Andre Haddad: Turo CEO

[AD BREAK]

[AL EMPIRE INTRO STING]

HEBAH: Hey, I’m HEBAH Fisher

DANA: And I’m Dana Ballout

HEBAH: And today on Al Empire, 

HEBAH: Okay. Let’s start at the very beginning. Please introduce yourself. 

ANDRE: Hello. My name is Andre Haddad. I’m a Lebanese-French-American. I was born in Beirut and 47 years ago. 

DANA: Andre Haddad is an entrepreneur and CEO of the peer-to-peer car sharing company Turo. The idea behind Turo is pretty simple: you have a car, you’re not always using it, so why not make some money off of it instead of just leaving it parked? Turo has raised $437 million. And Andre’s previous company, iBazaar, he sold that one to eBay for $140 million. 

HEBAH: Yeah. So, I met up with Andre at a startup conference called Techwadi in San Francisco, in January of 2019. And, actually this episode was made possible in part by Techwadi, which is the bridge between Silicon Valley and the Middle East. So, at this conference, Andre and I found a quiet room off to the side of the event, and we started talking. 

What was your childhood like growing up in Beirut and what kind of a child were you?

ANDRE: I had a pretty… sort of non eventful childhood in the early years before the war started. 

HEBAH: Andre is talking about the Civil War in Lebanon, which stretched a long 15 years, from 1975 to 1990. 

ANDRE: I was only four years old so I can’t really remember life, you know, before the war. And, you know, because of the war of course there was a lot of uncertainty. So my childhood I would say was typical of, you know, a Beirut kid, childhood living in those years. You know the war was… not a constant feature of our lives but there were some really challenging chapters. You know, it was sort of on and off. 

HEBAH: Can you explain that a little bit more, like what kinds of challenging chapters? 

ANDRE: See, I saw the war pretty close. You know, our home was based not very far from the green line that separated east from west Beirut for 15 years. There were some times where there was a lot of fighting. There was a lot of shelling, there was a lot of destruction. There were lots of bombardments. There were different phases in the war. But it wasn’t a constant level of intensity. So there were, you know, I remember certain summers for example where life was almost ordinary. And then there were certain summers or certain winters where, you know, we’re in the midst of a very bloody chapter of the war and where we… you know, couldn’t get out of our house where we would spend our nights in the underground shelters of our building. 

HEBAH: So what kind of child were you though? At 12, if your mother or your father were describing you, what would they say about you? 

ANDRE: I would say that I was probably a very introverted child uh with… not, not feeling at ease with telling my parents what was on my mind. I was sort of a secretive child. I had my diary where I’d write fiction. And, I think it’s partly because I grew up as an only child until I was ten years old. So I was definitely on the very introverted scale. I was also very into reading. My first little job when I was 13 was working at the local bookstore. There was a bookstore that happened to be in our apartment building and I loved spending time in the bookstore and I wanted to buy all the books but, I didn’t have enough money to buy all these books. So one summer… I realized that I could perhaps convince the bookstore owner to hire me for the summer to help them with some administrative work when some of the employees were on vacation. So, that was the first time I earned any money. And of course all the money I earned at the bookstore was spent in the bookstore. So, my book collection just continued to increase and grow.

A year later I really got into the world and, you know, the world outside of Lebanon. I was introduced by a family member to The Economist magazine when I was 13 and I started buying, every week, The Economist magazine. My parents thought that was interesting. It was like, they didn’t expect you know a 13 year old to be reading The Economist. And, I just… developed a lot of interest and curiosity about the world, about the economy, about the way everything works. You know, this is what got me to really love business to start thinking about building companies myself. And, ultimately that got me into being an entrepreneur. So it had a really big impact on me. 

HEBAH: So you, you always wanted to be an entrepreneur even when you were a young teenager. Did you have a certain business or company in mind at that age, that you said, when I’m older, that’s that’s what I’m going to do?

ANDRE: No it was not clear at all at that point in time. I just had a lot of admiration for all the entrepreneurial stories that I was reading. But I would say I was very early, very interested in technology. You know I had a… an Amstrad P.C. which you’ve probably never heard of. 

HEBAH: I… I don’t know what that is. [laughs]

ANDRE: Amstrad was a U.K. based company that got quite popular in the late 70s, early 80s by selling kind of personal computers before the era of, you know, Intel and Microsoft. But… it was something that got me really into technology and I was just fascinated by all the things that could be enabled by technology. 

HEBAH: So in 1989, I read that your family left and that was the year when the shell hit your apartment. Can you walk me through that discussion as a family? How did you decide – you know we’ve been in Lebanon enduring the civil war for 15 years – we can’t anymore. 

