SaaS Interviews with CEOs, Startups, Founders
928 1.5m Pay Their Parketing Meters Every Month Using This App
07 Feb 2018
Chapter 1: What is the main topic discussed in this episode?
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped.
Chapter 2: What is ParkMobile and how does it operate?
We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is John Ziegler. He is the CEO of a company called ParkMobile at parkmobileglobal.com.
He's a seasoned executive with consistent track record of driving growth and innovation in software and technology-enabled service businesses. John, are you ready to take us to the top? I am, Nathan. Good. Tell us what ParkMobile does and what's your revenue model. How do you make money? Sure. So ParkMobile is driving the next stage of auto-related mobility.
We do it by enabling convenience for drivers in what's historically been a very inconvenient and uncertain experience, which is parking. Right now, we primarily enable folks to find and reserve and pay for parking and other auto-related mobility services like charging stations through a mobile app or web. Our revenue model is we have a small convenience fee.
So every time somebody pays for parking on street or off street, using their mobile phone versus going and printing out a ticket or putting coins in a meter, we make a small convenience fee off of that. Okay. And does the person, does the town that owns the parking meters pay you a subscription fee or anything or no? No. So we contract with municipalities across the U.S.
We're in almost 300 cities in the U.S., including most all of the big ones. And then we also contract directly with all the parking operators for off-street garages. The service is free to the city. We have no hardware on street. We don't write any tickets.
What we do is we enable people to download our app, and then we contract with the city or the operators to then facilitate the ability to then drive the parking garage. OK, so so the city will receive the parking fees of the three dollars an hour as it would be. And then we take a small convenience fee from that.
And so if I pull up here on Austin and park on the side of the street and use your app to do it, let's say it's two hours, six bucks. What what fee do you take? I mean, we're talking like 10 cents or a dollar or what? Typically be about 30 cents, 30, 35 cents. OK, and is that flat or is it tied to the value of what you're paying for the meter? So when you're on street, it's flat always.
And cities vary depending on what the transaction is with the city, but it'd be a flat fee in each city. Okay, so 30 cents generally across cities and it's a flat fee regardless of how long you're staying. Correct. Okay. Typically it's gonna be between 30 cents and 45 cents depending on the city. And so here's my question to you. How do people find you, right? I park in Austin.
How do I know to go open my phone, download the app and use you? Sure. So Austin, ironically, is one of the few cities we don't have, but we're in places like Washington, D.C., Atlanta, New York. We're launching Philadelphia next week, Los Angeles, Minneapolis, Dallas, Fort Worth, Houston.
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Chapter 3: What revenue model does ParkMobile use?
It's not off of the posted rate actually comes from the garage. Okay. So you make a little less money on those deals. We could make more. Okay. So, I mean, are you generally saying you're doing more than 500 grand per month or less than? Oh. You know, we don't disclose numbers, but well, well more than that. OK. Yeah. And just to be clear, I'm just multiplying the numbers you gave me. Right.
One point five million times 30 cents minimum up to say you said 45 or 50 cents. So I'm just multiplying. We're doing well through that. So where am I? There must be a different revenue model you're using. Where am I missing revenue? Is the white label thing? Things like things like reservations. OK, so on the reservations you're making, it's not necessarily the same 30 to 45 cents.
That's correct. For instance, if you're going to pay $30 to park in Washington, D.C., we're going to make upwards of a few dollars on that. Got it. By the way, the consumer's not paying extra, though. That's coming away from the other thing. There's not a charge to the consumer for that piece. Who pays for that? The city? No. That's a private lot. It's a private garage. Wow.
OK, so that private garage owner is thinking, OK, it's going to cost me 10 grand to install this physical thing and print tickets for everyone that have to come up and put it on the parking spot and, you know, in the dash closest to the curb. Or they're thinking, I could just sign up for the mobile app and it's maybe cheaper. And that's how you win business there. Is that right?
Well, private operators are already going to have gate equipment at the garage. So think about an off-street lot, right, where there's a gate. But the issue is they want to make sure that they're filling those lots, that they're filling as many spaces as they can. If we can help make sure that drive volume to those lots so they're able to get more parkers in.
Remember, that parking spot in that garage, that's an airline seat, right? I see. You're bringing out this inventory in your app and helping people actually find the spot in the first place as well. Absolutely. And for us, the focus is really enabling a consumer to have real time visibility into all the parking options. You know, in a major urban area and Austin is no different. Right.
The average person is going to spend 25 to 30 minutes looking for parking. Right. If we can drop that down to 10 minutes because they know where the garage is as closest to where they're going. Or they can see where there's availability on street, which is a service we're going to be bringing out at the beginning of 2018.
So you'll be able to look in our app at the map and see color-coded streets where there's most likely parking to be available. Then I, while seeing all the garages, then I'm enabling you to make real-time decisions on where I'm going to go to get my car to rest because you're not actually driving to park your car. You're driving to get somewhere. Got it. But you got to park your car first.
