Brief Summary
This video features an interview with Ksenia Proka, the founder of Whizz, a company that rents electric bicycles to couriers in New York City. Ksenia shares her journey from a career in science to becoming a successful entrepreneur, navigating the challenges of starting a business in a new country, and the impact of the war in Ukraine on her business.
- Ksenia and her co-founders started Whizz in Moscow with electric scooters, but pivoted to electric bicycles for couriers after the COVID-19 pandemic.
- They faced challenges with financing and regulations in both Russia and the US, ultimately selling their Russian business and focusing on expanding Whizz in the US.
- Ksenia emphasizes the importance of discipline and perseverance in entrepreneurship, and shares her insights on the challenges women face in the startup world.
Addressing the Audience
Ksenia begins by thanking viewers for their support and encouraging them to donate to her channel to help her create more videos. She also asks viewers to share their thoughts on who they would like to see featured in future videos.
Teaser!
Ksenia introduces the video's main topic: an interview with Ksenia Proka, the founder of Whizz, a company that rents electric bicycles to couriers in New York City. She highlights Whizz's success in capturing the New York City courier market and its rapid growth.
Whizz Office in the Heart of Manhattan
Ksenia takes viewers on a tour of Whizz's office in Manhattan, showcasing the client area and the workshop where they repair and maintain the bicycles. She explains that Whizz has six locations in total, including four in New York City, one in Jersey City, and a recently opened location in Philadelphia.
A Look at a Bike Workshop in the Center of New York
Ksenia shares her love for bicycles and how the idea of a bike workshop has always been present in her dreams. She explains that Whizz's office is also a workshop where clients can rent bicycles and get them repaired.
“99 Percent of Our Clients Are Couriers”
Ksenia explains that Whizz primarily works with couriers, providing them with electric bicycles on a monthly lease basis. She details the rental process, including the cost, which starts at $149 per month, and the included repair services.
“An Inspector Came and Knocked Us on the Head” – About Inspections in New York
Ksenia discusses the regulations surrounding electric bicycles in New York City, specifically the limitations on storing batteries. She shares an anecdote about a fire inspector who issued a notice to Whizz for having six batteries on the premises, highlighting the strictness of regulations in the city.
Where Are the Bicycles Made and How Much Do They Cost?
Ksenia explains that most electric bicycles are manufactured in China, although production is gradually shifting to Vietnam and other countries. She reveals that the bicycles Whizz uses cost around $1,000 each, including delivery to their office.
How Much Do Couriers Earn in New York?
Ksenia discusses the earnings of couriers in New York City, stating that they can earn up to $5,000 per month, but the average is closer to $2,800-$3,000. She acknowledges the challenges of living in New York City on such wages, especially for migrants who often live in shared housing or shelters.
“Most of Our Clients Are Migrants”
Ksenia emphasizes that a significant portion of Whizz's clients are migrants who come to New York City with limited resources. She explains how they learned about their clients' living conditions in shelters after noticing a high concentration of clients living at the same address.
Whizz – It’s the Wind in Your Face
Ksenia explains the meaning behind the name "Whizz," which refers to the feeling of wind in your face when riding a bicycle at high speed. She also discusses the company's branding, explaining why they chose black bicycles with bright colors, which make them highly visible on the streets.
How Ksenia “Got Into Bicycles”
Ksenia shares her journey into the bicycle business, explaining that Whizz started in Moscow with electric scooters. She describes their initial plan to rent scooters to city residents, but the COVID-19 pandemic led them to pivot to couriers as their target market.
“Our Electric Scooters Became Useless” – How the Idea of Renting to Couriers Came About
Ksenia details the challenges they faced with their electric scooter business during the pandemic, as people were confined to their homes. She explains how they received the idea of renting to couriers from a mentor at a hackathon and how the demand for their scooters among couriers quickly became apparent.
Who Are Ksenia’s Co-Founders?
Ksenia introduces her co-founders: her husband, Alexey, and Artem, who joined the company later. She explains that they initially started Whizz as a team of three.
What Ksenia’s Company Did in Moscow
Ksenia explains that Whizz initially offered a variety of products in Moscow, including electric scooters, electronics, and home exercise equipment. She highlights the high demand for home exercise equipment during the pandemic due to the closure of fitness clubs.
Why Is Renting Bicycles an IT Startup?
Ksenia explains that Whizz considers itself an IT startup because of the significant role technology plays in their business. She describes their custom-built software that automates various processes and her role in defining the requirements for both internal and external software.
“We Never Did Startups Before” – How to Find a Business Angel
Ksenia discusses how she and her co-founders, who had no prior experience with startups, found their first business angel. She explains that they participated in online pitch sessions and met an angel investor who had extensive experience in the field.
