Why Snap’s not coming back
A rainy day…
It is exactly 2,000 days since I founded Snap and we have reached the decision that we won’t be bringing it back.
It’s painful. February 2020 was our best month yet, and we couldn’t have conceived that it would also be our last.
February 2020 saw us make money for our operators and achieve 14% gross margins for Snap. In a marketplace model like Snap, the magic moment where customers get great value while you and the suppliers make money is the point at which it is just a question of scale. We’d got there.
That same month, we launched our newly-built Events product; enabling consumers to crowdsource their own coaches and build them via social media. It was still in closed beta but when Greta Thunberg announced she was holding a rally in Bristol, we sent a link to the organisers and it went viral.
Within hours we had both the BBC and ITV ringing the office; and a succession of furious comments on social media from Bristolians accusing us of bringing Covid into their city. (At the time I thought they were fussing. With hindsight…).
It felt like we’d struck gold. Little did we know that this was both the first and last time the Events product would be used. By the time it came to release it from beta, events were banned.
While it, obviously, hasn’t ended where I wanted, I’m inordinately proud of what we achieved at Snap.
We created a new intercity transport model that provided reliable work for small, independent coach operators. We provided consumers with the lowest cost intercity transport service that exists. And we experienced the joy of creativity; of turning nothing into something.
As I’ve talked about on this blog before, we proved that star ratings incentive systems really do generate fantastic customer service. After hundreds of thousands of customer trips, the average star rating of journeys on the Snap platform was 4.7. Our public rating on Google and Facebook was 4.8. These are unprecedented for intercity travel companies.
I know those scores represent customers’ experience because I used to speak to 30 customers every week. My greatest satisfaction was when I spoke to people who were able to see friends and loved ones that they wouldn’t otherwise have been able to meet; simply because Snap existed. A £20 return fare and a journey from their local high street made a day return trip possible. I loved that.
Flixbus is expanding rapidly through the UK. Indeed, they’re one of the main reasons why we aren’t carrying on: they have just raised $650 million and we haven’t.
But they’re missing key elements of the model that made Snap a success. By branding coaches, they’re locking in certain operators, which eliminates the possibility of using star ratings to drive results. And they’re picking up and setting down in Victoria Coach Station, as opposed to utilising Uber-style tracking and picking up on the high streets where people actually live. And they’re offering a fixed timetable, which means they lose the potential to scale up and scale down in response to demand. I suspect that, once they’ve scaled, they will flex to look more like Snap as the world of transport needs the marketplace that Snap was created to become.
Founding a startup isn’t easy.
In their AGM last year, our first VC (Kindred Capital) told us the odds of success. They receive 10,000 applications from startups for investment each year. Of these, just 2,000 result in meetings. Of these, just 40 result in investment. Of these (based on VC norms; Kindred is too young to have its own results), 20 will fail outright and 1 will generate a return equal to the other 19 put together.
So there we go: in the VC game of 10,000 to 1, we made the last 40. Had it not been for Covid, we’d probably have made the last 20. Who knows if we’d have been the one.
We’re stopping because we got to the position where we had no money, no team and a catch-22. We needed cash to rehire but we couldn’t get cash without results and we couldn’t get results without a team.
So Snap won’t be coming back as an independent business. But it’s been an incredible journey and I will be sharing some of my key lessons learned on this blog in the coming month before joining TfL as Innovation Director next month.
