Zipcar

Topics: Zipcar, Carsharing, Cost Pages: 2 (562 words) Published: November 6, 2006
The Zipcar idea was brought to the US by Antje Danielson. Antje had recently traveled to Germany where she saw the car sharing concept in action. She felt this same idea could be adopted in urban areas of the US. Robin Chase would be Antje's business partner who would ultimately bring her idea to fruition. The development of the business took a total of 14 months and $1.3mil was needed for launching the business. The biggest challenge facing Chase is the growth of the business after the initial launch of the service.
There are several underlying challenges with the concept of car-sharing. First, the concept has an average to early expenditure curve. This type of curve implies most of the expenditures are needed in the initial stages of development. Chase needed $1.3mil to enter the Boston market only. This required a lot of up front work, refining the technology that would be used with the concept, and getting investor buy-in. One of the solutions to acquiring the up front investment costs is to have someone on the team that has respectable experience in the field in which you are trying to launch. Chase took this advice and hired a prestigious individual. The pro of doing this is that investors immediately have more confidence in the product/launch. Unfortunately, Chase saw firsthand what the cons of using this technique are – mismatch of skillset to the industry/launch, leadership skills become questioned, etc.

Another challenge for this concept is forecasting the awareness, the trial, the availability, and the repeat consumers for the product. The concept of car-sharing is completely new for the US and thus all projections for sales will be guesses regardless of how much research is put into them. Again, this makes it difficult for investors to feel confident in the concept. The best solution for proving the concept is to physically prove the concept. Chase was able to acquire enough money to put three cars on the street. Doing this...
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