Nicolas Brusson discusses BlaBlaCar’s journey from French success story to global winner

“It was all about being practical and preserving culture” 

- BlaBlaCar's Nicolas Brusson

Last month, BlaBlaCar announced its $115 million funding round to support its growth strategy and continue its mission of becoming the go-to marketplace for shared travel. Since its founding in 2006, BlaBlaCar’s story has had many chapters. After rapid international expansion across several continents, as the founding team brought Silicon Valley’s global ambition into Europe, and the extension of its offering to buses and multimodal transportation, BlaBlaCar is preparing for the travel rebound expected as the world reopens. Throughout the pandemic, the company’s community-based model showed strong resilience while the importance of its culture and values shone through. Today, more than 90 million BlaBlaCar community members travel by carpool of long-distance buses across 22 markets. 

Co-founder and CEO Nicolas Brusson spoke to me about BlaBlaCar’s early ambitions to be a European rather than local country winner and its progression to global player. From the company’s approach to international expansion and encouraging entrepreneurship within the team to the importance of avoiding technical debt and setting aside time to “think, read, absorb, and rethink”, read on to find out more…

Let’s start at the beginning. How did you end up heading to Silicon Valley from France to join a startup?

It was entirely by accident to be honest! The original plan was to finish my master’s degree, do a PhD at Berkeley, and become a scientist. But the Valley in 1999 was a new world of startups, venture capital, and stock options. It was like a foreign language to me - I’d never heard of any of this before. I never went ahead with the PhD – I joined a startup instead, as it felt like the right thing to do. And that was the start of an interesting journey. 

1999/2000 was the startup heyday, and I was in the hot space of telecoms – it all looked promising. But then came 9/11 and the severe downturn in the Valley in 2002. We filed Chapter 11, and had to restructure and rebuild the company, which we sold in 2006. This – very non-linear – startup journey was how I initially educated myself on entrepreneurship and raising money, before going through a phrase of expansion, retraction, and M&A. 

You then came back to Europe and joined a venture firm before co-founding BlaBlaCar. How did you go from VC to founder?

After seven years at a startup in the Valley, I knew I wanted to be part of the ecosystem. I liked the “change things, move fast, take risks” environment. But it was practically non-existent in Europe at the time. So, after taking my MBA at INSEAD, I started working as a VC in London, focusing on European tech.

But then I met Fred and, not long after, Francis. Fred had started a website called Comuto, with the simple premise of connecting drivers travelling from A to B with passengers looking for a ride. Back in 2006, that was a very weird concept. There were no social networks, let alone sharing economy then, so it took a while to take off. Until the first seed round in 2010 we were building the company with no funding. 

BlaBlaCar started in France and became a local phenomenon. It took time to build the community, but in 2010/11 things started to explode. What drove you to make the leap from French to European to a global player?

In Silicon Valley, the ambition is always global. Very few startups say they’re building products for California or the US. They’re building them for the world. I wanted to bring that level of ambition to Europe. The first generation of internet entrepreneurs did well, but they were “single country winners” – they were always “the French or German e-commerce company”, for example.

The ambition for BlaBlaCar was to be a European leader rather than just a French winner. It was in our founding team’s DNA. We’d spent a lot of time in the US and wanted to build an international team. We also felt thinking locally was the biggest hurdle for European startups back then - it’s changing now. With competitors in the US often 10 times bigger, they’d become an acquisition target. This became the ambition for many companies in Europe – to build something local and sell it to the category leader. 

We wanted to be that category leader. But, for that to happen, we had to be at least a European winner. We had a good product that worked well in France, so we expanded it across Europe between 2011 and 2014, before moving to a more global scale, launching in Russia, Mexico, and India. Today, we’re a global leader in the carpooling category, but back then that was a pretty new thing in the consumer internet space. The few companies in Europe that we turned to for advice were from Sweden or Israel - only a handful had become a global consumer internet leader.

BlaBlaCar’s global expansion and the different strategies you’ve adopted have been interesting. In several countries, you went through small acquisitions, in others it was larger acquisitions, and in others you started from scratch. What would you advise entrepreneurs expanding globally? When would you go for an acquisition versus an organic launch?

It was all about being practical and preserving culture. We used different playbooks to scale, either hiring someone local, sending someone from HQ to set up a country, or acqui-hiring. This wasn’t buying a business in the traditional sense; we were acquiring teams of entrepreneurs who could build BlaBlaCar locally and have a lot of local autonomy. These teams of two to five people were culturally aligned with us, had the same values and were solving the same problem. Clarity on what we’d give up in autonomy and what we’d retain centrally meant the brand remained consistent. As we expanded, BlaBlaCar never had different names in different locations. 

