Surviving SVB's Collapse & Outsmarting Uber | Kyte's Nick Cobb

0:00constantly tell the team like we will and we are okay are the phrases I want to hear and like the phrases that I'm personally using. Like when I write down goals, I don't say we need to build this. We will build this actually. And this is something that is coming for Kite. And I think, you know, using that sort of like bias towards action language, it helps create this atmosphere where folks feel like the things that they're sharing and that they're seeing our problems are actually things that we're going to work on. And they're not just kind of like stuff that we need to do in the future at some nebulous place in time.

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1:09Third, having co-review automation that auto-request changes. And finally, by automating PR approvals and merges. To learn more about how GitStream works and to try it out free for your team, please visit gitstream.cm or search for GitStream in the GitHub Marketplace. Hey, everyone. Welcome to Dev Interrupted. I'm your host, Connor Bronson, and I'm delighted to be joined in New York today by Nick Cobb, head of product and engineering at Kite, an on-demand vehicle delivery startup. Nick, welcome to the show. Thanks for having me. Yeah, really excited to have you here. It's fun to kind of be in person at an event like this at Lead Dev and have this opportunity to dive into quite a bit of exciting things that are happening in the space right now.

1:49Absolutely. One of which is maybe exciting as a slow phrase for this, infamous probably at this point, the SVB bank run that just occurred recently as we're recording. I know this has been a meteor that's kind of hit the startup space and it really readjusted some of the topics we were planning to talk about. As an angel investor yourself, obviously someone who's been heavily involved in the startup space for years, both on a personal professional level. I'd love to get your take on the impacts initially from this historic event. Yeah. I mean, I think the initial impact Thursday, you know, lots of people scrambling, trying Trying to figure out, you know, what to do, whether or not they needed to move their money or, you know, play catch up with with other fundraising, things like that and do damage control.

2:36Oh, man. I think as Friday rolled around, you know, a lot of people had either made that decision or were still trying to, you know, weigh what the outcome was going to be. And I think a lot of founders, like a couple that I talked to, they're looking at that decision between having 18, 20 months of runway go down to like four to six months. Yeah. Trying to make some new decisions. So definitely had an impact on a lot of folks. And I think, you know, now that it's kind of played itself out a little bit, they're feeling a little bit safer as, you know, depositors are made whole. But I think now, you know, folks are starting to think about what are the risks in my business?

3:10How quickly can I get profitable? You know, and if they didn't hear that message already, they're doing it for sure now. So yeah, it's been funny to hear the word geodiversity in banking. That phrase has come up a lot here in the last few days. Yeah. And I don't know about you, but I wasn't hearing that often beforehand. So it's really clear this is reframed, how people are thinking about financial risk. I'll say, like, personally, I think you and I both kind of agree that it's a positive. The depositors are made whole. Otherwise, there were essentially thousands of companies that weren't going to make payroll off of this.

3:42But it's a controversial thing. Did it personally impact you at Kite? We were minimally impacted. impacted. I think we had some exposure to like partners, I think, you know, Rippling and a couple other companies that helped deal with payroll, you know, they were interfaced with, with Silicon Valley Bank in some way. And so, you know, we weren't necessarily directly impacted in, in a massive way, but we've had to kind of work with those partners to kind of navigate around the problem and, you know, kind of move things around as needed. So. Yeah. It's been interesting as a, as a B2B business, like the one I work for where Linear B looked at it and said, okay, like similar to you, we weren't expecting to have major impacts.

4:20Sure, it would have some impact on us, but the second order impacts were very scary, right? Where it's like, are other banks going to fail? Is this going to cause many of our customers to have to say, oh, we can't renew because we simply don't have the runway to go forward with us anymore. So I think that was something where the initial piece of this puzzle was concerning enough, but the second order impacts could have been so much greater. And I'm curious what you think this result of having depositors made whole, but the ecosystem kind of showing its cracks will mean for the technology space and startups in general and how folks are going to react to it.

4:59Yeah. I mean, I think there was already a trend, say like, capital's not free anymore. We're not just, you know, funding ideas and, you know, some of the crazy stuff. Can't just get a, you know, fundraise based on your background and, you know, no traction and things anymore. I mean, I think a couple of things I've seen so far, you know, in B2B space in particular, folks saying, hey, like, we're probably going to delay payments until we can kind of like create that geodiversity that you were talking about or until the situation's resolved with depositors like fully. I think a couple of others has been, hey, you know, we're only taking payments in this account now.

