SpotHero: Mark Lawrence

27:35It's obvious. Visit www.happyegg.com slash built to find Happy Egg near you.

27:55Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2011 and in order to get customers for his new parking service, Mark Lawrence literally Googles, how do I get customers for my new parking service. And one idea he has is to start a blog about parking. So I went on the street and I would map every inch that you could park for free with pictures of the signs and where you couldn't park. And we had these maps that I made in Microsoft Paint. So if you thought our website spot here was janky, you should see my artwork of maps for free parking. And then when it was there, I was like, hey, if you don't want to risk free parking, click on this link to go to spot hero that is absolutely brilliant that's such a smart idea so you would you would spend all this time writing blog posts on how to front find free parking near a sports arena people would find it because they might type that in and it was really designed to get them to become aware of spot hero yeah and so that was where our first customers came from.

29:03In addition, we also posted on Craigslist too. Those would always get flagged and we'd have to go through different hoops, but between the content marketing and SEO and Craigslist, and, you know, we just went down the list. When you Google, how do you get customers? There were, you know, things came up like pay-per-click or SEM and our budgets were super low, like, you know, a few hundred dollars a month, but, you know, it added up. We didn't have too many parking spots, but we were able to kind of, you know, grow neighborhood by neighborhood. Got it. But still, I mean, the business basically started by going to people and saying, hey, rent us your spot, right?

29:38Like, just like Airbnb. But I guess after a year of doing this, you've realized that this is not scalable, right? This is not a great model. And I think it was around this time that you started to meet people who actually owned parking garages, right? Right. We were using Twitter at the time to tweet about parking and seeing can we attract people or see people who are frustrated with parking in Chicago or for Wrigley and say, hey, have you heard of Spot Hero? It caught the eye of someone named Eric Elo, who was at Central Parking, which at the time was the second largest parking company in the country.

30:16He saw your Twitter feed. Yeah. And so he had reached out. And so we met and it was interesting because, again, never sold parking in a garage. And to date, we had 50 spots, like 50 spots. It was a peer to peer system. Yeah. And so, you know, some of the conversations with Eric, like looking back are just, you know, kind of, kind of, you know, funny because, you know, he said, you know what, I'll try this out. Why don't we start something small, like a couple of thousand spots? And I remember like, you know, try to keep it cool. I'm like, wow, a couple of thousand spots. I remember I said, Eric, so are the, are the spots open every day?

30:59And he's like, what do you mean? It's a parking garage. I'm like, yeah, well, like a lot of the people we work with, sometimes they're at work or like they need to move their car or they use it on a certain day. And he's like, yeah, it's a parking garage. It's open 24-7. So instantly you go from 50 spots to a thousand or more, even more. Yeah. Initially, when Eric said, hey, let's try this. I'm curious to see how this will work. Was it cheaper? Would it be cheaper to go through Spot Hero rather than just to go directly to the garage and pull a ticket and go park? So, yes, it was cheaper and they would sell excess inventory.

31:37So they knew, for example, I'm going to have 800 empty spaces after 3 p.m. And I might only have, you know, 50 spaces during the day. Right. OK, so you're you're starting to work with parking garages. And then I guess you meet this guy named Harlan Karp, I think. And not only does he have garages, but he's also kind of building or developing scanning equipment like those machines that we use today where you scan your ticket to go in. And I guess he wants you to start using those as well, right? Yeah. And again, in hindsight, it seems obvious. But at the time, I'm like, goal, get spots for Bears games.

32:22We have zero. Harlan has these spots. And he's like, hey, let me show you this future vision of parking. And he was telling us about a problem that he was solving that we didn't have because we didn't experience it. We never sold parking in a garage. And so ultimately at that location, the Park Connect from Harlan stuff was put there. And you could scan to get out. You would scan your printed out, the printout? So you could scan a printout or you could scan it from a phone. Right. And so it depended on the equipment. But that was the first, actually, you know, that was one of the first garages that we got the equipment in.

