[Raised $175million] Ep.130 - The First 100 with Aidan Rushby, the co-founder and CEO of Carmoola | The Power of AB Testing | Blog Marketing

Aidan Rushby is the co-founder and CEO of Carmoola, liberating the archaic, slow, and backward car finance market with a new, straightforward “neo car finance” product that is effortless to use and reduces the time taken to complete a car purchase from days to just minutes. Carmoola’s exclusive proprietary technology and systems enable a streamlined process that provides buyers with a budget, generates a free history check on the car, and allows payment to be made both instantly online and at the showroom within just 60 seconds using a Carmoola virtual card for a seamless consumer experience. UK car finance fintech Carmoola [www.carmoola.co.uk]  has raised £140 in equity and debt facility from QED Investors, with participation from existing investors VentureFriends and InMotion Ventures, the investment arm of Jaguar Land Rover. It also includes a debt facility provided by Natwest and BCI, priming Carmoola for rapid growth in a lucrative market worth £120 billion in the UK alone.

Where to find Aidan Rushby:

• Website: Carmoola - Cruise Through Car Finance
• LinkedIn (7) Aidan Rushby | LinkedIn

Where to find Hadi Radwan:

• Newsletter: Principles Friday | Hadi Radwan | Substack
• LinkedIn: Hadi Radwan | LinkedIn

If you like our podcast, please don't forget to subscribe and support us on your favorite podcast players. We also would appreciate your feedback and rating to reach more people.

We recently launched our new newsletter, Principles Friday, where I share one principle that can help you in your life or business, one thought-provoking question, and one call to action toward that principle.

Please subscribe Here.

It is Free and Short (2min).

