Ample's John de Souza on B2B, Culture & Investors

The Challenges and Potential of EV Battery Swapping: An Interview with Ample's Founder

The success of San Francisco-based electric vehicle (EV) battery swapping company, Ample, faces considerable hurdles. Previous attempts to establish a business centered around exchanging depleted batteries for fully charged ones to mitigate lengthy EV charging times have often failed. Notably, Better Place, fourteen years prior, secured nearly a billion dollars in funding for a similar venture, ultimately resulting in bankruptcy.

A Shift in Landscape

However, the EV market has evolved significantly over the past decade, with advancements in technology and increased vehicle adoption. This changing landscape didn’t deter Ample co-founder, John de Souza. His personal journey, beginning with a childhood in Ethiopia and subsequent relocation to Dubai during the Ethiopian Civil War in the 1970s, instilled in him a resilient entrepreneurial spirit.

Founding Principles and Experience

De Souza, having received a full scholarship to attend university in the United States at age 16, previously founded several companies, including Smartleaf, Flash Communications, and MedHelp. His current co-founder, Khaled Hassounah, served as CTO at MedHelp. Both founders share immigrant backgrounds, which de Souza believes fosters a uniquely creative and entrepreneurial mindset.

Identifying a Market Opportunity

Neither co-founder possessed prior experience in the energy sector, but by 2018, they recognized a critical opportunity within the burgeoning EV market. They identified that a poor refueling user experience could hinder widespread EV adoption, making the technology less appealing than traditional gasoline vehicles.

Securing Investment and Partnerships

Despite skepticism stemming from Better Place’s failure, de Souza and Hassounah successfully raised over $275 million to address the limitations of conventional plug-in charging. Today, Ample has established partnerships with Sally, an EV rental company specializing in ride-hailing, taxi services, and last-mile deliveries, as well as Uber and Eneos, a prominent Japanese petroleum and energy company.

Deployment and Expansion Plans

Ample’s market strategy centers on contracts with fleets, enabling the deployment of its chemistry-agnostic, modular battery packs into a variety of vehicles. The company currently operates seven swapping stations in the Bay Area for participating Uber drivers and plans to expand into Europe, beginning with Madrid next year. Station development in Japan is also targeted for late next year, contingent upon COVID-19 border restrictions.

A Focus on B2B Strategy and Company Culture

An interview with de Souza explores the advantages of a business-to-business (B2B) go-to-market strategy, the importance of a positive and productive company culture, and the challenges of pursuing an idea widely considered unfeasible.

The Founder's Vision: Long-Term Commitment and Value Creation

You have a history of founding multiple companies across diverse sectors. Do you envision remaining with Ample long-term, or are you already contemplating your next venture?

It’s a collaborative effort with my co-founder, and alignment is crucial. I strongly advise any founder to work with a partner; it’s far more effective than going it alone. While friendship and collaboration can coexist, working with a friend requires a different level of understanding, as professional pressures can strain relationships.

From the outset, our focus wasn’t on a quick exit. We approached this as a long-term endeavor, aiming to create lasting value. A company’s culture reflects its goals; if employees dread Mondays and cherish Fridays, it’s a sign something is amiss.

Addressing Skepticism and Learning from the Past

There appears to be limited competition in the EV swapping space. Does this lack of rivals suggest the idea may be fundamentally flawed?

My co-founder and I are drawn to ventures deemed improbable yet achievable. We seek opportunities where success isn’t guaranteed, but a viable path exists. If an idea is universally accepted, it’s likely too late to enter the market. We embrace challenges that most consider insurmountable.

Lessons from Better Place

Better Place attempted a similar model and failed. What distinguishes Ample and increases its chances of success?

Extensive research revealed that electric cars have a history stretching back over a century. The shift from electric to gasoline vehicles occurred because gas was universally compatible, while early electric cars relied on vehicle-specific batteries. We’re now asking consumers to transition from a convenient fuel source to a potentially inconvenient charging experience.

Better Place’s approach mirrored this historical issue, requiring battery standardization across all OEMs – an unrealistic expectation. Alternatively, building a battery for each car model replicates the original problem. Our solution is a universal battery pack compatible with various models, enabling swaps in minutes, without requiring changes from vehicle manufacturers.