5:34You got to update all your accounts payable and like the place where you actually send your payment, the platform in which you're using, we're now using this other one. And so, you know, how they do their AR has changed a little bit and we've had to change a little bit of our AP and stuff like that. You know, I think like the companies that are going through this, they're job creators, they're entrepreneurs, they're doing hard stuff. You know, don't start a company unless you feel super passionate about it because you're going to deal with everything from growth challenges to employment issues to bank runs.

6:05So I think we can add this to the list of things that founders have to deal with, right? Yeah, absolutely. Do you have any advice for founders as they go through this process or face these other impactful challenges? Yeah, I mean, I think, you know, remember why you started the company. You know, a lot of times like we go through the same thing at Kite. I definitely went through this at Uber. Lots of news. There's always going to be something going around. You know, there's always going to be something to try to pull your attention in various places. Like keep your head down, keep working. If you believe in the mission, like just keep going so more generally as a someone who's been very involved in angel investing yourself i'm curious if this reframes how you think about risk for early stage companies at all whether it's like okay is are you now thinking more about is this company based in silicon valley or is it based elsewhere and how do the financial systems work around there just wondering if that's coming into play at all yeah i mean i have not really uh ever discriminated on location i think there's lots of talented people everywhere and so location is one factor maybe definitely before 2020 it was a bigger factor but i think now less so oh yeah async has just become so much more common yeah and remote work's been enabled both synchronously and asynchronously and i mean just the prevalence of zoom and slack and all these things that have really burgeoned it makes total sense you can now recruit remotely worldwide right yeah so but but risk-wise i think like i've always personally been focused right now like mostly on post-revenue companies um companies that are finding traction, but still iterating on the idea.

7:33Um, and then, you know, beyond that and later. So I think from a risk perspective, you know, that, that risk is always there. They're new companies, they're early stage. Um, but, uh, I think, you know, post-revenue companies have significant de-risking from companies that are still figuring that out and, and haven't created any revenue. So for me, I mean, I'm still looking at the same things, mostly seed and, and pre-A series A, you know, timeline. So. So this brings up an interesting point before we had this conversation, you said something that I thought was intriguing, which was, this is the perfect time to join an early stage startup.

8:06Yeah. Uh, why do you think that? Yeah. I mean, I think, I think, um, there's a couple of kind of like ideas that you could frame it as. I think number one is that, um, investing in equities or getting equity ownership in a company is a good hedge on inflation. Um, instead of putting, you know, your money in cash and having it sit and dealing with the kind of like the inflationary kind of like results of that. You can put your time and your energy into a startup that you believe in, that's performing well, that has a great founding team, that can be a big business, you know, these things, and that you find challenging and rewarding.

8:42And I think that, you know, through the next few years, it's going to be really hard. But there's a lot of challenges that, you know, if you're investing in yourself and you believe in the idea and the team that's there, you know, equity ownership in that company can really mean a lot. And I think more and more people with all the layoffs and things like that are starting to look at early stage startups and what's the opportunity in as much as there's a group of those people also looking for the safer, you know, kind of like a big tech company or something like that to kind of like, you know, ride out the storm.

9:11And so I think the builders and the entrepreneurs and the operators who are willing to take that risk are actually going to build some amazing companies. And we saw that, you know, coming out of the financial crisis in 2010, 2011. I think the talent opportunity for those founders is so much higher now, too. Obviously, it's a shame that we've seen such mass layoffs. I know it's very scary for a lot of folks, but it also means there are a lot of very talented people who maybe were paid to not do as much at a larger company and kind of rest and vest, so to speak, and now are saying, okay, I have to go find a new gig.

9:43Maybe the Metas, the Facebooks, the Microsoft, the world aren't hiring quite as much. Let me go put some time in at a startup and see this potential upside around equity, but also bring this depth of experience and knowledge I have. So that's got to be encouraging for founders, too. And I'll say just here at Linear B, we're seeing a rise in applications overall. And sure, part of that may be related to us doing well, but a lot of it, I think, is just the economic climate where things are going. And that talent quality is really rising. I mean, I think right now is probably the best time for entrepreneurs in America to get started on the hardest problems.