33:02So it was perfect because, I mean, with Harlan's technology, it could become more seamless. Right. And we ultimately were able to get, you know, these different garages on board from three of the largest parking companies in the country. Oh, wow. Wow. And I guess in the meantime, like neither you nor Jeremy were all that like technically minded. And so I guess around this time you brought on somebody who had more like technical skills because a guy named Larry Kiss to be your CTO. Correct. Yeah. And this, I think, is around 2012. And that was the year you also applied to Y Combinator, which, of course, famously, you know, incubated Airbnb and Coinbase and Instacart and a couple of other major companies and brands.

33:46So what happened with that? I mean, the interview was interesting, but it didn't go well off the bat. And the key reason they said no was because they didn't believe that we knew Larry long enough. And they were like, it's a huge risk to have two business founders and a technical co-founder, of which was such a new relationship. Yeah. Interesting. No, I mean, it makes sense. And their record's very good, but obviously they have to make a decision. Was that disappointing when you didn't get in? You know, it was, but I was so excited at the time to be in San Francisco, to have just been in the room at a Y Combinator interview.

34:33I felt it also clarified a lot of things for the business just by actually filling out the application. you know because of the experience i was so excited to apply to other um ones and you know did all these interviews and you know kept getting turned down and then um i remember we got in they accepted us into tech star chicago and it was interesting because we all weren't sure if we want to do it and you know myself larry and jeremy talked and we actually decided no and you know ultimately sat for, you know, a few hours talking to them about, you know, pros and cons and like what we're going through and, you know, conversations like you said, I have to be in all these meetings, meeting all these different people.

35:18I'm like, I, I'm like, I don't have time for anything. I'm going door to door. I'm having meetings to get parking spots. I'm, I'm, I'm doing our SEO and our pay-per-click. I'm, I'm like, right now I'm like, look, I'm missing customer service calls. People are, they need me and I can't answer the phone because I'm here in this meeting with you. And I was told, well, you could, you know, just you could hire someone. Have you thought about hiring anyone? And I'm like, hiring anyone? It's like, never thought. You know, it's like, it's been a year and a half. I'm like, I didn't realize you could do that.

35:51It just wasn't a thought. Okay, so you changed your mind, you and you wind up joining Techstars, the incubator. And, and to get into it, just to clarify, I mean, to get into one of these incubators would work to your advantage, right? Because, of course, you get usually an office and the office space and a network of people and mentors and investors who can come by for the pitch day, right? And oftentimes they get, sometimes not always, these incubators, depending on what they are, to get a little bit of equity in the company. Yeah, so they got 6 % of the business and we got$50 ,000. Did you need the money at that point?

36:30I would say yes. I mean, I know how beneficial, you know, joining Techstar Chicago is now. I didn't at the time. But I remember thinking when we raised, like, we're like, we raised$50 ,000. Like, it just felt so good. And I'm like, we did it. Like, it took a year, almost a year and a half to hit$1 ,000 of sales in a month. Okay. And which meant, like, we're taking home, what, like, you know,$150. But I remember in 2012, sales ramped in January, February, March, April, May from$5 ,000 a month to$80 ,000 a month in May. But the worry was, is this going to last? And so we were kind of scared to hire someone.

37:15And that$50 ,000 gave us the confidence to make our first hire. But when Techstars brought you in and they, you know, 50 grand, they get 6 % of the business. I mean, essentially the business is valued at just over a million dollars at that point. I think less. If we gave up 6 % for$50 ,000. Yeah, a little less than a million dollars. Yeah. Did anybody say, that's a lot. That's giving up a lot. Oh, like everybody. Yeah. But I, like, and that was kind of like why we initially said no. no and I thought about it after the conversation and I remember I was sitting you know by myself in the car everyone was like you should negotiate you should do this and like no you should say no you guys are already doing 80 ,000 a month and I remember just thinking I'm like okay what is the best possible outcome if I say yes to this and what's the worst possible outcome and thinking through those like different scenarios it became clear like okay I I want to do this.

