From Tesla Jokes to Billion-Dollar Dreams: The Story of OX Drive’s Unconventional Rise in the Car-Sharing Industry

Amidst the vibrant atmosphere of TechChill Milano, the international startup conference in Milan, StartupReporter had the opportunity to sit down with Egija Gailuma, the visionary co-founder of OX Drive, a Latvian startup revolutionizing the car-sharing industry.

In this exclusive interview, Egija shares the unconventional journey from Tesla jokes to their ambitious billion-dollar aspirations.

Oleksandr Komarevych (StartupReporter.eu): – How was OX Drive created, and what sets it apart? Why haven’t other countries launched it yet?

Egija Gailuma: – Since the very beginning, we, the co-founders, initially met sporadically to discuss various topics during our studies at the university. One co-founder delved into finance, handling deals at Latvia’s main bank. Another co-founder built and sold startups, grappling with the direction of the second one. The third co-founder specialised in deep tech and AI, working on complex projects across Europe and the U.S. through programs like the Baltic American Freedom Foundation and the Plug and Play accelerator in Amsterdam. Eventually, we all converged to build something meaningful, prompted by our shared desire to create and innovate.

At the time, I was leaving a car-sharing company, and the idea sparked when one co-founder, a Tesla and Elon Musk enthusiast, jokingly suggested creating a Tesla car-sharing service. The excitement led us to explore the concept further, each considering it an exciting venture.

Oleksandr: – What were your initial thoughts?

Egija: – Initially, we were just joking about each of us buying a Tesla and sharing it among ourselves. The next day, one co-founder texted me, suggesting it might not be a joke, and within 20 seconds, I replied, “Let’s do it. Who cares?” We began working on an Excel sheet as we couldn’t create an MVP due to the challenges faced by heavy-asset startups like ours.

Over the next year, we approached various investors, including international ones, but being pre-revenue with just an idea on an Excel sheet made fundraising difficult. Eventually, we secured seven investors from Austria, Latvia, and Estonia. The next challenge was financing, as banks initially rejected us based on our lack of proven viability.

Despite attempts with boutique banks, we faced similar hurdles. Ultimately, we persuaded one of our major investors to secure the initial financing for 20-25 cars. Subsequently, we obtained some bank financing, marking the beginning of OX Drive.

Oleksandr: – Share more about your founding team. What set you apart, and what advice do you have for early-stage founders?

Egija: – Our founding team (Kristians Karlsons, Kristaps Vasiljevs, Juhan Kaarma and I) is characterised by individuals who don’t wait for permission or someone to dictate their actions. This self-driven approach is crucial, as a founder should not need constant direction. This independence is a key aspect that defines our team.

Oleksandr: – So being proactive is crucial?

Egija:  – Absolutely. Being proactive means generating creative ideas and taking the initiative to explore solutions independently. We went beyond conventional means during fundraising, leveraging personal connections to meet influential individuals. For instance, we had dinner with one of the richest people in Latvia through a friend’s connection. This proactive mindset extends beyond traditional channels.

Another key aspect is embracing diverse opinions among founders. While some argue that a unified vision expedites decision-making, having differing perspectives, especially in asset-heavy startups like ours, proves beneficial. Each founder’s distinct viewpoint challenges ideas, leading to thorough evaluation and either affirmation or rejection.

It’s important that no founder blindly follows the loudest voice. Each founder should express their opinions and have the capacity to disagree constructively. We’ve designated specific responsibilities to streamline decision-making, but each founder needs to maintain their opinions and contribute to the startup’s success.

Oleksandr: – What does “hunger for success” mean to you?

Egija: – For us, it’s about building a billion-dollar company, not just achieving unicorn status in valuation. The ambition is focused on long-term success, aiming for substantial turnover over 20 or 30 years. Founders must share this common goal, ensuring alignment on their envisioned company’s scale.

Oleksandr: – When did you discuss this vision with the founders?

Egija: – We talked about our ambitions right from the very beginning. Initially, we asked each other about individual goals and what each person wanted to achieve. We delved into questions like, “Do you envision a comfortable life with €10k per month, or do you have broader aspirations?” We explored the reasons behind these goals, such as paying off mortgages or wanting to travel.

While our goals didn’t have to be identical, it was crucial to ensure alignment. Some of us aim for a billion-dollar company, while others might have been content with a hundred million. The key was an alignment that allowed for diverse perspectives and backgrounds among the founders.

Our diverse backgrounds contributed to the strength of our team. We had a finance expert, someone from car sharing with a tech and marketing background (myself), a sales-focused founder, and an individual skilled in deep tech and data. This diversity is crucial, especially in a data-driven industry like car sharing, where strong finance and data management are essential.

Oleksandr: – Do you handle data analysis internally or use external assistance?

Egija: – We extract data directly from our system, although our systems aren’t highly advanced yet. A significant portion involves manual counting and manipulation using Excel sheets. We have a proficient team member skilled in acquiring cars at favourable prices and selling them for a profit. 

