Lyft: John Zimmer (2017)

Hey everyone, we're gearing up for our first ever How I Built the Summit in San Francisco in October, supported by American Express. And we've just confirmed some great news, which is that ten percent of the tickets for the summit. will be absolutely free. We're calling it the How I Built This Fellowship. If you want to apply for a free ticket, you can join our new community group, go to Facebook and search for How You Built That. And once you're there, the application is pinned to the top of the page, and applications are due soon, July 9th. So join How You Built That on Facebook.

A sap. So here's a question. Have you ever wondered why lift is spelled with a Y instead of an I? Well, John Zimmer wasn't really trying to grab attention when he named the company, he was just trying to solve a problem which you will hear about in this episode, which first ran last February, and it's a really great one, so hope you enjoy it. Oh. One of the kind of funny things we had to figure out was how to quickly to the college campus. And so

One of our early purchases was A frog in beaver costume. That we uh put on I I went to Cornell. I was actually going to Cornell on a recruiting trip for Lehman.

And I was uh standing On the quad. In this ridiculous costume handing out cards about this carpooling service. Is this a frog costume or the beaver costume? I was the beaver. You were the beaver. Okay.

And At the next day at the Lehman recruiting event. A girl came up to me and said Did I see you in a in a beaver costume yesterday? Rom NPR, it's how I built this.

about innovators, entrepreneurs, idealists, and the stories behind the movements they built. Guy Raz and on today's show John Zimmer made Private cars work like taxis. In the process helped build a service.

Now worth billions. So d do you actually remember the days of walking onto the sidewalk? sticking at your hand, inhaling a taxi. I mean, it it feels like ancient history, right? But still Even though this world of instant car rides is just a few years old.

We're so used to it that If you're like me. You start to get really antsy and anxious when the Uber or Lyft app says you have to wait for three minutes for your ride. And just think about how quickly ride sharing apps like Uber and Lyft totally transformed transportation in many cities around the world. How

In most places They've become indispensable. Which has also meant that The competition between the two companies has been really fierce since 2012. When both of them launched a service.

That turned private cars into public taxis. But the amazing thing is is Even though lift is just a fraction the size of Uber, It is still valued at more than five. billion dollars.

And one of the guys behind it? John Zimmer? He never thought that ride sharing would be his life's work. He actually studied hotel management at Cornell. But his interests really started to change during his senior year. I took a course that was really, really important to me.

uh called Green Cities. and I have this amazing professor. His first lecture is the history of the world in thirty minutes. Kind of like The book Guns, Germs and Steel. And

He ended the lecture saying that we're at a really important time in world history. Where population density is rising rapidly in our cities. uh as more and more people move there. And resources And infrastructures

That were built decades ago. are becoming more and more strained. And he kind of challenged us at the end of the class and said, If you don't make this class the most important thing you do this semester. Then I don't want to teach you. Because if we don't fix these problems

we're gonna have major economic, environmental, and social problems. And that kinda set me on a path. Which eventually led to lift. But being that I grew up in the east coast and in Connecticut and New York.

I I did feel like I had to have a a finance experience and so After graduating I went and worked at Lehman Brothers. Uh in two thousand six. Wow. Lehman Brothers in two thousand six.

Like when when we look back on that in in a hundred years but we'll be like wow, those just woof. That was like the uh you know, the decline and fall right there. So you go to Lehman Brothers in two thousand six and what w what did you do there? So I was doing real estate finance. So I was right in the heart of where everything happened. And as you said, right at that moment from from two thousand six to two thousand eight was my two year analyst program. Was it interesting?

It was interesting for a few months, uh, but I gotta say I My interest declined. probably after just about a year. And so I started thinking what what else I could do. And it was actually about about a year into it that I was on Facebook one night

And saw Logan who is now now my co founder, who I didn't know at the time. Posted. on a mutual friends Facebook page saying that he was starting a website Called Zimride.

And and what like what Was it what was it what was his story. So Logan's background is that he grew up in LA hating traffic. He then went to U C Santa Barbara and made an experiment of himself, so he didn't bring a car to school. And he wanted to see how he could survive without a car. And he started a car sharing program similar to Zipcar first.

