Replay: IoT, SmartBike and Subscriptions

IoT, SmartBike and Subscriptions: How Clear Channel International is Turning Pedal Power and Data into Revenue

Learn how the SmartBike brand globally scaled into nine countries with over 25,000 bikes. Speakers detail technology decisions, including IoT, and processes that SmartBike

Discover how SmartBike partnered with cities to deliver sustainable transportation solutions and contribute to community development programs. By translating ride data into revenue, SmartBike was able to leverage creative subscription and charge methods, such as automatic renewals, over-consumption charges, and credit on-record features to “pedal” its way to recurring revenue for partner cities.

Learn how the SmartBike brand, which was launched over 20 years ago, expanded into nine countries with over 25,000 bikes. Speakers detail current and future technology decisions, including IoT, and processes that SmartBike is implementing that allow them to easily scale, delivering a streamlined customer experience, advertising, user tracking and revenue opportunities to maintain a thriving business.

In this on-demand replay you will:

  • Discover how to build and scale a global organization using flexible pricing and revenue management to deliver sustainable benefits to their partner cities
  • Learn how to strategize and monetize new technologies like IoT that strengthen the customer experience and brand awareness
  • See how a scalable financial platform provides the foundation to extend product offerings and quickly respond to market changes 
  • Discover to consistently grow business while constantly providing positive support to your communities

Get actionable insights that can immediately help your organization scale on a global level. Determine what’s next for your subscription business and how to successfully use IoT data in your subscription strategy.

On-Demand Playback

Presentation Slides (PDF)

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About Our Experts

About Magin Arias Colmenero, International IT Services Manager, SmartBike

Magin started working for Clear Channel Spain in 2006 to lead the implementation of their ERP. In 2009 he led the SmartBike migration for both of their initial cities, going from v1 to v2. In 2012, Aside from managing the service, he has been heavily involved in different projects and migrations in the bike-sharing space, including acting as Product Owner. Prior to joining Clear Channel he worked for one of Spain’s leading milk companies in the IT department and then acted as a consultant for a financial ERP in another company.

About Meri Christenson, Director Product Marketing, BillingPlatform

Meri leads product marketing at BillingPlatform, the industry-leading Saas-based platform that enables enterprises to monetize any billing model and satisfy any business requirement. With over 20 years of experience in billing and customer care, Meri has held various roles at Amdocs, Converse and CSG in product marketing, product management and operations. She is an experienced marketing professional specializing in go-to-market plans, technical communications, sales tool creation and sales enablement for companies targeting B2B and B2C customers worldwide.

About Kathy Greenler Sexton, CEO, Subscription Insider 

Kathy Greenler Sexton is the CEO & Publisher of Subscription Insider, a media company uniquely focused on the business of subscriptions. Subscription Insider reports on daily subscription economy news and delivers best-practice information, training and research through memberships, training events and conferences. Subscription entrepreneurs and executives representing all sectors of the subscription economy depend on Subscription Insider to improve decision making, team skills and business profitability. Learn more at qa.subscriptioninsider.com and www.subscriptionshow.com.

Transcript

Kathy Greenler Sexton:

Hello and welcome. This is a Subscription Inside Webinar and we are now officially getting started with today’s webinar, IoT SmartBikes and Subscriptions: How Clear Channel international is Turning Pedal Power into Revenue. Hello, my name is Kathy Greenler Sexton and I am the CEO and publisher of Subscription Insider and your host for today’s webinar. I’d like to welcome you. This is, as I’ve mentioned, the IoT SmartBike and Subscriptions Webinar: How Clear Channel International is Turning Pedal Power into Data and Revenue. The SmartBike brand which is part of Clear Channel International was launched actually over 20 years ago, and today, it’s expanded into nine countries with over 25,000 bikes.

Kathy Greenler Sexton:

Today we’re going to learn how SmartBike translated ride data into revenue through creative subscription and charge methods such as automatic renewals, overconsumption charges and credit on record features to pedal its way to recurring revenue for partner cities. Our discussion today, we’re scheduled for an hour and I’d invite all of you to use the chat in the lower right hand corner of your Zoom window to ask any questions. We’ve reserved some time at the end of our webinar today to answer all your questions, so please don’t be shy, ask them because this is your time to get the most out of this presentation. With us today, we have Magin Arias international IT Services Manager for SmartBike.

Kathy Greenler Sexton:

In 2009, Magin actually led the SmartBike migration for both of their initial cities and he has been heavily involved in the various and different projects and migrations in the bike-sharing space including acting as product owner for the SmartBike Service. Welcome Magin.

Magin Arias Colmenero:

Hello.

Kathy Greenler Sexton:

Meri Christenson is the director of product marketing for Billing Platform. Meri leads product marketing which is an industry leading SaaS platform that enables enterprises to monetize any billing model and satisfy any business requirement. With over 20 years of experience in billing and customer care, Meri has held various roles at Amdocs, Converse and CSG in product marketing, data management and operations. Welcome, Meri.

Meri Christenson:

Hello.