ANDRE: Yeah. That was… that was a very traumatic time. We had no intention to leave. But, you know, the fact that we came so close to experiencing, you know, destruction and death. I think that was the trigger point. And, if I may rewind just a little bit to the summer of 1988. It was one of those episodes where life was almost normal. I was actually – during that summer – a radio DJ… in one of the FM radios in Beirut. And during that summer though the most exciting event of that summer of 1988, wasn’t my twice a week deejaying sessions, it was actually the upcoming wedding of a cousin. So this was my cousin Sameer. He had left Lebanon many years before… that time. He was 30 at that time, I think when I was 17. And we had the kinds of conversations that you never have with your parents. 

HEBAH: His cousin Sameer encouraged Andre to think about his future, about a future, possibly, outside of Lebanon.  

ANDRE: So fast forward to March of 1989 when you know the… I think the last episode of the Civil War started – and probably the bloodiest one. That one lasted for almost nine months. The schools were shut down until the month of June. There was intense shelling every day. Many many people died on a daily basis. It was one of those just… such… awful episodes of the war. Indiscriminate shelling. All the people who were impacted were innocents. There was, you know, there wasn’t like, an army versus another army or… it was just terror. It was really terror. So it was… it was, you know, terror – one of one of the most frightening times that… that I certainly remember. We were staying with my grandparents. This was when our house was bombed. Our apartment building was hit by a shell. And thankfully we were actually sleeping that night in the underground shelters that were underneath the building. So we were safe, but our apartment which was based in the building on the fourth floor was actually hit by the shell.

And I called my cousin Sameer. I told him you remember the conversation we had last summer? He said, “yes.” I told him, can you help me get into a program that would get me into a business school in France? Because I think we have decided that it’s probably the right time for us to move on. And he was telling me, “Well, you know, you need to… you need to be ready for some sort of an exam if you, you know, want to continue your education next year in France. And at that point in time there was no school. So I started studying on my own so I continued going through the program on my own and in June there was a little bit of a lull – A cease fire that was declared – and schools reopened. The baccalaureate was supposed to take place in June. And of course it did not take place in June, because the schools were closed for almost four months… so we, we had a couple of months of intense studying between June and July and part of August to sit for the baccalaureate at the end of August. Got my results in early October and mid-October, I was in Paris. 

HEBAH: And, what was that plane ride over like? Do you remember what you were thinking? 

ANDRE: You know, I was, I was excited and frightened at once. I was worried about… just all kinds of things, you know, this was the first time I was gonna be living on my own without the, you know, the family around me. You know, everything from finding, you know, a place to live to, you know, the logistics of, you know, having a bank account in a foreign country having, you know, a credit card, having a phone line, you know, a lot of things that you never sort of think about when you’re a child.

And that, of course, comes on top of, you know, sort of the grueling program that I was gonna be part of that was sort of a competitive entrance program for the top business schools in France. You know, the first three months were… just incredibly tough. I was very lonely. I was not comfortable. I didn’t feel like I knew how to communicate with people – even though I spoke French very well – you know, I didn’t speak the, the sort of the colloquial language. And I, of course, had no real understanding of the current cultural landscape in France. So, I ended up feeling very much like a foreigner and not at home. So there was no one that I could really connect with that could share some of the experiences and could help with that transition. 

I was on a, on a real budget so… I remember that time, I was living in a very, very tiny room. With shared bathrooms with three other rooms and I did not have a kitchen. I just had like a sink and that I could use for without sharing with others and I didn’t have a fridge. But you know during the winter the temperature would be very, very cold and so I remember buying my, you know, jug of milk and for my breakfast cereals in the morning and then leaving the bottle of milk outside of the window [laughs] in, you know, the freezing Parisian winters. My dinner menu, I think, during that era was, you know, a baguette sandwich that I would get I would I would buy the baguette for… for like one franc at that time and I would buy some cheese for another Franc and I would make myself a baguette with cheese sandwich. I don’t know how I got through it. I don’t think I’d be able to get through it today. 

HEBAH: When Andre graduated, he went into consulting, and then became a brand manager for Procter and Gamble in France.  

ANDRE: At that time, I was continuing to, you know, be even more fond of computers and technology. I had an internet connection at my place in Paris back in 1996 which was very early. It was very expensive and very slow. This was the era of the modem connections at 14K kilo bibs. 

HEBAH: Turn it on and then go make a sandwich and come back. 