38:15So you guys now have significant revenue coming in, 70, 80 grand. But again, your costs were that super low. I mean, was that so, I mean, were you profitable in that year? Yeah, we were profitable. Yeah. And so with that, so essentially, I'm thinking now you've got some traction. You've got real money coming in. I mean, you're going to hit almost a million dollars in revenue in 2012. And so I have to assume that the strategy now is to just expand, get more and more and more, work with more and more parking garages. Yes. And the idea was, can we create a model that we can then bring and scale to other cities?

38:57And so our expansion, we were the only – because we started out all these different competitors pop up. And many were in 10, 20, 50, 150, 200 cities. We were only in one city. And our focus was, can we really get a true playbook for this business in a single market and then go to our next market? And I guess you raised a seed round in December of 2012. It's about$2.5 million you guys raised. And your idea is, let's do this slowly. Let's really first own Chicago. And then we'll expand out. Then we'll go to other cities. Essentially, you were able to iron out all the potential friction points by really focusing on Chicago.

39:45Yeah, the friction points because if you think about it, we've talked about, okay, there's the parking operators and there's the drivers, right? There's the parking spots, spaces, and drivers. But the third leg of the stool is the point-of-sale systems or parks, which help enable that consumer experience. And so it's not just as simple as getting the spots and the drivers. So working out the different kinks, understanding each detail that's needed by the different partners, right? Like there were also, you know, folks in the garage that we could talk with and understand what's happening. How does this work?

40:23But meantime, all over the United States, clones started to pop up. Companies doing the exact same thing but expanding faster in New York and Washington, D.C. and L.A., etc. Give me a sense of how investors reacted to that. Were your – even your seed round investors were there saying, hey, what's going on? Why are you just in Chicago? Yeah, I would say there was a lot of pressure. Why are you just in Chicago? If you're not in these other markets, you're not relevant. Um, Uber was also launching and, and, and, and Lyft. And there was this whole idea of blitz scaling and, and moving fast, making sure that, that, you know, the land grab didn't happen, you know, by, by somebody else.

41:14And my point of view was the parking industry was more about relationships. At the time, you know, 60, 70 percent of the dollars spent in parking were cash. It was a very, you know, old school group of folks that had, you know, set ways of doing things. And this idea that you can just throw money at a problem didn't work with an industry that was, you know, really about relationships and trust. But I have to imagine with all these other competitors out there, a lot of the money in Silicon Valley was going to those competitors. I mean probably a lot more money than you guys had raised. Oh, an enormous amount of money.

41:55And it was very stressful to see all of these pins pop up in different places that – well, we were just in Chicago. And we were called a one-hit wonder. Hey, you've got one city. It's really great. you know where you're going next i'm curious was a part of you scared and worried about expanding out and and and to the point where you were worried that it could actually tank the whole business i definitely was because i saw that happen to a lot of different companies they expanded and they got tanked and i'm like man if i'm you know in these different cities i'm not going to be able to have the same level of of care and the whole thing could come down so there was definitely a a worry of of spreading myself too thin we also didn't have the same resources as all these other companies right because you raised two and a half million dollars so you you had that runway but you also and you had some cash coming in but but you didn't have tens of millions coming in right because this is a i mean it's dog eat dog right like if you're not parking in my spot you're parking in my competitor spot yeah the the number one key thing for why we beat them all of the folks in Chicago is we were only in Chicago.

43:11Everyone else was distracted with all these other cities. Even the companies based in Chicago, they were focused outside of Chicago. You had competitors who started, who were also based in Chicago. Yeah. Multiple competitors based in Chicago. Just sounds like a nightmare. It was hand-to-hand combat, slog, like you could not imagine. Like, you know, I remember having a conversation with one of the, you know, CEOs at the time of a rival parking online company. And I said, you know, it's interesting. All of my signs disappeared and your signs were put in their place. We had a hundred of them and they all disappeared.