10:17Like, um, I think there's plenty of, plenty of, uh, venture capitalists out there who would fund what they call, you know, American dynism companies, you know, and take on a lot of things that will, that will give America, you know, advantages for the next couple of decades. We see a lot of defense startups. I think, you know, defense is like kind of a touchy subject, but, you know, onshoring a lot of manufacturing for semiconductors is a big deal. Um, bringing a lot of that technology that we've kind of like pushed away for a long time back, you know, back to the U S I think is an opportunity.

10:47And, you know, I do think about this all the time is that like the next thing I want to do is go work at one of these companies or start one of my own. So you're thinking founder next. We'll see. We'll see. All right. All right. You got a couple of years of kite here still. Yeah, there's plenty to do. Yeah. Let's talk about kite a little bit. Really fascinating company. I mentioned on demand vehicle delivery startup earlier, and I think it's interesting to talk about that based on your Uber background. Yeah. But yeah. What's kite for those listening? Yeah. So, I mean, we, we like to define Kite as, uh, you know, basically providing you a car for any trip longer than a ride share.

11:22Um, right now we're focused on the more traditional kind of like rental experience and improving on that. It's an industry that, uh, hasn't changed in decades. No, there's literally a Seinfeld episode from the late eighties about the rental car desk and getting a car, like booking a car, having a reservation there and then not getting the car that you want and like signing the paperwork and all of these other things. And I think like watching that episode, the experience really hasn't changed. So, um, you know, pre-booking, we support web and mobile. Uh, we try to have like a mobile first experience overall in the post-booking.

11:56Um, you can see in real time, the car being delivered to you. Uh, you can coordinate with the, we call them surfers, uh, who bring you the car, uh, in real time. We have direct access to chat support. You can add an additional driver without having to go to the rental counter and, you know, do any of that, you know, kind of, kind of dance song and dance. Um, we can do verification. So we identify the drivers and verify them. Um, we use like, you know, document scan and selfie and facial recognition. So we're using technology to kind of like further this, this, uh, this kind of antiquated, you know, experience for customers.

12:29And, you know, really for us, it's about unlocking freedom for everybody, right? Like, um, I think we saw it at Uber, there was a lot of underserved areas by the taxi industry. We were able to open that up using technology and kind of like remove that barrier. And I think Kite can do the same for car ownership, for the rental experience and overall like subscriptions as well. Right. So I don't own a car. I haven't owned a car in nine years. It sort of played well for me to work at Uber for seven years. Totally. Now, now I'm kind of doubling down on that with with Kite and I'm excited about it.

13:01So fantastic. What kind of metrics are you looking at to see whether Kite's being successful and how you're thinking about the future. Yeah, I mean, we look at utilization of the vehicle fleet overall. We own all the cars. We have what we call dark, you know, lots in the 14 markets that we're in today in the U.S. So we look at utilization overall. We look at a lot of the same core metrics that most startups look at, you know, LTV, CAC, you know, all of these kind of like, you know, acquisition, et cetera, et cetera. But we're really starting to look at like system performance as a metric for the business how often are customers interacting with the features that we're shipping that do kind of like wrap kites experience uniquely and then you know how do we take those those specific features and double down on them to create even more differentiation for for the customers that kites bringing but you know similar to like like i said many companies look at retention you know we look at travelers versus like locals and who's replacing a car like car ownership like I would versus somebody who's traveling regularly for business or for work or for leisure?

14:06Are they bringing their family, you know, all of these different types of customer cohorts and just like how the product gets used. Can you give us an example of one of those features that you've shipped maybe the last few months and how you're deciding on success there? I'd love to dive in there. I think it's a really informative thing for product and engineering teams to think about because it's so easy to get disconnected from, am I actually delivering value to users with this feature and say, oh, well, you know, the C-speed was happy and, you know, some people in sales really wanted this. So it's there.

14:32But is it being utilized? Is it actually realizing values? I'd love to dive into that. Yeah. I mean, the one that comes to mind in particular, if you have rented a car in the last couple of decades and, you know, halfway through that trip, you need to add your spouse or a friend. There's some reason that you're, you know, kind of like trying to open up the opportunity for someone else to kind of assist you with whatever task you have that you rented a car for. You've got to drive back to the counter. you've got to show their ID, you've got to sign some paperwork, you have like modified rental agreement.