ANDRE: [laughs] Exactly. Now that I was, you know, started to earn some money I… I thought I was ready. I was ready to spend some of the money. But of course I wanted to be, you know, thrifty with my music expenses. So, I was looking to find music cheaper than in the stores. And I was – one night – I was online and I discovered eBay. And eBay was very early back then. It was in, that was in ‘98. And it was only based in the US. There was no eBay anywhere else, and, but they had all the great music and, you know, there was all these used CDs that I could buy for cents on the dollar – compared to going out and buying the brand new C.D. in the store.

And, there was just an incredible arbitrage opportunity because the dollar was so low compared to the French franc [laughs] that when you take, took, and there was no taxes paid, unlike you know the CD that you’d buy in a store in France where you have to pay VAT, the value added tax. So net net including – I did my math – including shipping costs, which were expensive, you know, I would… I’d be able to buy these CDs for half of the price and they were used, but didn’t matter, you know, what mattered to me was the music. So I started getting these boxes of CDs from, from sellers based in the US. And I started accumulating my C.D. collection and there wasn’t a great way for me to actually sell it back because I couldn’t list it back on eBay.com. And that’s where I thought, well, this is just an opportunity for, for me to you know to start something similar to eBay, but in France. And I started talking about this idea with some friends. And, of course, I mentioned that to my parents, they thought I was insane. They said, “you – what do you mean? Strangers are going to buy stuff online, you know, and send money, send checks to one another in the mail?” I said, yes, that’s actually how it’s gonna work. 

[AD BREAK]

HEBAH: It was one of the first online classifieds sites in France. He called the company iBazar, short for internet bazaar. 

ANDRE: My Middle Eastern roots, with bazaar. I couldn’t help myself. It really is a bazaar. I was an Internet bazaar. It was, you know, it was great. You know, you could list anything, including music, of course. So, I started being a seller… and a buyer and, you know, you could sell or buy anything, really, online and… and, you know, fast forward a couple of years, it became a really big success story.

HEBAH: How did you learn what you needed to build the company? How did you – how did you learn what you needed to know to build a startup? 

ANDRE: I didn’t know anything. And I made so many foolish mistakes [laughs] but it was the era where even if you didn’t know – no one else knew anything – so, even if you marginally knew a bit more, or if you are flexible enough or curious enough to learn, you know, you’d be ahead of everyone else. Because frankly the rules of, you know, building an internet business were not written at that time. My role in the early days was based on my personal experience as a user of eBay, was to provide a, you know, a good understanding of what we needed to build in order to get the business started. And, and then when we raised some money – 

HEBAH: How much money did you raise? 

ANDRE: You know, we raised a whopping amount of money for, for that time in 1999 our first, our first, our Series A, we raised 80 million French francs which was the equivalent of 15 million dollars.

HEBAH: That’s incre– how did you do that? 

ANDRE: That’s the benefit of being in the right place at the right time. So, no supernatural capabilities on our part. The benefit – I think – of, you know, there was, those were the days of the bubble. You know, a lot of a lot of money was going to the Internet. A lot of people were looking at, you know, the Internet as this new Eldorado that was gonna be worth billions. And so, you know, we did our sort of business model. And, I remember we showed numbers that show that the business could be generating tens of millions of dollars in revenue in like, year three, year four. And then, you know, you compound all of that, you get investors who, you know, might be wanting to make the bet. And then I went ahead and convinced my co-founders to spend 50 percent of all that money on a television campaign… which was suicidal [laughs].

HEBAH: It’s a pretty hilarious commercial – there’s a crowd standing around this older woman seated at one of those huge desktop computers from the 1990s. You know the really big and clunky ones? And she whistles at the crowd, gets their attention, and shows them the future: buying and selling – anything – online.

How did you convince your co-founders to spend half of the money that you raised on a marketing campaign, on one television campaign. How did – [laughs] Can you, can you put me in the moment in that conversation, you’re sitting in the office around the table, you showed them a graph, what did you do? 

ANDRE: You know in 1999, I think only 7% of the population in France had internet access. So, you know, going after TV… was, in many ways… ridiculous. You were going to target 100% of the population, only 7% of those actually have any internet access, so you’re going to be wasting 93% of your money. And, you know, all this math was pretty clear in everybody’s head. I think the thing that convinced, convinced everyone to move forward, was we felt that competition was heating up and that, you know, we needed to differentiate in a radical way versus competition. And, you know, in many ways, the software itself was not going to be very differentiated, because, you know, everyone could build – even at that time – could build these kinds of features, it wasn’t anything particularly complicated to build or to replicate. So this idea was let’s, let’s go big, let’s, you know, establish the brand and let’s own, you know, this notion of buying and selling on the Internet, so that anyone that comes after us, if they make any kind of noise in the, in the same space of buying and selling on the Internet, people will just remember us. And you know, it turned out to be a very successful bet. Because our very first TV campaign launched in October 1999. And the…  that, that night we had our first TV spot and, in the middle of the 30 second spot, the website crashed. 

