In the early days of the pandemic, sheltered in place, serial founder Sunil Paul witnessed the wildfires in California escalate to epic proportions. The “Orange Sky Day” became a pivotal moment for Paul. He knew he had to figure out a way to do more to address the climate crisis by making EVs more accessible to the people who drive the most in the U.S.
On February 14, Paul joined TechCrunch’s Found podcast hosts Darrell and Jordan to talk about the end of the world, recruiting as a climate-focused fintech, fundraising and more.
You can listen to the full podcast here or, read the transcript below.
Transcript
Darrell Etherington:
Hi, and welcome to Found. I’m your host Darrell Etherington. Found, of course, is where you hear the stories behind the startups. And it is the absolute number one best podcast-
Jordan Crook:
Period.
Darrell Etherington:
… in the TechCrunch universe, but period. And who you heard just there, of course, it’s the Tesla to my Prius.
Jordan Crook:
Yeah. Jordan Crook. I like that. That’s sexy.
Darrell Etherington:
You’re a newer, better… I was like a precursor.
Jordan Crook:
Yeah. You started it though. You were a pioneer in the space.
Darrell Etherington:
Yeah. Just a hybrid-
Jordan Crook:
And then I’m a flashy newcomer who picked up the mantle.
Darrell Etherington:
I was effective at what I needed to do, but not really a looker.
Jordan Crook:
Why are we talking about this?
Darrell Etherington:
I don’t know. We should talk about this episode of the podcast. Our guest this week is Sunil Paul, who is the co-founder and CEO of Spring Free EV. Which is not an EV company, per se, even though EV is in the name. It’s actually a fintech company that makes EVs more affordable for actual drivers. So basically they lower the cost using an innovation they came up with called the mileage purchase agreement. Actually Sunil came up with that many, many startups ago.
Jordan Crook:
Moons ago.
Darrell Etherington:
Yeah. But he realized this was an innovation that could be used to help spur adoption of EVs and get specifically small fleets on board with purchasing them in volume. So very cool. It’s one of those things where you’re like, okay, I get it. This is one of those ideas that is a nuts and bolts behind the scenes idea, but it’s one of the things that is really actually going to spur adoption of vehicles. Whereas things like Plaid Mode or whatever Elon’s coming up with might not attract a huge amount of people to go buy the cars because that’s on the very expensive model and no one can afford that, for instance, right? It was a great conversation with Sunil. We went far and wide on EVs and climate, and everything in between. So let’s go ahead and let him explain what Spring Free EV is, and how he came to create it.
Darrell Etherington:
Hi, Sunil. Thanks for joining us.
Sunil Paul:
Hey, great to be here.
Darrell Etherington:
All right. So we like to start these off by getting a little bit of an explainer of your company. So we’re here to hear about Spring Free EV, which I just learned is a bit of a tongue twister.
Jordan Crook:
Yeah. Real time lesson.
Darrell Etherington:
But definitely a very cool concept behind the company. You’re probably better at explaining it than I would be. So why don’t you take it away and give us a kind of TLDR on what Spring Free EV is all about?
Sunil Paul:
Sure. Well, thanks for having me. I’m Sunil Paul. I’m CEO of Spring Free EV. And I get a lot of practice saying it so I usually don’t trip on it. It is a fintech company set up and designed to have impact on climate by making electric vehicles more affordable and accessible. We do it through a really simple idea, which is we charge a fee per mile, and use that revenue to make the upfront costs more affordable. As you probably know, the upfront cost of the electric vehicle is the biggest problem with adoption. And so we fix that problem.
Darrell Etherington:
Nice. Yeah. And I’ve noticed the focus is on high mileage drivers. So I imagine you end up tying up with a lot of folks who do gig economy work, or Uber Eats or Uber or Lyft, or that kind of thing. Is that fair to say?
Sunil Paul:
Yeah. So there are two reasons for that. So we are focused on the sharing economy, and car sharing in particular. And many of those car sharing hosts also work with Uber, Lyft, and delivery drivers. The reason for it is that if you have an electric vehicle, eventually the total cost of that vehicle will be lower than a gas powered vehicle—but only if you drive it. If you just stick it in the garage, it’s never going to be cheaper.
Darrell Etherington:
That’s actually the reason I still … My car, I use, I don’t know, like once a month. I use it enough to keep the battery going, but not much more than that. And if I had an electric, I would feel like an idiot. And also it would just be the battery would just be leaching, or whatever they call it, like slow drain, right? Especially in the cold Canadian winters.
Jordan Crook:
Canada.
Darrell Etherington:
I take that point very personally.
Sunil Paul:
So that’s one of the big reasons. The other big reason is they are the ones that use sedans. And if you think about what are available today, it’s all sedan electric vehicles. The SUVs and the pickup trucks are not yet available. Now I happen to know a lot about car sharing and ride sharing. I’ve been involved in car sharing from the beginning. I incubated Getaround. I started the first ride sharing company. So this is a comfort zone of understanding that world. And it’s really just the beginning. We have ambitions to be able to solve this problem across the US, around the world. You got to start somewhere. You can’t boil the trillion dollar ocean. You got to start with a niche.
Darrell Etherington:
Yeah, for sure. And so you mentioned a bit about your background. Was that kind of your in to this business? When you were working in car sharing, did you see this opportunity and figure like, oh, this is perfect? Someone should build this business and it should be me. Or how did you kind of get into it?