43:54But, you know, I was told, Mark, you know, it's just coincidence. And I'm like, coincidence, really? And so, you We had our back and forth, different sign wars. So it was a slog. But the real thing is we focused all of our efforts in one city. And because all of our efforts are concentrated there, dollars, focus, operation, relationships, every aspect, we could react quickly. We could make changes quickly. We could iterate. We had much closer attention to the details. Our response time was extremely fast because we don't have 20, 50, 100 cities. We have one city. But it sounds like even some of your investors are skeptical of your strategy.

44:37Even people who are on your side are skeptical of your strategy. Absolutely. Investors were very skeptical, you know, feeling like, hey, the trajectory in one city is not interesting. The idea of what Spot Hero could be nationwide and then worldwide is exciting. And people are eating your lunch everywhere. And by the way, that's not bad advice. I mean, these are experienced investors, VCs who had probably invested in other platforms and companies that had done very well with the strategy. So who are you, an upstart young guy, to say, I know better? Yeah, it's interesting because I wasn't thinking like so much I know better as I really fear going to another market.

45:33Right. Like, you know, so it was like they would try to elicit the fear of losing, but the fear of expanding was greater. Yeah. All right. So finally, after a lot of pressure, the first place you go to expand is Washington, D.C. which I, February 2013, I was living there at the time. Who sort of owned the DC market when you guys went in? Because again, there were competitors everywhere. Who had the best market penetration? There was a company called Parking Panda. Parking Panda had the largest concentration in both DC and Baltimore. They had, you know, started around the same time as us. And by the way, could one parking garage, did they have to exclusively work with one brand?

46:21or could they work with Parking Panda and with you guys? So they could work with Parking Panda and us. So some were exclusive, some were not, but they could work with both. But the way that we communicated was different. All the other companies were trying to get exclusives and our strategy was like, we don't want exclusive. We want to prove to you that we can bring more dollars than anybody else. Here are references from Chicago, from people in your company, some they know, some they don't. and they work with, you know, three, four, five, six, seven, eight players. And we bring more than all of them combined.

46:56And we want to do that here. In addition, we were the first to have anytime parking on a website. And then we were the first that had an app. We were the first to iOS. We were the first to Android. And the focus of being only in two markets allowed us to really leapfrog parking pandemic. And I think very soon after DC, you expand to Baltimore. and then Boston. And that year, right, because now the last time you'd raised money was in 2012, it was$2.5 million. Now you go back to raise money. This is in, and you're looking for Series A money. You know, given the success now, you got success in DC, you're expanding, but still slowly.

47:38Was, were investors lining up to back you at this point? No. Investors, no way. They were not lining up. Not only were they not lining up, And our traction was good, but not great. And it was slightly interesting, but not interesting enough. I didn't keep in contact with the investors. The ones that had put money in? Yeah. I was just focused on building the business. So you weren't sending regular updates or anything? Not really. No. Yeah. That was probably not very popular among some of the investors. Not very popular. And now, wow, we have a burn. We're running out of money. But, you know, we did have some investors that did step up.

48:23You know, Cole led the round with Chicago Ventures, Bullpen Capital, and Mike Gamson. But it was really, it was a really hard round. This was May. If we didn't have that first wire, we would have been out of business, right? It got to a point, and I never lie, but I lied once. and it was to our accountant, Stephanie. And I remember she came to me and said, hey, I'm looking at the bank account. When is the round going to be done? I said, why? She said, well, because we have money coming due. Like we have to pay payroll. We have to pay operators in like two days and I don't see enough money in the account.

