Guillermo Cornejo is the founder and CEO of Riders Share, the largest peer to peer motorcycle rental platform globally. He started it while attending a full-time MBA at UCLA Anderson. Before that, Guillermo worked in data analytics for Nissan, GM, and Hyundai in the United States. He grew up in Peru and moved to the US to attend Texas Christian University. If he weren’t running a company, he’d be playing guitar and video games instead.
Riders Share connect motorcycle riders and owners for a better rental experience. Easy, safe & secure. Owners can earn extra cash by renting their bike to riders vetted and insured, while renters have access to the largest selection at a much lower price than a typical rental agency.
In an exclusive interview with AsiaTechDaily ,Guillermo says:
I want to ensure my investors don’t lose their money for believing in me. I also want to keep all the promises I made to employees – it’s not easy. So I guess the biggest motivation for me nowadays comes from taking care of the people I work with.
The practice is more important than talent.
Being empathetic goes a long way towards making you and your people happy.
You are not supposed to be happy all the time. Shit happens, and it’s ok.
Please don’t do it. It’s overrated. Working long hours and being broke isn’t for everyone. Do it if you hate your life and need to change it, and you don’t have many downsides, like me.
The best advice came from Techstars. The world is more competitive than it ever was. To succeed, you need to hire exceptional talent. This means that if you are going to hire a COO, your candidate better is an ex CEO from a successful startup. It’s that hard to win.
Read on to know more about Guillermo Cornejo and his journey.
Please tell me about your personal background, and What motivated you to get started with your company?
Guillermo Cornejo: I was born in Texas, but my parents moved within months to Peru, so I grew up in Lima, and Spanish is my first language as a consequence. I wanted to be a professional guitar player, but my parents convinced me to study in the US instead. I moved back to the US for college at TCU, where I majored in Economics and Political Science. I then went on to work in auto finance at Nissan, GM, and Hyundai for 7 years before working on Riders Share full time. Well, almost full time: I got am MBA from UCLA Anderson while launching the startup in 2018.
There were multiple reasons why I started a company:
- In college, I learned the most effective way to make a positive impact in the world is to become a billionaire. Their power is longer lasting than that of elected officials
- Like many in my generation, I was enamored with the idea of reading about it on the news. The reality is less glamorous!
- I could outwork teams of 5 people with decades more experience at my corporate job by working smart, so I felt underutilized
- I hate materialism, but the mother of a pretty girl at TCU told me her daughter would never date me because I wasn’t rich enough. I then dated a different girl, and we also broke up because I couldn’t keep up with her living standard. It put a chip on my shoulder
- The possibility of starting a tech company despite not knowing anything became very real when a 23-year-old friend of mine at TCU received a $500 million term sheet, and he knew less about business than most!
- I wasn’t privileged, but I had a much lower risk than most. No debts because my education was paid mostly by scholarships, no wife, and no kids. I could take on debt because of the worst-case scenario. I could return to Peru and avoid paying them. I funded my startup with debt backed by my credit because of this
- My unique experience in subprime auto loan risk management allowed me to identify a business opportunity that most missed, as well as seeing risk management as a moat
What is your current main product, and can you share any previous product pivot story to the current product?
Guillermo Cornejo: The current product is an online marketplace for peer to peer motorcycle rentals. We never pivoted, but I launched it 3 times. I failed the first 2 times due to a lack of experience and a solid technical cofounder.
How much money have you raised in total so far? When was the recent funding round?
Guillermo Cornejo: A total of $3.3M, the most recent round of $2.26, was announced in July 2020.
What were the internal decision processes in determining when to begin fund-raising, and what were the logistics for this? And how many investors have you met so far, and how did you meet these investors and which channels worked best for you?
Initially, I intended to keep all the earnings to myself. The internal process was like:
“Oh shit, in 3 months, I’ll have $40,000 in credit card debt, the limit, and no more money to spend.”
The second time:
“Oh shit, in 5 months, I’ll have $300,000 in total debt and no more money to spend, and I’m burning $50,000 a month.”
Raising from the right VCs helps in terms of advice; otherwise, you are just giving up a large chunk of your future wealth for short term liquidity. I only did it because everything was more challenging than you could imagine and had no choice. I think everyone got a great deal by investing in Riders Share (and hope to reward them for believing in this first-time entrepreneur with a thick accent and no pedigree).
What are the biggest challenges and obstacles that you have faced in the process of fund-raising? If you had to start over, what would you do differently?
Guillermo Cornejo: The biggest challenge was not knowing what VCs look for and being able to meet those requirements. We lacked an experienced team (they look for prior big tech or successful startup experience, or at least an Ivy League degree, or professional athlete, or any indication you have grit). We also had trouble demonstrating the market’s size because many of them are on the West coast and are unfamiliar with our market. Finally, I was too honest. It would be best if you projected confidence, whereas I was concerned about certain business aspects. Every deal has some concerns. I addressed those concerns with traction instead.