Kathy Greenler Sexton:

Today’s webinar is part of Subscription Insiders Webinar Series where we bring you information and insight from industry experts like Meri and Magin. Subscription Insider is an information company where we deliver news and insight for executives working in the subscription economy. We offer news, how-to information, memberships training and events. You can learn more about what we do at subscriptioninsider.com. I’d like to highlight an event that’s coming up in four weeks. It’s Subscription Show 2020. It starts on October 5th and it is the premier conference to understand the latest subscription intel including insight on the current trends impacting all of our businesses, subscriber acquisition and retention, understanding what the latest is in member churn and networking with many people who will be there and understanding the technology and services that you’ll need for your business. I invite you all to check that out at subscriptionshow.com.

Kathy Greenler Sexton:

With that, I’m going to turn the mic over to Magin and Meri to present the case study on IoT SmartBike and Subscriptions. Take it away.

Meri Christenson:

Thanks, Kathy, and thank you all for joining. As Kathy mentioned, we have a great topic today, IoT, SmartBike and Subscriptions” How Clear Channel International is Turning Pedal Power into Data and Data into Revenue. For the next 30 minutes or so, you’re going to hear about how SmartBike has partnered with cities throughout Europe and Latin America to provide a sustainable and healthy form of public transportation. We wanted to share this story because we think it brings to life many of the changes we’re seeing in the world. First, we all know that the global pandemic has rocked the business world. Now more than ever, companies are shifting to cloud-based business functions for the flexibility, reliability and scalability they offer.

Meri Christenson:

It’s also boosted the growth of on demand services such as grocery delivery, not to mention the overnight transition to work from home and the rise of Zoom meetings. While some companies are struggling during this time, others are being creative like when SmartBike collaborated with local hospitals in Antwerp to provide free service to healthcare workers during the lockdown. The transportation industry as a whole is going through a shift as well, from the decline in airline travel to rethinking if we need to own a car or even a bike. Both bike-sharing and car-sharing services are becoming more common.

Meri Christenson:

Today in some cities, you can use an app on your phone to find a rental car close to you, unlock the car and drive away. When you’re finished, you simply leave the car and you’re automatically charged by either time of use or just as traveled, possibly far more cost effective than buying a car. SmartBike is working on a similar service to do the same with IoT technology. The bike and car-sharing examples are also a part of the next major shift, the focus on sustainability. That includes improving the health of our environment with clean air initiatives and changing the urban transportation landscape with bike-sharing programs like what SmartBike is offering.

Meri Christenson:

Finally, community programs are growing in importance with initiatives such as Trees for Cities where Clear Channel is a longstanding partner and has committed to planting trees to help limit their environmental impact. A key outcome of some of these changes is the way customers buy and consume products and services. In many cases, it’s no longer a one-time purchase or a simple subscription. Instead, consumers want to be charged for what they use. It’s a great business model, especially if you take into account the benefits company see such as the ability to attract more customers by offering package options and the ability to grow revenue when usage increases. These are some of the reasons why companies like SmartBike have been able to take advantage of these changing conditions and use them to their advantage.

Meri Christenson:

Now, I’d again like to introduce Magin from SmartBike. Magin is here to talk about their journey in partnering with cities, developing and monetizing the service and the future path for SmartBike. Magin over to you.

Magin Arias Colmenero:

Hello. Hi, everybody. First, I wanted to just do a small introduction about the company. We’re Clear Channel International as part of Clear Channel Outdoor Holdings, and together with Clear Channel Outdoor America, we’re one of the world’s largest advertising company. Clear Channel has around 500,000 sites in 22 countries and with millions of people seen our advertising every month. One of the things inside our company that we’re looking at now is not just about projecting advertising, but it’s actually showing the right advertising to the right customers in the right place at the right time. For that, we need to work on smart and distinctive ways of being able to do that.

Magin Arias Colmenero:

For example, we’ve recently are starting to roll out here in Europe, an application suite called Radar developed by Clear Channel Outdoor America which actually gives our customers the opportunity to plan and then measure the impact of their ads. We’re going through right now, and I think a lot of companies are seeing this with the challenges we’re finding, that in outdoor, it’s very interesting time. Outdoor is one of the oldest medias. You can actually even trace this back to Ancient Egypt, though the billboard into the street more or less started in the 1830s. We’re working on a digital transformation using technology and data to be able to become a digital media versus what we were in the past by just using paper.

Magin Arias Colmenero:

Inside the company, we have different responsibilities. A couple of them that I think are related with what we’re going to talk about today is data privacy. We take very seriously the data that we store from our customers and also the aspect of sustainability, right? Like Meri said, we have initiatives that we work with like Trees for Cities or we develop solar panels shelters and also SmartBike, for example, is one of our products that falls into that sustainability with our leaders inside Clear Channel. One of the messages is about we want to make positive contributions and reduce our carbon footprint as much as possible in the communities that we serve, right?

Magin Arias Colmenero:

Then going a little bit into SmartBike, SmartBike we launched the first bike-sharing system to use RFID technology in 1998 that was launched in Rennes in France. Before then, there was bike sharing, but it was using locks and keys. We made it a lot more cumbersome in this case. Customers, they have a card and go to the station. We would be able to identify them and give them a bike, right? Over the years, we’ve grown. We’ve had cities. We’ve lost cities, right? We have this competitive market. We’ll talk about that. Currently, we are running the scheme in 12 cities across eight different countries in Europe and Latin America.