Sunil Paul:
Well, believe it or not, I’ve been thinking about this since at least 2009. I was looking for some other patents that I have and I looked up one. I happened to see this one I kind of forgot. I filed a provisional original patent on a variation of this idea back in 2009. It’s been kicking around in my head for a very long time. It didn’t really start taking life until the wildfires started happening here in California. And I looked at my own what can I do more to have an impact on climate? And realized that using my strengths, I’m an entrepreneur, I’m an operator, I’m a fundamentally an optimist. And I thought, oh, that MPA idea, that mileage purchase agreement idea, which is the crux of what we do, that could have big impact. And I went and did the math, and figured out, yeah, we could have big impact with this idea. Bigger than what solar did with Sunrun and SolarCity and Mosaic. Those companies fundamentally changed the nature of solar installs through fintech innovations. And we think we can do the same thing with electric vehicles.
Darrell Etherington:
Yeah. I mean, it’s an interesting approach to take the fintech angle. We actually had on another founder, Kentaro from… Jordan, remind me of the company name.
Jordan Crook:
Persefoni.
Darrell Etherington:
Persefoni. Right. And so they do counting for carbon credits essentially, right? The idea being companies will want some kind of verifiable standard that they can show to regulators and peers. But his quote was capitalism created the climate change problem and capitalism is the means by which we need to fix it, or words to those effect, right? But it seems like your approach is very much in that spirit. Is that fair to say? When you look at that, and you think how can I contribute, I suppose a lot of people would say like, “Well, why don’t you go non-profit road,” or something like that, right? Especially if you’ve been successful thus far. You have significant means. But you’re obviously taking the approach of a for-profit business is the way to turn this around. So talk a little bit more about that motivation, I guess.
Sunil Paul:
It really comes down to this business and every other business that will end up solving our climate problems is going to need a lot of capital. And if you look at where is the capital available? There is money in the philanthropic sector, and there’s also money in the government sector, but the vast bulk of money available, because in the philanthropic sector and the government sectors, that money’s already allocated. And relocating it to something else is a challenge. Relocating something in the commercial sector is a function of risk and reward. So if you can and develop a new method for better return for the same risk or better whatever, get that ratio right, money is going to flow in. And there’s a tremendous amount of capital out there that wants to invest in sustainability and governance, ESG kinds of investments. There’s already $3.5 trillion just in equities globally, interested in ESG investments.
Sunil Paul:
And by the way, there’s not that many opportunities to invest in something that can scale to hundreds of billions of dollars. So our goal is really to create a new asset class. A new asset class that can bridge the gap between all of this capital that would like to be able to have an impact and the millions and millions of drivers around the world that want to have an electric vehicle. Electric vehicle is fundamentally a better car. The number one obstacle is it costs more upfront. And so if we can remove that obstacle, it’s going to unleash a huge wave of innovation, and it can have an impact on climate. I’m happy to talk more about that, but it’s the reason why we’re doing this company.
Sunil Paul:
You ask why not a non-profit, that’s one reason. But I will tell you that I think non-profits definitely are an important role in all of this in instigating for having solutions to climate. And there may yet be a role here. I mean, especially you look at the way that the crypto world is set up. Often there is a non-profit that is the center of it. We definitely continue to think about that as we grow. But right now, we’ve got something that’s working. We got a product market fit. We’re just like just keep the pedal down.
Darrell Etherington:
Yeah. Yeah, yeah. For sure.
Sunil Paul:
Keep growing.
Jordan Crook:
So what was the starting point, right? You mentioned the provisional patent in 2009, and then the wildfires kind of sparking something emotional or internal in you. But then when you sit down and you’re like, okay, I’m going to start this company based on this idea, what’s step one. Right? How do you identify step one, and where did you start?
Sunil Paul:
It’s interesting because I did not start out thinking I was going to start a company. I started out thinking I’ve been trying to give away this idea for 10 years. I’ve talked to people about it. I’ve shared it with big auto OEMs. And it was actually on my birthday 2019, I remember I posted something on LinkedIn saying, “Hey, are there so much entrepreneurs out there that’d be willing to help me with a new idea?” And so I got some responses. I ended up running a contest to try to get other entrepreneurs excited about the mileage purchase agreement, and see if we could get to product market fit with that effort, right? Basically I got 22 teams from around the world, all kind of focused on different aspects of product market fit.
Sunil Paul:
And should it be rideshare? Should it be trucks? Should it be the US or India or the UK? And that was a fantastic experience. And what I learned out of it was, okay, there are some possible paths to product market fit. And these companies are going to need capital to be able to scale. And so the original, original idea was, well, let’s go create a fund that can help these companies scale.
Sunil Paul:
As we looked at that idea, two things happened. One, I did the math. And I’ll tell you, the key moment for me, if you were in the Bay Area in the fall of 2020, everybody remembers the orange sky day. It was just so bizarre. And we all sat around saying what WTF? And that moment, along the other wildfires, I went and I did the math. I said, okay, how many vehicles would it take to get to one gigaton of carbon dioxide reduction by 2030. I published the results of this.
Sunil Paul:
And I had been thinking about that result. I was like, oh, right. Okay, well, could a financial innovation like this, could a fintech innovation like this get to 100 million extra vehicles? And I concluded, yeah, yeah. We could do that. Okay. Well, that’s not a fund anymore. That’s a company along the lines of Sunrun or Mosaic, and that’s a whole different proposition. So it also is why we are focused on B2B. We don’t offer a product that the consumer can use. We offer a product that a small, medium sized fleet can use. And they turn around and offer it to the consumer. So in that way, it kind of reflects the heritage of where the idea came from. So yeah, the story is not aha moment. And by the way, I know you’ve interviewed a lot of people, it’s never an aha moment in a little tiny thing. Maybe it is in hindsight. Maybe in hindsight.
Darrell Etherington:
When you create your story in retrospect, I think that happens a lot, right? Because it’s better. It’s better for an audience to consume it. But yeah, mostly it happens in degrees.
