What it takes: Lorenzo Caffarri

My route

I ran IT projects in a large supply chain company. I liked what I was doing, but sometimes at large companies it’s not so easy to progress as fast as you would like. I thought I could do better and have more of an impact by running my own business. Basically I am trying to make it simpler for people to find taxi services through smart phones which should make the industry more efficient as a whole.

The motivation

When you’re running your own company you decide on everything and you have a much more diverse role rather than being in a niche. I definitely find it much more rewarding. In doing something you like day in and day out, there is real excitement although it is a lot of work: I work seven days a week, 16 hours a day.

The process

One project worked on in my previous job was a businessto- business aggregation platform for transportation services. The ubiCabs idea emerged from that and it was developed further after chatting with a group of five or six MBA colleagues, where we bounced ideas off each other for about two to three months.

The opportunity

I think it’s a great opportunity, but it’s very hard to take to market because it’s a very low margin business with a lot of customers and little revenue per customer. This means acquisition costs can take months and months to recoup.

My skills

I was an engineer before doing an MBA and really didn’t have much financial knowledge, almost zero, and subjects like strategy and marketing I didn’t really know much about either. I knew how my job worked, basically managing projects and optimising processes. That is where my strengths lay, but the rest was not my cup of tea. As an entrepreneur you have to do everything — from the legal side to accounting, marketing, business development and IT design. You have to be a man of 1,000 talents.

My route

I ran IT projects in a large supply chain company. I liked what I was doing, but sometimes at large companies it’s not so easy to progress as fast as you would like. I thought I could do better and have more of an impact by running my own business. Basically I am trying to make it simpler for people to find taxi services through smart phones which should make the industry more efficient as a whole.

The motivation

When you’re running your own company you decide on everything and you have a much more diverse role rather than being in a niche. I definitely find it much more rewarding. In doing something you like day in and day out, there is real excitement although it is a lot of work: I work seven days a week, 16 hours a day.

The process

One project worked on in my previous job was a businessto- business aggregation platform for transportation services. The ubiCabs idea emerged from that and it was developed further after chatting with a group of five or six MBA colleagues, where we bounced ideas off each other for about two to three months.

The opportunity

I think it’s a great opportunity, but it’s very hard to take to market because it’s a very low margin business with a lot of customers and little revenue per customer. This means acquisition costs can take months and months to recoup.

My skills

I was an engineer before doing an MBA and really didn’t have much financial knowledge, almost zero, and subjects like strategy and marketing I didn’t really know much about either. I knew how my job worked, basically managing projects and optimising processes. That is where my strengths lay, but the rest was not my cup of tea. As an entrepreneur you have to do everything — from the legal side to accounting, marketing, business development and IT design. You have to be a man of 1,000 talents.

The C word

There is a big thing with confidence. Making this kind of jump is not easy so you need confidence in the idea and you have to believe in yourself.

Tomorrow

At the moment we service only London but we want to expand to the UK and internationally. We went live in November 2010 and are now looking for funding. As an entrepreneur you think, I’m putting all my time and life into it because I love the idea and it’s something that can become really, really big (the UK taxi market is worth £4-5 billion a year). We have a target of at least 30,000 active users by the end of the first year. It’s a network scale business, so if you don’t reach that minimum scale it’s very hard to make the business profitable. Lessons: Everybody says you have to allow for double the time, half the demand and double everything else.

Living with failure

The percentage of start-ups that don’t succeed is very high. Everybody thinks that it’s going to happen to other people. We are optimistic, but the emotional ups and downs take a lot out of you, it’s exhausting. I recently met a well known investor who said no, we’re not going to invest now. After hearing something like that, you begin to think whether it really is such a good idea. You need to just forget about it and move on. The danger is you start to over-analyse and never move forward.

It takes three

Jay Patel joined me after a few months. I’m the person behind the product and the idea, he is more the public face of the company, working more on the marketing, business development and in PR. He’s complementary. You need that. We are now looking for a CTO, a co-founder to make it three and have a complete team. I think that’s the right number, and it would free up my time to focus on growing the company.

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“What it takes” can be read in full in vol 22/issue 1 of Business Strategy Review.

This article was taken from Business Strategy Review, for the latest business thinking from all London Business School faculty