Magin Arias Colmenero:

Also, as Meri said at the start, bike sharing is a healthy and sustainable transport. It’s really, really good in that sense, and yeah, we don’t produce carbon dioxide and we actually do exercise at the same time. It’s also a transport that we can run 24/7. One of our ideas with bike sharing has always been to try to bring people to home, close to home or close to work, take you that last mile where maybe the other public transport hubs are a little bit farther away. This does imply that we have to work closely with cities, to work with them and see how we can improve the service and improve the way our customers see us and also even how they interact with our service and the other transport services inside the city.

Magin Arias Colmenero:

Of course, being an advertising company, advertising is a key part of what we look for when we go to bike-sharing tenders. If you look a little bit at the history of bike share, you’ll see that the biggest companies initially where Clear Channel and JCDecaux. JCDecaux is another outdoor advertising company, and again, we were looking at offering services to cities that were sustainable, but also in exchange for having advertising space inside the cities. It’s a good service. Like for example in COVID, Meri mentioned it, we work with healthcare, with the hospitals in Antwerp to give the service for free to the healthcare workers during the lockdown.

Magin Arias Colmenero:

One of the things that they were saying is you have to be careful with public transport, not get too many people together. Bikes are ideal for that, right? You’re individual and you just have to be careful of washing your hands after riding the bike. That was a very good initiative that we’re having. The business model and this is a very complex thing because it’s really going to depend a lot on each city and it’s also going to depend a lot on how the city produces the tender for the bike sharing, right? There’s one model and the one we’re looking for is advertising and the advertising model associated with SmartBike is pretty good in the sense that being part of the public transport system, our bike stations are in very good locations. They’re near transport hubs. You’re getting places where a lot of people can see your advertising, right?

Magin Arias Colmenero:

Another way and this is something that you can see in the system in New York, for example or the system in London which are sponsored by banks, Citi Bank in New York or Santander in London, before it was Barclays. We even had a … Inside the company, inside [inaudible 00:13:48] in Barcelona, we were able to get a sponsorship deal with Vodafone and their chief marketing officer was very, very happy with this, was seeing the impact and how their brand was being seen across the whole city and also associated with something that the people in the city life which is their bike-sharing scheme.

Magin Arias Colmenero:

Other ways is using a revenue-based model, right? This could also be a mix, advertising sponsorship, revenue base, everything gets mixed together. In some cases, you have some, others no, but in the revenue based, there’s two things where you can see the city supplying funds, where they’re subsidizing like they would subsidize other public transport to keep down the costs, right? That’s actually very good for a company in the sense that it keep during, for example, COVID or the crisis we had in 2009, SmartBike kept a stable revenue coming into the company. Of course, there’s also the option of not subsidizing it and having the customers pay for the subscribers.

Magin Arias Colmenero:

That will result in a higher cost for the subscription. You can sometimes compare if you look at the cost for bike sharing in New York where most of it, I think, is coming from customers and the sponsorship, it’s much higher than the cost that we would have, for example, in Antwerp where a lot is being subsidized by the city. Another trend we’re seeing now is mobility as a service, right? Companies are seeing that there’s a space where they can take up where it’s offering a customer how to get from point A to point B the most efficiently possible and also according to the preferences of their customers. That’s where bike sharing can be a very important part too and that would mean that we would also be able to get money coming in from that area. In the end, bike sharing is a very good thing for cities.

Magin Arias Colmenero:

Nowadays, it’s a lot more competitive than when it was in the past. When I saw the initial tenders that we were going for in the company, it was mainly Clear Channel, JCDecaux and maybe some local bike-sharing company, but this space has been filled over the years. Now tenders are very competitive and we have bike-sharing companies that exclusively just work on this and not a part of an advertising company like we are, like Clear Channel. Again, that gives a lot of options to cities. It’s going to give a lot of competitiveness and that lets cities choose the best option. Now you even have e-bikes into the mix with Swytch. You do a lot of things that you couldn’t do before. E-bikes will let you go up a hill and will also let you go longer distances without the same effort, right?

Magin Arias Colmenero:

One of the things cities see and this is something that also I’ve seen over time where cities would install bike sharing and then they would have to move over to installing bike lanes as they saw that it becomes popular and it becomes, again, a very important part of your public transport. Here, there are some elements that actually help with this. The open data element, we share data, the availability of our bikes and the availability of our stations. We share it openly so anybody can find where they want to go with the bike or where they want to find a bike, but we also share it with the city, so that they can use that data together with data that they have from the other transports and through big data initiatives and be able to optimize their public transport schemes.

Magin Arias Colmenero:

Another important thing that you’ll see in public transport with bike sharing is the station locations. Stations that are in high-density areas reach many more people and those services usually work much better than when you start hitting areas that are low density. Especially in low density areas, you don’t want to put station-based systems because one station will cover very few people when you go to neighborhood full of houses versus putting the station in the middle of Manhattan where you get a lot of people because of the tall buildings versus smaller houses. That’s also key. For example, in neighborhoods and things like that, we’ve seen that free-floating solutions seem to work better, but free floating in the center of the city isn’t sometimes a good option in the sense that you could cram a lot of bikes into one area and make it very uncomfortable for pedestrians, right?