Sunil Paul:
I would say the orange sky day was transformative for so many people. Yeah. It was just otherworldly.
Jordan Crook:
Why’d you call it orange sky day?
Darrell Etherington:
Because the sky was orange.
Sunil Paul:
Yeah. We woke up in the morning and there was no sunrise. In the morning, it was more reddish. And then the entire day, the sky was orange. There’s no sunset. We never saw the sun.
Jordan Crook:
So I remember seeing it on the news and stuff. But we flew in to San Francisco for an event two days after that. This is going to sound a little weird, but I remember being kind of bummed that I missed it just because, I mean, I don’t want the world to end, but Darrell and I have talked about this a million times, if it does, I want it to be pretty dramatic.
Darrell Etherington:
You’re hoping it’s spectacular.
Jordan Crook:
Yeah. I want to witness the craziness of it. And that felt like one of those like surreal things that, it’s sad, but it’s also a once in a lifetime thing to see like something that truly feels like the end of the world, like another planet.
Sunil Paul:
Yeah. You’re the one on the beach watching the tidal wave come in-
Jordan Crook:
Totally.
Sunil Paul:
… like in movies, right?
Jordan Crook:
Yeah. The movie Deep Impact. I’m Tea Leoni, 100%, chilling on the beach.
Darrell Etherington:
Wow. That’s a good pull.
Jordan Crook:
Thanks.
Sunil Paul:
Or like Woody Harrelson with the volcano.
Jordan Crook:
Totally, totally. Up there with a radio, like, “Let’s go.”
Darrell Etherington:
But at least this, to your point, Sunil, this had an impact that it wouldn’t have had otherwise, right? Without that huge shared effect that everyone saw and was just such a dramatic thing, like so many other things that go on where we just kind of don’t notice them because they’re happening all around us all the time, right? But I feel like it unified people and it kind of galvanized people into action. I’ve heard that from a number of people where that was a turning point, especially Bay Area folks.
Sunil Paul:
And it came on like that was the third or fourth year of smoke from wildfires. It came on the epidemic pandemic. It’s just this feeling that the world is messed up, and what can we do? and many of the us, most of us have some agency, some ability to do something. And whether it’s joining a company that’s making a difference, or joining a non-profit or starting one, we all can do something. And I think we’re all looking for something to do. Yeah. We don’t want to be here helpless while the wave consumes us. We want to go out and destroy the asteroid.
Darrell Etherington:
Exactly. There’s something to that with the great resignation that I haven’t seen talked about much. Maybe it’s too early to see the kind of impact. But I feel like a lot of that is that effort, right? Where people are like, well, I’m inclined to go work for something, some company that is making a difference in some way or whatever, right? And so there’s that dissatisfaction. And then there’s just not enough yet potential, I guess, hires or something, or maybe the skills matches aren’t quite there in terms of what people are looking for. But I think that’s a big part of it, at least from anecdotal evidence, just talking to folks on why they left.
Jordan Crook:
Well, and the mission oriented thing is kind of weird too, right? Because I think Darrell’s right. Anecdotally, at least, it feels to me like a lot of people that left their jobs, and just in general, the way that younger people are looking for jobs is very more emotional and more like I want to stand for something good. If this is going to be eight hours of my day every day, I want to feel good about the impact that it’s having, and who my leaders are and what they stand for, the principles and values that we have. Not just what my paycheck looks like. And I’m curious from you on being a pretty mission oriented company in a space like climate and sustainability, where-
Darrell Etherington:
With a fintech focus too, right? That’s cool. Because then you attract and speak to an audience that maybe hasn’t had the opportunity to go pursue this type of work before, right?
Jordan Crook:
But it also feels maybe a little bit diluted by this point. Not by you, but just in general. Like the we’re going green, right? It’s this kind of thing where it’s lost its trust. And even the idea, even if it’s not sustainability, just the idea of a mission-oriented business is something that we’ve heard so much for so long, and it’s like a buzzword. So it’s like-
Sunil Paul:
I could go so deep on this. Let me try-
Jordan Crook:
Do it.
Sunil Paul:
… for the TLDR… Oh, do it. Okay. Here we go.
Jordan Crook:
I mean, do whatever. Whatever makes you happy.
Sunil Paul:
Here we go. Here we go. First of all-
Jordan Crook:
We only have one life.
Sunil Paul:
We only have one life. I agree. And one of my big mantras is do not waste my time. Do not waste your time. Don’t waste people’s time. Because we’ve only got one, and it’s not worth wasting your time on useless things. So I have endeavored to try to create companies with positive externalities. In other words this idea of externality is that not everything that a company does is captured in the price. Traditionally, it’s known as a negative externality. So for example, if you’re a utility and you’re making electricity, there’s all kinds of positive things you’re doing. Creating jobs and electricity and making life easier for people. And there are all these negative externalities. Your pollution from the coal and natural gas and whatever else. There are certain companies that can create all kinds of positive externalities more than the negative.
Sunil Paul:
And so my second company in particular was organized around that way, as an anti-spam company. The idea was can you align the profit motive and the mission so that it’s not like, oh, we’re a utility, we’re going to clean up our act? It’s more like, oh, the nature of what we do is fundamentally going to have a positive externality. The value to society is not just in the price that we charge. There’s all this extra stuff that gets generated, like a better climate.
Sunil Paul:
And so I’ve been thinking about this and focused on it for quite some time. I was part of Cleantech 1.0. Lost a lot of money in that one. And honestly my efforts around car sharing and ride sharing, they were organized around the idea that efficiency in transportation would have a positive impact on climate and pollution. One of the important realizations that I had after Sidecar and with all those wildfires, that I was wrong. Efficiency ends up generating more demand for the product.