And so our goal is convenience. The consumer is the pure focus for us. This is traditional marketplace play. What year did you launch the company in? The company launched in the US in 2009. Okay. And what kind of wrangling did you have to do back in 2009 to land your first parking garage and your first person to download the app? Because, I mean, that must be tough.
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Chapter 4: How does ParkMobile find and retain customers?
Isn't that great? I said, no, he's given us a 45 day free trial at Nathan Latka.com forward slash schedule. That's not going to stay up forever. So go get it now. Nathan Latka.com forward slash schedule. Are you competing with anyone else for these cities like Philadelphia? And if so, how are you winning? We do. We compete a lot with our competition. Name one or two. Pardon?
Name one or two of them. Sure. We have one competitor. It's called Pay by Phone is a good example for on-street, and that's municipal business. When you start talking about reservations, there's a company called Spot Hero who competes with us. We believe we win because we have a great product.
We have the only product in the market that enables consumers to park both on street and park off street with reservations. So we can accommodate any parking scenario that there is versus others only do one. And the other thing is our network. ParkMobile has, if you look at population that's living in the top 50 cities in the US, we cover 76% of that population.
And just to quantify that, you have 7.5 million total people that have downloaded the app since you launched and about 250,000 new downloads per month. Is that accurate? That's registrations. That's correct. Okay. How is a registration different than a download? Well, a download, I download a ton of apps that I don't actually put my payment credentials into.
I see, so people download and put their, 250,000 download and put their payment information in each month. Yeah, we have nearly a 90% downloaded registration rate, which is pretty strong. We think we have a high value proposition. That's great. Have you bootstrapped this or raised capital? We have raised capital in the past. We haven't raised capital in quite a while.
So we've got five shareholders. John, I liked you so much when I thought you were bootstrapped. Now you're on the dark side. How much have you raised? Uh, you know, we, we don't really, we don't really, uh, uh, above or above or below 10 million, uh, above 10 million below 50. Okay, good. That's helpful to understand. Um, and why did you make strategically the decision to raise capital?
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Chapter 5: What are the key statistics for ParkMobile's user base?
Uh, you know, this is what we do is a scale play, uh, you know, making, making a couple cents a transaction is not, is not something that's, that's easy to, to get, uh, you know, to, to get scale on. And the other thing is that we really needed capital to be able to grow the business. I was mentioning our network.
The reason that we've been so successful winning is that we are now we've been able to create a network of presence where 28 percent of our people use us as they travel. So if you fly from D.C. to Boulder, Colorado, to, you know, to Oakland, California, to Minneapolis, you're using ParkMobile everywhere you go. And, you know, it takes money.
It takes time to build the right product that people are going to want to adopt and then to drive the behavior. So now that they're starting to say, hey, I should expect this kind of convenience wherever I go. And I don't want to have a separate app for every single city I travel to. Yeah. So it took us that time. Last few questions here before we wrap up with the famous five.
What's team size today and where are you guys based? Team size. We're just about one hundred and six people right now. We're based out of Atlanta, Georgia. And most of our folks are here. I'd say probably 90% of our employees are in Atlanta. All right, John, good stuff. Let's wrap up here with the famous five. Is there quick answers? Number one, what's your favorite business book?
Favorite business book's probably The Hard Thing About Hard Things by Ben Horowitz. That's a good one. Number two, is there a CEO you're following or studying right now? There's not right now. I've had two CEOs that I've worked for, though, that were just polar opposites in the way they operated and yet drove incredible results, both in culture, commitment. Name one.
So a guy named David Osip and Stuart Harvey. Total opposites and yet drove incredible results. David Asip, what company was he with? So he actually runs a company called Ceridian that I used to be at now. And Stuart Harvey ran Ceridian beforehand and I worked under both of them. Number three, what's your favorite online tool, John? I thought about this one. It's probably gotta be Google.
All right. Nothing wrong with that. Number, uh, number four, how many hours of sleep do you get every night? I get about six. I used to get five and I'm getting older. That's well, the more sleep is good. The getting older is maybe not so good, but you can't help it. Right. So what's your situation? Married, single, you have kids. Uh, I am married with five kids, five kids. Wow.
And how old are you? Uh, I'm 44. All right. Last question. Take us back 24 years. What do you wish your 20 year old self knew? My 24 year old self, uh, I would give myself probably two pieces of advice. The first I would tell myself is that I'm limited, that you're limited only by your willingness to work harder and hurt more than the next guy. And talent's only about 5%.
The second thing I would tell myself, and this is probably the most important, would be just I tell myself to work every day as if my job depended on it. And to make decisions every day as if I could never be fired. Making decisions driven by a desire to hold on to what you got is rarely in the best interest of the long term. There you guys have it from John, founder of ParkMobile back in 2009.
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