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Being able to finally describe your business as a ‘unicorn’, aka having a value of more than $1billion, is something every founder dreams of one day achieving.
For Tom Leathes, the CEO of used-car marketplace Motorway, that achievement became a reality just four years after he launched the business.
“I'm much more excited about the fact that we have 70,000 trust pilot reviews of five stars.”
“And then we have customers emailing me saying that was such a different experience to everything else I've had in selling cars, and that's really made a meaningful difference to me and those things actually, I think, land better for me and for the team than than labels like unicorns.”
Having found success in four previous ventures with his two friends and co-founders Harry and Alex, Tom told the How to be a CEO podcast that they wanted to make a real, effective change to the car buying and selling experience in the UK:“So we've done four companies together prior to this, and we've worked in lots of different sectors, but the car industry was something we'd always been fascinated by.”
“It's always been a difficult task to do almost anything in cars and feel like you've won, and you often feel like you've got a bad deal, whether you're buying a car, selling a car, whatever it is, we found that it was an area that consumers were not empowered in.”
“But also it felt like the last major stand out as a large industry that has not embraced technology, where technology hasn't changed the experience.”
Tom set up the business as an online marketplace that allows car dealers to bid on private sellers’ vehicles, and he said they saw a real boom in business throughout the Covid-19 period:
“We grew pretty rapidly over the first few years, but remained quite lean, and then Covid hit, which was very much an accelerant for us, we were seeing a lot of traction.”
“There's still quite a lot of holdouts of people that felt like cars is ‘the one thing I wanna do offline’, especially from car dealers who are very reticent to buy online.”
“But then when Covid happened, as everyone knows, that really accelerated the shift online and car dealers were really forced to try new things to acquire stock and Motorway was a real secret weapon for those that embraced it, and what we saw post-Covid was just an extremely rapid growth curve.”
Motorway’s success has largely run alongside the growing sales of EVs, but Tom explained that the market for used EVs is still very much in its infancy:
“What's interesting about it is that the used EV market has not yet really taken hold.”
“Obviously, the market’s there, people are buying them, but it's a quite different experience because as a buyer of a used EV, your biggest question is not whether some particular element of the engine might have been worn out and needs fixing, it's all about battery health, and the battery within an EV could be more than half the value of the car.”
“And it's very hard for anyone to know ‘Is that battery alright, or am I gonna drive it and is its range gonna be half what it was advertised when it's new?’”
“And so that requires a change in thinking in how retailers advertise these cars, and also how companies like us would profile these cars to make sure we're understanding the data of the vehicle.”
To hear the full conversation with Tom, listen to this episode of the How To Be A CEO podcast above or alternatively find us on Apple, Spotify or wherever you stream your podcasts.