Darrell Etherington:
It’s the classic LA roads example, right? You keep building the roads, and they keep putting cars on them, right?
Sunil Paul:
LA roads. Great example. So the notion that we got to shift over to electric vehicles is informed by that failure. Even though I helped create tens of billions, maybe hundreds of billions of dollars in value in the industries, it was not successful in having an impact on climate. Possible, it had a slightly negative impact. But it’s also turning out to be a great place to start for electrifying. So there’s a chance at sort of redeeming the overall direction.
Darrell Etherington:
Yeah. I mean that you’re not alone in that realization obviously, right? I think that was an assumption a lot of people made with good faith and good intent going into that industry. Being like, look, we do this, we’re going to raise utilization, but inventory’s going to stay flat or go down. It’s going to be great for everybody, right? But it didn’t end up being the way that it worked, which is fine. You try something, you make a hypothesis, and then it goes the other way.
Darrell Etherington:
But you’re unique at least in terms of people I’ve spoken to who saw that, and then we’re like, well, but we can take the different approach. Take that reality we’ve now made, and then turn it into an externality positive net result with this other key thing we really want to do. Because if you start with fleets and whatever that gets OEMs geared to it, right? OEMs want to build for fleets and volume first, and then the consumers will be pulled along with that.
Darrell Etherington:
Because that’s the other thing about electric cars. When you were talking about EVs and you’re talking about price, we’re old enough, Jordan, we saw the rise of EVs where you heard about them and you were like, oh, they’re massively expensive. But don’t worry, over time, volume and scale will mean that initial cost comes down. And it hasn’t. And that’s the thing that still needs solving. So something like what you’re doing solves it.
Sunil Paul:
It does come down. But here’s the problem is it’s not coming down fast enough. So one of the interesting bits of analysis we’ve done is that… Actually we didn’t do the analysis. Others have done this analysis. Figured out that in order to get to net zero by 2050, we need to have a lot of extra vehicles, 75 million extra vehicles, by 2030. Why? Because these things have a long lifetime, right? You can’t just be like, oh cool. It’s 2045, time to throw a bunch of cars out there. So we need to get to net zero by 2050 in order to hold warming to 1.5 degrees Celsius. So it avoids kind of the catastrophic, in the analogy-
Darrell Etherington:
Jordan’s beach scenario.
Sunil Paul:
… of a meteor or a tidal wave version of climate change. So that’s the gap we’re trying to solve for is that, even with all of what government’s doing today and all the subsidies and all the infrastructure investments and all the you can’t drive with a gas powered car in London, even with all of that, we’re still not going to get there. It’s still a significant gap.
Darrell Etherington:
Since you’re a Found listener, I’m going to bet you’re also pretty interested in startups and technology. Great news. We’re going to give you an offer for 25% off a subscription to TechCrunch+. TC+ is our premium product and what you get there are deep dive interviews for some of the best startup founders and investors in the industry. You get surveys of different investors in different areas of expertise and geographies. You get market maps of opportunities in new and emerging industries. And you get deep dive looks at some of the hottest startups out there. You can subscribe to TechCrunch+ at techcrunchplus.com. That’s probably the easiest way to get there. Or if you’re already on TechCrunch, just follow the links for TechCrunch+, and you’ll get a prompt to subscribe. Once you’re there, just enter the code, which is Found, the name of this podcast, during checkout, and you’ll get 25% off a one year TechCrunch+ subscription.
Jordan Crook:
Are you a super duper huge fan of Found the podcast? We have big news for you. So we’re going to start doing live recordings where you can actually come hang out with us. We always do this podcast on video, but we’re going to show that video to the world.
Darrell Etherington:
Yes.
Jordan Crook:
And it’s going to start on February 17th. We’re going to be doing it every other Thursday. Our sister podcast Equity is also going to be doing that on their alternating Thursdays.
Darrell Etherington:
All the podcasts from TechCrunch together. Well, separate but together.
Jordan Crook:
Yeah. The TechCrunch podcasts are coming to you live. So that means you’ll get to listen to new episodes early. And I think probably the best part that I’m excited about is you’re going to be able to join in on those conversations. So you can log in to Hopin, and you’ll be able to chat your questions directly to us, right within the episode, and talk to our guests. And we’ll be able to incorporate what you’re thinking and what you’re wondering about right into the episode itself.
Jordan Crook:
And those are all going down… Well, it starts on February 17th. They all go down at 10:00 AM Pacific, 1:00 PM Eastern every other Thursday. And we’re going to have some stellar guests. In fact, our first guest for February 17th is going to be Thor Fridriksson. If you don’t recognize that name, you should. He founded QuizUp, which was a massive game back in the day. And then he also founded a gaming studio called Teatime. And he’s working on his third thing now. Serial entrepreneur. And he’s two for two on creating hyper viral casual mobile games. So lots to learn there.
Darrell Etherington:
Maybe he’ll just dish. Maybe he’ll reveal during that episode what his next huge game is. We can’t guarantee that. Asterisk, asterisk.
Jordan Crook:
Maybe he’ll explain how he got two viral hit, and has yet to really bring them through on the successful business side of things. So you just find the link in the description if you want to register to come and hang out with us.
Darrell Etherington:
What about on the supply side? Because the other thing I hear people complain about a lot, especially right now with supply chain and issues is, I want to buy a car with a battery in it. I can’t find a car with a battery and on a lot to buy, right? So how has that affected your business, and how are you kind of navigating that?
