Podcast #55 - Ilya Movshovich DIscusses CARMAnation: Collaboration, Charity and the On-demand Economy
CJ Todd | December 10, 2015
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Adam: Well, it’s wonderful to have Ilya Movshovich on our podcast, The Crowd, and he is CEO and co-founder – I’m guessing co-founder. Do you have a co-founder, Ilya?
Ilya: I do have a co-founder.
Adam: Fantastic. Always got to mention the co-founder. Of CARMAnation.com. Wonderful to have you on The Crowd, Ilya.
Ilya: Thank you for having me. I really appreciate it.
Adam: Not a problem. And I know you got a lot of insights because you are a go getter. You are a doer of things and an entrepreneur that I’m sure lots of people are going to want to hear a little bit about your story about how you got where you are today. So could you maybe just start by telling us how you got to where you are, the Ilya Movshovich story?
Ilya: Sure, of course. Mine’s actually not as typical as most founders. I actually do not have a tech background. I started out with receiving my undergrad in Marketing and then going in the direction of law school and receiving my Law degree at which point thereafter I realized only that I want to go into tech. And growing up, I’ve always had various ideas from an entrepreneurial kind of thought process. And so I started going into consulting. And so I started consulting on the biz dev side and strategy and growth for numerous projects and then going from startup to startup doing exactly that until landed in one startup called Posit Science where I decided to do Head of Sales over there for a number of years and continued doing consulting at the same time in various other startups again.
Adam: Well, I would suggest in Silicon Valley that’s a pretty rare breed to have that business acumen tag team with growth, legal and sales. There’s plenty of tech people out there but maybe not so many founders with your background. So maybe you got a leg up on some of the others with that.
Ilya: Absolutely, yeah. It’s like I said it’s unique. It’s different.
Adam: And what’s been your biggest lesson that you’ve learned to date as an entrepreneur and in particular one that’s building a marketplace with CARMAnation?
Ilya: The tough part was – going back in the day, it was much easier at that time to raise money just with a simple idea and coming to investors. At this point now with more entrepreneurs and more VCs, the tough part is raising money because that proof of concept that you have to build up. And each VC is different. You need more users for some in terms of showing growth. And in my case, you need to show growth for users and you need it to show growth for inventory. And each one of them had a different understanding or need of what it is that they wanted, a certain number which was never really disclosed. And you always had to kind of guess what it was.
Adam: Got you. That resonates for me. So let’s get all of these hoops and put them on fire and make you jump through them and do a funny dance for us before we’ll think that you’re up to scratch for investment.
Ilya: Absolutely. But it makes you think. It makes you get creative.
Adam: The fact that you’re continuing on and you’re building momentum leads me to ask, how are you then driving that supply and demand? How are you building both sides of your marketplace?
Ilya: Well for us, we look to the leaders. We are in the sharing economy and so we looked at the leaders in the sharing economy. First one obviously that comes to mind is Airbnb. And so for us, we looked at Airbnb in terms of how it is that they were doing it. And I had the pleasure of being introduced to one of the co-founders, Nate, of Airbnb who I spoke with. Basically, how did you guys do it?
Adam: Now, you know that everybody is asking the question. What was the answer in detail?
Ilya: Read about it. They’ve spoken about it numerous times.
Adam: Hacking Craigslist, I think.
Ilya: Hacking Craigslist. Absolutely. We actually focus on Craigslist. For us, we rolled out as a web-based platform because without inventory you wouldn’t be able to do anything. We needed those parking spaces. So that’s what we focus on. We looked at the door-to-door aspect. We did flyers. We tried events as well as sports events, concert venues and so on. So we did incentive programs.
Adam: That makes sense. How did they work? Out of those, what were some of the surprises that you found as far as marketing to both the supply side and getting the demand coming?
