Veo CEO Candice Xie's Plan for Sustainable Scooter Growth

The Calculated Growth of Veo: A Micromobility Success Story

Startups are often characterized by rapid expansion and a relentless pursuit of market dominance. However, in today’s dynamic business environment, this approach isn’t always the most effective, particularly within the mobility sector.

A Different Path in a Competitive Landscape

Numerous companies, such as Lime and Bird, have secured substantial funding to revolutionize urban transportation via electric scooters. Yet, this aggressive growth has frequently resulted in financial losses.

Veo, an electric scooter company, distinguishes itself by adopting a more conservative strategy. Instead of prioritizing rapid scaling through venture capital, Veo focuses on validating its business model in individual markets before expanding. This deliberate and methodical approach has proven successful – the company may be the sole operator in its industry consistently achieving profitability.

A Vision Beyond Profit: Transportation as a Utility

Veo’s strategy stems from the belief of its co-founder and CEO, Candice Xie, that the transportation industry demands a long-term perspective. She posits that achieving substantial profits quickly is unrealistic, especially when considering the needs of cities and their residents.

Xie views electric scooters not merely as a business venture, but as a public utility – a tool best implemented through collaborative partnerships between the public and private sectors. She has instilled this ethos within Veo, aiming to become the most impactful company in the micromobility industry.

From Financial Planning to Micromobility Innovation

Prior to founding Veo in 2017, Xie worked as a financial planner for Schneider Electric, an automation solutions company, in Chicago. Her inspiration came from the bike-share programs flourishing in Asia.

She was dissatisfied with the substandard quality of many available bikes and frustrated by the limited options for affordable, safe, and convenient transportation within Chicago. Market research conducted with co-founder Yanke (Edwin) Tan, a bike engineer, revealed a significant gap in last-mile transportation solutions in the United States.

An Interview with Candice Xie

The following interview, part of a series focusing on founders in the transportation sector, has been edited for brevity and clarity.

Regarding your Medium post, “Sorry, Boys. The First Profitable Micromobility Company Was Veo, Not Lime,” you directly challenged Lime and the broader micromobility industry. This was a significant statement.

I believe the influx of venture capital and industry hype often obscures the fundamental simplicity of the business. My post aimed to clarify this and provide a more grounded understanding of the industry.

What prompted you to write it?

Lime’s announcement of achieving profitability, based on EBITDA, generated considerable attention. I was compelled to respond to inquiries from industry observers questioning whether Veo should adopt a similar approach.

I felt Lime’s claim was potentially misleading and irresponsible. I wanted to share our insights and offer a more transparent perspective.

Challenging the Industry Norm of Rapid Scaling

How did the industry react to your post?

It felt as though a veil was lifted, allowing for more honest discussion. Many individuals expressed appreciation for the insights and confirmed they shared similar concerns. They found the article to be direct, transparent, and truthful.

Your core principle is that sustainable growth doesn’t necessitate rapid scaling. This contrasts sharply with the strategies of many competitors. What led you to this approach?

The optimal approach varies by industry. While rapid scaling and demonstrating unit economics are important for attracting venture capital in consumer-focused sectors like consumer electronics or SaaS, transportation presents unique challenges.

Transportation requires years of collaboration and relationship-building between public and private entities. Infrastructure development and urban planning take time, and understanding user needs is an ongoing process. Achieving billion-dollar valuations while simultaneously addressing the needs of cities and users is unrealistic.

Strategic Expansion and City Partnerships

Veo recently secured a permit for New York City, a major milestone. Was New York always a target, or does this reflect a shift in your business strategy?

Our recent success in Santa Monica is also noteworthy. This represents a natural progression of our capabilities. We began in university markets, refining our business and operational models to ensure long-term profitability and sustainability.

We then expanded into mid-sized cities with populations around 300,000. Last year, we began entering major U.S. cities, validating our model at each stage. The New York City permit is a logical outcome of this deliberate approach.

Given this measured expansion, are you planning to enter other large cities in the future?

We have a clear plan. We will be launching in Seattle this July or early August, and are also pursuing permits in Los Angeles and Austin, both potentially in July.

Innovation and Vehicle Diversity

This summer appears to be a period of significant growth for Veo. Are you prepared for the challenges ahead?

We have a robust business and operational model. Crucially, we offer a diverse range of vehicle types, including our seated scooter. We are actively expanding our vehicle offerings, which differentiates us from competitors.

We prioritize innovation, particularly in hardware development. As a young industry, we are still discovering what users truly want and what additional modes of transportation we can provide. Currently, commuting accounts for only 20% of all trips, indicating a significant untapped market.

Addressing Accessibility and Safety Concerns

Standing scooters aren’t suitable for everyone. They can be intimidating, and riding at high speeds alongside traffic can be dangerous. Individuals wearing high heels or the elderly may find them impractical.

Expanding our vehicle types is essential to providing inclusive and accessible micromobility for all. Investing solely in standard scooters is not the answer; continuous learning and adaptation are crucial.

Could you elaborate on the form factor of your scooters?

We currently offer pedal bikes, e-bikes, stand-up scooters (with our fourth generation launching soon), and seated scooters. We are also developing vehicles with increased cargo capacity and weather resistance.

We aim to attract families and individuals who require the ability to transport children, potentially with two seats and child seat options. Numerous vehicle designs are currently in development.

Controlling the Supply Chain for Agility

A key differentiator for Veo is our control over the supply chain. We design, manufacture, and deploy our own vehicles, enabling rapid lead times and continuous improvement. We implement vehicle design and feature enhancements monthly, utilizing small-batch manufacturing.

Many companies require large orders (e.g., 10,000 vehicles) to secure favorable pricing from manufacturers. Our approach allows us to maintain agility and responsiveness to user feedback.

For example, users have expressed concerns about hand gestures on stand-up scooters and the lack of visibility at night. We are addressing this by incorporating turn signals into our shared scooters, enhancing safety.

Global Manufacturing and Future Industry Trends

You mentioned manufacturing your own scooters. Is this done domestically? Is that why you can manage small batches?

Our manufacturing facilities are located in Cambodia, Vietnam, and Portugal.

What are your predictions for the future of the industry and its competitors?

Our primary focus at Veo is to better serve all riders and support our public partners in achieving their goals. I am less concerned with competition; ultimately, the most effective companies will prevail. Those lacking a sustainable business model will struggle to secure funding and remain viable.

You stated in your Medium post that you were the first scooter company to achieve profitability. Is that still the case?

Yes, we remain profitable, quarter after quarter.

And this is, as you say, due to prioritizing a sound business model over rapid scaling?

Precisely. We strategically choose our expansion locations, focusing on feasibility and profitability. We don’t engage in land grabs or compete solely on speed.

Vision for the Future of Micromobility

Looking ahead, what are your goals for the next year?

Our goal is to become the leading micromobility provider in the U.S. We have a strong product offering and established best practices. We aim to set the industry standard and drive its evolution.

When you say “No. 1,” what does that mean to you?

It’s about impact. We want Veo to be the first company people think of when they consider micromobility. We strive to provide the best user experience, the most innovative vehicles, and the most positive impact on cities.

What do you anticipate the industry will look like in a year?

Many cities are recognizing the need for higher standards for hardware, but a clear standard is lacking. This allows companies without a proven track record to enter the market, potentially compromising quality and negatively impacting residents.

It’s crucial to help cities understand the key features needed to enhance safety, the vehicle types required to ensure accessibility, and the regulations necessary to foster harmonious coexistence between riders and non-riders.