Another challenge was getting started. I don’t have a wealthy network, so the “family and friends” round was impossible for me. Many entrepreneurs come from privileged backgrounds! I was lucky that one of our super users happened to run a fund, Texas HALO, out of Houston.
It wasn’t enough to gain access to the opportunity to pitch at investors; warm intros work best. The MBA at UCLA expanded my network, which led me to Techstars, which opened the doors to practically every VC in the world.
What are your milestones for the next round? And what are your goals for the future?
Guillermo Cornejo: In 2021, we will spend a large amount on paid advertising to demonstrate that we can return at least 4x in the lifetime value of a customer per dollar spent on advertising. This means we focus on reducing variable costs, increasing conversion rates, return usage, and how the product encourages positive word of mouth. Most of our funds in 2020 and 2021 were used in product development and improving our users’ experience.
How have you attracted users, and with what strategy have you grown your company from the start to now?
Guillermo Cornejo: Initially, we relied on media coverage, which is free. Media coverage helped us get ranked on Google, which became our #1 channel, which is also free. We amplified that channel by investing in making the site SEO friendly and producing content. We later spent on SEM and experimented with all kinds of channels. Different channels work differently for supply vs. demand for motorcycles in our marketplace.
Which has been the best marketing software tool for the growth of your startup, and why?
Guillermo Cornejo: Google LightSpeed is a free tool that tells you what you can do to improve your site’s performance.
What do most startups get wrong about marketing in general?
Guillermo Cornejo: That getting the product right comes first, and to do that, you need to measure EVERYTHING. If you spend money on marketing and deliver a bad experience, you are not just wasting money. It is counterproductive in the long run. If you don’t measure the ROI of each channel separately, you could be building an unsustainable business. Ideally, the product has features that help it go viral without marketing, but that isn’t easy to do. Paid marketing also provides predictability for financial modeling: “I can grow X by spending Y, so fund me!”.
How do you plan to expand globally?
Guillermo Cornejo: Slowly. Auto insurance is highly regulated and different in every country.
What are the most common mistakes companies make with global expansion?
Guillermo Cornejo: I don’t have experience with this yet and haven’t researched it yet.
How do you handle this COVID-19 outbreak situation for your company’s survival in the future?
Guillermo Cornejo: We were lucky to raise money around this time. The outbreak hit the motorcycle rental industry by -70% and attracted riders that are more likely to crash motorcycles, which also hurt our margins. We maintained a small headcount and didn’t spend on trying to open up new marketing channels. Instead, we focused on the ones we already know worked and focused on the product. We were able to grow despite the contraction.
What are the most common mistakes founders make when they start a company?
Guillermo Cornejo: Are you even the right person to build this company? Many wannabe entrepreneurs are not. They don’t know the industry or their market or the challenges involved. In my case – Riders Share looks like a simple website, but we currently have 14 APIs to mitigate risk and working on adding more. I had some prior experience in financial risk management, but it barely extrapolates to marketplace risk management.
Most people don’t have the talent, experience, or grit to succeed. A good idea is the easiest part/ Facebook didn’t invent social media. They just executed better. HomeAway existed long before Airbnb, but Airbnb’s founders had better technical talent and a superior business model driven by design thinking.
What’s the best advice you’ve ever received? And What advice do you have for someone who is interested in doing similar things like yours or in a similar direction?
Guillermo Cornejo: Please don’t do it. It’s overrated. Working long hours and being broke isn’t for everyone. Do it if you hate your life and need to change it, and you don’t have many downsides, like me.
The best advice came from Techstars. The world is more competitive than it ever was. To succeed, you need to hire exceptional talent. This means that if you are going to hire a COO, your candidate better is an ex CEO from a successful startup. It’s that hard to win.
What are the top-three books or movies (TV series) that changed your life and why?
Guillermo Cornejo: The Lean Startup is an excellent approach towards product development, whether you work for a big corporation or a startup. The Innovators Dilemma also helps you understand how disruption works. For marketplaces, The Platform Revolution is a must-read. Those 3 will help you find the optimal strategy for launching a marketplace startup.
How do you keep yourself motivated every day?
Guillermo Cornejo: I want to ensure my investors don’t lose their money for believing in me. I also want to keep all the promises I made to employees – it’s not easy. So I guess the biggest motivation for me nowadays comes from taking care of the people I work with.
Initially, my goal was to get rich enough to influence politics and make the world a better place by lobbying for better laws. It remains a goal, but it’s more of a long term thing, and very unlikely to happen but worth a shot.
What are the top- three life lessons that you want your (future) sons and daughters to know?
Guillermo Cornejo: The practice is more important than talent.
Being empathetic goes a long way towards making you and your people happy.
You are not supposed to be happy all the time. Shit happens, and it’s ok.
What would you like to be remembered for?
Guillermo Cornejo: I’ll be forgotten anyway, sooner or later. So answering this question feels very egocentric. I think that billionaires have more power to do good (or evil) than politicians in the current state of Western democracies. Still, entropy is inevitable, the universe will end, and ultimately nothing we do will matter – so carpe diem, you won’t care about what people remember you for when you are dead.
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