15:01Somebody's printing that usually on a dot matrix printer, you know, and you have to sit through this whole thing. There's somebody typing into an interface for 30 minutes. We don't, we don't really know what that interface does. But point being is that, you know, we can like improve that experience and have using our additional driver feature. And so in the app, if you have an active trip, you literally tap a button, you get a share link that you can share just like you send a text message or any other link, you know, to a friend and they'll pop that open in a web browser. It'll deep link into the app.

15:29They can sign in. They can complete the verification process in under 30 seconds and they can be added to your trip automatically. And so that feature in particular, it does two things for us. It creates this differentiated experience as we've talked about and like kind of up levels the car rental experience in general, but it also creates a growth strategy for us because people are inviting their friends to trips. They see how easy it is to get a kite and invite their friends. They tend to sign up automatically when they get added to the trip and they go through verification. And then we see those folks booking two and three more trips after they've been added as an additional driver.

16:05And so it's kind of almost like a referral, but it's involving them directly in the product like from day one and getting them directly onto a trip. How did that feature come about? I think that's a really illustrative example of both where you've seen success with the product and engineering work. But I would love to kind of back out of that and say, okay, you know, what inspired it? How did you find that piece? Because I think that's something that a lot of startups look for is, okay, like what's the right way to decide on key features? And this has clearly been successful for you. Yeah. I mean, I think, you know, adoption is one, like we have a hypothesis.

16:38We go through the product discovery process and we say, you know, do we think that, you know, this particular effort will move the needle, you know, a certain amount. We look at revenue per rental day. We look at, you know, revenue per unit on a vehicle basis. And we try to determine, you know, is the feature we're adding going to create more additional value in those metrics? And then we, you know, we go back, hypothesize on what that feature might be. How do we improve on the experience that we're creating for users? And then, you know, we experiment. We ship the lowest, you know, kind of effort thing and try to iterate on it.

17:10So I tell our product team a lot, like downscope everything to the smallest degree. Great advice. And we can talk about engineering strategy as well. Love to dive in there next. Yeah, in the last year and a half. I mean, we've, we have shipped and started moving the technology stack in a direction that removes engineering and in some cases product from the iteration cycle for the operations and markets teams. And so where we have business operations, markets, or where we have growth, we want to run experiments quickly and easily. We now have the software capability to look at, you know, a million different dynamic configurations.

17:42So if we have different tax structure in New York City, in Manhattan or in Brooklyn or in Jersey City, we can actually distribute that across configurations. Software can read all of those things and the market operations team can make those modifications as needed. We can adjust prices. We can adjust, you know, the latency of the feature. We can adjust, you know, tune lots of different parameters. And we can create this globally consistent experience where everybody's experiencing the product in the same way. but it's tailored, you know, more towards the local constraints of their market. So that's, that's been one of the big things that we've shipped is dynamic configuration and an experimentation platform in the last, you know, year and a half.

18:20What led you to that kind of modular approach? Yeah. I mean, uh, there was a lot of learnings from Uber, I think, because Uber did a really good job of creating this, you know, global experience in 300, 400 plus cities during the time that I was there. And I went to India, I went to Southeast Asia and like four or five different markets and I saw that the Uber that you know I was using in San Francisco was very similar to the Uber that people are using in India and there were different you know kind of like product outcomes fine-tuned differently you could pay in cash in Southeast Asia and India right we didn't have cash payments here and the adoption of cash was much better in those those markets it fit that the market dynamic and so you know the the product and growth teams they figured out how to implement cash in a way that you know was successful in those markets and all of the constraints around cash and how to do payments and how to alter the product and both on the driver and the rider side.

19:12And those things were very modular in the product and they did a good job of scaling that. So, you know, because we have similar kind of market penetration and footprint and breadth, you know, and we'll have more and more of that, we want to create that structure early and, you know, kind of build that out in a way that can make Kite very globally consistent, but, you know, modified per market. This seems like a logical time to ask you, Do you think Uber is still succeeding in that same kind of product innovation? Because I've seen some of your tweets. I know you have feelings on this. Yeah, yeah.