Ilya: Yes. So for the supply side, as the sharing economy has grown, individuals have educated themselves quite highly. And as such, they know more than when Airbnb launched in terms of the features even or insurance questions. And one of the first questions was well who’s liable? It’s sharing economy. I know all these things that have happened on Airbnb. Well, how are you going to cover me? And so for us, that was one of the things that was very important later on that we didn’t really offer originally and that’s to include the insurance policy to be able to protect those that are offering up their parking, those that are offering up their inventory. And when we made it safer, as a result, we were able to get more inventories as such. That was a big differentiator in fact from Craigslist because if you offer it from Craigslist, oh, I’m sorry on Craigslist, you don’t have that peace of mind. You don’t have that insurance coverage that we would offer. And so that was an easier process for us to be able to – when we did contact the Craigslist users offering up their parking, we were able to concentrate on the fact that not only do we have a service with lots of other features but we also make it more secure and safer for you.
Adam: Yeah. I think that whole trust and credibility is definitely what sets you apart from what we call the Wild, Wild West of marketplaces out there versus something that is very narrow, focused and provides trust, credibility, insurance. And that’s absolutely what you’re offering.
Ilya: Absolutely.
Adam: So is parking really that big of a problem? Obviously, CARMAnation provides a way for a person looking for a parking spot to find one. And is it really that big of a problem? I know it is in San Francisco. So it’s a little bit of a rhetorical question.
Ilya: Yeah. It actually is a big problem and everybody is trying to solve it. You have on-demand valet companies that are trying to solve it in their own unique way. You have even Lyft and Uber in a way trying to solve it and Zipcar as well as Enterprise CarShare. All of these have different models that they’re attacking trying to come up with the solution, either don’t have a car, get a car from us, avoid parking will make it easier. Ours is a little bit different. We looked at the San Francisco market. First of all, we looked at the global market and it’s a 100 billion dollar market in terms of parking. And our solution was different. We looked at – listen, there are hidden parking spaces that we typically don’t know about. These are residential and these are privately owned businesses that we don’t have access to. And so what we’re doing is we are offering more of those parking spaces to the general public so that it opens it up. The research that we did in San Francisco alone, there are 720,000 roughly of privately owned parking spaces.
Adam: Wow!
Ilya: And San Francisco has 440,000 roughly total number of parking spaces that are offered. That’s not enough. There are more private ones that are available.
Adam: And going back to your point about trust, credibility and offering insurance, that then has tipped the scale a little into those private parking spaces being offered out on the platform.
Ilya: Absolutely. The insurance has the profiles, the reviews, the security. We don’t open up the exact address of where the parking space is until the transaction takes place. After the transaction takes place, that’s when you know the exact spot. Beforehand, you only know the cross streets.
Adam: Well, the sharing economy is nothing new. These days, it seems like as you said everybody is wanting to solve these types of problems. And lots of different companies and startups are popping up around and building marketplaces. What would you say is the biggest differentiator on what you’re doing compared with companies like Uber or Airbnb?
Ilya: For us, what we focus on and the reason that the company is called CARMAnation has to do with karma and kind of good deeds. We wanted to go back to the original reason why sharing economy was created. And so for us, one of the biggest things is we only focus on private parking. We are focusing on working with the cities so that cities benefit. And we also implemented charitable donations. Basically, you can offer up – if you own a parking space, you can offer it to a charity instead of your own pocket. And so we partnered up with Great Bay area charitable organizations such as Raphael House, Project Night Night, Habitat For Humanity, Make -A-Wish and Guide Dogs For the Blind.
Adam: Wow! That’s awesome. And what proportion of those people that are listing are taking up that option to have their parking space remuneration go towards a charity?
Ilya: So originally when we first rolled it out, a lot of the charities were obviously – liked that this is another option to be able to receive donations. That was about 50 percent at that time. Come holidays, we have – it jumps up because newsletters come out from those charitable organizations. We’re now on an average before if you don’t take into consideration the holidays and more of a push from charitable organizations, it’s about 20 percent.
Adam: Okay. Well, that’s good to know. I mean, that’s still a proportion of funds that is going back into goodwill and organizations that are having a positive impact on environments or in society as a general rule. But you mentioned also working with governments and being government friendly. And now, we’ve seen a few interesting staunches between various marketplace, sharing economy, collaborative commerce services and local government, state government, federal governments around the world. How are you planning on combating the push back and similar ways that you’ve had with governments? Or are you – as you said, you’re working with them instead of against them. Can you explain a little more of that?