We had a massive influx of traffic [laughs]. We went – I think – from, you know, a few tens of visitors to thousands of concurrent visitors. And, you know, our technology – and our hardware – was not really designed to support such intense concurrent usage of our Web site. 

In a short amount of time, you know, in a, in a year, I think we ended up having a million users who signed up – in a year. Back in a time where, again, less than ten percent of the population had Internet access. So, in a, in a year we became one of the top five most visited Web sites in France. 

HEBAH: In that time… so, a year later after you started I read that eBay approached you to buy iBazaar… how much were they offering?

ANDRE: So, they approached us a few times. I think the first time they approached us was in 2000. Right before, you know, the Nasdaq crashed in March 2000, I think, they approached us around January, February. And we were looking into raising some additional capital. You know, all these TV campaigns were quite expensive. You know, they… they were really interested in acquiring the business because they were looking at expanding into Europe. And, so at one point they made us a, an offer to acquire us for a billion dollars, but we refused that offer [laughs]. 

HEBAH: Why?

ANDRE: Well we, we thought that, you know, we… it was still – you know, we thought we could be much bigger business and we would perhaps be an independent company. We didn’t necessarily think that we wanted to sell and certainly it felt like it was still early days, you know, in the development of the business and, you know, we thought the business could be worth a lot more in the next five years. And, of course, we were super foolish. We had no idea what was going on. We were not really… aware of the extent of the bubble and how, you know, that was going to be the peak of that cycle. And, so we ended up raising another round of capital in February of 2000. We raised another 20 million dollars and we bring in some really great investors, the valuation of the company skyrockets and we’re like, we’re going to continue. 

HEBAH: The year 2000, as you may know, was the last year of what’s called the dot com bubble. And in that year, the bubble burst.

ANDRE: And, you know the Nasdaq crashes, and in the ensuing twelve months loses 50 percent of its value. We were running out of options, and so we sold the company to eBay for a fraction of the initial offer for 140 million… which was an amazing outcome, nevertheless. You know, personally, I was just looking back, you know, that was in 2001 and just 12 years before that, I was under the bombs of Beirut. 

HEBAH: After eBay bought iBazar, Andre stayed on working for eBay for the next ten years, first in Europe and then in the US. He transitioned away from eBay in 2011, and at the time, he was based in Silicon Valley. And, it was there that he heard of a new company, Turo. 

ANDRE: So, the first time I heard about Turo which was called Relay rides back then, was through a… an investor friend of mine who was, had already invested at Turo and he wanted me to meet Shelby Clarke the founder of Relay Rides, Turo. And, this was in the early summer of 2011. I had just left eBay. I left in April 2011, after ten years at eBay. I didn’t really have any reason to leave, but I really wanted to just take a break. You know, there were – our twins were four or five at that time – and, you know, I was just on that treadmill for the last ten plus years and, so I thought I’d just take a one year sabbatical. I was lucky to be able to do that financially because of the success with iBazaar, and the success with eBay. And so, you know, my plan was to be off for a year. Do some travel with the family. Take care of the kids. I had taken actually nine months off when the kids were born, because my husband was at Berkeley back then and he was very busy with his studies. And so I took nine months off and I was at home for the first nine months. 

And, as I realized later, you know, of course the first nine months are important. But actually, it gets more complicated and more interesting and more demanding as they grow up. So, I thought I’d take a year off when they were four and, you know, spend time with them and the family. 

But shortly after I had, I had quit eBay – a couple of months after I’d quit – one of my friend’s Howard calls me and says, “Oh, I’d really like you to meet with Shelby. I think what he’s doing, you’re going to enjoy.” And I met with Shelby and Shelby told me about his vision for the business, a vision that hasn’t changed since 2010, 2011. We like to tell the story of our, our mission as a company as: putting the world’s 1 billion cars to better use. And, he mentioned that to me, and I was like, oh my God. Of course! You know, it’s funny sometimes you see opportunities and sometimes you just don’t see them and they’re staring at your face. And, after that initial conversation with Shelby I was just realizing all these cars around me, you know, they – you know, we, we get used to them. We’re used to this notion that you’ve got all these cars not being utilized. But if… if you really think about it, it’s just incredible waste. 300 million cars in the US now, 1.2 billion cars around the world, the number that keeps on rising. So literally people invest trillions of dollars in their cars, buy them and maintain them for – I think utilization rate at least in the U.S – that’s less than 10 percent of the time. 