Using university fleet vehicles. And he got the attention of the local transit port. Elected him as the youngest member ever to be on this transit board and Logan was in Santa Barbara. In Santa Barbara.

And he quickly realis the challenges. In public transportation and and came to the conclusion that across the country, when you pay to get on the bus, you're really only covering about thirty percent of the operating cost. So what that means is a three dollar bus for actually cost the government ten. And as the lines get more busy. They get harder to fund.

So they actually The more busy they get, the worse they get. So he came to the conclusion that public transportation was broken. And while the promise of public transit is phenomenal, the reality was not. And so He then traveled to Zimbabwe.

Where he saw people. Sharing rides out of necessity. and got inspired to build a website. That would connect people. Going the same way to be able to sell a seat.

in their car and that's why he called the website Zimra. After Zimbabwe. Yeah. So Logan was was basically trying to build a website that was like Hey, I'm going this way, like a uh sort of a car sharing website. Um Like it used to be that you would just advertise on like Craigslist or put something on a pinboard and like on college campuses saying driving from, you know, s LA to San Francisco

Do you need a ride? But he was basically trying to take that concept and put it online. Exactly. Yeah. So Like you said, we had these Physical bulletin boards or digital bulletin boards.

for people going along the same way if they're going home for spring break or fall break. Uh but there was no identity. uh or ratings behind that and so it was limited in how many people actually use them. And so we thought how can we make a safer system? Uh and

you know, if you tied something to a social network like Facebook You could have a profile of the individual you're gonna share a ride with. and follow up with ratings uh of of how that ride experience was, uh which would create a a safer and more broadly used environment for for carpooling on college campuses. Hm. So what happens to you guys then? Like at at this stage, you and Logan still haven't met, right? So do you email him or do do you call him or what? So we got on a call, I believe, and and he said that he was actually going to be uh in New York City in a few weeks.

And so we ended up meeting up. and talking a lot about about carpooling and and I shared some of the thoughts uh that I had from that course I took at Cornell. We realized that we were both so passionate about solving this same problem. And and began working together right after that trip in New York. Did you and did you guys just hit it off right away you liked each other?

Yeah. Yeah, we're he's become uh my best friend. He was best man in my wedding. He's also a very Focused. calm and thoughtful person. There's this funny story when he was a kid, I think he was about Eight years old.

His parents had had just gotten a TV. And uh I guess a few weeks later he said he asked his parents to remove the TV from the house because it was distracting him. So uh I think that just speaks to his His level of focus and uh I I've really enjoyed

Uh working with him because of that that both passion, uh focus and thoughtfulness. Okay, so you guys uh start working on Zimrite together. A and at this point you're s you're still at Leon Brothers, right? Right. And what what w what what's Slogan doing at this point? So he's at UC Santa Barbara as a sustainability coordinator after he's graduated. He's working on Zimrite as a side project project. He actually did

Uh a lot of the original coding. Of the website. And We didn't know whether it was a a big business. We thought it it could be. Um, but before we were going to jump all the way in, we wanted to start working on it.

So we spent uh nights and weekends uh working on on Zimride. Just like remotely you were in New York and he was in Santa Barbara and you were just Like emailing and like Skyping and stuff all the time.

Yeah, yeah, we'd have Late night Skype and Every maybe month or two we we try to get together. And On on Logan's and he's you know, working on building the website on my end, I'm figuring out how do we get enough people using the platform.

So that it works. It was really like a chicken or egg problem where The idea of having a lot of seats to choose from on your way home from, say, Cornell in upstate New York to go to New York City was exciting. You know, there's Very few bus routes.

Not everyone owned a car or had a car on campus, and so If I could go on you know, Zimride Cornell edition. and buy a seat in someone else's car for twenty dollars or thirty dollars. that would be really exciting, but it had to be there. It had to be available. We had to create both sides of the marketplace. So the idea was like kinda like the how Facebook originally launched, which was

You would just have these sites at university so so students could figure out like who they could hitch ride with. Exactly. And and so One of the kind of funny things uh we had to figure out was was how to quickly market to the college campus. And so This is kinda strange.

costumes on campus. and hand out information about this service. Our one of our early purchases was A frog in beaver costume. That we uh

put on. I I went to Cornell. I was actually going to Cornell On a recruiting trip for Lehman. But I went a few days early. And I was uh standing on the quad. In this ridiculous costume handing out cards about this carpooling service, the Broad costume or the Beaver costume.