Ilya: Yeah. So, the one that does not count in a way would be San Francisco because we didn’t have an opportunity to work with San Francisco prior to launching here. This is the first city that we’ve launched out but we’re actually in talks with the City of San Francisco. What we’re doing is in order for us to expand, for expansions, we’re only rolling out in cities after we have in a way partnered with those cities ahead of time.
Adam: Got you.
Ilya: So we don’t want to do what a lot of tech companies nowadays do. It’s basically –it’s easy because we’re applications. Simply go to web-based or go into an iStore and just download the app and you’re able to launch. We literally are trying to figure out what are their laws, what are their regulations before we launch there. So we contact the city officials and we’re discussing with them. Then we see well, in each one of these cities, the reason we rolled out in them is because they have parking problems. So we are looking at – and that’s part of our differentiator is the fact that we’re looking at how can we tie our technology into the cities. Basically, we now have interests from six cities in terms of implementing our platform into each one of these cities transportation programs.
Adam: And I guess your background in both marketing and legal has played a part in that business model and approach that you are taking to be collaborative with these governments.
Ilya: Absolutely. Yeah, it has. It’s just been great to be able to incorporate that.
Adam: So the old adage build it, they will come which we know doesn’t work anyway – you’re much more around partner and collaborate, solve the problem and let’s make it equitable and fair for everybody rather than let’s just go in and disrupt this incumbent. I think we you go up against governments, there’s not a high likelihood of winning unless of course you’ve got very deep lobby pockets and have the right lobbyists behind you.
Ilya: Correct.
Adam: And most startups don’t have that.
Ilya: That’s correct. Yeah. I think what gets lost in a lot of tech founders is exactly what you just touched base on with regards to disruption. I think a lot of startups launch out with a mentality of let’s disrupt but screw the government kind of a mentality. You can still disrupt, you can disrupt the market but you should work with the cities and governments where it is that you’re launching. It’s going to make it easier for you in the long run. And also, it’s going to be much more beneficial you’ll notice in the short run as well.
Adam: Yeah. I think it’s a really great strategic approach that you’ve applied and that’s obvious from your background and thinking a little differently than pure technology play. Speaking of that strategic thinking, what’s your long-term plan with the company? And where do you see CARMAnation expanding beyond San Francisco? I know you’ve mentioned there are a few cities you’re working with. But global domination and all of that stuff, what are your plans?
Ilya: Yeah. For us, obviously like I said, it’s about rolling out into other cities that have parking issues and we’re doing that one at a time basically. There are a number of cities in the East Coast that we’re speaking with right now that have parking problems. There’ve been lots of research done and it’s a known fact of which cities have traffic problems. If there’s a big traffic problem, there’s a parking problem. SFMTA actually did a number where they said 20 percent of all traffic is drivers looking for parking. So we looked at that and that’s kind our way to expand. And it is expanding through partnerships. So we’re trying to do it differently. We’re trying to expand and grow CARMAnation by implementation into the city’s transportation programs. And we’re doing it one city at a time. It is a longer process without a doubt because there are so many parties that are involved from the mayor’s office to the city attorney’s offices to heads of transportation and so on and so forth. And from there, that’s kind of where we’re going in terms of expansion. We’d love to be the next kind of Airbnb company but for parking, in terms of solving parking problems but with collaboration with cities.
Adam: Yeah. I think that’s a strategic move but certainly as you said takes longer because working with government always takes much longer but in the long term can set you up for success and particularly when you’ve got local governments who derive so much revenue from parking and working hand in glove with them to ensure that they’re not feeling like that’s being eroded will probably get them on your side.
Ilya: Absolutely. I mean, some of the cities, a lot of the cities have taxes that you’re actually not aware of with regards to having to offer up your parking space but none of these taxes are able to be collected. And yeah, there’s a way to do it.
Adam: Well, how easy is it to use CARMAnation if you want to – walk me through the process at a high level. And then I’ve got one more juicy question for you after that.