It isn’t common when acquiring a company to use your brand and give them autonomy on the way it’s marketed and how the team is built. One of the challenges we faced was convincing entrepreneurs to give up their brand and product to be part of a global company. We learned the importance of being clear on our expectations of the local team, as well as the central. 

It’s important to be clear on your own brand, product, and tech platform, too. In your first M&A, it’s easy to believe you can manage two brands and two platforms. But after five or six M&As, you’re in 22 countries, and you have multiple brands, and different products and platforms. It becomes too complicated. Having a single brand and product helped us scale faster. 

Culture is also important.

It’s critical to ensure you have a unified culture, with the same codes of conduct and behavioural principles across different countries. 

You mentioned the importance of having a single platform to scale, but you also need a platform that’s flexible enough to adapt the product to the specificities of different geographies. In 2013-15, BlaBlaCar went through a full replatforming to enable the platform to tackle all these different countries. What did you learn going through this process? What advice would you give entrepreneurs on how to think about the architecture and structure of their products?

A platform will become more complex as it grows over time and will need to be re-engineered. It’s a mistake to think that four or five platforms with different names in different countries will save you from the fact that, after six or seven years, you’ll need to change those platforms and reinvest in tech. Having a single brand, tech team, and platform is much more scalable than multiplying the number of platforms. 

We shifted from being a monolith, in terms of code, to a service-oriented architecture. Doing that as you grow, particularly after being global with lots of specifications for different countries, is painful. You’re constantly wondering whether to continue building new features on the old platform, or slow down and spend more time reinvesting in the platform itself by creating it anew and then building features. But there’s no perfect answer. You need to find a trade-off between investing in your product and features, and continuing to invest in the old platform while migrating to a new one.

We made those hard choices in the last couple of years. We could have launched some features earlier but decided to pause and reinvest in the platform. There’s always a trade-off. Just be careful not to be too short-minded, otherwise you’ll pile up technical debt and soon find out that it takes years of replatforming to move on.

Shifting gears. Let’s talk about BlaBlaCar’s culture and values. I remember when BlaBlaCar launched in Germany. It was a very quick decision. The company managed to make it happen in just a few weeks. This was down to the culture and values you’d put in place. Could you elaborate on the key tenets of these, and how important they were for success?

Culture and values are critical for any company at any stage – and they’re tested in hard times.

Whether you need to make a quick decision, or you’re in a crisis like COVID, you’ll see how resilient your culture is.

We invested in culture early and wanted meaningful values. Firstly, you need a strong sense of purpose and be clear on the problem you’re fixing and why. Internally, we also worked a lot on our general principles around the way we work for our  employees, crowdsourcing them at a company offsite in 2013. We realised that a company’s internal culture - its sense of purpose and behaviours- is very much carried by its founders. However, that culture won’t scale beyond 50 or 60 people so, as you grow, it needs to be formalised. 

It’s important that any internal principles are embodied within actions and processes. We say “Dream. Decide. Deliver.” at BlaBlaCar, for example. While this could just be written on the wall, the agenda of every meeting is tagged either dream (brainstorm) decide (make a decision based on previous dream sessions, but no more room for dreaming), or deliver (provide a progress update on execution)”. This makes meetings efficient, and ensures the principles are relevant. 

We test our principles over time asking people if they’re being applied and how they’re embodied. If they’re not, we either work at fixing them, or drop them and evolve.

BlaBlaCar’s story has many chapters. There was rapid international expansion. The rationalisation of some of the countries which weren’t working. The launch of buses, railroad, multimodal, and then COVID happened. How do you think about resiliency as a CEO, a part of a company’s culture? Did you adapt the values?

Uncertain times test the resilience of your company and culture. COVID has put a lot of stress on the company over the last year. We’ve been tracking employee morale, before and during the crisis, using NPS as a key company metric. We’re proud to say that it hasn’t gone down - we’ve seen consistent employee happiness, even during these uncertain times. We were very proactive though. We over communicated and were very dedicated to keeping the team together and living by our principles throughout. We also stuck to our tech and product roadmap and in fact, there was lots of innovation over the last year, and we were able to ship more product features as we’re investing more in the tech platform. We also held an internal hackathon dedicated to supporting the fight against COVID-19, just at the height of the crisis, and ended up launching BlaBlaHelp as a result, a community app enabling people to support each other with grocery shopping during COVID-19.

Being able to keep the team together, keep your key talent, keep delivering, and keep morale up is the acid test of your culture and values. Every company faces challenges and  bumps in the road, and if people jump ship, the culture may have been written on the wall, but it probably wasn’t embedded in the team. 