Sunil Paul:
Well, the supply chain issues are definitely a short term problem. We do see that that will resolve itself just through all the investments that are happening. But the more interesting thing that’s happened in the last… There’s plenty of supply promises being made by the automakers. In other words, they’re saying we’re going to deploy a lot of electric vehicles. A really interesting thing is happening though, which is BMW is releasing a version of their 4 Series. And the CEO is quoted saying, this is in the Wall Street Journal on Saturday, that they will build that car with either a gas engine or battery, depending on demand. So unlike the world of Tesla, which is just all battery-
Jordan Crook:
They’re going to crowdfund it.
Sunil Paul:
I would say the other way around. In other words, if they don’t see adequate demand for batteries, they’re going to be like, well, we’re just going to keep going with the gas. So we need to demonstrate massive demand for electric vehicles. And I’m certain it will not be just BMW taking that approach. Because when you’re an auto maker, you make a huge investment in a plant. And fairness to them, the sort of whipsaw effect of Trump comes into power and says, “No, we’re not going to do electric cars,” and Biden comes in and says, “Yes we are.”
Darrell Etherington:
Yeah, it’s hard to build. Because they build their platforms for like-
Jordan Crook:
Within a span of five years.
Darrell Etherington:
… 15 years or whatever, at least, right? They build their platform and they’re like, we’re going to build one platform. All of our vehicles going to be based on it for at least a couple decades, or whatever, right? And it’s a massive, massive investment. And then to have the rug pulled out from under you every four years must be horrible, I can imagine.
Jordan Crook:
Well, that part of it’s probably not going away, unfortunately, right? The pendulum swinging at full speed right now doesn’t seem to be slowing in any way.
Sunil Paul:
That’s a political pendulum swing. Our goal is to turn it into a nonstop consumer wave.
Darrell Etherington:
In some ways, it’s a chicken and egg problem where you’re like, well, who goes first, right? But if you get everybody behind the idea of we’re all in on this, then it’s not going to matter what the government does. And it’s a bit of a wag the dog situation anyway, because they dictate where the government decides to legislate.
Sunil Paul:
Right now, EV adoption is still heavily, heavily a project of government incentives and programs. For example, the incentives that are put out there by the car maker are used to balance their ability to sell polluting SUVs. And even with Tesla. Because Tesla’s selling those credits to other OEMs. So even if you’re just a pure battery maker, you still don’t get away from it. So we’ve got to shift that dynamic away from this thing that they’re doing just because of CAFE standards in the US and other standards elsewhere so that it it’s kind of in our collective control.
Sunil Paul:
I was going to mention, I was going to go back to the great resignation. Because I think there’s another interesting dynamic there that relates to us. Lots of people are quitting their jobs to go create businesses. And I don’t think most people realize how many businesses have already been created around the sharing economy, in particular, the car sharing economy. So companies like Turo, which just released their S-1 to go public, and Getaround and HyreCar. We’ve got a partnership with HyreCar. And Turo released in their S-1 over something like 85,000 hosts. And I know from experience with car sharing and ride sharing, probably about 20% of them are running it as a real business. So in other words, you can make a living doing this. And those are our customers. Those folks out there who figured out how they can have usually at least five to 10 cars out for rent. At that level you can make a living. And many of our customers are up in the dozens of cars. A few of them passed a hundred cars. It’s a real interesting business.
Darrell Etherington:
Yeah. That’s an interesting part of Turo. I speak to Turo fairly often, but I think that was a part that people didn’t really understand about the platform. I mean, very similar in terms of trajectory to Airbnb, but they thought it was a thing where you would just like, oh, somebody has a cool Mustang and they’re not driving it. I’m going to go rent it. But it’s actually a platform for establishing small rental companies in effect, right? Competitors to the big Hertz, or whatever, but little, tiny, individual owner operated things. That’s where their real opportunity is. And they’ve explicitly launched it to some markets with that target in my mind, right? And at first they were targeting the existing mom and pop shops that are open, but then they were creating their own. And it is, you’re right, there’s a massive number of businesses that are just that. It’s a passive income business in a lot of ways. I mean, there is some active involvement. But in the same way that somebody’s Shopify store is… Jordan, it’s the part where I mention Shopify.
Jordan Crook:
Shopify.
Sunil Paul:
Are they a sponsor?
Darrell Etherington:
No, no, they’re not. I just used to work there.
Jordan Crook:
Every episode, Shopify and Canada.
Darrell Etherington:
But a lot of people associate that too. Once you resign, and you want to control your own destiny, you find these opportunities where there are platforms. You can build little businesses, and you work on them and you invest in them, but they’re not necessarily tracked or visible to a lot of folks.
Sunil Paul:
This great resignation may end up turning around, we’ve had a decline in entrepreneurship since the 70s. Despite all of topics that you all write about, it’s kind of surprising. And it’s possible that this pandemic will actually turn it around. Because there’s a lot of people deciding, oh wow, I can go make a living on my e-commerce site, or as an Airbnb magnet.
Sunil Paul:
Also think about it as a tech entrepreneur. I think this story gets played out over and over again, which is we go out and we create these platforms that allow as little as one person to plug in and do something. Whether that’s eBay back in the old days, or more recently Airbnb and Turo. But also companies like Mosaic, which is a solar finance company. They start out being able to handle small participation. And then people discover, oh wow, I can make a living on this. I can a real business on it. And then the volume of transactions ends up being driven by the people who are kind of professionals at it.
Sunil Paul:
And the same is true for ride sharing, right? When you get into a ride share, it used to be everybody was kind of a casual driver. Now you get into it, and most of the time, it’s somebody who does it either part-time or most time. And so the same dynamic plays out in all of these platforms. Because once you can create that low cost infrastructure that’s capable of handling a lot of people, then you can scale it up to take on incumbents that have a much higher cost of infrastructure.