How Whizz Decided to Open an Office in New York
Ksenia explains that the decision to open an office in New York City came after they started attracting serious investors in Moscow. She shares how investors encouraged them to consider a global market and how they chose the US due to travel restrictions during the pandemic.
“They Invested When We Didn’t Have Anything in America” – About Investments for the New York Launch
Ksenia discusses the investment they received for their New York City launch, highlighting the fact that they secured funding despite having no existing business in the US. She explains that investors were convinced by their initial marketing efforts and the potential demand for their services.
What Ksenia Did Before Whizz and Why She Left Science
Ksenia shares her background, explaining that she worked in a scientific research field for seven years before starting Whizz. She discusses her work in international trade consulting for the government, analyzing the impact of trade agreements on the Russian economy.
“I Started From Scratch and Went Through Hell” – First Steps in Entrepreneurship
Ksenia describes her initial foray into entrepreneurship, emphasizing that she started with no prior experience and had to learn everything from scratch. She shares anecdotes about her struggles with understanding basic concepts like landing pages and navigating the complexities of registration and taxes.
How to Open a Business in Manhattan Without Leaving Moscow
Ksenia explains how she and her co-founders were able to open a business in Manhattan while still living in Moscow. She highlights the similarities between the courier markets in Moscow and New York City, making it easier to adapt their business model.
How Delivery Works in New York
Ksenia discusses the delivery landscape in New York City, explaining that while there are services like Amazon, which offer same-day delivery, most people are accustomed to receiving deliveries within a few hours or the next day. She emphasizes that Whizz's clients are primarily couriers who deliver hot food and groceries.
Instructions for Opening a Business in the US
Ksenia provides a step-by-step guide for opening a business in the US, highlighting the key steps involved, such as opening a bank account, registering a company, obtaining necessary licenses, and securing insurance. She emphasizes the importance of insurance in the US, especially for businesses with physical locations.
How Much Does Life Cost in Manhattan?
Ksenia discusses the cost of living in Manhattan, emphasizing the high cost of rent, especially for apartments near Manhattan. She explains that a small studio apartment in Brooklyn or Jersey City can cost around $3,000 per month.
Is New York Overrated?
Ksenia shares her opinion that New York City is overpriced, especially for those who can work remotely. She acknowledges that many people are moving to other states with lower taxes and more affordable living costs.
Is It Easy to Start a Business in America?
Ksenia believes that starting a business in America is relatively easy due to the large market and the potential for entrepreneurs to thrive. She highlights the prevalence of online businesses and the opportunity to find a niche in the market.
How the War in Ukraine Affected Ksenia’s Business
Ksenia discusses the impact of the war in Ukraine on her business, explaining that it created significant challenges for both her Russian and American operations. She details the difficulties they faced with financing in Russia due to restrictions on foreign ownership and the challenges of operating in two countries that became hostile towards each other.
“No Investor Wants to Take Such Risks”
Ksenia explains that the war in Ukraine made it difficult to attract investors in the US due to the perceived risks associated with having a portion of their business in Russia. She highlights the concerns about potential issues with payroll and the overall instability of the situation.
“We Couldn’t Choose Moscow” – About Dividing the Company
Ksenia explains that the decision to sell their Russian business was made in collaboration with their investors, who insisted on focusing on the US market. She emphasizes that they did not have the option to choose Moscow due to investor requirements.
How to Sell a Business in a Downturn
Ksenia describes the process of selling their Russian business, highlighting the challenges they faced during a period of low investor interest and declining revenue. She explains how they had to adjust their valuation expectations and navigate a difficult market.
“We Sold Our Apartment to Cover the Holes in the Budget”
Ksenia shares the extreme measures they took to keep their business afloat, including selling their apartment to cover financial shortfalls. She emphasizes the difficult financial situation they faced and the importance of finding a strategic buyer for their Russian business.
“We Went to the Bank with Suitcases of Cash” – How They Transferred Money to the US
Ksenia describes the complex process of transferring money from Russia to the US, highlighting the challenges they faced due to sanctions and bank restrictions. She shares anecdotes about using various methods, including transferring money through Raiffeisen Bank and using cash transfers through Georgia.
Did Whizz Have Problems Because of Russian Citizenship?
Ksenia addresses the potential challenges they faced due to their Russian citizenship, explaining that they were initially concerned about securing financing and leasing in the US. However, they were surprised to find that their Russian background did not hinder their business operations.
How Is New York Similar to Moscow?
Ksenia compares New York City to Moscow, highlighting the similarities in their dynamic nature, cultural offerings, and the presence of a large migrant population. She explains that she felt comfortable adapting to life in New York City due to these similarities.