49:07And I'm like, oh, well, there's other accounts. Like, don't worry. and I didn't know when the wires would actually hit. And one of the bigger wires, I was, you know, asked, hey, you know, I've got a delay for a couple weeks because of some capital calls and VCs, they're going on vacation. You don't mind waiting a couple weeks, right? And in my head, I'm like, well, if I tell them no, they're going to be like, why are you out of money? Right? So I said, fine. Luckily, we were able to get a wire on the day that we had to pay payroll and operators. And so it was fine, but very hard. All right. But you raised$4.5 million.

49:52Again, you've got well-capitalized competitors. You're still under pressure to expand. And by the end of that year, December 2014, You do go to San Francisco, which is a tough place to go to simply because, you know, there's tons of competitors. The smart, you know, again, I don't want to say the smartest, but look, just statistically, if you look at the stats, the smartest startups and VCs are here in the Bay Area. They are. I mean, you've got Stanford, you've got Berkeley. A lot of them are coming out of here. The money is here. It's on Sand Hill Road in Silicon Valley. So it's a tough place to come to from Chicago, right?

50:30Was it did it feel intimidating? It was extraordinarily intimidating, and I didn't want to expand to San Francisco because of that. And Bullpen Capital, who, you know, co-led our round, you know, their view was, you're not raising a Series B, and you're not going to be taken seriously if you're not in San Francisco. But I feared expanding to San Francisco the most. When we come back, Spot Hero goes west, where its competition has more visibility and a lot more money. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

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53:53Hey, welcome back to How I Built This. I'm Guy Raz. So it's the end of 2014, and after much hesitation, Mark and his partners decide to expand Spot Hero to the city they fear most, San Francisco. The problem, I think, in San Francisco is you've got some really hot competitors, companies like Lux and Zerks, raising insane amount of money because they believe that the future is valet parking. Not self-parking, but valet parking. And I guess they capture the attention of a lot of VCs who agree. They're saying this is the future. I mean, this was quite possibly one of the most stressful periods that we had experienced to date.

54:40We had worse ones later, but to date, that was enormously stressful because not only had we had only raised$7 million, but these companies had raised$40,$50,$60,$77 million. Lux, Zerx, Vattler, Carbon. And they were also extremely visible with the umbrellas and the skateboards. And I remember a board meeting where I was told, hey, Mark, you are going slow. We've been telling you're going slow. You're not expanding fast enough. And now there's this new model, and it looks like you guys are dead. You're being disrupted before you have the chance to disrupt. half a billion dollars went to fund companies that said we were the relic and meetings in the valley were extremely demoralizing because people would say hey like you know i've heard great things about you clearly like this business isn't going to work out but i wanted to get to know you for your next one lux and zerks were the hot were the hot ones you saw their logos all over the place Their logos were all over the place.

55:54Everybody knew who they were because they were spending crazy amounts of money. The other thing is our cost of customer acquisition were exploding because they were just paying unlimited. And so costs of acquiring customers were going up. They were also prepaying for six months or a year to shut us out completely of some great locations. Wow. So they were subsidizing parking for people basically. Extremely. I mean, totally subsidizing. And we were, you pay$15 or$20 to park, and you park your car yourself. They also had to pay for labor. So you would pay$15 or$20, but they would park it for you.

56:33Right. So they were, you know, our average was like$20 to park. So they made it where it's$15. But they would valet your car both ways. So the consumer experience was, quote, unquote, remarkable. like wow I can just press a button and my car gets picked up wherever I'm at and then dropped off and brought back to me it sounded amazing on paper yep and there was actually a vote to pivot the company to be on-demand valet there was a vote from from who the board your board yes voted to pivot your company it was more of like hey all in favor of pivoting the company like it's very clear, like, this is where things are going.

57:16And I'm like, all right, well, you know, that's great. But it was very clear this was definitely not going to work. Didn't make sense. It wasn't sustainable. You'd have to hire. I mean, all your costs would go to paying for valets, humans who are parking the car. It made absolutely no sense. You had to pay for humans parking the car. But here's the other thing. There was a thesis that, well, if you park the car farther away, you can get an arbitrage. And especially in New York City, it could be$100 to park in a specific area. But it's only, you know,$15, you know, a couple of streets over. But the problem is that as you get farther and farther away to get lower costs, lower and lower parking, the amount of time it takes to bring the car there and back increases.