I was the beaver. You were the beaver, yeah. Yeah. And and were you like handing out flyers? Yeah, so we needed to get a critical mass. of let's call it a thousand people offering their seats so that those that went on to look for a seat could find one. And it worked. And

At the next day at the Lehman recruiting event, uh a girl came up to me, well, I was surrounded by a lot of our managing directors and said, Did I see you in a in a beaver costume yesterday? You know, the next step was Let's sell a private network. Mm.

And uh we were able to over uh a few year period sell to a hundred and fifty universities and companies that would pay us an annual fee for this private car pooling network. Oh wow. So so you were not you weren't taking a cut off the like off the fee that people would charge to share a ride. Uh correct. Not at not at that time. So you the the business model was let's sell these to universities like on a subscription model and you sold it to a hundred so you were personally calling universities and pitching this to them? Yeah, so I was personally calling and and travelling to

Probably visited hundreds of universities. Uh in in those first few years. How did you do this in the beginning and work at Lehman Brothers full time. So In the in the first year it was more about getting the product stood up and having a proof point. Yeah. And that being kind of Cornell and so

Uh the the majority virtually all of those sales came once once I went full time. Uh in two thousand and eight. You were like, you know what, I'm gonna do this. I'm gonna leave Leonard Brothers. Yeah, so it was early two thousand eight and had made the decision and

Uh, my best friend's mother actually worked in the same building as as me, uh, when I was at Lehman Brothers and I told her what I wanted to do and she said, How could you leave a shore thing like Lehman to do a crazy carple startup? How many people said that to you, by the way? How many people said, We're leaving Lehman Brothers? Yeah. In two thousand eight? To go do some internet thing?

Yeah, s several people said that to me and And then, you know, three months later Lehman was bankrupt. It's crazy. We knew there there were

challenges going on at Lehman, but I could not have predicted that Three months later. Uh they would have been bankrupt. So you moved to Silicon Valley in two thousand eight to go full time

On Zimride with Logan Green? Yes. Did Zimride get become profitable? Yeah. It did. Like hugely profitable or respectably profitable? I'd say res respectively profitable.

Did you see this as this was gonna be your thing? This is what you were gonna do with your life? Yeah, I mean the dream was to start a business that had a major and important impact on our world and specifically on the way that our cities are designed. And so You know, I think from an early period we we consider this Uh our lives work.

I mean you were gonna basically transform carpal and you were gonna do for carpooling, sort of what Airbnb has done for Accommodation. Exactly. So so what happened? How did you shift from like this concept of carpooling to what

would eventually become lift. So in the middle of two thousand twelve. Um like four years in now. Yeah, about four years of doing it. Full time. Yeah. And and we stop and look at ourselves and say

You know, how how is how are things going? And what would we do? If we were starting over today. I think that's a really helpful exercise. What was true

In two thousand twelve, that was not true. When we started was the proliferation of smartphones and operating systems. that would enable more short term planning.

and short distance transportation. 'Cause with Zimride you had to go on a website and you had to find the date and the person going, right? And you had to So do it I guess a at least a day in advance, right? Exactly. Yeah. So once the technology shifted that would enable uh more instant uh decision making to happen. our our thought process shifted.

And you guys start to think m maybe we should focus on something else. Yeah, so we had seen uh Uber had started kind of limos on demand. The black car, right? Yeah, and we said you know that's

interesting from a uh you know using you know mobile technology But it wasn't that interesting to us from You know picking You know, a small population of people that can afford. kind of a private driver type expression.

Yeah, so The average American household spends over nine thousand dollars every year on owing and operating a car. It's equates to over two trillion dollars annually. In the US and the car sits parked ninety six percent of the time. And so he said.

How could we Take these personal vehicles that are parked at all times. and expensive to their owners. And make better use of them. And and so the idea was to create an app

where you could you could request uh someone's personal vehicle on demand. But the but the platform really at the at that point was just Hey, I have a car sitting here and and I'm gonna make it available to kind of rent out for an hour. No, it was uh Hey, I have a car and I have time.