“Rats Can Run in the Streets, and There Are a Lot of Crazy People”
Ksenia acknowledges some of the less desirable aspects of New York City, such as the presence of rats and the occasional encounters with eccentric individuals. However, she emphasizes that she has grown accustomed to these quirks and finds them part of the city's unique character.
What Is the Hardest Thing About Living in New York?
Ksenia shares that the most challenging aspect of living in New York City was initially the lack of a social network. She describes the feeling of isolation and the difficulty of building new connections in a new city.
“Speed Is Important for a Startup”
Ksenia emphasizes the importance of speed in the startup world, explaining that they had a very short launch period for Whizz in New York City. She highlights the need to test hypotheses quickly and iterate based on the results.
Why Did Whizz Get a Fourth Co-Founder and a New CEO?
Ksenia explains that they brought in a fourth co-founder, Mikhail Peregudov, to focus on fundraising and external relations. She highlights the need for a dedicated individual to handle these tasks, especially during a period of financial instability.
How Did You Divide the Shares?
Ksenia explains that the shares in Whizz are divided relatively equally among the four co-founders, with slight variations due to the timing of their involvement. She emphasizes that the decision to bring in Mikhail was based on the need for his expertise and the potential benefits for the company.
The Most Dramatic Moment in Whizz’s History
Ksenia describes the stressful period surrounding the sale of their Russian business, highlighting the uncertainty and financial pressure they faced. She explains how the simultaneous sale of another company by their buyer created delays and increased their anxiety.
About the Last Round of Investments
Ksenia discusses the recent investment round Whizz secured, which included $5 million in equity and $7 million in debt financing. She explains that the debt financing is primarily used to purchase bicycles, a significant expense in their business model.
Where Are There More Women Founders: Russia or the US?
Ksenia shares her observations about the representation of women founders in Russia and the US. She notes that she encountered a higher number of women founders in Moscow, but was surprised by the lack of female representation in the US startup scene, particularly in the mobility sector.
Are There Privileges for Companies Founded by Women?
Ksenia discusses the potential benefits and disadvantages of being a woman founder. She acknowledges that there are programs and initiatives aimed at supporting women founders, but she has not personally experienced any significant advantages.
Why Do Women Rarely Start Startups?
Ksenia explores the reasons why women are underrepresented in the startup world. She attributes this to factors such as risk aversion, family responsibilities, and societal expectations. She shares her own experience with these considerations when deciding whether to pursue a PhD or a career in entrepreneurship.
How Much Does Whizz Earn Now?
Ksenia reveals that Whizz's annual revenue is currently around $8 million. She explains that they have approximately 3,000 bicycles in circulation in New York City and are aiming to reach 10,000 bicycles by next year.
“Electric Bicycles Were Banned, But They Were Sold Illegally” – About the New York Market
Ksenia discusses the unique history of the electric bicycle market in New York City, explaining that they were banned until 2021. She highlights the dominance of Chinese manufacturers and the emergence of organized competitors like Fly Bike.
When Will Whizz Become Profitable?
Ksenia shares that Whizz is currently operating at a loss but aims to become profitable by next year. She explains that their unit economics are positive, but they are still working on covering fixed costs, particularly in management.
How to Conquer the Courier Market in America
Ksenia discusses Whizz's plans for expanding their business, highlighting their focus on capturing a larger share of the New York City market and expanding to other states. She emphasizes their expertise in working with migrants and their ability to assess creditworthiness.
About Theft in New York
Ksenia acknowledges the problem of theft among couriers in New York City, explaining that the high value and liquidity of electric bicycles make them attractive targets. She shares anecdotes about stolen bicycles being repainted to disguise their identity.
Marketing Channel – “Just Walked In”
Ksenia discusses Whizz's marketing strategy, highlighting the importance of both online and offline channels. She explains that while they use digital marketing, such as social media and Google ads, a significant portion of their clients come from seeing their bicycles on the streets and walking into their office.
“Usually This Race Takes 7 Years” – Ksenia About Whizz’s Future
Ksenia discusses Whizz's long-term goals, explaining that she sees the company's journey as a 4-5 year race to achieve significant growth or potentially prepare for an IPO. She acknowledges that the average startup takes 7 years to build a successful story.
When Can a Founder Exit a Company?
Ksenia discusses the possibility of a founder exiting a company, explaining that it is often a long-term process that involves building a mature business that can function independently. She highlights the importance of a strong management team and the potential for founders to gradually transition out of their roles.
Blitz
Ksenia answers a series of rapid-fire questions, including her preference for speed over cost in business, her belief that discipline is the most important quality for an entrepreneur, and her favorite activities outside of work. She also shares her admiration for Michelle Obama and her preference for New York City over Moscow.