Magin Arias Colmenero:

One thing that’s very tricky in bike sharing is the rebalancing element. Of course, when people go to a bike station, they want to have a bike there. That’s like expecting to go to a bus stop and expecting the bus to be there waiting for you, right? It’s public transport. It means that it will come, but it doesn’t always come immediately, right? The effort of rebalancing and this is where supply and demand playing in, this is a very, very important part of the operations behind the scenes. Here, we’ve looked at different initiatives on how to improve operations and rebalancing.

Magin Arias Colmenero:

One thing we practice is grouping stations, right? Instead of having 300 stations and looking at the stations individually, if they’re full or empty, if you group stations and you make sure that you have availability of bikes but also availability of parking areas in areas of the city, it can be easier to give more supply for the demand that we have. Actually doing this, we’ve been able to increase 20% the rides, but it does take a little time for people to get used to it. You have a station that you would go to and there was usually a bike there. Now, you might have to walk 100 meters to a nearby station to take that bike.

Magin Arias Colmenero:

We’re also now been using since this year machine learning. We’re working with a third party to help us with automating our rebalancing and with artificial intelligence being able to predict where bikes are needed and to know from where to take bikes there, right? Our operatives will get automatic orders to go to a certain place, fill their van up with bikes and take them to stations that need it. Another thing that’s important apart from advertising, of course, the financial model has to work. We can see that some schemes, for example where I live in Madrid, the city had to take over this scheme. The company was running bankrupt because the financial model behind that tender was very, very bad, right? It’s not only advertising, but it has to make sense financially to be able to go [inaudible 00:21:06].

Magin Arias Colmenero:

Path to success. How can we be successful? There’s two key points here. It’s around the customers, right? We need our customers to be happy. Happy customer is something that cities also like. In the end, people are voters. If you get a bad service from the city, it might impact that or you’re tweeting the mayor and he doesn’t like any negative tweets. It’s really around looking at customers, being customer centric and looking at ways to make the customer journey better, right? For that, we do have to use technology and we’ll talk a little bit more about that later.

Magin Arias Colmenero:

Another thing that’s very important, and again, this is something we’ve learned the hard way is stability and performance, right? We become part of the public transport system, then people want to be able to use it when they need it, right? If your system is down, it’s not working, then well, people get frustrated, they’ll have to take a different means of transport. Again, frustration leads to complaints and that impacts the relationship with the city. Nowadays, it’s very difficult to hide any kind of problem from a city. In the end, anybody can tweet the mayor. There’s a lot of public forums where people can let the city know that they’re not happy, but if you have happy customers and your system is up and running, it really helps to become a partner with the city. Again, you work closely with them to see how you can improve but also how you can improve the interactions to SmartBike with the rest of their public transport system.

Magin Arias Colmenero:

Monetization, one of the tricky things I’ve seen with SmartBike is that there are different options. A lot will depend on what you have inside the tender, but there can be certain flexibility there. We do have long-term users. We have short-term users. Short-term users, you have all kinds of different variations there, one day, three-day week, monthly. Then you also want to work on getting more people into your service. We have ways of giving out promotions through coupons or vouchers. It really makes for needing flexibility to be able to do this. You need a system that can give you flexibility. Also, we have the need of flexibility with our interaction with the payment service providers, right?

Magin Arias Colmenero:

It’s not the same to do payments in Europe as it is to do in Latin America, and even inside of Europe, you can find payment suppliers that don’t work in some regions or others that are much stronger. We need a system that will let us connect to different payment suppliers dependently of where they are. Also, another thing that we use in SmartBike is direct debit. Again, this is driven by a tender. Direct debit is where the money is drawn directly from your bank account. We’re using here in Europe a standard called SEPA. To do that, that’s a file-based exchange with XML files. Again, need a system that gives us that flexibility about not only doing our credit card payments with different suppliers, but also being able to do other types of payments.

Magin Arias Colmenero:

Behind the scenes, seamless customer experience, this is what I was mentioning about using tech to enable our customers to do as much as they can on the road, right? We want to make them autonomous as possible. For that, we use the website and mobile app and we try to give them as many options as they need to be able to just go on with their lives on their own without having to contact us. Because in the end, contacts through call centers or whatever will have a cost and we want to try to reduce that, but when somebody does contact us, we need a system that can help us respond quickly and efficiently to whatever issue or question or whatever they have, right? Again, very important to have an efficient system behind you and also very quick system because you don’t want to have a person on a call for 10 minutes to be able to respond to a problem, to resolve a problem.

Magin Arias Colmenero:

Another thing, and this is I mentioned at the start, inside Clear Channel, we take very seriously customer data and customer data is very, very important for us. Actually, the reason or one of the key factors in choosing Billing Platform during the process of changing from our legacy system to the new one we have was that they were PCI compliant, right? PCI is the Payment Card Industry data security standard. This is the standard for storing and managing credit card data. At the point in time where we were looking for a new system, we still had two of our major cities storing credit card data. We needed a system that would be capable of doing that for us.