And yet, as you probably know, cars depreciate a lot in value. They cost a lot of money in insurance and parking. And when you look at all of the correlated costs, they’re the second line item on an average household, in an average household budget. So, a lot of money goes into cars. They lose value. They are heavily underutilized. And, I thought, of course, you know, building something like an eBay for cars…  could be just an incredible opportunity. You know, creating a lot of economic value for people who can suddenly earn money with their cars when they’re not using it. So one conversation led to another and Shelby and Howard convinced me to join as CEO in September 2011. So, a little bit over seven and a half years ago and – 

HEBAH: And how, how long did that – from the first time you met Shelby to when you agreed to join – how long was that? 

ANDRE: Three months.

HEBAH: And, what was the conversation that you had with your husband, for instance, coming home – because you were supposed to be on sabbatical taking care of your kids – so what… what was the, what was the conversation like? 

ANDRE: So the – one of the reasons why it took three months, was that we had a camping trip planned, an eight week camping trip that we had planned, as part of my sabbatical and as part of the summer of 2011 that we had really been looking forward to. And there was no question that I was not canceling the camping trip. We had just bought a 2003 Volkswagen Eurovan –the one with the tent. It’s a small camper van. And we were determined to go on this trip with the twins, and to visit all of the beautiful national parks. And, so when the conversations started getting a bit more engaged with Shelby and Howard, you know, I just sort of quickly told them listen if you need some – if we do this – we’re not gonna be able to do this anytime soon, because I’m gonna be out in July and August.

And so during that camping trip we had a lot of time to discuss. We talked a lot, a lot about it, I think. My husband, Benoît, had a big influence on my decision there. And he was now an environmental engineer and he’s very passionate about sustainability and the environment. And – 

HEBAH: That’s very – very apt.

ANDRE: Absolutely, yeah! I mean amazing kind of how things sometimes come together. So, he, you know, he had been on a family campaign to help us become more sustainable in our house and with our own energy consumption, and with recycling, and with solar panels, and electric cars, and so forth. And… and so as we were talking about the opportunity, he’s like, “Yes, of course! You must do this. This is a, you know, a great idea that is going to create a more sustainable future for us, as a society.” And, you know, we, we talked a lot about it and, you know, he was instrumental in, in sort of pushing me to do it. 

HEBAH: So, Turo has raised $437M in funding. As of 2018, there were 300,000 cars listed on the platform and they had ten million signups. 

HEBAH: This is a little bit morbid but it’s instructive, I think. What would be the first two lines of your obituary? 

ANDRE: I hadn’t thought about this. Maybe I should [laughs].

HEBAH: What would you want your three kids to read about their dad? 

ANDRE: I mean, I think the – I would hope – that the first two lines would say that… that I was a great family man and that I had a positive impact, for the people close to me: my family, my friends. But also for, you know, a positive impact on a bigger circle and, you know, that circle that I feel is a, it’s a big circle today is the community of, of, you know, users that use Turo. You know last year we generated quarter billion dollars in revenue and 60 percent of that went into the pockets of car owners, that listed their vehicles. And, you know, that’s… that’s a lot of economic empowerment that we’ve created. And so I love this notion of having positive impact in, in terms of economic empowerment. There are other wonderful ways to have positive impact. I would like to be remembered as someone who had a positive impact on people around them.

HEBAH: What does your dad say now about what you do? What is he – ‘cause he was saying, you’re crazy for leaving a well-paying job to become an entrepreneur – what does he say [laughs] about what you’ve become? 

ANDRE: So my dad is very stubborn [laughs]. He still thinks I’m an idiot and that Turo is a stupid idea, and that it’s never going to work. 

HEBAH: I have to convince my mother everyday, what it is that I do as an entrepreneur as well [laughs].

DANA: This episode was produced by Hebah Fisher, and myself, Dana Ballout, with editorial support by Linah Mohammad and Alex Atack. Sound design by Mohamad Khreizat, and fact checking by Zeina Dowidar. Our original sting was composed by Ramzi Bashour, and Al Empire is produced by the Kerning Cultures Network. A huge thank you, of course, to Andre, for giving us his time for this interview. All of our guests are extremely busy people, and so it means a lot to us that they trusted us with their time. Thank you, Andre. 

And next week on Al Empire…  

HATOON: The episode went viral. It was everywhere. I started having calls from agents and I didn’t know how to do it! I’m… I’m a housewife, minding my own business, doing a PhD. Why are you calling me? I don’t know what to do! 

DANA: That’s in 1 week. 

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