Ahead of their on-stage conversation at Phocuswright next Wednesday in Los Angeles, teenage founder of Tesloop, Haydn Sonnad, reveals to Yeoh Siew Hoon a change of direction for the company he founded in 2015 when he was 16.
Haydn Sonnad: From a physical ride-sharing Tesla service to building a connected marketplace for data-driven services.
Tesloop, the Tesla ride-sharing service started by teenager Haydn Sonnad in July 2015, has ceased operations as of last month, while the startup focuses on building Carmiq into the world’s first connected electric/hybrid car multi-sided marketplace for data-driven services such as insurance, tyre maintenance and financing.
“The biggest value will be to allow anyone to effortlessly share their car with anyone when they are not using it,” said Sonnad, speaking to me on the phone from Los Angeles. “Anyone with a Tesla can connect with Carmiq to make their experience better.”
Sonnad said the decision to switch directions from a ride-sharing service to an open-sourced software model was due to the realization that “building software is far easier to deal with than handling physical operations”.
Sonnad came up with the idea of Tesloop when he got his driving licence at age 16. “I became deeply infatuated with Tesla and stumbled on the happiness guarantee – return the car in three months if you are not happy.
“I tried it out to see if I could make money, told my dad the idea and he said you are crazy.”
He then pulled the by-now famous stunt where he bought one Tesla share, got his way into a shareholders meeting, sat strategically next to a microphone and managed to ask a question of Tesla’s founder Elon Musk and got the first definitive answer about when Tesla cars could be fully autonomous.
Musk’s answer of “three years” fired Sonnad into action and he pitched the idea again to his father, who was working on another startup at the time. Ultimately, he got Dad and three co-founders onboard to get Tesloop off the ground, with the idea that it would offer ride-sharing from Los Angeles to Las Vegas first.
They spent the first 12 months learning how to design the best long-distance experience, calling it “Starbucks without the bathroom” and if you need a pit stop, it’d be a Starbucks.
Over three years, Sonnad said they built a customer base of 25,000 to 30,000 on its rides from Los Angeles to Las Vegas, Palm Springs and San Diego.
“We thought it’d be mainly 25-year-olds but access to affordable high quality transportation is such a fundamental need and we built up quite a diverse group around the most practical choice of travel.”
One surprise was how many Australians booked the service, said Sonnad. “We don’t know where that came from.”
With new companies coming into the space, Tesloop started developing software to collect and store vehicle data. “We shared that with insurance companies and got a 40% reduction on premiums, we shared it with tyre companies and got better rates.
“What we realized more recently is that Carmiq is very applicable to anyone who owned an electric and connected car – most of them are driving 4% of the time, without data-driven connectivity.”
He admitted that dealing with red tape on the physical operations was slightly frustrating but with the heavy lifting having been done by companies such as Uber and Lyft, that wasn’t the key reason for the pivot as much as the recognition that Carmiq represents the bigger opportunity.
Around March and April, Sonnad said “we caught the blockchain fever and thought about how the capacity to centralize tech could help us with Carmiq. We were first overly bullish and we have toned it down but the fact remains – all cars are connected, what’s key is the strength to which that is leveraged.
“Remember when PCs were first connected? We think something very similar is happening with cars today and we are working on how this platform and network should look in terms data control, the decentralization of governance, data use, the services it can provide.”
Hence its current focus on Carmiq, with Sonnad saying they expect to sign up about 3,000 cars in a year. “We want to support a similar city network that Tesloop did and make owning the car a radically different experience.”
With 500,000 Teslas globally and 200,000 of which are in the US, with California having the highest domestic concentration, Sonnad said it’s a good base from which to launch Carmiq.
Carmiq, the new thing Sonnad is betting on.
On why it chose Tesla to build on, he said, “It has the best software and API structure. We will expand to other manufacturers longer term but for now, we will focus on Tesla cars.”
Sonnad admitted it was difficult getting a business off the ground because of his age – he was 16 when he started Tesloop – but “I recognize that I too have to earn my stripes”.
“There’s also an entire team involved in Tesloop and Carmiq so it’s not just about me.”
Growing up, Sonnad remembers moving around a lot – from Seattle to Virginia. “This gave me the ability to adapt, make friends easily and travel a lot.
“My dad is a super do-it-yourself person too – he would always challenge the status quo of anything and rather than accept limitations, explore possibilities of what can happen.
“It is interesting to me as to what the future of transportation could look like, shaped by my generation.
Register for the Phocuswright conference here.