19:39I mean, you know, I have a lot of friends who work there, probably some of the best engineering culture in the world. And those folks are gone. I think that the way the company has been managed lately, like the level of innovation has significantly backtracked. You know, a lot of folks talking about app redesign and stuff like that. I mean, that's been four years in the worst to create this kind of super app. And I'm not sure that that when I open the Uber app or customers open the Uber app, they think about getting every single thing through Uber. And I think it's a bet. It's you know, I think it's courageous to take that kind of bet and really look for that.

20:11But I'm not sure that that strategy wouldn't have been more effective, implemented faster to kind of like get more people thinking that way. You go into the pandemic and you really have to kind of burn a lot of the businesses and the core bets that really made Uber successful in a lot of different ways. Like if you don't take moonshots, you don't get the microwave. You don't get, you know, tinfoil, you don't get, you know, the, the tang and all these other things that came out of that, these great innovations that we have as humanity, because we're taking moonshots. And if you're not taking those, um, it does impact the culture overall and, you know, how people feel about what they're building.

20:45Um, and I think, you know, the, the business has, has just kind of like reacted to more of the market need and, and less of maybe the customer need. And I think, you know, that's an advantage startup has, you know, build for speed and focus, listen to your customers and build what they want. You're not doing that. I don't know what you're doing, right? If I put you in charge of Uber's product and engineering teams and it's like suddenly Nick, hey, you're the new head of all engineering and products at Uber. You've got this like carte blanche to reimagine how Uber's taking their approach. What would you do to try to inject more of that innovation DNA or improve what you're seeing as far as outcomes?

21:23Yeah, I mean, I think that the dog food and culture seems to have disappeared. And I think that's the big thing. We're creating that at Kite. We want everybody internally using the product as often as possible. um the first thing that i would want to fix just like personally is dispatch latency in san francisco um i know it's you're san francisco nato right i'm from memphis but i live in san francisco and i use a product and you know i i just dropped a general kind of observation on twitter and said it feels like dispatch latency is like three four minutes when i request the car i can kind of leave my phone and just go get a coffee go do something else and you know there there was a realization that we had at Uber back in the day, which was people start to demand like a better experience year over year because they get used to the wait times being lower.

22:06And so they anticipate that, you know, it's gone the other direction. Yeah. And I think it's gone the other direction. And my hypothesis is they've, they've integrated taxi into the supply and that they're doing that for, you know, core business supply constraint reasons, I think, and partnership as well. And yeah, I mean, every time I get a taxi, it's a 10-minute dispatch. It takes forever. And I'm upset with the product experience right now. So that's something I would focus on. It does feel like you have to, and this is super anecdotal, but order your Reaper farther in advance today. I'm not going to think, oh, I can get one quickly.

22:45I know I'm going to have to wait a little while. And I think that's a great sticking point to mention where it's like, okay, there's been this big focus on being coming, you know, North America's WeChat, it feels like in some ways. But it's like, we're going to have everything on here, grocery delivery, everything you want to do. And it has missed out on some of that core business, which, I mean, I hear you on the whole, like, maybe they could have gone faster on the super app and maybe that was the direction. But because it's moved so slowly in some ways, and obviously a pandemic headwinds have heard it, the core business now is, at least from a user perspective, suffering.

23:21Yeah. Yeah. I mean, there's still a lot of good people who work there. You know, I still have a lot of contacts, you know, and friends that are still there. And I think they're really doing their best. I think that business always struggled with the business side, the making money side and ride sharing. It's a hard business, right? Like it's a bits and atoms business. anytime you have atoms in the real world it's probably the hardest thing that you're going to do but yeah i agree with you i think i was thinking about the the app redesign further it's like you know we redesigned the rider app in 2016 and that was an all hands on deck you know overnight every week burn and everyone was excited and everyone was you know kind of like pitching in and trying to solve this challenge and i highly doubt anybody's staying at uber after 5 p.m these days, you know, so, and, and I mean, that's not required.

24:07It's not, it's not, you know, And it's hard with an enterprise scale company where you start to get kind of abstracted away from that core team and feeling connected. Yeah. You start to lose that, like do whatever it takes, you know, kind of mentality. And, and you stop believing in, you know, some of the product and maybe even the innovation, you know, level of the company. So, um, but yeah, I mean, you know, they're still working at it and, you know, I'm rooting for them, but, uh, you know, I'm going to give them some feedback along the way. Yeah, totally. is there an enterprise that you see today that is doing a good job with that dogfooding approach you mentioned?