Let’s talk a bit about your leadership style and broader views on entrepreneurship. How would you describe your personal leadership style?

Transparency is the main word I’d use - we’ve always tried to push this at the company. Whenever we give a CEO talk, we share lots of numbers and financials. It’s all transparent and open. Trust matters, too. BlaBlaCar was built on trust between members sharing their cars. The fundamental belief is that you give people as much information and context as possible, and assume it’ll result in brighter and better decision making. 

We encourage people to be entrepreneurs internally and talk a lot about the BlaBlaCar mafia that have gone off to set up their own companies. We say BlaBlaCar is a place where you learn and, when you stop learning, you go elsewhere. People can learn for a few years and leave. Sometimes they never leave, they just keep learning. Our culture of entrepreneurship, and accepting that, at some point, people leave and do something else creates a great deal of autonomy and transparency, and a healthy dynamic internally. 

I think the quality of your staff shows in the quality of your alumni network. There’s no stronger signal for attracting new talent than if people do great things after spending time at BlaBlaCar. Today, more than 30 people have left to start a company, with more than €60 million raised. 

What do you wish you’d known back in 2012 when you got the first $10 million investment from Accel? What advice would you give to entrepreneurs starting their journey?

Pick your co-founders and investors carefully. People don’t realise the intensity and length of the entrepreneurial journey.

Successful companies aren’t built overnight - you’re going to spend a lot of time with your co-founders. The same is true of investors. Accel came onboard in 2011, so it’s not just a year or two. You’re looking at five years plus on average.

I’m always a little sceptical when I see those incubators where people meet and – bang! – they start a company. It’s like going speed dating and getting married right away. Likewise with super-fast fundraising - you end up with two new board members you only met the month before. At BlaBlaCar, we typically spent a lot of time and knew everyone for years before they joined the board. 

I’d advise every entrepreneur to invest in those relationships. Don’t see fundraising as just raising cash and getting the best financial terms. Make sure there’s a fit. You’ll be spending a lot of time building your company’s strategy with your co-founders, investors and, more specifically, your board members. 

What life hacks or habits that you’ve developed over the years to cope with the stress of building the company can you share with other entrepreneurs?

I live in Brussels and the office is in Paris, so I travel a lot. I segment my weeks to try and spend at least three or four days a week in the office (pre-COVID) concentrating on the team. I do very few external meetings and avoid emails. 

I always save a day a week at home, with very few meetings, to go through data, and take time to think, read, absorb, and rethink. We all need quiet time, so you need to segment your week and not run like crazy all the time. Otherwise, you won’t have quality time to write or think. Spend less time on tactics, and more time thinking strategically. 

Spotlight on Engineering Team Building: Lessons learned from Algolia

Team building is top of mind for any start-up founder or exec. Recruiting and retaining top talent is even more challenging for software engineers.

To get an insight into how successful start-ups approach team building, we spoke to Sylvain Utard, employee number 1 and VP of Engineering at Algolia, an Accel portfolio company. Algolia is transforming the search and discovery experience that businesses can offer their users online, managing over 50+ billion search queries a month for enterprise customers including WeWork, Zendesk, Twitch and Stripe. Algolia has been doubling YoY since we invested in 2015 and has now more than 300 people, including 90 engineers.

We asked Sylvain to share his secret tips with us.

How do you attract talent as an enterprise start-up?

Sylvain: Because we don’t have the visibility of a consumer brand or a well-established enterprise company, we focus on what differentiates us. The first is culture. From the very beginning, our founders Nicolas and Julien talked about building a culture-first company, and for us it provides a way to both attract and assess candidates. 

The second is to demonstrate the reach of the product. Almost all of the tools, especially technical ones, that engineers use are customers of Algolia. That is a very powerful statement.

How do we get these messages across? We make sure the hiring managers are involved in the entire recruitment process, from sourcing candidates and selling the company. Not only does it ensure that we get across what the company is about in an authentic way, it also gives our teams visibility and input into the process.

In parallel, it is essential to tap into the widest possible talent pool. Many prevalent recruitment tools, including LinkedIn, tend to produce a pipeline of mostly male candidates - our experience is that the response rate is 40-60% among men, compared to 10% with women. We work to broaden our reach, through initiatives including meetups for female developers at our offices and pro-active reach-out to women. We also over-hauled the language used in job specs and other communication to remove typical male tech stereotype words such as free beer and a desire to hire “ninja’s”.

What are your top tips for assessing technical competence?