Darrell Etherington:
Yeah. This will be my last Shopify thing, I swear, Jordan. But that 70%, that was one of Tobi’s favorite quotes as well, right? That entrepreneurship is actually on the decrease. And it’s their job to kind of turn it around. And then also they created Shopify Plus by accident, for exactly the reason you’re talking about, right? They were supporting small individual sellers. Some of those got to the scale where they were coming, and saying like, “Oh, I’m going to run my international retail business that does 100 million in revenue yearly on your platform. Can you support that?” And they were like, “I guess we can.” And then they just added a Plus to it, and said, “This is our product now.” Right? And gradually added enterprise figures. But it’s the exact same thing you’re describing for the e-commerce market.
Sunil Paul:
Yeah. Same thing’s happening with Stripe, and just on and on. This is the same movie that’s playing out in tech over and over again.
Darrell Etherington:
Then I want to ask, or transition into, future focused stuff for Spring Free EV. Do you think about different kinds of financial products, or do you think about the scaling customers? Are you seeing that already? How do you see the evolution of the business?
Sunil Paul:
What a good question. We think a lot about what we do next. I can tell you that it’s all organized based on our top priority. So as a corporation, we consider our top priority to be climate impact. That’s above even having profit and all the rest. So when we think about new product opportunities, we think about that as kind of the guiding principle. So the number one thing we’re going to do is simply execute on what’s in front of us. When you’ve got great product market fit, you’ve got go to market fit, don’t screw around. Just go get that done. So that’s job one, two, and three.
Sunil Paul:
Now, in addition to that, we know that there are additional kind of supporting products that will help us in that journey. So those are all coming. I’m not going to pre-announce them here. But you can imagine that there are things that would make our fleet managers more efficient. There are things that, our customers more efficient. There are things that would kind of expand the offering so that we could make it attractive to more and more people.
Sunil Paul:
Right now, our offering is you’re a car sharing host on Turo or on HyreCar, you can get a handful of electric vehicles. You can get dozens of electric vehicles. And you’re going to pay a monthly fee and a mileage fee, but you’re not going to have to go through a credit check. You don’t have to mortgage your house. You don’t need five years of operating history. But it fits within a particular band of vehicles. So you can see us expanding the band of vehicles.
Sunil Paul:
But beyond that, the next segment that we see beyond this kind of car sharing and gig economy, is being able to offer something for high mileage drivers. If you’re a high mileage driver today, which by the way, there’s about 10% of US drivers, there’s almost 300 million cars in the US, 280, so 10%, roughly 30 million drivers that put on an average of 30,000 miles a year. Now these drivers skew SUV and pick up truck. So there aren’t good SUVs and pickup trucks that are EVs. The world’s not kind of ready to go create an EV product for them quite yet. But it’s about to happen. So we want to create an offering that if you are a high mileage driver, you could enter into the mileage purchase agreement, and lower the price of your car or your truck or SUV. The reason why it’s so compelling for a high mileage driver, is that your options today, you don’t really want to get into a lease.
Darrell Etherington:
No, it normally penalizes you for being a high mileage driver.
Sunil Paul:
Yeah. So we like opportunities where the competition is terrible. So that’s kind of our next segment after this car sharing economy category.
Darrell Etherington:
That makes a ton of sense because, yeah, I mean, that’s the reason why I lease. Because I go in, and I’m like, “I’m going to use this many kilometers.” Canada. But they they’re like-
Jordan Crook:
Canada.
Darrell Etherington:
They are like, “Okay. First of all, you shouldn’t even own a car, idiot. And then second of all, this is great. We love you. You’re our favorite customer.” Right? But yeah.
Sunil Paul:
By the way, can you buy cars on Shopify in Canada?
Darrell Etherington:
Oh, that’s a good question.
Jordan Crook:
Double whammy.
Darrell Etherington:
Wow, man, I got to learn that because I could drop it-
Sunil Paul:
Because you could just totally-
Darrell Etherington:
… in a future podcast.
Sunil Paul:
… drop that. I can’t believe you didn’t prepare for this interview like that. Come on.
Darrell Etherington:
Listen, I prepared in other ways, but not-
Jordan Crook:
You got three of Darrell’s favorite things all in one, which is buying something excessive, Shopify, and Canada. Ding, ding, ding.
Darrell Etherington:
You work with Tesla and Nissan, for instance. I pronounced those wrong. Tesla and Nissan. But do you work with a lot of OEMs? And is it something where, especially with this new product category, we see Chevy, I think, is electrifying its Silverado, Ford, obviously F-150, and they’ll probably go down the line of their trucks to the more affordable ones. Are you in there early with those conversations talking to them? Do you have their ear on that kind of stuff?
Sunil Paul:
Yeah. We’re in conversations with a bunch of OEMs, including new OEMs that are bringing electric vehicles to the US. A lot of the cars we buy are used cars to put them into this program. So we announced a partnership with Cox Automotive. Cox Automotive may not be a household name, but a lot of the-
Darrell Etherington:
Huge.
Sunil Paul:
… companies that they own are, like Kelley Blue Book and Autotrader. And they’re like the world’s largest processor of cars. They do like six million a year. So we’ve teamed up with them to acquire the cars, to inspect them and condition them, get them ready to deploy, and a bunch of other logistical things that basically give us scale to be able to deploy across the country. So that helps us a lot with the used segment or the pre-owned segment.
Sunil Paul:
And then for new cars, we’re kind of in conversations with a number of OEMs about getting access to more cars. But yeah, the Nissan, we’ve got a number of them showing up this month and next. We’re excited about continuing to expand. Because they’ve got a new Ariya coming out this year. The Leaf has actually kind of got a bad start because it was kind of a compliance car. In other words, a car that was built just so that they could comply with the rules, and not all that well designed. But it’s actually a pretty good car, especially the latest version.