Transcript

Let's do it. Let's do it Broadcasting from around the world you're listening to the first 100 a podcast on how founders acquired their first 100 paying customers Here's your host Hadi Rod one Aidan, good to have you on the show. How are you doing today? I'm fantastic and yeah, pleasure is all mine. And thank you so much for inviting me on. Really looking forward to the challenge. Absolutely, absolutely. A fellow Londoner, let me just start with a quick introduction for our listeners. Aidan Rushby is the co-founder and CEO of Carmula, which is essentially a platform, a car finance platform that allows people to enjoy the journey of purchasing that car. And you've been doing that for. A few years, you've raised around 140 million from notable investors in the market, such as venture friends in motion. You're going after a big market, a lucrative market in the UK alone, which is around 120 billion, which is a B number. I would love to chat more about how you entered that space, but before we dive into that, did Young Aid and Exhibit any signs of entrepreneurship as you were growing up? Yeah, definitely. From a very young age, I've come from quite an entrepreneurial family. So I think I started my first business, which was washing cars, probably at the grand age of about 14. My first customer was probably my dad, and then branched out into sort of local customers and did that. I got one point, I set up my own racing team and I was about 16. called a sponsorship for that and did that for a while, which was really fun. And wanting to go to university and so went on and did a business degree. I really struggled with dyslexia as a youngster. So a lot of people had written me off and I was very keen to push through and prove that I could do it. And yeah, then I set up my first real business when I was about 25 and did that for best part of seven. seven years and then started CarMula three years ago, which is just the easiest, cheapest, and fastest way to get car finance. We're a full-stack lender and it's been an incredible journey so far. Amazing. I mean, your company is trying to liberate an archaic and slow and backward car finance market with something new and revolutionary that can take a set of days, just a minute. Walk us through your product and How did that story start? Yeah. So the story started is there like, I'm always super passionate about making customer companies. Like I really love building consumer businesses and finished working on my last business. I'd exited and I was thinking, what do I want to do next? What do I want to spend the next 10 years doing? And I'm a bit of a geek and I love reading IPO prospectus. And I remember sat there reading the kazoo and IPO prospectus is thinking, this is a terrible business. I thought it seemed very operationally heavy. I thought that there's no technology in the world that would make this business more efficient. And it was super slim margins. And when I kind of read deep, I sort of saw, wow, there's this huge profit pool in the car finance area. And that's really how everyone makes money. started to look at our customers having an issue in this space and it very quickly became very clear that the traditional lenders in the market were very old school, slow, time consuming. It was really expensive mainly because of the distribution channels and all the broker fees that were being taken. I could see what the likes of some of the more modern fintechs like Klarna were doing. where they were just going through and educating the population about downloading an app, getting a budget, buying whatever goods they wanted with full freedom of where they wanted to buy it from. And so I came up with the thought, wow, I think I can do a really great job here. And there's this huge opportunity to effectively disrupt the car finance market. So I came up with an initial... product offering, which would be a mobile app that within 60 seconds of downloading using fully automated decisioning and underwriting, we'd give the customer a budget or a credit limit of how much they could buy a used car for the customer then would just need to enter the registration of the car they wanted to buy. And then the app would generate them a virtual card so they could buy the car instantly online on kazoo or cinch or One of the other online marketplaces that are available, well, they could add it to their Google or Apple wallet, walk into a car dealership and pay instantly. And post-purchase, and also pay via bank transfer if they wanted to. And post-purchase, we'd make it fun and rewarding for the customer to pay back. As a result of this, we would basically be able to deliver a cheaper, easier and faster car finance because by operating the products in such a simple way and building the full technology stack out, We could do this in a fully automated way. We could underwrite the customers better than anybody else using dynamic pricing and various other techniques. And so therefore this would enable us to do it cheaper, but also deliver an incredible customer experience through the product. And yeah, I was very excited when I kind of sort of could see that opportunity and thought about a product. And yeah, and luckily enough, I knew some incredible people. that would help me execute on the vision really. Amazing. Walk us through your early thought process of how did you validate that there is a pain point in the market around this? Because today, if I want to buy a car, let's say, what are my options? Is it that I go to the showroom and they provide me with a payment plan or should I go to the bank first and try to get a credit line? And this process is archaic, difficult. Walk us through. the ABCs of car financing. Yeah, so I think that there were a couple of key insights that I was kind of blown away by. It was that in the used car space, about only 22% of used car purchases are brought on finance. So the vast majority of purchases are really cash. And so I was like, wow, this is like a really interesting space. I noticed that there was this huge trend in consumers looking to get... pre-approved for car finance. So traditionally, they would go into a dealership and you would be sold point of sale finance. But there was this huge growth in customers looking to get pre-approved for finance before they even start their car buying journey. I think this is being driven through the things like ClearScore and various other financial products that are really driving that. So the customer's choice, if they wanted to go through this process, depending on which segment, because there's a vast array of different segments in the in credit was that you go into a dealership and you're sold point of sale finance and you'll pay probably two to three percent APR higher than what you would if you go direct to a lender. Or you use an online broker where you go and get your kind of pre-approved finance where you go to like an online card broker and then you effectively fill in online form and then it's very manual. A lot of telephone calls back and forth. until