Sylvain: For entry level engineers this is quite straightforward and includes both technical interviews and home assignments. We’ll also want to look at someone’s previous work, and what they’ve been posting on GitHub (or Dribble for designers).

With manager level candidates, it’s important to recognise that they may have become one step removed from development work. To compensate, we ask them to conduct a mock interview, as if they are themselves interviewing a prospective new member of the team. This gives us a good impression of both their own technical knowledge, and how they would assess and coach that of others.

Retention is a big challenge for every growth company. What’s your approach to extending the life-cycle of your engineering team?

Sylvain: Onboarding is a crucial part of turning a good hire into a great team member. At Algolia, it includes sales call shadowing (because engineers need to understand how to sell the product, as well as build it) and a specific project that will be completed in the first 2-3 weeks, giving new hires an early opportunity to demonstrate their skills.

You also need to show people how they can grow their career at your company. This is best achieved by pushing decision-making power down the hierarchy, to keep your rising stars challenged and motivated.

Today’s talent expect flexibility and as a company you need to be responsive. In developing our remote working policy, we have spent a lot of time thinking about everything from the communications tools we use (no more whiteboards!) to the question of how client data will be accessed. Because our product is reasonably complex and requiring a good level of support, we find it beneficial to have people working closely together at least some of the time.

There has to be acceptance that retention is never total, however; People will eventually leave, and that doesn’t necessarily mean your system is at fault.

Finally, what’s your approach to team structure and management?  

Sylvain: Your teams need to change as your company does. We now operate a squad model, where our engineers are grouped into smaller teams dedicated to one specific task. There are currently over 20 squads, across products and focus areas from APIs to analytics. This model gives you focus, but you also need to work on connectivity between squads, for times when you want to make horizontal improvements across the entire product range.

Over time we’ve also come to recognise the importance of having enough management layers in place. At one point, I was line-managing 25 engineers and it became clear we needed an engineering manager to help the teams prioritise tasks and maximise productivity. At this stage, your role as the manager’s manager becomes important, offering a sounding board and helping them to learn and evolve in their role.

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Thank you, Sylvain, for sharing your wisdom. Building a great team is something that requires care and precision at every stage, but it is worth every minute invested. It is one of the most important success factors for a start-up. 

Tech Investments: is Paris ahead of London?

Interview (in French) on BFMTV earlier this week

French Tax Law for Start-ups: Ringing the Alarm Bell

 

Accel has already invested over $60 million in French start-ups and we would like to invest more – but will there be enough entrepreneurs left if the new Tax laws are voted in? 

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This post is a translation of the article: « Pigeons » : le cri d'alarme d'un fonds américain published on LaTribune (12/10/2012) and is a response to the proposed tax law proposed by the government of Francois Hollande, suggesting to tax all capital gain at the same level than salaries or 60%.

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While France has been a fertile ground for innovative start-ups, the new fiscal law threatens to disrupt an ecosystem that has slowly emerged over the past 12 years. Instead of increasing the tax burden on these companies driving job creation, why not take full advantage of this evolution of the tax law to position France as the most attractive country for entrepreneurs in Europe?

France has proven its ability to develop innovative internet models

 

Over the past three years, we have invested over $60 million in French technology start-ups with Showroomprive (number 2 in Europe for online private sales), BlaBlaCar (Covoiturage.fr the European leader in ride-sharing) and Shopmium (offering coupons via a mobile app) and as a result have contributed to creating close to 600 jobs. While our investment focus covers all of Europe, we consider France to be a very important market for our business and we are actively seeking new investment opportunities.

France is indeed a country with a proven track record of developing innovative business models.

Here are a few examples: the “flash sales” model was launched by VentePrivee and Showroomprive, the two European leaders and has been copied in the US by several companies such as Gilt Groupe; “online retargeting” was invented by Criteo, who currently operates in 30 countries with over 3,000 customers and whose success relies, among other things, on its 10,000m2 R&D centre located downtown Paris. Since its launch, Criteo has created 800 jobs, 40% of those in R&D; France has also been a pioneer in the space of ride-sharing with the creation of covoiturage.fr, a company that has built a strong community of over 2 million members and transporting a number of passengers equivalent of 1,000 high speed trains every month. And the list of success stories continues with companies such as Free, Meetic, AuFeminin.com, PriceMinister, SeLoger…

The second strength of France resides in its talent pool of entrepreneurs. With the experience accumulated during the first internet boom, this talent pool has grown considerably and gained in strength over the past few years. Those who have enjoyed success have given back to the community as business angels, through the creation of seed funds such as ISAI, Kima Ventures or Jaina Capital, or by sharing their personal experience through forums, conferences or teaching. A good example is the creation of École Européenne des Métiers de l'Internet (EEMI) in September 2011, founded by Marc Simoncini (Meetic), Jacques Antoine Granjon (Vente-privee.com) and Xaviel Niel (FREE).

