John Zimmer Reveals That Lyft Almost Ran Out of Money and Considered Shutting Down
Just four years ago, the ride-hailing giant was almost out of financial runway–while competitor Uber was soaring. A top investor advised Lyft’s president and chief executive to give up.
Lyft co-founder and president John Zimmer. CREDIT: Winni Wintermeyer/Redux
You may know Lyft as the $15.1 billion ride-hailing startup that's been in the news a lot lately. Just six years old, Lyft's founders Logan Green and John Zimmer have grown their San Francisco-based startup on the back of cute pink mustaches and a "sit in the front seat if you want" ideology. The company's peppy, buoyant vibe contrasted nicely as Uber grew hulkingly large and started oozing scandals. Now, Lyft has grown to reportedly have brought in $563 million in revenue in the third quarter of 2018. But that sort of success wasn't always a sure thing. Inc. asked several entrepreneurial luminaries like Zimmer to share a piece of early career (or life) advice that changed everything. Here's the advice he didn't take. --As told to Christine Lagorio-Chafkin
About four years ago, Logan [Green, Lyft co-founder and CEO] and I were meeting with one of Lyft's largest investors. We chose a conference room on the first floor of our former office in San Francisco that was kind of tucked away, because the mood was dark and we didn't want any team members to overhear the conversation. At that time--this was the very beginning of 2015--things were pretty rough. The outside world didn't know this, but the company's survival was at serious risk.
Uber had just raised over $2.5 billion. The odds were stacked against us with a 30-to-one capital difference. Most people were already counting us out. And they didn't know what we knew: that we had only about four months of cash left.
There were awkward silences in that meeting. But the investor had advice, which we were there to listen to. He'd started businesses, invested in several companies, been on several boards, and had a decade or two more experience than we had. His advice was: "You should take the funding you have left, return the money to investors, and close down Lyft."
It wasn't a demand, it wasn't a mean or malicious thing, it was just that person's view, and something that we took seriously. We entertained the idea. I mean, we were 29 or 30 years old, and had this perspective from someone who was coming from a seemingly sage position.
I'm the kind of person who does appreciate advice, and I like to hear both sides of an argument. If I'm not hearing both sides of an argument, sometimes I will argue the other side as a way of seeing which one feels right. So I like pushing an argument, I like debating, I like exhausting it.
What that investor told us was the best and most important advice Logan and I ever received because it forced us to double down on our conviction, to double down on our values, and to double down on our belief in the team.
Of course, we didn't follow the advice. Instead, we put our heads down, and then got in front of the whole team. We gave a talk, letting them know that with our backs against the wall, everyone had to level up and put in even more energy and passion and effort. We needed to fight. Our message of improving people's lives needed to be represented in the fight.
When you look at this whole experience for us, that advice could have been the beginning of the end for what we were doing. It became the beginning of something much more important, and I think from there we had a deeper belief in ourselves that ultimately propelled us forward.
I also learned that a good adviser may give you amazing advice nine out of 10 times, but you need to be able to spot the one time when you need to stick to your own convictions.
From the March/April 2019 issue of Inc. Magazine