you end up being concierged, if you like, all the way through the process. If you really think about it, there was just no easy access to the market. If you're a younger consumer, if you're a female consumer, do you really want to use some of these outdated approaches? I think segment by segment, we're opening the market up as well as taking market share from ways of doing it. Amazing. Take us back to the early days. How did you acquire your first batch of customers? What was tactical or guerrilla marketing strategies you deployed early on? I think I'll just answer, to jump around, but I thought it'd be really useful for me to answer the question for your audience, which was like, how did we validate your idea? One of the very first things we did before we did anything, actually, before we even wrote an investment deck. was build a landing page and designed lots of different versions of the proposition to understand where the value proposition was. We did it under a different brand name actually, and then we just used loads of paid search to drive customers through. And then effectively what we did was we built an Excel spreadsheet predicting what we expected the funnel to look like for the product based on our experience. And from there, we could understand really what our cost of acquisition was, because that was the biggest risk to the business. Lending was quite well defined in terms of some of the loss rates or the APRs you could charge. But really, the key thing was understanding what the cap was. So we did that. And very quickly, we learned that it was very cost effective. I can't remember how many it was. We had to turn it off because within the first two hours, I think something like 1,200 people had signed up. And we were like, wow, okay, this is really interesting. Probably onto something here. Yeah, so that was really cool. And then from that, we kind of very quickly learned that PPC was one easy way to market. But from that point onwards, it took about 15 to 16 months before we were able to go live. And it took a long time to get regulatory approval. We built all of the technology from the ground up. So proprietary loan management system, proprietary fully automated underwriting, proprietary collection servicing platform. The regulatory approval was quite complex because we were doing something quite new. And so that took some time, but in that time, some of the things and tactics that we did to drive early adoption is we started to write a blog, started to build some of our SEO and content out. Yeah, that was probably where the first hundred customers came from. We almost hit almost instant product market fit. I remember that we turned it on and within minutes, we built a Slack channel where you could see all the customers coming through and within turning it on, it was like ping, ping. I think in the first day or so, there was a lot of people getting declined because we were quite strict on our lending policy. I remember thinking... When are they going to convert? When are they going to buy? And it actually took some time. I think it took like 11 days before someone brought their first car. So yeah, it was, it was really interesting. Um, but super fun. And so, yeah, I think like using organic channels and was the first way that we got those first hundred customers, probably with a bit of paid social and paid search in there as well to boost it a little bit. This is an amazing story. Thank you for sharing this. If you go back to the early days and assume you had unlimited funds. Is there one channel where you think would have made the most impact knowing what you know today? It's really hard for me to say that. We've had something like 2 million people apply for credit on the platform since we launched 17, 18 months ago. I think the team executed extremely well. I think in hindsight, would have I started to kind of build a marketing function out. We only very recently started to build a marketing team out, brought some really great talents and have a really great talent joining the team. If I was to do it again, I would have done that sooner. I really brought those people in soon as because it takes such a long time with some marketing activities to really kind of build it out. So building out that really well from ground zero, I think would have been a much better way of doing it. Amazing. You said 2 million people have applied, which is an enormous amount of people in less than two years. How would you approach the showrooms in that case? Are these potentially customers for you indirectly or you would stick more to the organic reach that the buyer is pushing? So would you go to showrooms and make partnerships with them or you think that's something that you would avoid at this stage? I think with any company, you need to ask who your customer is. Who do you stand for? Who are you there to serve? I think in the world of car finance, I think it becomes very difficult when you start working with the... having other actors involved because they have their own agenda. You have to then... Who is the customer? It becomes slightly difficult to understand. And so I think our core focus at the moment is just delivering... the best possible consumer experience for the end consumer. I think that in time, I think we'll build potentially some referral mechanisms and ways in which dealerships can introduce customers. But that's not our core focus at the moment. Our core focus is delivering the best possible experience we can for the end consumer. Amazing. Has there been any crucible moment in your journey that could have gone both ways, either blown up and grown, or it could have said, you know what, this is not a business that's going to work. There has always been incredible customer reaction to the product. Our MPS score is 94. It has been above 90 ever since we launched on a monthly basis. There's definitely been some times where the business could have failed. We managed to raise our series A. We were raising our Series A, which was led by QED in the end, one of the probably the premier fintech investor. But one of our partners and investors, Venture Friends, were incredibly supportive. They led our seed round. But there were times during the end of the summer when we did our Series A, so this must have been like this time last year, where we had at one point like three prime ministers, I think, in the space of. couple of weeks, I just remembered being very, very nervous. At some point, some investors are going to get very worried about the UK, especially US investors. But I was extremely grateful for the team at QED that took a much longer-term view and hopefully is really paying dividends since they joined our revenue as 4 or 5X, since they invested 12 months ago. So yeah, like I think the times where it's gone very nearly wrong is when we'd nearly run out of money and been a couple of weeks from having no money left, which is always scary. But I think that's the joys of doing something new and building a company from the ground up. That's why so many fail