Intro
As two college students with nothing better to do in the summer, we decided to start an ambitious project of launching the first interactive advertising network in Boston cabs. At the time, we thought of it as a small stepping stone in our journey to build companies and at most could help us pay for school/secretly make us college-ballers. What started as some good fun ended up being the craziest 9 months; including being asked for bribes, learning about the Russian Mafia & money-laundering, out-competing a Fortune 500 company for market share, and raising capital during the worst recession since the Great Depression.
Back in 2008 – 2009, my co-founder, Sumant Yerramilly, and I co-founded and sold our first startup, Amp Idea Corp. Our biggest mistake was never writing about our journey for others to learn from. We made many mistakes and learned a tremendous amount about ourselves and business and made it out on the other side to tell our story.
Amp Idea started on the notion of developing credit card processing systems and advertising units for Boston taxis. Our mission was to revolutionize advertising forever by introducing an interactive medium that exists beyond your cellphone. We were looking at everything from digital billboards to restaurant units and even interactive billboards. However, it all started with our humble roots of taxi cab advertising in Boston, MA.
This story spans Boston, New York City, Philadelphia, and Chicago.
Before I begin, I’d like to offer some context.
Numbers
We were astounded by how big of an opportunity exists in the taxi industry. Now there’s players such as Uber, Square, and others after the market, it makes sense given the numbers. These are the numbers for the total market in Boston. We ended up with 340 cabs so divide the following by 6:
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Cab Revenue |
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Total Cabs |
1800 |
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Daily Transactions/Cab |
45 |
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Monthly Transactions/Cab |
1,350 |
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Average Fare/Cab |
$22.50 |
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Monthly Revenue/Cab |
$364.50 |
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Total Monthly Revenue |
$656,100.00 |
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Total Yearly Revenue |
$7,873,200.00 |
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Credit Card Revenue |
Ad Revenue |
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Credit Card Rate |
2.00% |
# Ads |
10 |
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Estimated Credit Cards (%) |
60.00% |
Average Price/Ad/Cab |
$20.00 |
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Estimated Credit Cards (#) |
810 |
Monthly Revenue/Cab |
$200.00 |
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Total Monthly Revenue |
$393,660.00 |
Total Monthly Revenue |
$360,000.00 |
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Total Yearly Revenue |
$4,723,920.00 |
Total Yearly Revenue |
$4,320,000.00 |
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Players
Disclaimer: All characters appearing in this work are fictitious. Any resemblance to real persons, living or dead, is purely coincidental.
Boston Government – The mandate was led by Captain Pride who let his ego overshadow sound and logical judgement. He is no longer serving as the Hackney Commissioner and his original mandate for credit card processing was never taken seriously by any company or taxi professional.
Boston Cab Industry – This is a very complicated setup of cab associations (names on the cab e.g. Top Cab/City Cab, Boston Cab, Metro Cab, ITOA, etc.). See this post for more information.
MTSeats – NYC based company that was the first company to offer backseat advertising and credit card processing. The main person behind this company is Don Jerkman but the day-to-day is run by J.D. (short for Just Desperate). Don served on the TLC and ran experiments in his cabs prior to the official mandates.
TVS (Transportation Vehicle Systems) – In 2008, they were a joint venture with a large credit card systems manufacturer and a Spanish taxi equipment manufacturer. The main person is C.M. (short for child-molester).
CabTek – Tried and failed in NYC. Led by a former-lawyer turned entrepreneur named Jason Lee who tried to compete again in Boston.
Etc. – There were many others who will be introduced later that provided us some help, criticism, feedback, & competition.
These are the major players that affected our company the most.
Summarized Plot
We learned the art of the hustle by selling to the largest and most respectable ad agencies in the world. Amp Idea is a story that we’ll remember forever more than it being our first time but more about the tumultuous period that will define all of our future entrepreneurial activities.