Ilya: It’s actually quite simple. If you’ve used Airbnb before, you’ll be able to use CARMAnation. You have a parking space, you as an individual. And when I say parking space, it could be a business or it can be residential. And you can have a driveway in some cases or you can have a garage. You simply create a title for your listing. You select if you offer it on a monthly, weekly, daily, hourly basis. Entirely up to you. At that point, you select if you would like to offer that spot for free in some cases. You can offer it for whatever monetary value it is that you would like. Or you select if you’re offering that to one of the charitable organizations. If you offer it to the charitable organization, 100 percent of it goes to the charity. We do not keep anything. It goes straight to the charitable organization. If you offer it for the monetary value, we do retain 15 percent on the transaction.
You put in basically the address where your parking space is located. That is kept private as I said before until the transaction will take place. Then you put in the size of the vehicle that’s going to be able to fit in the parking space. You take some photos, upload photos. You don’t have to. You could just use kind of a Google Map. And then you put in private instructions. You put in instructions that will open up later after the transaction process in terms of description of how to get into the spot. It could be a code. It could be where the key is. And then the spot gets listed. It’s a very quick simple process at which point we do have internal messaging and so on. If anybody has a question, they could send you a message, inquire further. There’s a calendar just like you would see on Airbnb in terms of what’s taken, what’s not. That’s that.
Adam: It sounds easy. Well, everyone is going to have to check that one out. So I know I’m one of those statistics that you talked about before in San Francisco. Man, I’ve talked about nightmare driving around in circles trying to find a parking spot. I know Sydney, Australia where – I spend a lot of time in Melbourne, Australia. It’s also a candidate for this. So lots of opportunity globally. I know for sure. Poland, I know our Polish team listening to this podcast is going yeah, the traffic is crazy here too. It’s a global problem. Well, it’s been awesome to talk to you. And I just have one question.
Ilya: Sure.
Adam: And this is something I’d like you to cast your mind back to when you’re a young child. Sit down in my coach as I psychoanalyze you seriously.
Ilya: When I was a young child, I was in Russia.
Adam: Okay. Right. Well, with your name, I kind of guessed that. But I’d like to know, what’s the one piece of advice that was given to you in life that resonates with you even now? So if you close your eyes and thought through, what’s that one thing that comes to mind that someone said to you that you never forgot and that you have taken to heart?
Ilya: For me, it came from my father who’s actually an engineer. And he said it doesn’t matter what you pick to be in life but make sure that you love doing it. And if you love doing it, give it not 100 percent, give it 200 percent. Be the best at it. And you’ll have hurdles. You’ll just try to go over those hurdles because you have a goal and strive for it.
Adam: That’s a brilliant, brilliant advice. Is there a term in Russian that could encapsulate that and you could say?
Ilya: Not at all. Nothing like that at all.
Adam: I was just listening. As you were speaking that, as you were telling that, find that thing that you just fall in love with and then give it 200 percent, I was thinking of how your dad would have said that as he had you on his knee talking to you about life. But it’s brilliant advice in whatever language you say it. And it’s been absolutely brilliant and a pleasure to talk to you, Ilya. I think we need to know now how we can reach you on social media, LinkedIn, all of those places if you could share that with us. We’ll obviously put that into the blog post that will accompany the podcast and for people to reach out and connect with you if you could share that with us.
Ilya: Yeah, absolutely. I mean, I’d love to – I’m always happy to grab coffee and speak with other entrepreneurs in any way that I can help through my established network or just whatever it is that you’re building. I feel like it’s important to be able to help one another. So feel free to reach out. Twitter, it’s @ilyamov. And then LinkedIn as well, let’s connect. It’s just Ilya and last name Movshovich.
Adam: Excellent. Well, as I said, pleasure to talk to you. You shared so many great insights about your journey. And we wish you all the best for this holiday period coming up where I’m hoping lots and lots of people are going to be using CARMAnation to find a parking spot in San Francisco. So I’ve been talking with Ilya Movshovich at CARMAnation.com. Thanks again, Ilya.
Ilya: Thank you, Adam. And if you – you don’t have to necessarily just rent spots. It’s holiday season. Offer them up, offer them up to one of our great charitable organizations. Thanks, Adam.
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