Magin Arias Colmenero:

That’s, again, one of the reasons we looked at Billing Platform. Even though we never actually stored any credit card data, we moved away from that. We all now just work with token-based systems and we give to our payment service suppliers, they are the ones that manage the credit card data. They’re experts in that. It’s better for them to do it, but we could if we wanted to store credit card data. That part is … When GDPR changed in Europe and the fines and everything went up, having our data in a system that is PCI compliant made us feel more comfortable. Actually because in the end PCI just checks around security, right? Having a system that’s doing those 250 checks really gives you confidence that security is being taken seriously.

Magin Arias Colmenero:

What are we working on right now? One of the things, and this is a fun one, I think we were the first company to take bikes with RFID technology. We haven’t been the first company to be able to take a bike with the app, with your mobile app, but that’s something that we’re working on right now. It’s just pretty exciting when my team found the right approach to use because what we didn’t want to do is change the way that our system works drastically to be able to add the option of taking a bike with a smartphone. What they did is using IoT, they were able to convert the phone of the customer, as if it was one more component of our station, right?

Magin Arias Colmenero:

Our station has a card reader. They have keyboards where customers can enter codes. Well, now we also have the phone, right? That enabled us to be able to work the exact same way we work right now. We didn’t have to change any of the logic or any of the processes because it’s always working the same way, the station initiate the contact with the central application to validate the user, but it’s using the user’s phone as the ID, not as even the communication. It’s really, really nice. I guess, some of the things that you can use with IoT. Another thing we’re working on is gamification, right? We want to see how we can promote customer loyalty. We want to keep our customers with us, but also this can be an opportunity for us to look at ways of having our customers also been able to help us with the rebalancing, right?

Magin Arias Colmenero:

I mentioned one of our headaches is moving bikes from one place to another, right? People in the morning want to go to office areas. Then in the afternoons and evenings, they want to go back to residential areas, right? That means that bikes stations become full in some parts of the city and empty in other parts of the city. Through gamification and prizes and getting points out, we are looking at how we can encourage people to go against the morning flow, so take a bike. Instead of taking a bike from a residential area to an office area, you take a bike from an office area to residential area and we give you points or something, right?

Magin Arias Colmenero:

Another thing we’re looking at, like I mentioned earlier, that’s becoming a trend is looking at mobility as a service, right? “I want to go from one part of the city to another. I like using bikes,” or, “I like walking,” or, “I like trams or trains,” I don’t know. These companies are offering them that. The integration with them, because again, we’re one part, but they have to integrate with many. What we’re looking at is using bike-sharing industry standards as the way of sharing the data. That way, we have an industry standard. Anybody that’s adapting to it will be able to interact with those almost immediate.

Magin Arias Colmenero:

One of the things we have is looking at how to manage the subscriptions. Like I said, we mainly work with subscriptions based on time, one day, one week, one month, one year, but this is more a subscription based on a ride. It’s a different way of looking at it, also a completely different business model, right? Ride-based subscription is different to the more client-based subscription. That’s where we have to look at in some of the tricky things, “Who’s responsible for the bike? If it’s the end user, who’s responsible for the end user?” The mobility as a service company, yes, right? That’s where you have to adapt for this.

Magin Arias Colmenero:

Lessons learned, don’t grow too fast. Now, this is really a lesson learned if you’re installing a scheme for the first time in a city. Whether you’re changing from one system to another or one company to another, it’s going to be a little bit different, but we saw Barcelona when we went live there in 2007 how it just got out of control. The number of people subscribing to the service went crazy and we hit the forecast we have for the full year, 52 weeks, we hit that in 18 weeks. So many people had subscribed to the service it went out for €6. It was incredibly cheap, so people just subscribed, but they couldn’t take bikes because we had so much demand and very, very little supply because we only started off with 30 stations, right?

Magin Arias Colmenero:

That caused us to have to push a three-year plan of growing from 30 stations to 420 into a one-and-a-half-year plan. We had a really, really go fast to try to get above the initial demand we have right the best thing here is to have a waiting list and that way you can control. Once you start seeing that the number of bikes per ride is going up too much, when you start getting more than seven rides per bike per day, it’s something that’s starting to get very heavy and that’s when you know that you have to start looking at restricting who can subscribe to the system, right?

Magin Arias Colmenero:

Another thing I’ve seen over the years is trying to get into complex projects, nine or a year projects that then when you deliver them, things aren’t going well, or actually, it’s not delivering exactly what the business wanted, right? Now, we try to get things started and then improve upon it once it works, right? They’ll go more from a like a startup mentality, we get it going and then we improve on top of it instead of one of these big projects where you go away for a very long time and come back with something that doesn’t work, right? We’re now more focused on getting a minimum viable product out there.