And I'm gonna go drive uh other people around for for a payment. And it goes back to kind of My hospitality experience of how do we create something that was centered around service about treating driver and passenger with respect.

But also you gotta remember what is now accepted as normal of getting into someone else's vehicle. was not at all normal. At the time. In fact. We had to

Work to change people's behaviour and In the early days suggesting people sit up front. um and and creating this your friend with the car ho hospitality environment. We felt that one it opened the audience to a larger set of drivers. Yeah, if you go in a room of our

a hundred of our friends and you ask how many of you are willing to drive a taxi A couple hands maybe go up. When you say how many of you are willing to sure ride. Uh you know, seventy five hands would go up. And so

We wanted to create the experience around that. uh because after Many many years Of being You know, told not to do this behavior.

And many many years of seeing a yellow vehicle. and thinking that that is safe just because it's yellow. Um we had a lot of you know, behavior change to To kinda push through.

John Zimmer, co-founder of Lift. After the break how the state of California almost killed his company. Stay with us, I'm Guy Rod and you're listening to How I Built This. from NPR.

It's how I built this from NPR. I'm Guy Raz. So it's 2012 and John and Logan were still working on this carpool concept called Zimride and they were doing pretty well. They'd pitched a bunch of investors in Silicon Valley. They got some money. But around this time, they decided to change course and focus on other ways they could make car sharing accessible to millions of people. Basically an early version of what eventually would become lift.

But before they could really launch the app, they needed to test it out, so they got in touch with a bunch of drivers. So the first set of of drivers we actually Emailed uh a bunch of Zimride. Users. And

Uh we said, Hey, we have this new project we're trying out. And uh we'd love you to to try it out. Then we invited them over to the office and walked through kind of the whole Experience uh that that we were that's they were all in in in in San Francisco area? Yes.

And w what did you tell them to do? Uh well we we first kind of walk through how how the App works, all all the safety standards that we had. And we let them know that What what's going to happen is that you're going to get a request on your phone and it's gonna let you know where that that passenger is.

That they could go pick up that passenger. Uh and and take them where they needed to go. and that the app would kind of help help them uh navigate and do do all those pickup and drop off. And at the time there was a suggested donation at the end of the ride. that the passenger could make through their credit card that was attached to their profile.

Oh, so this was gonna be free if you wanted it to be free? It was in the early days. Um, you gotta remember again, one that this was was very, very new and and not normal and uh you know I say would was fall w would fall in a regulatory gray area. And so one of the ways that we we we saw around that was to say

uh to to make it optional uh for payment in the early days until we had uh forge through the the right regulatory structure. So so at wha what point did you come up with a a a new name? Like when did it go from from being called Zimride to Lift? Before we launched it.

uh the working title was Zimride Instant, but while going through It's actually really a three week period that the Lift app, the original Lift app was built. It was very, very fast. And the brand Lift. was thought of during that period as well, along with the logo and everything. So Lift is in gimme a lift. Yeah.

Except you couldn't get L I F T'cause that was probably taken. Yeah, LIFT dot com is owned by Otis Elevators. Okay, fair enough. Yeah, right. So you got L Y F T. Yeah, in the in the middle of twenty twelve. Uh again over a three week period.

the team moved incredibly fast to build the app, come up with the branding, and uh meet And background check and onboard. the first set of drivers. And then we then we invited a few friends and And it was uh we got an incredible response. So this is only in San Francisco at this point, right? Yeah. And and so how long did it take before you know you you opened this up, you made this into uh into something anybody could use? So I'd say it was probably the the second half of twenty twelve, where we

You know, it started to take off. We decided to divert resources from Zimride over to Lift. And then really in in January of twenty thirteen. We said, Okay, we we need to go all in on this. This is A massive opportunity. This has been incredibly successful.

With a small amount of focus. But that was a really In many ways, a tough moment because we had worked for You know, four or five years on Zim Ride. And we were deciding to divert all of our attention.

So you guys Sold them, right? Exactly. Yeah. So we sold Zimride to Enterprise Rent A car. And basically the the assets uh the contracts with the universities.

And retained the entire team. And went all in on on Lift. So in that first year, how many people downloaded the app? Um Best guess tens of thousands. And you guys your your model was you were taking a cut out of every Right, right, like a percentage or something like that.