This aspect is critical for the core functioning of our car-sharing business. Additionally, marketing is a key component in our B2C business model, where the brand needs distinct characteristics and values akin to a person.

Oleksandr: – How do you determine the best strategy and tools, especially for branding in the B2B and B2C space?

Egija: – In our case, B2B and B2C strategies are similar because individuals who drive for personal use often inquire about opening business accounts. Our priority is to ensure a seamless transition between the two. For B2B, we send out offers highlighting the option to open business accounts and receive invoices.

Regarding B2C, I noticed a gap in the more premium category during my previous industry experience. However, recognising that our market might not be affluent enough to afford higher prices, we offered premium options at the same cost as regular ones, such as Volkswagen Golf or Toyota. This approach became a competitive advantage for us, requiring meticulous cost optimisation.

Negotiation skills, particularly among the founders, have been crucial. Being recognised as tough negotiators has even led to partners recommending us to others. We consistently negotiate for the best prices, ensuring that the company never offers a better deal to someone else. This commitment to cost optimisation extends to areas like insurance, where securing the best deals requires persistence and effort.

Oleksandr: – It’s intriguing because not all founders approach negotiations with such intensity. Some prefer to walk away rather than negotiate intensely. Why do you take this assertive negotiating stance?

Egija: – I’ve noticed that not all founders share our approach. However, we’ve yet to encounter a situation where only one provider can offer the services we need. If there’s competition, even if one provider is slightly inferior but offers a better price, we explore ways to make it work.

In a heavy asset startup like ours, cost optimisation is critical. We believe that even if there’s a seemingly less favourable provider, negotiating skillfully can often lead to securing the desired price. It’s about finding creative solutions and navigating the negotiation process effectively. This mindset is something we encourage in our team, emphasising the importance of negotiations, especially in our industry, where alternatives are often available.

Oleksandr: – Your emphasis on negotiations is intriguing, especially since not many startup founders discuss it openly. You mentioned that it might be because most startups are software-based and don’t face the same significant costs. Do you believe the intensity of negotiation is a necessity due to the heavy asset nature of your business?

Egija: – Absolutely. The nature of our heavy asset startup drives our negotiation intensity. With assets worth millions, we can’t afford to overlook cost optimisation. It’s about maximising revenue and ensuring efficient use of our substantial assets. Elon Musk’s approach to SpaceX negotiations is a notable example; he eventually built it himself after challenging negotiations.

Our mindset sets us apart — we constantly remind ourselves that it’s not just investor money but our hard-earned money. This perspective fosters a deeper emotional attachment and influences how we negotiate. We’ve observed cases where founders may not feel the same attachment when dealing with investors’ funds, leading to different decision-making dynamics.

We’ve encountered situations where startups casually mention burning millions of investors’ money without a significant impact. Still, every investment is a substantial commitment that requires careful consideration and efficient utilisation. This mindset is crucial for our success in a competitive market with significant assets.

Oleksandr: – If someone reading this article is interested in working with you, what characteristics are you looking for in potential team members?

Egija: – The top priority is attitude. We prioritise hiring based on a candidate’s mindset, willingness to learn, and adaptability to the startup environment. The startup mindset is crucial, and while we don’t demand excessive working hours, being open to occasional longer hours when needed is essential.

Another key trait is effective communication. Even if a candidate lacks experience, articulating thoughts and communicating well is highly valued. We appreciate individuals who can express themselves clearly, ask questions, and actively participate in discussions.

Lastly, we consider a candidate’s background in various activities. Whether it’s participation in NGOs, sports teams, Erasmus programs, or any form of active engagement, we believe that past experiences shape individuals. Even unconventional experiences, like one team member’s work on bobsleighs in China, showcase an individual’s ability to take on challenges and figure things out.

These three factors — attitude, communication skills, and past engagement — help us identify potential team members who align with our startup culture and contribute to our dynamic work environment.

Oleksandr: – It’s fascinating to hear about your expansion plans. It seems like you’re considering markets that balance size and competition. Markets like Portugal, Greece, and Croatia, where you have a significant population but aren’t oversaturated with big players. With its growing demand and favourable financing conditions, the Middle East sounds like a strategic move.

Egija: – Absolutely. Choosing markets where we can demonstrate success with a smaller budget before tackling more significant challenges is a prudent approach. Our experience in Latvia has shown that if we can make it here, we can navigate similar-sized markets effectively. We plan to expand around 2024, targeting markets that align with our strategy and allow for organic growth without the need for massive initial investments. With its unique dynamics and support systems, the Middle East presents an intriguing opportunity for future growth.

We must be practical and strategic in our expansion, considering factors like market size, competition, and logistical feasibility. We aim to replicate our success in Latvia in new territories while maintaining operational efficiency and optimising costs.