58:10So your labor costs go up. So for a consumer standpoint, when it launched in San Francisco, everyone was like, wow, I pressed a button, had a valet come in two minutes. Yeah. And it felt like Uber. Okay, but then fast forward and, you know, there was people screenshotting. It's the valets coming in 72 days because the algorithm was like, well, there's this many valets and there's this many people pressing the button. And so it did some crazy calculations, right? And people like 72 days, I need my car now, right? And so, you know, tested this in New York and Chicago and it just did not work. And I presented to the board the findings.

58:52And? Clearly, they would because they had voted to pivot the company. Yes, but the findings were pretty clear. And the discussion was, OK, well, then why are they able to get such mind share? They're like, if this is going to be the thing, we need to make sure that we are also part of that thing. If it is not the thing, OK, fine. But they have how much more money than us in terms of capital? How long can they be irrational? And what are we going to do to survive this, right? We're shut out of parking spots. Our cost of customer acquisition is going – everything is blowing up. Like what are we going to do in order to survive this and get to the other side?

59:39This is such a great case study in sticking to your core principles because it makes sense to me why investors would want you to do this, right? Because at the end of the day, their goal is to make money, right? And there's nothing wrong with that. That's what an investor is there to do. They're not in the charity business. And so when they see these other hot brands doing these things and all their friends are talking about and everyone's talking about it, you and you're in the in San Francisco, you're thinking, well, this is where it's at. This is where it's all headed. And so it makes sense to me that they would say that to you.

1:00:16But on the other hand, it's very reactive. Right. And humans are reactive. We're not patient by nature. It's very rare to find somebody who's like, no, let's look 10 years down the line. So it is kind of remarkable that you were able to withstand that pressure and prove that this really wasn't going to work. This wasn't sustainable. Yeah, it was definitely extraordinarily stressful for so many reasons. And me questioning myself and thinking, okay, I remember when different parking companies would tell me nobody is going to buy parking on a telephone. Hey, this internet stuff is a fad. And laughing at how ridiculous the things were that they were saying.

1:01:01And remembering them saying, listen, I've been in parking for 57 years. I've been in parking for 37 years, 50 years, 40 years, right? What do you know? And I remember thinking, well, I've been in parking for, you know, five years. And then thinking, wait, am I being just like that? Yeah. So the amazing thing about this story, because I'm going to give it away here. is that a year later, 2016,

1:01:30Zerx shuts down. And I think the next year, 2017, Lux ceases operations. They both fade away. They fizzle up. And the other ones did too. Even though in 2015, everyone was like, this is where it's at. These are the hottest companies out there. Yes. These are the hottest companies. This is where it's at. And this is where half a billion dollars from dozens and dozens of the top Silicon Valley firms are putting their money. You know, listen, that's what investing is about. You're going to win some, lose some. But it is amazing how our perception is so biased, right? Like what we think is right is so skewed.

1:02:16Our reality, and I can apply this to anything. It's just so flawed. I include myself in this. The way we see the world, we're so certain because it's how we're seeing it. And so often, it's just not the reality that is. Now, I sound like a word salad there, but you know what I'm talking about. I know exactly what you're talking about. I mean, whether it's recency bias or whatever you want to call it, the idea of what is right in front of me is exactly how it is now and how it always will be is definitely not the case. And it was certainly not the case with on-demand valet. All right. So you withstand that very difficult time.

1:02:59This is in 2015. Mm-hmm. We were doing our Series B. We're trying to raise$20 million, which at the time, that was a pretty sizable Series B in 2015. So you raised the money, and that, of course, enables you to continue to expand. And as you grow, right, I imagine you're not profitable, right, at this point. We're not profitable, no. But 2017, you acquire your previous competitor, Parking Panda. that was made better when you went to D.C. Yeah. And that gave you access to Canadian cities. What was interesting, though, with Parking Panda is they basically decided, they're like, we're selling. And so it was interesting because they were actually the number two at the time.