Um So the the rate is calculated Based on Uh distance and time. And then lift uh receives.

a commission off of that was twenty to twenty five percent. uh off of the overall rate. The rest goes to the driver. As well as a uh trust and service fee. So what so so when you start this, right?

Did you I mean now we look back and say, Oh, of course this is gonna work. But presumably like you start to face a lot of backlash and and obstacles from cities that had pretty entrenched you know, taxicab commissions and drivers and established regulations about who can pick people up and drive them for money. Yeah, so about a month into launching Lyft, this was in later Uh twenty twelve.

We received our first of many cease and desists. uh from various different governments. Um and It basically said you need to stop operating. And what did you do?

We read the letter and when we had already done our Uh legwork and research on the laws and and we asked for a meeting. And I think that was followed by a second cease and desist, but we eventually got A meeting. With the with who?

with the Public Utilities Commission. Okay. And our approach to regulations is to to really understand the motivations and the needs of of the regulating entity because we understand they have a very important job. And so we went in and and asked that. We said hey look our

Is this a matter, you know, of public safety? Or is this about, you know, existing industries? And they said public safety, of course. And so we said we don't own vehicles, we don't have employees driving for us, so we don't fall into the category that you currently have. But we've looked at your safety regulations since that's the most important thing, and

we've gone above and beyond on the background checks, which actually still to this day for uh limos in in California are not required. We've done it. Driving record checks with more strict criteria. And we've created an insurance policy.

That's a million dollars and theirs is and was seven hundred and fifty thousand dollars. We said so if s if it's about safety What we'd love to do with you is to create a new category. That allows you to enforce that we are doing these things that we tell you we're doing.

But that we're able to do this in in a safe uh way that brings more affordable transportation to uh California. I mean They were threatening to sue you, right?

Uh they were threatening to shut us down. uh you know in enforce against the drivers that were driving in the community. Were you scared ab about that possibility? Yes. 'Cause you had sold off Zimride and you put all your eggs in this basket and It could have been shut down.

Yeah, I think I literally had a headache for one month. I w I had to go Check and make sure nothing was wrong. But it was it was an incredibly stressful time. Because as you say, we we switched all of our focus over to from Zimride to lift. And The opportunity was massive.

And the regulatory obstacles. uh were were just as massive. How long did it take for you to overcome Those initial regulatory challenges. Like was it

Months years? I'd say at least At least a year probably for that first year, if I was to pick the one thing I Spent most of my time on. was the government relations.

and was working to create a a new regulatory category for for the space. And then, you know, not just doing that in one State. But being able to demonstrate that. In in multiple uh cities and states.

So when so when you started to expand outside of San Francisco and then LA How fast were you expanding to other cities? Was it like every month, every day, every week? In the that kind of earlier period it was more

uh every few months. Maybe the most intense moment was April. uh twenty fourth, twenty fourteen, when we launched twenty four markets on the same day. Wow. Who were your competitors?'Cause Uber was still doing black m mainly black cars, right?

Yeah, and th there there really wasn't um there were some other companies that that were try in this in this kind of peer to peer Personal vehicle space. But there w there wasn't a a large amount of competition. There were still so many questions looming around Regulatory.

Frankly. Um That I think, you know, people were were waiting back uh to see how that played out. Your focus was on this. like Airbnb model where you've got a car

And it's gonna be community and it's gonna be this sharing economy thing, like What happened when when all of a sudden Uber started doing Uber X where they basically copied your model? Yeah, so I mean we we assume that because the opportunity was so large and everything we're seeing that there would be more More competition coming.

Uh and so there wasn't it wasn't it wasn't a big surprise. And Uh it just, you know, I think over the the course of the the few years we've been doing this, it's It's made us uh better and and frankly I think both both companies grow faster.

How do you differentiate yourself from them? Like how do you make the case that actually you should go with us and not them? Yeah, so our our focus In the early days was we needed to uh ensure we solved the two most important things for our customers first, which was uh reliability, you can get a ride when you want it. At the best possible price.