Magin Arias Colmenero:

Another thing and this one, I can’t stress it enough, we have to be reliable. Our system has to perform well. We are part of the public transport system. If our system is down for a considerable amount of time or it’s impacting or generating a lot of frustration on customers, we will hit the local news and it won’t be positive. It will always be negative, right? We need something reliable. We need it to perform well, so that when somebody goes to a station and there is a bike that they will be able to take it, right? We do focus more on the activity of being able to take a bike but we need actually all our systems to work because people can take bikes, your core is working, but maybe they can’t subscribe or they can change their data or they can activate their card to be able to take a bike ride. It’s not only our main part of the system, being able to take a bike, but our subsystems are also very important for us. That’s it. Meri, I’m going to hand it back over to you. [inaudible 00:34:56].

Meri Christenson:

Great. Thanks, Magin. It’s a great and we’re happy to be a small part of your success. As he mentioned, they’re using Billing Platform to monetize their services and grow their business, but for those of you who aren’t familiar with Billing Platform, we help companies accelerate ideas into revenue. Our cloud-based platform enables them to easily automate their lead to revenue processes. With our flagship billing and revenue management module, we give companies the power to create and deliver any business model and support even the most complex recurring revenue relationships.

Meri Christenson:

Our customers bring innovative new products and services to market 30% faster and reduce operational spend by as much as 50%. All due to the flexibility of our solution. With SmartBike and other companies using our platform have found is that the flexibility of the solution really helps them to solve their unique business needs and address the changes in the buyer behavior. To do that, there are a few key capabilities that we feel are needed, things like a robust billing and revenue management solution that can handle pricing and rating. Companies can move beyond simple subscriptions and include consumption and usage based pricing.

Meri Christenson:

Another is an extensible data model. That means you could configure and add on to the base solution so that it meets your exact needs, especially since the world doesn’t look to be stopped changing anytime soon. A key part of that extensible data model is the ability for users to be able to manage the platform with point and click configurability. A simple example of this is that a business user should be able to create, design and roll out an offer rather than having to rely on IT or development. In fact, a recent Gartner report talked about the importance of a configurable business experience, so that business users can construct the platform experience to their needs without involving IT.

Meri Christenson:

Then there’s business process automation, a critical requirement that allows businesses to replace manual processes and automate the end-to-end lead-to-revenue process. These key capabilities will not only help companies turn ideas into revenue, but will also help them to reduce costs and improve operational efficiency and expand into new markets. Genie, will you go to the next slide please? Magin touched on a few things that we were able to help them achieve due to the flexibility of the platform, but here are a few more. They were able to replace a number of manual and rigid legacy systems. They not only automated billing processes but also customer notifications. They’re now able to roll out complex subscription models with distinctive rules as Magin mentioned.

Meri Christenson:

They can build based on multiple customer types. They can manage coupons and vouchers to encourage use of their service. Finally, the system is able to support their global customer base with regional specific payment platforms. This is also an example of what we do for enterprises around the world. As the industry leading cloud-based billing and revenue management solution, we enable industries to automate any business model. Our solution is built for extensibility and scalability, so you can tailor the platform to meet your exact needs and it will grow with you. We also provide multilingual and multicurrency support for global companies, as well as the security that Magin mentioned is so important, the security and compliance that’s really needed to meet industry regulations and standards.

Meri Christenson:

We also offer workflow automation for collections, accounts receivables, invoicing, notifications, financial reports and more, all to eliminate manual tasks and reduce errors. With our built in mediation engine, you can turn that usage data into revenue and move beyond simple subscriptions. On top of our unmatched billing and revenue management, you have everything you need to manage, lead to revenue process including a robust product catalog, account management, accounts receivable and business intelligence. We also have solutions to manage collections and debt management and revenue recognition which are all supported by our workflow engine.

Meri Christenson:

It’s these things and more that provide the foundation for SmartBike as well as the other companies around the world that use our system to build and scale the organizations by deploying any business model using creative pricing, extending current product offerings, and quickly responding to market changes, all while strengthening the customer experience and building brand awareness. With that, I’ll turn it back to Kathy to see if we have any questions.

Kathy Greenler Sexton:

Well, thank you, both Meri and Magin, really interesting and fascinating. I’d like everybody, if you have a question to submit that in the chat. We have a couple questions. By all means, I’ll ask those. I’ll get to those. While everybody is submitting, I’d like to remind everybody about Subscription Show 2020 coming up. We are so excited about this. It’s going to be online about four hours every day that we’re doing this live. We’ve got 100+ sessions. We’ve got networking. We’ve got a virtual lounge for people to hang out and talk with your peers across the globe that are all working and scaling their companies. I’d invite all of you to go to subscriptionshow.com, if you haven’t already, just to check that out.

Kathy Greenler Sexton:

Let’s get to some questions. Magin, actually, this is my question. I actually texted you just to make sure this is okay. I hope this is good. When you’re talking about the open data, that was so, so fascinating, I’m curious, what were the surprise learnings in the open data that you and your partners found when you started looking at that?

Magin Arias Colmenero:

Well, it’s more giving it out to the public. We have more operational data that we look into. It’s mainly around how stations behave, right? The open data is more public. One of the fun things that we found out of that was a guy in the UK built a very nice tool that would show you how a city would evolve over the last 48 hours. I guess he was capturing out on the beta that we were making available and then you could run it on a map and you just see how parts of the city were filling up and parts were emptying out. It was a tool that our operations people actually started using to help them understand how the system was behaving at certain times very visually.

