisco 2014 is decentralization, where users and consumers are gaining influence over the systems supplying and/or containing energy and resources. How do you see decentralization affecting Local Motion?
Our goal is to unlock mobility from the 1:1, centralized, ownership structure. This means making the interaction point between users and mobility systems smart, to make that experience of interaction between people and their vehicles a pleasant one, to make that experience a bonus to their lives.
By connecting vehicles to the cloud we’re able to communicate with the vehicles for the users: we know when a service needs to happen, when the tires are low, if a door was left unlocked, when a check-engine light is on, when someone breaks in and tries to steal the car. We are adding smarts.
OEMs focus on one thing, and that’s in-vehicle experience. That’s because OEM’s are used to the single-ownership model. Our focus is making the car smarter for the user. By doing this, we’re allowing users to take mobility off of their planning plate and to have it on demand.
What we want to see and predict, through analytics, is both when and where the peak vehicle demands will be. Every time a user needs a car, every time a user leaves a building, we want to ensure that a car is there. Our system learns where those demands are going to be in the future, and we can use insight to position the vehicles in the right places, at the right times.
Tell us about your role in the Local Motion story: what experiences have served as the foundation for your approach to being CEO?
My first thesis project was decentralized solar – I wanted to help move the panel to user. Looking at our current urban power line structure, placing panels with the user makes all sorts of sense. As circumstance would have it, the Solar industry started to ebb at the same point that I started to hone in on the importance of the user in a decentralized, solar powered world.
This, in combination with my history as a car guy (I’ve always been tinkering with and building cars) got me thinking about our systems of mobility. What excites me is trying to fix big, broken systems. And this helps explain why I founded a biofuels company (though that company wasn’t a success, I learned a ton).
My program at Stanford was based on human centered design, and that prepped me to find this weak spot in mobility, where the user experience was ripe for massive improvements. By combining certain aspects of the sharing economy that ZipCar pioneered with an obsessive focus on user experience, I identified an opportunity to make a big change across our systems for transportation.
Clement is obsessed with our software optimization, and I am obsessed with our user experience: together our brains are fuel and fire and it’s an idea flood, it’s fun.
What do you like most about launching Local Motion? What is your favorite part of Local Motion’s business?
What I like most about this business is its ability to help clients conserve time, resources, and money. Optimizing existing infrastructure allows us to do that, and to do that now. Unlike some of the fantastic clean vehicle technologies currently under development, which still remain years away before reaching scale, Local Motion is centered on creating change now. The focus on what’s possible today is a thrilling sweat spot for us.
What is the biggest challenge in gaining traction and market share?
We’re an early-stage startup travelling at 500 miles an hour: how many mistakes can we make on the way to reaching massive scale? We need to balance building hardware and software and creating awesome user experiences with securing market share and servicing a rapidly growing group of clients. It’s a common problem for hyper-growth startups… but that doesn’t make it any easier.
What opportunities are your team focused on for 2014?
2014 is all about deploying 10,000 units in the field. We’ll get there by saturating current clients and aggressively signing new clients. 10,000 units is an audacious goal- this would make us the third largest vehicle sharing company in the world. We have a rock star team and a great customer base, so I know we can get there. It’s fun to have an aggressive and exciting goal like this.