Darrell Etherington:
Yeah. Yeah. They iterated well on that. Yeah. It gives them the ability to say like, “Oh, well we were one of the first.” Right? That is the other side benefit. The Leaf has been around for so long. But mileage in the original Leaf was such that like it was not really a useful automobile. The new one is a perfect fleet car to imagine for in city use basically, right? It’s not-
Sunil Paul:
And we know it’s very popular in some European cities, specifically the electric. And so yeah, we’re seeing good traction here.
Darrell Etherington:
Well, I think we’re just about out of time. But I just want to end by asking, you’re a serial founder. Obviously you founded a lot of companies, been very successful at it. With that combined with the climate topic, is the VC conversation now at this point, just like, okay, come on? It’s me, look what I’m doing, give some money. Or is it still tricky and difficult? Or how’s that go for you?
Sunil Paul:
Well, I think it does make it way easier, both because of knowledge and relationships and track record. I guess that’s three things, isn’t it? And it’s kind of like the more successful you are, the more ambitious you get. And frankly, the ambition here is driven by a big social mission. So we need to get really big. And to be successful, we know that it won’t be just us. We can’t go deploy 75 million vehicles ourselves. We know that others will do it. But in order to get other people to do it, we need to be very successful.
Sunil Paul:
I mean, the analogy I use is if Elon Musk went around trying to convince car companies to build electric cars 20 years ago, instead of starting a car company and having it be… He’s maybe no longer worth a trillion, but worth a lot of money more than the existing companies. Now there’s a bunch of conversations in boardroom like, “You need to be more like Tesla.” That only happened because Tesla ended up being so successful.
Sunil Paul:
So we need to be so successful that there are boardroom conversations in the incumbent sources of financing for the automotive world that say, “How do you be more like Spring Free EV? Because look what they’re doing, look at the market cap,” et cetera. So that requires a lot of engagement. Not only, interestingly, not just in the VC world, but also in the world of asset finance. So something that some of your listeners may not be as familiar with, but in the climate world, it’s really important to understand that this is pretty capital intensive, but you don’t want to use the venture money to finance all of that capital intensity. You want to use asset finance. And so we’ve already been successful in raising and using asset finance. And we’re out talking on both fronts on both the sort of equity and the asset finance fund.
Darrell Etherington:
Yeah. That is a good point. I’m sure people though realize, but I know of other companies that are in the same boat where you don’t realize they are… Fundraising is a slog, right? And a lot of our listeners know fundraising is a slog. But imagine you’re also at the same time going and talking to, yeah, banks and asset lenders. And you got to pitch them too in a very different way. But you’re doing simultaneous pitching on both sides, right?
Sunil Paul:
Now luckily for the climate world, I mean, one of the very big differences between now and Cleantech 1.0 is there’s so much more capital that understands it. And many of them have been through Cleantech 1.0, and now have the lessons of both what to watch out for and what can work. And so it’s so much easier because of the learnings from last time around.
Darrell Etherington:
All right, well that is going to do us for time. But thanks very much for joining us, Sunil. It was great talking to you. We had a pretty far ranging conversation, but awesome. Illuminating. I learned a lot. I don’t know.
Jordan Crook:
Well, thanks Sunil. It was fun talking to you.
Sunil Paul:
Well, I enjoyed doing it. Thank you for having me on.
Darrell Etherington:
All right. That was our conversation with Sunil. We sprung free EV. Jordan, what did you think about our chat with Sunil?
Jordan Crook:
I’m always interested in these startups that innovate on the things that are normally kind of set in stone, right? Like business model innovations, right? Which is essentially what this is. We call it a fintech company. I mean, it’s kind of a fintech company, but ultimately it’s just buy these cars a different way. It reminds me of ClassPass, right? Where ClassPass was like what if you did classes, but on a subscription?
Jordan Crook:
We take for granted, I think, sometimes those kinds of innovations or breakthroughs. And so I’m always interested in people already buy EVs, we want people to buy more EVs, and buy them faster. Let’s just change the way we buy them, right? We don’t have to change anything about the technology itself. So I’m always interested in that because I think it’s a different way to approach a startup that people, I think it’s forgotten or ignored more because there’s always a playbook, right? It’s like, oh, this is how cars are sold, or this is how gym memberships are sold. We’ll just follow that. But we’ll make a different gym membership, we’ll make a different car, right? You can look at the other side and it can be just as fruitful, if not more.
Darrell Etherington:
It’s this area where essentially the companies are looking at a bunch of ingredients that kind of already exist, and then putting the ingredients together in a way that is novel to achieve the thing they wanted to achieve, right? This is one where it is a technology, but it’s like a technology that often gets overlooked where it’s like a financial technology, right? Like a debt investment, and debt capital is a technology. It’s just so fundamental that we kind of don’t really think about it in that way. But it’s like somebody had to come up with the idea of, oh, this organization that has money can lend it to this other one. And that’s not just something that exists in nature. It’s a technology, right?
Jordan Crook:
It’s like wood.
Darrell Etherington:
Well, it exists in Settlers of Catan, which is, again, not nature, it’s technology. Wood for sheep. Yeah. But I did think it’s cool because it’s one of those things where it’s like, you can tell he thinks about this stuff a lot. And he’s spending a ton of time thinking about, look, this is what I know, and here’s what I want to achieve. And he brought up repeatedly that the company has as their top line goal is actually not profitability or revenue. It is to proliferate the adoption of EVs, right? Which is one of those things where you’re like, well, I mean, can it be it? I guess it can if you’re a pre-public company. B Corps exist and things like that so that you can actually define that as part of your mission while still being legally satisfying stakeholders and everything. But pre-public, yeah, you can say that. And it sounded like he cares about that a lot, right?
