"No day is the same. One day in micromobility is equivalent to a week anywhere else" - Industry Insiders #13

We caught up with Caroline Seton, Co-Founder and Chief Legal Officer of Forest - the bike sharing company that’s taking London by storm. Together, we covered Forest’s future, the appeal of cities outside London, and Caroline’s ‘magic number’ of operators…

Fluctuo: You’ve been with Forest for over 4 years now, but where did your interest in micromobility first come from?

Caroline: Micromobility is the intersection of so many different facets - policy, regulation, investment, transforming the way that we move, and there are so many more stakeholders for us to consider since we founded the company and continue to grow. We’re at the forefront of this burgeoning new industry and the regulatory landscape is always shifting. And that just makes it so exciting. No day is the same. As we say, one day in micromobility is equivalent to a week anywhere else and a week is equivalent to a month - just because so much is always happening.

How would you describe the journey with Forest so far? 

Ups and downs - that's the nature of any startup, but so far the trajectory has always been up. 

We've really built a challenger brand and a strong user base here in London, and created an offer that is compelling, both for cities and for users. That’s coming together really nicely with the competitive landscape in London changing as a result. 

Tell us about the challenge of operating in London. 

London is a patchwork of regulation and the challenge has been to navigate the different needs of each borough, and then to stitch that together in a way that isn't too confusing for the user. But we've done it by providing a unique offer that is affordable and sustainable  in ways that the competition is not.

Plus, we have been growing the market share of cycling by bridging the gap between those two key pillars, making our offers accessible to a much wider range of people and encouraging more people to take up cycling - which is a key aim for national and local governments. We’ve got people onto bikes that had probably never used a dockless bike or maybe even cycled before. Also, we've definitely seen a real sea change in the way that boroughs have approached and partnered with us. This means that now we can work in collaboration and look to achieve the same aims - they see the demand for dockless bike services, and how they can play an important role in complementing the existing transport infrastructure of a city.

Dockless bikes in London are now recording more rides than the public bike scheme, why do you think this is?

The electric assist is certainly important, allowing people to go to and from their destination quickly and with relatively lower effort which is particularly great for smartly dressed commuters and those with certain accessibility needs. People also really believe in the software and hardware. This, plus the ability to be more flexible with where you can pick up and park an e-bike, has been the real game-changer - there are minimal friction points on both sides of the journey. We’ve got to try to navigate any future regulation to make sure we support cycling without compromising the convenience and accessibility that our users have come to rely on.

Are you focused on London, is a European expansion on the cards?   

Both. We'd love to grow in London, and that's definitely the plan, but we’re also looking ahead to Europe to expand. There are a few public tenders coming out that we're working towards, so that's definitely something that's taking a lot of time at the moment, but we've got to let those processes and procurements run their course.

Our ultimate goal is to give free and sustainable mobility to everyone. And how we achieve that is through opening more cities. So the objective right now is very much just to keep growing in a way that is sustainable and profitable. We've waited to be profitable in London, so now we've got that blueprint for expansion. It's never copy paste, of course. But we've at least now got the processes, the tech, the right operational structures, the ads and the right team in place - all that will make sure that we can roll out Forest into new cities and reduce the time to profitability.

What are your criteria for launching in a new city? 

We're focused on cities that can take a minimum of 5,000 bikes and I think that's where we really differ from some of our competitors. We want to open in cities where we can achieve that critical mass, that bike density and have a big enough user base. So for us, smaller UK cities are unfortunately less viable without sufficient subsidies. 

Do you tend to work in short term goals, or are you always looking to the long term, to the next few years?

When we first started, it was really short-term, we were a small team - we started with just three of us. And so whilst you've got an eye on the long term, you're very much focused on the here and the now and what needs to be done to launch, and then grow, the business. In that way it was very much a short sprint, but we've now got the privileged position of growing and building a team around us, a team that allows us the space to think longer term. We can now put structures in place to bring to life ideas that we couldn't have conceived when we were more bogged down with the minor details that come with a small business. Now we're almost 70 people, so as a management team we now have the time to think more broadly.  

Forest’s advertising model is unique to your brand. How focused are you on the ad space, and how do you think that will change as your user base grows? 

It is something that we're really focused on in London. Because it's a more mature market, ads are more appropriate as the people who are looking to buy ad space are familiar with Forest. It’s also clear that our users like the ads and products and services being promoted, and are happy to watch more in return for free minutes via our Minute Builder. In the future, we really will strive to keep ads relevant and in line with our mission - we always look for companies that are promoting sustainable initiatives and companies that resonate with our users.

You mentioned the idea of B2B sales for your ad software - how is that going? 

It’s growing, and it's a really exciting new part of Forest that we're working on called Ad Moai. We're seeing a lot of companies that want to follow our route towards ad software, and integrating Forest’s platform is the solution for them, as it's taken years to build. Even if companies have their own tech team, they’re focused on the core business and don't want to divert resources away to build something that may or may not work. So we're really seeing a lot of appetite for that kind of add-on that we can just white label, and away they go. In fact we’re launching with our first client later this year! As I said, it's a software that’s really quick to market and means that our clients’ own tech teams can stay focused on what they're there to do, because you need quite specific skills and resources to build the ad platform which we have created.

Where is bike sharing headed? Will there be more disruption to come, or can we expect more stability? 

It has definitely stabilised as shared e-bikes are becoming a more accepted and integrated part of the public transport offering in cities. But I think tenders are crucial to the next step - they help to formalise the dockless schemes and also create more certainty around the longevity of contracts and help businesses to plan ahead. Previously a large mix of operators have been finding their feet in a range of different markets, but given the high capital intensity and tight margins, we’ve seen the market consolidate and shift. So I think now a tender system makes sense to open up markets to a select few operators with clear SLAs and requirements to meet a city’s needs. We are of course still in a transitory period - a year ago nobody would have thought that TIER and Dott would merge! Things could still change at any moment.

What is the optimal number of operators for a city to have? 

We think the magic number is three. There's been a lot of consolidation lately, so we're seeing that some cities have an issue where they have appointed players that later merged. As a result you are edging closer to a monopoly, which is not good for users, nor for the city. So in this period of consolidation it's quite important to have a number of players. I think the other reason is not just consolidation, but also some players have been, unfortunately, leaving markets for financial reasons which again reduces choice for users and does not serve the city well. Having three operators also raises standards for the user - there's more choice, more competition, and I think that ensures the operators stay true to their SLAs and they're always thinking about how to improve and innovate, to ensure that they stay on top of their game. So the magic number raises the standards, and it also provides an insurance policy, which is needed as the operator landscape continues to shift and innovate.

What is the achievement that you're most proud of at Forest? 

We've given away 5 million minutes to users in London. I think it's a huge, huge milestone, and one that we're so proud of, because it's really facilitated that modal shift, giving people the chance to take the bikes, and hopefully we’ve allowed them to continue to ride, not just with Forest but with other companies too. I think we’ll soon see, as we’ve really hoped, a change in the hierarchy of modes of transport within London, maybe with more space given up to cycle lanes.

How do you feel about e-scooters? Do you see them as a viable option for Forest in the future? 

We're a bike company through and through, we don't do anything else. We love bikes, and we want to fight cars. We're not thinking about any adjacent businesses - a lot of the other competitors do scooters, food delivery, last mile, ride hailing, you name it, but that isn’t the case for us. And I think that's why we've been able to be profitable in such a short space of time - we're always focused on how to be better and improve efficiency, just by focusing on bikes, bikes, bikes.

If you think we should be interviewing you, let us know!

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