1:03:49They were the second largest at the time, and we were the first. And there was a moment where I wasn't sure if I wanted to buy them. and you know you're kind of cagey because you're like if i give too much to my competitor then and they don't buy me then they know my my secrets so to speak but if you don't give enough then it's not interesting and i was asking them like i'm like i need to see more detailed revenue by city and they were so cagey they showed me a breakout and i was like why are you like he's like I'm going to turn the computer. I'm like, why are you so afraid? Like, remember, if we're going to do this together, like, we need to understand like where, not just your P &L, but like, where are you doing revenue?

1:04:32And he's like, well, our strategy was we went to all these places to hide so that you wouldn't compete with us to grow our revenue. And I said, where? And I'm looking at and I'm like, you're doing how much in Sacramento? What? Secondary cities were actually arguably proportionally more profitable. Yes. And that meant that together, the overlap was so low, there's literally going to be 5%, maybe 10 % overlap. And that was a really great acquisition. I'm really happy we did that. All right. So now you've got Parking Panda, and you are really starting to emerge as a big player, if not the big player in the parking space.

1:05:21And, you know, we're not going to go through all the additional rounds of funding because you start to raise more money. And by the way, I mean, you know, 50 million round series D was that by 2019. I have to imagine it gets easier at that point to raise 50 million. I wouldn't call it easy. We've always been in a category that has always something wrong with it, right? Yeah, what do you mean by that? Well, obviously, it's my fault I didn't keep in touch with investors or give updates. I'm very good about that now. But let's take, you know, Series A, right? The idea that every day in the media, Uber and Lyft is saying parking is dead.

1:06:05The future is no car ownership, but everybody Ubering and Lyft everywhere, right? Then it was, okay, parking is not dead. It's the future. And everybody is going to, car ownership is great, But valeting those cars is the future and it's not you. Then it was actually, sorry about that. It's not labor that's going to scale this industry. The cars are going to drive themselves and they're going to be in perpetual motion. And so they don't ever need to park. And I'm just like, come on, can we get a break? Yeah. We've never been like what I would call on trend, right? Like we've never been this like on theme type company.

1:06:46For a raise. Because you're not that hot thing. It's like, oh, well, what about this AI company or that tech startup? And you're selling parking spots. So it's boring, but it's also – the thing is, I don't mean boring, but the boring, quote-unquote boring businesses are very often the most successful businesses. Well, here we are. Here we are. All right. Let's go to let's get to COVID because I, you know, you're plugging, you're growing. Everything's looking great. You've raised at this point up to this point, I think now you're looking at at least, you know, close to$100 million by the time COVID comes around.

1:07:29And then that's it. It's like the world shuts down. And you're now in the movie theater business. No one's parking all of a sudden. Yeah. I remember right before COVID, we had a board meeting in February, early February. And it was a kickoff to the year and I gave a bit of a preamble. Every year in the company, we had an existential threat to parking and spot hero. And I went through every one for every year just to remind people of what we had transcended and come through. And I said, and this is the first time that we sit here today without an existential threat to spotty and parking. I am reminded by the board constantly about the words that I should eat because obviously COVID happened.

1:08:20And I always thought about— And that was what, two, three weeks later? Two, three weeks later. I'm like, oh, man. And I remind them. I said, well, it wasn't an existential threat to parking. It was an existential threat to everyone. But yeah, it was two or three weeks later. And that was by far the hardest time that we as a company had to go through. I mean, brutal, brutal. You guys put on your blog that you're looking at 90%, a drop of 90 % bookings. Yes. Installed by April of 2020. April was 98%. 98%. Yeah, May was 95%. Yeah. It was just an absolute brutal set of decisions to having to lay off close to 70 % of the company.

