The founder of Rocket Internet backed start-up Carspring is on a mission to shake up the way the United Kingdom and Europe buy used cars.
Whilst working for strategy consultants McKinsey & Co. Max Vollenbeich, a man with a passion for all things automotive-related, worked on one of the most detailed research reports of recent times into the future of the automotive industry.
The conclusion was that there was much to be done. With its fragmented market and old school way of doing things, there was a significant amount of opportunity to be entrepreneurial and introduce new technologies. In start-up land parlance, the used-car industry in Europe is “ripe for disruption”.Backed by one of Europe’s biggest start-up players, Rocket Internet, Max and business partner Dr. Peter Baumgart are fully equipped to shake up the market
Rocket was founded by the Samwer brothers; 3 German entrepreneurs who lived together for over a year in a one bedroomed apartment in Silicon Valley while they perfected the art of launching lean and agile new start-ups, often creating businesses eerily similar to other successful disruptive enterprises.
Rocket Internet completed an $8.2 billion IPO last October, and is now the world’s largest online platform outside the US and China. Flagship companies include Hello Fresh, Food Panda, and e-commerce site Dafiti, all proven winners in their respective sectors.
Rocket has been keen to break into the used-car sector and found the perfect match in Max.
Smart and with a good sense of humour, a pre-requisite in the used car market, he understands buying a used car is traditionally a case of caveat emptor.
Most people expect to buy at least one “old banger” in their lifetime through sites like Autotrader or Exchange & Mart, or through a dodgy dealer, which has to be sent straight to the scrapyard. It’s not unusual for 3, 4 or even 5 figure sums to be written off.
With the launch of Carspring, Max hopes to change all that by providing an end-to-end solution with the aim of protecting both buyer and seller.
To begin with, any seller who wants to list their vehicle on the site will receive a personal visit from a qualified Carspring mechanic, who will subject it to a 150+ point check and advise the seller about the right price to list at.
If any issues are discovered, Carspring will carry out the repairs themselves and deduct the cost from the eventual sale price, and, depending on the value of the car, take a 5-10% cut as payment for their services. A perfectionist, Max insists on all cars being delivered to buyers personally by a Carspring employee. That way every buyer forms a relationship with somebody they can use as their future contact person.
Prices are based on closely monitored market data produced by CAP. Whenever possible, Carspring will crunch the numbers, say for a car that traditionally sells poorly, to ensure that the best and fairest price is always offered.
From the buyer’s perspective, Carspring offers a service that Max hopes won’t end with the sale of a car but will continue through the lifetime of the vehicle and beyond. Leveraging the tech that gives modern-day start-ups such a competitive advantage, Carspring intends to help its customers manage every aspect of the paperwork and regulations and even introduce an app to send reminders about tax disc, insurance policy renewals, and scheduling MOTs.
Max wants his customers to experience the same levels of customer service as on the high street. He points out that the number of cars that are purchased on finance is high in the UK. Carspring has thus teamed up with leading UK Car Finance provider Zuto (formerly CarLoan4U) to give site-users access to finance and vetted, fairly priced cars all on one platform.
His ambition is for Carspring to become a “one stop shop” with advice, follow-up services, data storage and relationships that last a lifetime. It’s bold and determined but starting small. Carspring currently lists just over 100 cars for purchase, although Max has set himself the goal of making this number rise to between 200-300 cars before the end of 2015.
“I’m a simple minded guy”, he protests when I quiz him about the possibility of arbitraging the market to drive profits, “I just want to sell good quality cars to people. We’re starting from scratch, integrating new solutions but respecting the industry as well. The way I judge the success of the company is by asking how many satisfied customers we have and how many cars have been sold.”
That said, now that the platform is built and the infrastructure is in place, Max believes that he is ready to scale and is capable of selling hundreds of cars every day. “The only restriction on our growth should be customer satisfaction”, he says fastidiously. Make no mistake, he wants to make his mark on the industry, but he wants to be remembered for the right reasons.
Max recognises that “our typical customer is probably not a petrolhead, they are someone who wants to get from A to B in a reliable car”, but at the same time he believes “everyone remembers their first car; the colour and make, and most of us form a relationship with the cars we drive. At first they represent a coming-of-age and then they kind of form part of our life story.”
He believes in “aiming high and creating something good! I go to work every day to try and make the process better.” Getting into his stride, he adds, “I guess one day I want to tell my kids what I did and I want them to respect what I achieved; I want to create a bit of history.”
“It’s a lot of responsibility but it’s fun. When I look to recruit I look for people who like to make a difference. I can forgive a mistake as long as that person goes out of their way to make amends, and learns from the experience.”
It’s an attitude that is likely to be welcomed by anybody trying to navigate through a sale or purchase that is too often fraught with the risk of losing a hefty chunk of money. Peace of mind is paramount, and that is what Carspring are on course to deliver.