March 20, 2017 –When John Zimmer reflects on how good decisions about financial investments shaped the way Lyft has transformed transportation, he doesn’t focus on technology, or on product management, or on customer service. Zimmer talks about something far more fundamental.
“Alignment of values is incredibly important,” he says. “Shared values are the single highest priority to align with your Series A investor,” he regularly tells entrepreneurs.
In Lyft’s case, Zimmer says “the company’s shared values with our Series A lead VC firm, Mayfield, and the team of Raj Kapoor and Navin Chaddha, have been extremely strong — and Raj even ended up joining Lyft as Chief Strategy Officer. Navin continues to deliver on the promise that Mayfield made when it invested in Lyft’s predecessor, Zimride, in 2011. The entire team has been strongly and solidly there in our corner as supporters and as people I trust, that we trust.”
“Shared values are the single highest priority to align with your Series A investor.”
Experience Is Capital
“The other thing that is important is a firm or investor that understands life on our side of the table,” says Zimmer. He’s talking about how investors like Mayfield — those who have extensive experience as entrepreneurs and operators — can contribute essential things to a new enterprise, and over the long run.
“Of course we want them to be great investors” — but Zimmer also says it’s also important they can contribute to business activities. Beyond shared values, the main things a good investor can provide, says Zimmer, are “good advice and a good network.”
The advice, he explains by way of example, could be around a hire: “You should or you shouldn’t. It’s now time to hire this type of person, or it’s now time to hire for this type of position.”
Investors with deep experience in the trenches can weigh in throughout the growth of the companies in which they invest. Zimmer particularly values input that relates to the challenges inherent in growth: “We saw companies that when they went from 100 to 500 people over two years, these are the three biggest mistakes they made so you don’t make them” — that, he says, is the sort of input an investor should be able to provide.
Then, he says, there is the network factor. “Whether it’s a potential partner, a potential hire, or the next round of investors — those are the types of introductions and contacts that are important.”
“John Zimmer and Logan Green were twenty-somethings with a big vision of disrupting the $4 trillion transportation industry when we met them in 2011. By building a delightful app, a ridesharing marketplace with vibrant community, and operational excellence, they exceeded our expectations of forever changing how people live, work, and play.”
Navin Chaddha, Mayfield
Lyft’s Top 5 Firsts
Zimmer singles out five “firsts” when marking the major milestones in Lyft’s history. The “first first” actually precedes Lyft. It dates back to Zimride, which he co-founded with Logan Green, and which they pivoted into Lyft. “Finding a co-founder that is not the same person as you and adds something different, while sharing a similar set of values, is the most important first milestone.”
“The second,” he says, “was getting our first team member, and learning to hire people better than you while not trying to do everything yourself.”
Bringing on their first customer came next, followed by the first round of investment. The fifth first is somewhat unique to Lyft, and speaks to its transformative role as a company that continues to alter the way the world works: legalizing their very business. “We created the first regulatory environment for ridesharing in California, which became the model for rideshare regulations around the country,” he says proudly.
Zimmer’s initial response as to what’s next at Lyft is of the “then I’d have to kill you” variety. Then he pulls back the curtain just a little. “Our mission,” he says, “is to improve people’s lives through the world’s best transportation.” For most Lyft users, that originally meant peer-to-peer service for private rides. “Then came Lyft Line for shared rides,” says Zimmer, not just listing items but charting the company’s trajectory. Those, he explains, are just initial steps in a specific direction. “To fully follow our vision,” he says, “the next step is to create a complete and full alternative to car ownership.”
Three Pieces of Advice to Future Entrepreneurs
Zimmer jokes that his second and third pieces of advice are no more operationally or technologically oriented than his first: “Making sure to get a good workout routine is number two — and then sleep is number three.” For him it’s all about balance.
“Simple things,” he says — but from simple things, big things grow.