1:09:15But it made it easier to be brutal externally, right? Yeah. Meaning what? What I mean, meaning that is like, okay, we signed some SaaS contract in January. Don't care, not paying it, right? You just stop paying it. Just stop paying literally every bill. It's some like, I don't know, customer relations management or something. Some voice automation, like, you know, you name it. And I'm like, wait, I have to decide between paying for some software to some stranger that I don't even need to use. because of some contract, and then I got to fire somebody else? Someone is going to lose their livelihood because of this?

1:09:59I'm like, absolutely not. Even as people start to emerge from COVID, you guys, I mean, I have to imagine it was slow going because, I mean, even to this day, San Francisco, as you know, 30 % of office space is still empty. Have you recovered from the pre-COVID, you know, sort of, I mean, And have you fully recovered and more? And if so, how long did it take? Yeah. So, I mean, we have fully recovered and more. Right now, we are, you know, three and a half times larger now than we were pre-COVID. And there's a number of different factors for that. But there is actually a greater percentage of people driving and parking.

1:10:45Because they're not using public transit. Right. Public transit, you're used to the routine. You go in five days a week. You always take the train. you're coming in two days a week, one day a week. You're going to drive. You're going to drive, drive and park, right? Interesting. So the public transit crisis, in a sense, has kind of benefited the parking industry. It is part of it. But the other part, too, there was a time where people were worried about public transit, regardless of the different servicing issues in different cities. People just felt safer in their cars. Yes. and you know we ultimately obviously had a had a snapback and we ended up hiring a lot of folks that we unfortunately had to let go and and um you know they're they're they're still with us which is great and now you know you start in 2011 lots of competitors there still are competitors out there where are you in the competitive landscape would you say you guys are the biggest or among the three biggest or or what yeah i would say like we are we're the largest like we have 1 ,600 parking companies that we partner with and when you look at you know the sales that we're doing usually it's it's greater than all the others combined I started this with the idea of how do I stop getting parking tickets and you know love to drive hate to park I'm actually like loving to park a lot more now and I'm you know just absolutely jazzed about like what we could accomplish, right?

1:12:15Like to me, it's focused on executing. How do we change the moments of people's days, right? How do you make it so people don't even have to think about parking? When you think about the journey you've taken, you know, we started out as this little kind of project in 2010 and where you are now and all that you've been through, how much of where you got to, because you could have been crushed at many points along the way, right? so many variables. How much do you attribute the fact that you guys are here and successful and now the sort of the 800-pound gorilla on the block, so to speak, is due to how hard you worked in the grind?

1:12:56And how much do you attribute to just getting lucky? I mean, I think there's a value to consistency. There's something to be said for focus. Our focus, consistent focus you go through the history of the company every aspect all these potential distractions or things to spread ourselves too thin or things that could you know have have killed us sooner our focus on just one thing and one thing very very well has contributed yes of course there's there's always luck and i do believe in luck but i also believe in manifesting it and i think that consistency and focus has been key across everything.

1:13:40That's Mark Lawrence, co-founder and CEO of Spot Hero. By the way, remember that bicycle tour Mark was planning to take across Africa before he started the company? Well, he still hasn't done it, but that ride from Cairo to Cape Town, it's actually a pretty popular trip. It's nearly 7 ,000 miles. And the fastest that anyone's ever completed it? 41 days, 10 hours, and 22 minutes. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at gyros.com.

1:14:21This episode was researched and produced by Catherine Cypher with music composed by Rantin Eriblui. It was edited by Neva Grant, and our engineers were Patrick Murray and Kweisi Lee. Our production staff also includes Alex Chung, Elaine Coates, Casey Herman, JC Howard, John Isabella, Iman Ma 'ani, Chris Messini, Sam Paulson, and Kerry Thompson. I'm Guy Raz, and you've been listening to How I Built This.

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