Kathy Greenler Sexton:

That is fascinating. Here’s a question. When you first launched, what was your packaging like? Did you start with long-term subscriptions or they just really single-ride purchases?

Magin Arias Colmenero:

Well, my first experience before joining Clear Challenge International, I work for Clear Channel Spain and there we have Barcelona and Zaragoza. Barcelona, for example, the experience was only long-term subscriptions. They only have the yearly passes. The idea was really for the short-term subscriptions, there was a lot of lobbying by bike rental companies, because they thought it was going to impact their business. The city didn’t want to get into problems there or have too much media attention. It was just long-term subscriptions, right? Then for example, in Zaragoza, the other Spanish city, there they have long-term subscriptions and three-day subscription and that was it.

Magin Arias Colmenero:

One of the things we saw is that three-days subscriptions don’t work very well. You’d probably end up better with one-day subscriptions than three days subscriptions, right? Even if it’s somebody there for a couple of days, they don’t want a three day subscription because they’re losing a date, right? Even if you bought two one-day subscriptions and they cost more, you’d probably still buy two one-day subscriptions, “Because I might not use it tomorrow.” It gives people more flexibility, but we can’t change the type of subscription because it’s in the tender. Again, it’s really going to depend on what a city puts in the tender that will give you the options of doing one thing or another.

Kathy Greenler Sexton:

Fascinating. I have a quick question here back to open data. Is there open data usage in Sweden? That might be a follow-up question.

Magin Arias Colmenero:

We were in Malmo in Sweden, and yes, we have open data there too. Just they need to contact us and it’s open, but we do just limit that we have the user data, the person that’s going to get the data and the reason for it, but we never put any limitations.

Kathy Greenler Sexton:

Perfect. Here’s a question here. You had to make a lot of technology decisions frontend to the backend to your financial systems. What were the critical determining factors when you were making those technology selections?

Magin Arias Colmenero:

Well, the thing is we want to try to use … We don’t want to invent the wheel, that we already exist. We want to go out and try to find things in the market that will help us, right? The thing is you don’t have bike-sharing schemes in the market. There is a market about that, but it’s very small. Sometimes you might actually could end up competing against another company with the same system, around negotiations and all that. When we were building our system, we wanted to use as many things that we could, but there are parts that we have to develop ourselves, right? That’s the balance. We develop the part more focused on the bike part and taking that bike and managing the bikes and all that. We found a system that would manage the subscription, so we didn’t have to worry about developing all that part, right? Then, the good thing is with Billing Platform, we found that we can interact with them through the web services very easily.

Kathy Greenler Sexton:

As you implement these new technology options like IoT, do they get automatically fed out to all the different city locations that must have been a challenge to figure out or was it?

Magin Arias Colmenero:

Well, we try to develop things in a way that they can be deployed to all cities that, they’ll usually start off with a request by one or a few cities, right. Then once, it’s developed and implemented there, we will see the option of rolling it out to other cities, but again, you might actually even have constraints because of the contract in doing certain things.

Kathy Greenler Sexton:

Got you. Now, as you were thinking through the monetization, you talked a little bit about the subscription plans that you started with. What are the subscription options that you have today? Were there any options that you’re doing today that you didn’t really envision when you started? I’m curious how that evolved?

Magin Arias Colmenero:

Yeah, well, across our whole landscape, we have yearly subscriptions. Those you’re always going to find. We have one-day subscription, three-day subscription, one-week subscriptions, one-month subscriptions. You have all of those different timeframes and the one, I’d mentioned it, with mobility as a service, right? Instead of being time based, it’s more ride based. Ride-based subscription. This is something that we’re looking at right now. Not any more time. It’s you use the bike once and that’s it. It ends there.

Kathy Greenler Sexton:

Got you.

Magin Arias Colmenero:

Or 20 times or whatever.

Kathy Greenler Sexton:

Got you. Now, you talked about, I think, gamification. Can you talk about these loyalty programs and what results you’ve seen from them?

Magin Arias Colmenero:

We’re still working on it? I don’t know exactly. We don’t have any metrics at the moment because again, it’s work in progress. We’re still analyzing exactly what we want to do, but again, I think our focus is going to be more on keeping customers, just offering them things for using the system, but also seeing if we can motivate them to help us rebound because it’s really our big operational headache.

Kathy Greenler Sexton:

I’m looking through just to see what other questions we have. I see one about splitting revenue. Here’s one that literally just came in. Are you monetizing data collected from users as they use the app on usage trips, travel times, locations, demographics and other things?

Magin Arias Colmenero:

No, we aren’t monetizing any user data at the moment.

Kathy Greenler Sexton:

Got you. This next question is about revenue split. What portion of the advertising revenue goes to the city? Does it all go to the city? How do you split the user subscription revenue? How does that work with your partners?

Magin Arias Colmenero:

It will depend on each city in each tender for example. In Barcelona, all revenue went to the city and the city would pay us more for the operations, but in other cities, what we have like in the land, there’s a lot of revenue coming in from the advertising element and we also get to keep the subscription revenue. It’s really going to depend on each city and each contract with boundaries they have.