Jordan Crook:
Yeah. It sounded like he meant it.. which is something we’ve talked about a lot, right? The climate of climate tech is this thing that has had a counterweight to it. Which is like, oh, is it really credible? Is this really what you mean? Or is it just greenwashing? Or mission driven is thrown around all the time. And it does feel very genuine coming from Sunil.
Darrell Etherington:
Yeah. And he brought up the point that green tech now is, in many ways, a easier area to work in when you’re talking to investors because of all the lessons learned from the first green tech bubble. So in a lot of ways that was bad for climate tech in general. Because when you had the first… Actually, I mean I think you brought it up, but I think there’s been probably two rounds of that now hype and deflation. But there was a lot going on and a lot of stuff was being thrown at the wall, and there was very little in the way of accounting for what was real and what was not, right? And then I think people got burned and learned their lessons out of that, and are coming into this with a bit more rigor. I mean, who knows? Five years from now, maybe I’ll eat my words. But we’ll still be doing this podcast of course. So I’ll just check in and be like, well-
Jordan Crook:
Our lives never change.
Darrell Etherington:
Yeah. Or we’ll all be killed by the tidal that you–
Jordan Crook:
Yeah. We’ll be bones on the beach by then.
Darrell Etherington:
I like it that way. I mean, it’s alliterative and it’s also pretty cheerful the way that you just put it. So not such a bad outcome.
Jordan Crook:
It makes me imagine like a pina colada in the mix, right? Like bones on the beach.
Darrell Etherington:
Like a funny skeleton with a cool beach hat and stuff. That’s where we’re going.
Jordan Crook:
Some nice beachy music.
Darrell Etherington:
He brought up that he had lived through this. And he brought up also, the most interesting thing for me from this podcast was that he was cognizant of the impact that his previous focus had, like car sharing. He’s been involved in multiple car sharing startups. And he brought up that thing that is increasingly being demonstrated by the data that car sharing didn’t alleviate-
Jordan Crook:
Reduce emissions.
Darrell Etherington:
… traffic in cities. It exacerbated it significantly, right? Which was not the intent. At least it was not the way that it was sold. I think, depending on who you’re talking about, some people might have been aware that that was going to be the case, or might not have been. It seemed like, for Sunil, it was genuinely like, oh, this is an unintended consequence. An unintended externality, as he put it, that he did not like, right? So it’s cool to hear about somebody realizing that they’ve done that, and then setting about to correct it. Whereas when we talk about negative externalities in tech, a lot of the times we’re talking about people realizing they exist, and then ignoring it, or going off to do something else. Zuckerberg is the prime example. But like, oh, I did Facebook.
Jordan Crook:
Right. Easy one.
Darrell Etherington:
Society is ruined. I think I’m going to go do a metaverse now, right? I’ll leave that burning pile of garbage behind and go do a metaverse.
Jordan Crook:
With little to show that any lessons were learned, right? It’s not like we’re going to see metaverse be like no ads and we’re never going to take your data. And we’re policing the way that conversations are happening and public discourse takes place. He’s like, “Let’s just do it with headsets on.”
Darrell Etherington:
Yeah, yeah, yeah. Exactly. Same thing all over again for in the other place. But yeah, Sunil had that genuine moment of self-reflection and a realization that he wanted to do something better. And he applied the levers he knows how to use in the way to maximize that impact, right? So I think that’s very cool.
Jordan Crook:
I think so too. I also thought it was interesting that he did not want to build this for 10 years. And was like trying to hand off a good idea to an entrepreneur. I’m curious if that’s a thing that happens a lot.
Darrell Etherington:
I think among VCs, it is. I hear about it a lot. And it’s like they always saying, “Someone please this and I’ll invest in it.” Right? And then eventually, they get tired of it.
Jordan Crook:
But from the other side, wouldn’t you be like, “No, I don’t want to build your idea.” Right? There’s like the entrepreneur in residence that kind of does that sometimes, or like the studio model, right? Where those people are like, “Yeah, I just want to like build the thing, right? I don’t necessarily care about what it is.”
Darrell Etherington:
Yeah. From the entrepreneurship community, there are rarely free radicals just floating around looking for an idea.
Jordan Crook:
Yeah. You got anything I could build? They’re normally like, “I’m super passionate about this one idea I had six years ago, and I just couldn’t stop thinking about it.”
Darrell Etherington:
Well, that’s why I think with people like Sunil who are operators and are lifelong operators, and then go into the venture space, they usually end up ping ponging back out into the operator space again. Because they get one of those ideas that catches root. And they’re just like somebody’s got to build this. And eventually they realize it’s got to be them, right?
Jordan Crook:
Well, anyways, it was a good conversation. You should rate and review this podcast, et cetera, et cetera.
Darrell Etherington:
Yeah. But be excited about it, unlike Jordan. Just get in there and get really excited about your review. And leave scintillating one. Maybe put caps lock on.
Jordan Crook:
Put caps lock on.
Darrell Etherington:
And just go to town.
Jordan Crook:
Why is that so hard to say? Put caps locks on. Anyway. Good day, folks
Darrell Etherington:
Found is hosted by myself, TechCrunch news editor, Darrell Etherington and TechCrunch managing editor, Jordan Crook. We are produced by Yashad Kulkarni, and edited and produced by Maggie Stamets. TechCrunch’s audio products are managed by Henry Pickavet. You can find us on Apple Podcast, Spotify, or wherever you get your podcasts. And on Twitter at twitter.com/found. You can also email us at found@techcrunch.com, and you can call us at (510) 936-1618, and leave us a voicemail. Also we’d love if you could spare a few minutes to fill out our listener survey at bit.ly/foundlistenersurvey. Thanks for listening. And we’ll be back next week.