01:16:50 · John Coogan, Wayne Ting
[01:16:50] S1: Yeah. [01:16:50] S9: They were in the market longer. And it's obviously hard because if it was easy, they would have done it too. And I think it also requires a clear a clear view of like what actually matters. And in the world of limited resources, we are very focused that we want to be the way to crack this business is great hardware, great software, great operations, government relations. Yeah. And then everything else, we have to deprioritize in a incredibly strict way in order to put our limited resources towards the things that actually matter in this business. [01:17:23] S1: What is going on on the supply chain side? Is there a is there a constraint on battery capacity because of demand from AI broadly? It feels like the AI industry is sucking up every possible piece of the supply chain from coatings that go into toilets to everything that generates power under the sun, rocket motors and jet engines are being bolted to the ground to generate power. Is that a constraint or is there an opportunity that demand for energy will ultimately reduce the price of batteries or maybe even extend their life?
01:17:23 · John Coogan, Wayne Ting
[01:17:23] S1: What is going on on the supply chain side? Is there a is there a constraint on battery capacity because of demand from AI broadly? It feels like the AI industry is sucking up every possible piece of the supply chain from coatings that go into toilets to everything that generates power under the sun, rocket motors and jet engines are being bolted to the ground to generate power. Is that a constraint or is there an opportunity that demand for energy will ultimately reduce the price of batteries or maybe even extend their life? [01:18:04] S9: So I haven't seen a shortage on battery cells today, but I think one of the advantages that Lime has is we are vertically integrated in hardware and software. We have every e scooter you see online, we have designed, engineered in house. Mhmm. We control our own supply chain. We outsource the manufacturing. But because Lime is the world's largest purchaser of e bikes, e scooters, it also means we get we get warning when there are shortages of critical parts, and suppliers want to sell to Lime. So I have seen this year a shortage and inflation in memory chips. I mean, clearly AI has driven up demand on the high end memory chips. Mhmm. We don't put the AI chips into a line bike or scooter, but I think a lot of this supply chain has reinforced manufacturing the high end. So even if you're using a [01:18:57] S1: Yeah.
01:18:57 · Wayne Ting
[01:18:57] S9: Middle of the road or low end memory chip, we're seeing significant price inflation. But more importantly, if you don't lock in supply, you're not even there's not gonna be any supply to be bought in 2027, 2028. But because Slime is the global leader in micro mobility, our suppliers are coming to us early and saying, how might we work with you to secure supply for next year? And let's lock in prices now before the kind of price inflation that we see. And I think that's one of the advantages of being vertically integrated. But even this is a it's a real game of interest. We have to we have to look ahead on not just what's gonna happen this year, but what's gonna happen in the future. The other supply chain challenge we we navigated this past year or was liberation day. So the president announced a series of tariffs, and some of these tariffs were a 150% on some countries. But because Lyme controls their own supply chain, prior to 2026, we started to diversify where we are doing our manufacturing. In fact, we stood up full manufacturing capacity in three different countries. What that allows us to do is depending on the policies of the day, we could work with different vendors to ensure that not only do we have the right supply, but that we are optimizing for the any sort of tariff of headwinds that we see. If you're buying off the shelf hardware from the same Chinese manufacturer, these are not tools in the box for you. And I feel like a lot of our competitors really couldn't navigate whether it's the tariffs or any sort of component shortages in the same way that Lime can. This is also where scale matters. We are in a winner take most market similar to Uber and Rideshare and DoorDash and food delivery. And winner take most market, it's great to be the winner, and that's Lime. It sucks to be second and third place because you don't have the same reliability, the same scale to invest in software, hardware, capital expenditure, and you don't have the scale to actually build proprietary hardware. It doesn't make sense to build your own scooter or ebike if you only have a fleet of a thousand vehicles because you have to amortize that RD cost over a much smaller fleet. We're able to have a independent product strategy because Lime operates over 300,000 bikes and scooters in 230 cities, 29 countries around the world.
01:21:26 · Wayne Ting, Jordi Hays
That scale advantage only accelerates now that Lime is public because we have more capital to invest in the business. I think we realize it's important to be vertically integrated. We realize the importance of scale, and we build a business to capture those competitive advantages early, which is why Lime is here and most of our competitors are bankrupt or not doing very well. [01:21:49] S0: Yeah. If you could rewind to the early days during the height of the competitive dynamics between, you know, you and Bird and and other players, How how would you have knowing everything that you know now, what what would you have done differently? [01:22:07] S9: I I think there's lots of small things I would do differently, but I think the overarching strategy it was the right one. And I think it's proven out by Lime's going public today. I think it starts with I remember early days of Lime, and people still have this debate in Silicon Valley, and it really is a false choice, which is is growth more important or profitability more important? And that's not really you need to get your unit economics right to earn the right to grow rapidly. And the incentives in the early days were so that it really incentivized the wrong behavior. Because nobody was making money, the only way to survive is to open up incremental venture capital. And when venture capital firms are saying that what we're gonna value you on and what we're gonna give you money on is growth. It incentivize companies to chase after unprofitable revenue and frankly unsustainable growth even if it doesn't make financial sense.
01:23:06 · Jordi Hays, John Coogan
[01:23:06] S0: Yeah. And that would be even like markets markets that turned out to not be a great fit for this type of mobility solution. That is that like an because I imagine like there was just play like like LA is an interesting city because it's like so dominated by by Cars. Cars and it feels, you know, anyways, and I just remember when I I moved to LA during the the the early days of this like of the war that you guys had during the heyday of like bird graveyard and all those accounts that probably made everyone's life a lot harder. Mhmm. But it felt like if you're just chasing growth, you're gonna go into markets that you know are not even that great because if you don't get that revenue growth, your competitor is going to, and they're going to be able to raise more capital, etcetera. [01:23:55] S1: Capital fight.
01:23:56 · Wayne Ting
[01:23:56] S9: Exactly. And in fact, one of the first things I did when I became CEO was shrink our footprint. Mhmm. Because I mean, you're if you are running a coffee shop and you are losing money at every cups every single cup of coffee, should you probably sell fewer cups of coffee and figure out how to make money before you started opening up new coffee shops. And that was the reality of Lime eight years ago. I think I want to say our gross margins were negative 300%. Every dollar of revenue, we lost $3. And it was like, before we think about growth, let's fix that. We should be making money at the trip level, at the scooter level. So we shrunk our footprint, focused on the things that matter, fixed our unit economics, and but and then really accelerate the growth once we got that right. Mhmm. And I think the companies that really had a growth at all cost mentality, even when it doesn't make financial sense, actually raise more money for a period of time, but the law of economics catches up to everybody. You can be economically irrational for a period of time, but you can't be economically irrational forever. Even the dumbest VC at some point figures out the game. And I think when the when the irrational funding left the industry, that's actually when I think Lime's competitive strengths really became more obvious because we were not competing on our ability to raise more capital and to burn it faster. We started to compete on the quality of our hardware, the quality of our operations. And I actually think getting past the hype cycle was a major reason why Lima is here. If we're still in the middle of the hype cycle, then we'll be on that treadmill of crazy growth, burn all this money to raise more money, to burn more of that in order to raise more money. And I think that is a loser's game.