Once you have parity on those, and now now we do, we've built up enough infrastructure, enough uh you know base of driver community that you can get a ride within on average three minutes. In these cities. Then it's about the experience. In today's world By treating drivers better than any other company,

The ability to have cashless tips, get paid in the same day. uh create an environment where drivers are respected by passengers, and that trend translates to passengers being uh treated better than on any other service. Are you a competitive person? Like do you Do you look at your competition and and really want to beat them? Yes, absolutely.

Like how much does that drive you? That idea. Oh, that's a I'd say uh to to a large degree. I used uh to play sports Whether it was running track or or playing soccer.

Um And you know, I started running track as Just to stay in shape for soccer and then I wanted to to win the race and I wanted to

Go under five minute mile. And was able to do that. And so I I think often now today You know, we're we're in Uh what could be described as a mile. Four laps.

And we're in lap two. Hm and You know, lap three is typically in that race the most critical m uh lap. where you set yourself up for victory. And so I think we're making a lot of important moves and decisions now.

uh that should allow us to to win the race. Do you take it personally? Like, you know Uber obviously has, you know, been a pretty tough competitor and at times there have been accusations that that that they've kind of tried to sabotage you or maybe you guys have to them and Is it is it personal to you? Do is it something that you really feel emotionally.

Yeah. Yeah, definitely. I don't I mean, is part of it well, it's just is it just business and and you know, in business or Days where you know you hate your your competitor but you all still respect them? Or is it really like, No, actually, this is really personal, I don't like them? I think we take it

And I take it personally, which drives me. Because I believe so strongly in what our team is working on and why we're working on it. We believe that By building what we're building we can make our cities Designed around people instead of cars.

And By having the right values and ethics. We can impact society in a way that's bigger than the transportation we provide. Mm. And so

I take it personally. Because we're out to win for the values that we represent. I don't let that distract me. uh I let that you know fuel the fire. And

I think in the early days. When I was less mature. It would it would distract me. Uh but but today I think it it just fuels The desire to to push harder.

How how many people work for Lift today? So at the company there's about Uh thirteen hundred. Uh people. And then drivers, do you do you disclose that number?

Uh No, we we've said several months ago that, you know, last year there was over three hundred thousand and and you can assume that this year That number has grown quite significantly. Yeah, we think about like these ride sharing um companies like Uber and Lyft As

this thing, this permanent thing that we of all come to depend on. I've got the apps of for both companies on my phone, sorry, I do have both. And um They've become a part of our lives. Like they're like I can't even remember what life was like before Lyft or Uber, right? And yet we have to imagine one day something is going to replace you guys. You know, people are talking about driverless cars, for example. Do do you ever think about that? Sure. I mean it's that

You know, I I saw the rise and fall of Lemon right before my eyes, and I think that that creates the the right sense of awareness and when building a company that that you've seen something like that. But when you look at the future, you know, you talk about autonomous cars. An autonomous car is not gonna drop out of the sky and be able to do a hundred percent of our trips. That's not real. What's real is that Over the next

A few percent of our trips, ten percent of our trips. Fifty percent of our trips. And what that means for this opportunity is that We're going to be able to address that ultimate goal we have of ending car ownership and providing a full alternative.

In fact what you'll be able to do Is by You know, likely a miles plan from us. uh monthly subscription. To handle all your transportation needs.

And over the next few years some of those trips will be done by uh human drivers and and others uh will be done by autonomous vehicles. uh to the point that we can provide you with amazing uh hospitality experiences on wheels. John, when you look back at, you know contacting Logan over Facebook and then like working on the side project and then moving to Menlo Park and

pouring your heart and soul into the into Zimride and Then starting lift and watching it turn into a company that valued that's valued over five billion dollars. Do you sort of look at that and say sort of say to yourself, Okay, I can like breathe out a sigh of relief. Like We're okay, we've made it, we've gone, we've we've passed the hump. Or are you constantly worried and vigilant?

Every day. Yeah, no, I don't think there's a a sigh of accomplishment. I think there's Uh the bar keeps getting raised. And that's the bar that That we raise on ourselves.

The goal over the last ten years For Logan, I hasn't changed. You know, it was Zim Ride. And then it was left. And then it will have a

autonomous implications. Until we've accomplished the fact that you don't need to own a car in a city until we've accomplished the fact that we don't need Аз мене родсь і паркінлас. Uh in our cities.