Reviving a Failed Model: A Strategic Approach

What guidance would you offer to founders attempting to revive a business model that has previously failed?

It’s essential to critically evaluate the reasons for the initial failure. If numerous individuals express skepticism, it warrants careful consideration. Stubbornly pursuing a flawed concept is counterproductive. Thoroughly analyze feedback, understand opposing viewpoints, and determine if circumstances have genuinely changed.

Consider Tesla’s success. They weren’t the first to produce an electric car, but they pioneered a software-centric approach to automotive design, differentiating themselves from previous attempts.

Ample's Unit Economics and Scalability

How do Ample’s unit economics support the viability of this model?

The economics are favorable because achieving profitability at a single station doesn’t require a large volume of vehicles. Even a small fleet of 20 cars can generate sufficient revenue to break even. This allows us to deploy stations strategically, based on confirmed customer demand. Long-term contracts with fleet customers provide revenue visibility, enabling us to align expenses with anticipated income and secure financing.

Transitioning to the Consumer Market

While the fleet model is currently successful, how will the economics change when expanding to individual consumers?

We’ll only enter the consumer market after establishing a robust network of stations. Incremental infrastructure expansion can then be aligned with customer acquisition. Investing in infrastructure upfront, hoping for consumer adoption, is a risk we’re avoiding, as evidenced by Better Place’s experience.

Learning from Gogoro and Securing Funding

Gogoro has achieved success with micromobility battery swapping. What lessons have you drawn from their experience?

Standardization is easier when providing a complete service, as demonstrated by Gogoro’s approach. Encouraging manufacturers to adopt their battery standard simplifies network utilization. They’ve gained a first-mover advantage in the two and three-wheel vehicle segments.

Funding Strategy

You’ve secured significant funding this year. How much additional capital will be needed for scaling?

We’ve attracted investors with a strong understanding of new mobility and energy sectors. We’re also exploring alternative financing options, such as infrastructure, asset, and project financing, to leverage capital more effectively. We can strategically select cities for full profitability or raise additional funds for accelerated expansion.

Investor Selection

How do you approach fundraising and investor selection?

We prioritize investors who genuinely understand our space. Generic venture capitalists often struggled to grasp the nuances of our business. Many sought to categorize us within existing frameworks, such as “the Uber of X.” We value investors willing to embrace innovative technologies and take calculated risks.

Strategic Partnerships and B2B Advantages

You’ve partnered with strategic investors like Eneos in Japan. How important are these collaborations?

We’ve also partnered with Shell, Repsol, and PTG. While investment isn’t a prerequisite for partnership, it’s beneficial to collaborate with companies that understand the industry. We prefer to establish financing agreements independently, allowing for more flexible operational partnerships later.

The Power of the B2B Approach

What are the advantages of pursuing a B2B go-to-market strategy? What can other startups learn from your approach?

Securing contracts with fleets of 10,000 cars each provides a rapid path to 100,000 vehicles, far more efficient than acquiring 100,000 individual customers. The financial benefits are substantial, with revenue visibility and recurring EBITDA attracting debt financing and simplifying public market understanding.

We avoided the pitfalls of Better Place by prioritizing customer acquisition before infrastructure deployment.

Lessons Learned and Building a Sustainable Culture

How have your past business experiences shaped your current strategy?

Each startup provides invaluable lessons. Prioritizing positive relationships with partners and investors is paramount. A collaborative environment fosters resilience and shared success. We’ve also learned the importance of cultivating a strong company culture to minimize employee turnover.

We focus on hiring intelligent individuals with humility and emotional stability. A rigorous interview process ensures cultural alignment and minimizes internal conflicts.

Fostering a Relaxed Work Environment

How have you created a more relaxed company culture?

We avoid imposing artificial internal deadlines, which create unnecessary stress. We reserve deadlines for critical tasks and empower employees to prioritize their work. Trusting our team and providing flexibility fosters a more productive and enjoyable work environment.

We recognize that employees spend a significant portion of their lives at work, so creating a positive and supportive culture is essential.

Looking Ahead: European Expansion

What are your expectations for Ample’s progress in the next year?

Our primary goal is to deploy and launch operations in at least one major European city.