Innovation and Disruption were the buzzwords of Factory Berlin’s Fireside Chat with FlixBus CIO and co-founder Daniel Krauss. The soon-to-be dad, ”Undercover” reality star, and avid boulderer has guided the complete domination of long-distance bus sectors using AI, on-demand mobility, and natural swagger.
FlixBus is speeding to success on the autobahns of Europe and the US. With origins that emerged from boredom, the three co-founders, or rather, musketeers of mobility, have been the ultimate changemakers for travel and tech markets. “There are two parts of our heart. We are tech first because we can improve mobility due to tech, but we do transport with our tech developments.” Recently, their mission to bring smart, bright, and green mobility to everyone exploded to a 2.5B (USD) valuation.
How would you describe FlixBus colors to someone who was blind?
Freshly picked apples sprinkled with a little bit of morning sunshine.
How do you bring innovation into such a traditional industry?
We looked at what worked and what didn’t, then enriched it with modern technology, updates, and making software for almost all areas. We connected the dots. It’s not disrupting but innovating within a certain market.
We need a bus with 50 seats, not 30. No one cares about vending machines on a f**king bus, they want WiFi. Generally, it’s where you go and the price.
How did you manage this insane growth?
Although we are built from deregulation, it’s the regulation that keeps us from growing super fast. Organizational growth takes time and you have to find operational structures to pursue a strong incremental strategy. I am really proud of our team, we all take care of each other.
Personally, I spend about 10% of my time burning monkeys – the s**t you have to do. 20% is dedicated to strategy and another 70% is maintaining and nurturing our organization and culture.
How does innovation extend to your business model?
We have an enhanced partner model where partners get a solid fee and we share revenues. 70% for them, and 30% for us on average. We do well when buses are full. If the buses are empty, then the smaller guys still do ok. We shifted to a different platform model with more money for tech and marketing. It enables fast scaling because you don’t have to buy or build tangible assets, rather, tech challenges and language issues. It has a low-risk profile and investors find it pretty interesting.
You use big data, but which numbers are most important?
The number of people we can mobilize. Right now, that’s 120 million people worldwide. Of these, 50% or more didn’t have the opportunity to travel before FlixBus for structural reasons. We closed a gap, and that makes us really proud.
We quickly realized that France, as well as Germany, was affected by the deregulation of the bus market and so we expanded. It was a chance to grow across Europe and the US. After 5 years we operate in 30 countries in 18 offices and employ 1,200 people.
What is your secret sauce for tech?
It’s a question of skill and how we connect dots. There are heavy and deep learning approaches to yield our competition analysis and weigh external conditions like weather, location, and markets. Operating and managing thousands of buses around the clock is difficult, but there are real-time solutions.
Where is FlixMobility going next?
The US market is doing better than we expected since there’s no seasonality. Buses will soon run in Texas and Florida and by next year we will hopefully be market leaders.
We want to maintain 30-40% growth via our train service, which is 20 times larger in everything. It is exactly the same model, but denser, and Europe’s white spots will open in 2020. There are also many places outside of the EU and the US.
Factory of Innovation
Innovation is at its finest when lean and agile approaches are made. For example, when the speed and scale of data management are efficient or the ability to successfully process your maximum capacity operations. These aid in the adoption and leveraging of newer technologies such as AI, language processing, machine learning, and accessibility.
As innovation brings new processes, the effects and building of updated infrastructures, their operationalization to sustain functioning and efficient infrastructures, carry a significant impact on people’s daily lives than the vast majority of technological innovations.
However, the most important part of being one of the three musketeers is the bond of trust formed between the other two musketeers. Daniel Krauss, Jochan Enghert, and Andre Schwaämmlein not only want to be able to sustain their long-lasting friendship but their work relationship too. The valid iteration of trust and it’s consequential transacting remains at the core of any process, whether its scaling or driving the road to innovation.