and the good companies always get stuff done, I think. And I think Commodore was able to achieve that. mainly due to the incredible work really of the team and their ability to execute at an incredible job. Amazing. So you're not a first time founder. You have extensive experience in fast moving scale up businesses. You've co-founded before Move Bubble. What are major things that you have learned from your first startup that you brought with you to the current company? And then what are major things that you had to unlearn? I think it's a really interesting question. One of the things I had to unlearn, let's start with that first. I think it's more interesting. I think I had to unlearn something that was more of a personal journey where I had to unlearn. I used to have this huge fear of failure and I spent way too long on Move Bubble because I feared letting lots of investors down. I went through a lot of therapy over the last two or three years I was running that business and it enabled me to learn that it was okay to step away and to take my learnings and lessons and go and build something else and that wouldn't be failing. It's kind of just learning. I had this immense fear that I'd like almost that shame of letting go of that. So I think that was an incredibly empowering experience and something that I really could take forward. And then that really enabled me to take the lessons from what I learned on my first business into my second business. And the key things that I learned really was, number one, and most critical one was pick a big market. And I think it's really, really key. And be very clear that you can access the revenue pools within that market. And so not only pick a big market, but make sure... it's easy for you to not easy, but there is like a clear path of how you extract economic value from that market. I think it's very easy to pick a big market, but if you can't access it, then it's no good. And then really understand, and third and not last really is like, what is the competitive response to your strategy? And I think a lot of that stuff you can map through, and you can kind of build the playbook. even before you start building the business of how you're going to respond to those different scenarios. So yeah, those three things, I think, is the number one, how big is the market? Number two, how do you access the market? And how much is it realistically going to cost to access the economic rent in that market, if you like? And then three, what is the playbook of the existing competitors going to do? Try and fight back. And I think if you can understand those things, and you're confident that you've got a good... plan around that, then I think you can really take that forward. And they were the three things that I really learned. Amazing. Thank you for sharing all of these with us. What's the principle that you live by that has served you well in your entrepreneurial journeys? It's a really great question. I think there's a couple of key ones for me. I really think that number one is if you're going to do something, make sure you deliver well. our number one value at Carl Mueller is deliver wow. And that means that it's about delivering wow through the product, but it's about delivering the wow through your work. You know, I think today in today's world, there's so much noise. There's so many people that do things average. It's about how do you go about doing something and making sure everything that you do is incredible. And I think if you do that and you make people go wow, like this company is different or. And wow, they've really thought that through. And this comes through in lots of different ways. This can be the way you report to your investors, the way in which the product is delivered to your customers, the way you speak with your customers. And so the types of people that you hire, I think that is a really key for me. And guiding principle is about delivering wow in what I'm doing and why I'm doing it. Another key principle I think is really hard and something I think I... highly recommend to other entrepreneurs out there is honesty. I think it's really easy with all the hype and we've kind of seen this over the last playing out is that integrity and honesty is something that you have to live by. I think there are times and there are people out there that oversell things and they kind of say that it's not always selling. Well, at some point it's lying. I think you have to stick true to your principles about being honest. realistic. I think in the long run, it plays much better. I think in the short term, you get judged on that you're not the most salesy person or you're quite calm. But the reality is, I think in the long run, having that level of honesty and truth plays out and it will deliver massive value over 100 years or 50 years. We might live a little bit longer these days, I don't know. But yeah, I think it's really key that. Amazing. One last question, Aidan. What's next for Carmilla? Our ultimate vision is to turn Carmilla into a global super app and capture all of the spend around the car. So I think this will include not only the way in which that you pay for the car and the different financing options around this, but this could also include insurance. It could also include being able to pay for your fuel. all your energy for the car, your servicing, your maintenance. I think there's so much opportunity to deliver a lot of value for consumers around the car. And so our initial focus over the next 10 years will be purely focused on the car finance category. I think a recently registered get mover, I think that there probably is a much longer term vision to become moving to other categories. But the next 10 years, we're purely focusing on... building out the car vertical and doing an incredible job and capture all the spend around that. Amazing. Thank you, Aidan, for joining us and sharing your story. Two more questions. Where can people find you and are you hiring? Best place to find me is on LinkedIn. I think I'm the only Aidan Rushby on LinkedIn. It's a very easy name to search there. So feel free to drop me a message and I'll do my best to reply. Yes, we are hiring. I think we're currently hiring for a technical plan manager and a CRM, head of CRM. So yeah, a couple of hires. Our team is super lean. I think there's only 25 of us in the team. We don't plan to add many people this year. We've automated so much of the platform that it, you know, kind of goal is to really minimize head count and show that we can really scale the platform without having lots of people. Aidan, pleasure meeting you and having you on the pod. We wish you the best of luck. Thank you so much. Thank you so much for listening to the first 100. We hope it inspired you in your journey. If you're enjoying the podcast, please subscribe to our podcast on Apple iTunes, Stitcher, Google Play, or Spotify, and share it with a friend starting their entrepreneurship journey. Leave us a five-star review. Your support will help spread our podcast to more viewers.