Until we allow for our cities to be, you know, redesigned around the people living in them instead of the cars. That are parked in them. uh then we're not happy. John Zimmer. co-founder of Lift.

Since we first ran this episode last February, Lift's valuation has more than doubled to over$11 billion. And by the way, John Zimmer will be joining us live for our How I Built the Summit in San Francisco on October 16th. There's lots more info and tickets available online at npr.org slash summit. And please do stick around because in just a moment we're gonna hear from you about the things you're building. Hey, thanks so much for sticking around because it's time now for how you built that. And today we're gonna update a story we ran about a year ago. This one comes from Kyle Ewing of Denver, who got his idea for a business in kind of a roundabout way.

I got the idea when I was trying to create a product for students traveling abroad. This product was a backup copy of their passport. Kyle was trying to sell backup passports online that would be as durable as the real thing. but also tearproof and waterproof. The problem was the market for this type of product doesn't yet exist. So I was trying to create the market, which proved to be very difficult, and I was trying to figure out what to do when the phone rang, and the guy on the phone It was actually somebody who said, Hey Kyle, I love your passports. I even bought four of them for my kids. And he said, All four of my daughters.

Use the SOS world pass, I love it. But I have a question for you. Can I buy a case of your paper? And at that moment, Kyle realized that the waterproof paper he was using for the passports was actually a better business idea than just the passports. That moment

was me standing up out of my chair. and spiking the pencil and doing a touchdown dance because it was an immediate light bulb moment where I realized this failing business just grew legs and all of a sudden I had a million and one ideas of what I could use waterproof paper for. And that is a pretty long list. Waterproof restaurant menus. Waterproof children's books, waterproof maps, field manuals for the US Navy, nautical charts for the US coast. Kyle is not an engineer, but

When he was working on the passport idea, he made a bunch of calls to chemical experts and he told them he was looking to make paper that was totally waterproof, much more waterproof than say you know, just laminating something. So iteration after iteration we finally got to That's both waterproof and rip proof uh and something that can also receive and hold ink when it's been printed on. He eventually manufacturer in the US to make a polyester pulp that could be pressed and rolled into waterproof paper. But he wanted to tinker with the product himself, so he moved a laser printer into his living room. But when I put it through my home laser printer,

Immediately. White smoke came out of the printer and it smelled like burning plastic. And the entire printer was trash after that. Kyle's very supportive wife Ashley came home that night, she smelled the burning smell, and she said, Kyle, I love this arts and crafts project. You've taken on. But I think it's time to get to a more realistic product or business idea. But one printer and seven iterations later. And Kyle says he came up with the most waterproof paper on the market, and he has the clients to prove it, including, yes, the US Navy and Air Force, several restaurant and hotel chains, university labs, even Google.

and a good entrepreneurial day is when you sit back. you look at your sales or you look at the new client you just got and you think, oh my gosh, this is a real business. I'm building something that matters and it actually is a success. Since we last spoke with Kyle last year, his revenue continues to grow. He'd rather not give the specifics, but suffice it to say, it is in the millions. He now has a team of 10 employees and his list of clients is growing too. It includes UPS and the LA Kings. If you want to tell us your story, go to build dot npr dot org. We love hearing what you're building. And thanks for listening to the show this week. If you want to find out more or hear previous episodes, you can go to howibuilthis.npr.org.

Please also subscribe to the show at Apple Podcasts or wherever you get your podcasts, and while you're there, please do give us a review. You can also write to us at hibt at npr.org and if you want to send a tweet, it's at how I built this. Our show is produced this week by Casey Herman from Teen Airbluey Composed Music. Thanks also to Neva Grant, Sanas Meshkin Pur, Noor Kutsi, and Jeff Rogers. Our intern is JC Howard. I'm Guy Roz, and you've been listening to How I Built This. From MPR. We all have moments where our limits are tested.

What I wanna talk about? is how we define those limits. And what it means to exceed them. I'm Jay Williams. Check out my show, The Limits.

where I talk to people who have overcome theirs. And achieved great things in business, sports. And culture. Listen to the limits. From MPR.

What you see above is a preview of the first minutes. One unlock costs 3 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.