Kathy Greenler Sexton:

Got you. Gary from UK, I see your question. I think it’s a really good one. I’m going to recommend, please make sure that your question wasn’t anonymous, so we can follow up directly or just put in your contact information in the chat and that way, Magin can follow up with you on that because I think it’s very interesting. He’s in the space and knows gamification and looks like it’d be an interesting conversation between the two of you. I think-

Magin Arias Colmenero:

Cool.

Kathy Greenler Sexton:

Here’s an interest one. Do you offer different kinds of bikes or do you have one model?

Magin Arias Colmenero:

No, we can offer both mechanical and electrical bikes. For example, in Italy, we even have bikes with child seats that we offer. That scares me silly. I don’t know why. Something the city requested.

Kathy Greenler Sexton:

That’s great.

Magin Arias Colmenero:

Then, e-bikes will have different monetization models, right? Usually what we’re doing is we’re giving you an X number of minutes for free to take the bike, but with the bikes, we usually charge even that first range of time, right? Let’s say you get 30 minutes for free if it’s a mechanical bike, but you pay 50¢ for the first 30 minutes if it’s an e-bike.

Kathy Greenler Sexton:

Got you. That’s really fascinating. All right, this might be a detailed product question to both. If e-bikes can charge a mobile phone?

Magin Arias Colmenero:

In theory, they probably could, but then I think the tricky part here, remember, this is street furniture, things that are outside is that mechanism where you would connect your phone. Of course, people can have all kinds of different phones and you would have to be able to connect all of them because if not, then you’d have citizens that would be mad. I think you could, but I think the logistics about having an adapter that will work out on the streets that will take the rain and vandalism and heat and all that is going to be the more complex part, but I’m pretty sure they can, yeah.

Kathy Greenler Sexton:

Well, that sounds good. I think I’m going to take one last question. I have a wrap-up question. Meri, did you want to jump in and comment on anything? I know we’ve been asking a lot of questions focused on the model and I see …

Meri Christenson:

Nope.

Kathy Greenler Sexton:

… some other specifics here on the model. I want to make sure. Here’s the last question I’m going to grab then. This business model that you’ve developed and you’ve grown, do you ultimately see it as potentially sustainable without public investment?

Magin Arias Colmenero:

It’s sustainable without public investment, but again, people will have to adapt to certain things. You could just put the bikes out there and let anything happen, that you’re generating frustration, when people in the morning go to the office areas and they can’t find a place to park and they have to try to find a place to park further and further away from where they’re going. In the end, that’s going to generate frustration and might even push them off using this and take other means of public transport.

Magin Arias Colmenero:

In the end, it’s just finding that balance. Of course, if there was a way for the system to rebalance itself, that would be fantastic or if we could magically make bikes appear because there are times when you’re getting a rush hour, people are sometimes limited and not using our service because of the supply. They can’t find the bike, right? If we had stations that could just create unlimited number of bikes, we wouldn’t even be able to increase more the number of rides we would have in cities. It’s a very, very nice way of moving around the city. If cities are flat, mechanical bikes are fantastic. If you have hills in the city, e-bikes will work really, really well, right? Again, it’s that operations behind. It’s the making available the bikes to the people that costs a lot of money.

Kathy Greenler Sexton:

Well, as we all know, operations can make or kill any great idea. I think that’s a really, really good point, Magin. If you have any other questions, put them in the chat box and we can follow up with you. With Meri and Magin, we’re absolutely happy to follow up with you. I’d like to ask one last question as we hit the top of the hour. What are your kind of recommendations or predictions on where things are going to be going and what we need to plan for in this space? I’m sure … Who wants to take it first, Magin or Meri?

Meri Christenson:

Go ahead, Magin.

Kathy Greenler Sexton:

Magin, you’re on the hotseat. Go ahead.

Magin Arias Colmenero:

No worries. I was going to go back to I think something Meri said. I think these kind of sharing and sustainability efforts, the more we share, the less we impact the environment. I think there are things that are good trend and I think that it will be a focus, I hope, at least for humanity, going forward. I think sharing is going to be good. Even car sharing, for example, having a car, paying for the insurance, paying for the car and all that, it’s a lot of money. If you don’t really need it constantly, car sharing is fantastic or just renting a car or using public transport and you rent a car when you really need it, right? I think these kind of initiatives are good and I think they’ll stay. I think they’ll probably also move more and more towards electric bikes as they become even cheaper and batteries more reliable and everything.

Meri Christenson:

I agree with Magin. I think work from home, the need for sustainability and the sharing economy will remain. I think it’s really important that you do operationalize those in such a way that is beneficial not only to you, to your communities, but also to your customers, and really enhance that customer journey.

Kathy Greenler Sexton:

Well, good. Thank you. I think that was really important points. Meri and Magin, thank you very, very much. I’d like to thank all of you attending today. This session will be available on demand. We’ll be getting that out later today, so look for an email on that. We appreciate all of your time. If you have any questions, feel free to reach out. Have a wonderful day. Thank you.

Meri Christenson:

Thanks, Kathy. Thanks, Magin.

Magin Arias Colmenero:

Thank you. Have a great day, guys. Bye-bye.

Meri Christenson:

Bye, thanks.

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