SnappCar, the car sharing company for private cars, is on a mission: becoming the largest company in their field in Europe. We asked co-founder Victor van Tol how he wants to do it.
The underlying ideology is that car sharing is a less intensive means of transport, which can reduce the number of cars and therefor decrease environmental impact. It also contributes to more social cohesion in cities and communities.
The ‘Big Hairy Audacious Goal’ of SnappCar is to have 250.000 European car owners sharing their car via the SnappCar platform in 2018. The acquisition of Copenhagen-based competitor Minbildinbil last month brought them a step closer to this goal.
SnappCar focuses on urban areas in northwest Europe. Co-founder Victor van Tol explains: “We did research to identify areas in Europe in which people are expected to be open to car sharing. Among other things, we looked at economic climate, political preferences, the use of Airbnb and cultural factors such as degree of masculinity/femininity.”
According to Hofstede’s cultural dimensions theory, a masculine society is one in which the masculine values competitiveness, assertiveness and materialism are relatively more important as opposed to the feminine values quality of life and relationships.
Van Tol: “We see that in feminine societies, people are more willing to share their cars. Northwest Europe has a more feminine culture than countries in the south, for example Italy or Spain. In these ‘macho’ cultures, people regard their car as an extension of themselves, something they certainly don’t want to share with others.”
What about the Netherlands? “Here, many people are open to car sharing; we regard the Netherlands as a growth market. I think we could grow from the current situation with 12.000 cars shared to 80.000 cars. However, to reach the impact we would like to have, it is necessary to expand. We made a top ten of European cities, two of which are in North-Germany: Hamburg and Berlin.”
First things first: the acquisition of the Danish company, including five employees, means a new phase for SnappCar. “Our challenge now is to deal with an international team. We decided to organise most processes centrally, in our headquarters in Utrecht. This is possible for example for R&D and customer support. Processes that need to be organised locally will be organised in Denmark, such as the activation of the community.”
As for every startup, many mistakes were made and lessons learned. “At the beginning, we had a company in mind that would facilitate the sharing of all kinds of things: cars, boats, campers. We learned that it is better to focus on one thing and do this really well. For example, we worked on sharing of lease cars for a while, but handling fleet managers is very different from handling private car owners. So, we decided to focus on private car sharing.”
“Another valuable lesson is that you can’t start too early with thinking about financing,” Van Tol says. “Start early, because many deals won’t proceed or turn out differently than expected. I would advise to begin six to nine months in advance, instead of the often-heard advice of three to six months.”
You can’t start too early with thinking about financing
Vision on sharing economy
Some people say that the current ‘hype’ of the sharing economy stems from the economic crisis and that as soon as their economic situation improves, people will start buying again instead of sharing. Van Tol doesn’t agree. “I think that the economic crisis was an accelerator for the sharing economy, but there’s a deeper motivation for sharing. Research shows that if you ask people why they share their car, only 20 percent fills in they do it exclusively for economic reasons. The others also have social and ecological motives.”
“I think many people realise, especially generation Y, that it is impossible to fill up the world with goods as we used to do. Many of us are done with hyper consumption and are perfectly happy to use goods without owning them. This is the philosophy behind SnappCar. We foresee that car owners eventually will realise that it is quite strange that most cars are not used many hours a day, and that they can help other people by sharing their car. And as an extra, they will earn money.”
In 2014, SnappCar organised the most successful crowdfunding campaign in the history of Dutch startups. Five hundred people gained a convertible note for a total of five hundred thousand euros. After the acquisition of the Danish company, these loans were converted to stocks. For everyone who regrets not investing, there’s another opportunity.
Van Tol: “After the campaign was finished, we got a lot of reactions and requests of people willing to invest in SnappCar. So we started a new campaign. First, we asked our five hundred previous investors whether they wanted to participate again, this campaign already raised two hundred thousand euros. Now, others can invest in SnappCar too.”
Photo: from Snappcar company website