Finally, another notable strength of France resides in its Telecom infrastructure. Indeed, France enjoys the highest penetration rate for broadband in Europe (32.7% for France vs. 26.5% on average in Europe according to Eurostat, Jan. 2011).

Amendments proposed to the 2013 Tax law are insufficient and threaten to destabilize the ecosystem

 

I will not go over the initial regulation proposal, which recommended a 60% tax rate on profits made by entrepreneurs after an exit (basic idea is to apply same tax rate on salary and capital gains). Instead, I will focus the discussion on the recent amendments suggested by the minister of economy and explain why these amendments are insufficient and threaten the growth of a booming ecosystem that has already proven to be and should remain a source of job creation.

The first amendment relies on the definition of « founder » and imposes a minimal ownership of 10% of the company and a holding period of two to five years to benefit from a lower tax rate. Let’s examine first the ownership constraint proposed by the amendment: the ownership level of a founder in his / her company depends on two key factors: the number of founders in the start-up and the potential dilution that occurs with fund raising (needed to sustain the company’s growth). Imposing a minimum ownership threshold on founders penalizes teams with several co-founders, while the combination of talents and skill sets coming from having several co-founders is usually core to the success of a start-up. This proposal also penalizes companies that have struggled to grow and had to raise several round of funding before reaching a critical mass, and have therefore been diluted more than they would have liked. Finally, it puts a break on the fast growing start-ups that could benefit from an additional injection of capital to fuel their growth but won’t do it to avoid further dilution. In our portfolio, we have companies with founding CEOs who own less than 10% of their companies for some of the reasons I just listed. Why should they be penalised in such an arbitrary way? The duration criterion is also very punitive for start-ups playing in the dynamic technology market. Let’s take an example in our portfolio: Playfish, a “social gaming” company, was launched in London in 2007. It enjoyed explosive growth, created 200 jobs in two years, and was acquired in 2009 by the American giant Electronic Arts. If that company had had to comply with the proposed regulation, its founding partners would have faced the following dilemma: either forfeit 60% of their gains in tax, or … ask Electronic Arts to come back later. Why should rapid success stories be penalised more than companies whose success is slower to come?

The second amendment proposes to apply tax rebates on capital gains applicable over a six years period for those who cannot meet the founder status. While this measure also relies on an arbitrary duration, which does not account for the dynamic environment in which start-ups operate, it will also create inequalities among start-up teams by dividing them into three “classes”: the “founders” who will be protected in some instances, the employees who have received stock options (and will fortunately not be impacted by this regulation) and the employees who have received shares and will be subject to a complex tax waiver scheme. Is this the “social justice” announced by the government?

To conclude, the ecosystem of internet start-ups is based on three key stakeholders: the entrepreneurs, who create the start-ups, the employees, who contribute to their success and the investors (business angels and venture capitalists), who invest capital to fuel growth. Those three constituents share the risks and play a key role in the development of start-ups. The proposed law, instead of bringing more cohesion to the ecosystem and aligning stakeholders’ interests, will in fact introduce inequalities that will ultimately lead to disequilibrium and conflicts… in addition to adding unnecessary complexity to the model. 

Why not take advantage of this law to make France the champion of Entrepreneurship in Europe?

 

Instead of introducing extra layers of complexity and penalising both start-ups and entrepreneurs, why not going back to simplicity and proposing positive changes that would position France as a beacon for innovation and entrepreneurship in Europe?

If we all agree that start-ups need to be protected given they are a unique vector of economic growth and job creation, why not take a step further and give them an attractive tax rate that could apply equally to all shareholders independently of any ownership level or duration? Why not apply a 15% tax rate on all capital gains coming from start-ups? Not only would such a measure boost the French technology ecosystem, but it would also attract entrepreneurs and investors to France.

One way to create boundaries for this proposal, would be to apply it only to shares acquired during the first twelve years of a start-up’s existence, after this date all transactions would be taxed at the current capital gain tax rate (regardless what the rate is – although I personally do not agree with the tax rate currently proposed by the government).  So why twelve years? While that threshold should be thought through, it would apply well to our current portfolio: among the 250+ active companies we have funded, the proportion of those founded before 2000 is minimal.

Such a change would play to France’s advantage and give a boost to the start-up ecosystem. Why not take a chance?

 

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