Steve Taylor on the Lyft Pink Mustaches and a $20B IPO

Michael Koenig: Hello and welcome to Between Two COOs, where phenomenal Chief Operating Officers come to share their knowledge, advice, and at the very end of each episode, a crazy story. I'm your host, Michael Koenig, and I'm excited to welcome our guest, Steve Taylor, the Chief Operating Officer and co-founder of Hip Train, an online fitness company. Steve spent the early part of his career flying E-2C Hawkeyes in the Navy before making the switch to the private sector. In 2015, he joined Lyft when it was still a private company, and he managed a P&L of over $500 million in annual revenue in some of their most important markets like New York City. He helped the company grow from 200 to 5,500 employees and achieve a $20 billion IPO. His next stop was at Fixd, which he helped exit to Assurant. The $10 billion global insurance provider. Welcome, Steve. I'm excited to have you on.

Steve Taylor: Great to be here. Thanks for having me.

Michael Koenig: So we're definitely going to dive into the details of the explosive growth you helped Lyft achieve. But before we do, can you tell us a bit more about your path to the co-founder and COO seats? How'd you end up here?

Steve Taylor: Yeah, so the short answer is I spent the first part of my career in the US Navy, as you mentioned, 5 years in consulting after that. Then about the last decade or so in tech, operating, advising, and at times investing in early-stage companies. The longer version is that I grew up in Orange County, California. My dad was in advertising sales. My mom was a schoolteacher. And similar to the path that my dad and several uncles and grandparents took, I started my career in the Navy. I went to the Naval Academy, graduated in 4 years, became a naval flight officer, spent a tour in Japan after flight school, a tour in Iraq. and my last tour of duty was at the White House where I was, uh, um, helping coordinate military assets for, uh, continuity of operations. Uh, and at the time I really thought I wanted to be like this Jack Ryan character. I had this military background, I loved public policy, um, and I loved, uh, national security. And so, uh, applied to the Walsh School of Foreign Service at Georgetown while I was at the White House. And so lived this interesting existence for about 3 years where I was working at the White House, going to grad school, learning policy, thinking that that was the path I wanted to take after my military career was through. And what I learned in those 3 years was that that was not what I wanted to do. And after I got out of the military, I moved to New York City and worked at a nonprofit helping military veterans transition out of the military with things like mental health benefits and education benefits, things like that. Spent about a year in New York, and then eventually moved back to DC and got into consulting. And as I mentioned, was in consulting for about 5 years. The first part of that, I was at a small consulting firm called PRTM, where I was doing mostly supply chain management consulting, as well as continuity of operations consulting. I was taking my background in the military and at the White House doing continuity of government and continuity of operations and creating a service offering to provide to private sector clients. A year and a half into that, that job, our small little consulting firm was acquired by PricewaterhouseCoopers. And for the next 4 years or so, I spent a lot of my time on talent transformation, and then started getting into like venture capital strategy, which I found really, really interesting. And that experience though, like what I realized when I was in consulting was that this wasn't really what I wanted to do with my career. I didn't like the idea of just simply advising companies or putting a lot of hours, a lot of sweat, blood, and tears and weekends into helping these large corporations save a few million dollars. I really felt that I wanted to put my mark on a company. I wanted to build something from the ground up, similar to actually what my dad had done. My dad was an employee in advertising sales and eventually quit and started his own company. And several of my uncles were also both business owners and entrepreneurs. And so, that felt like the path I wanted to take. But it wasn't until I was post-military and now into this 5-year consulting career where I realized that. And it wasn't until the acquisition that I knew exactly what I wanted to do, but I didn't know how to get there. So, I found that the best way to find my way towards startups and entrepreneurship was to angel invest. And so, I spent from 2012 to 2015 investing my nights and weekends into early-stage companies, spending time with founders, with founding teams and taking the consulting work that I was doing with large companies and just bringing that skillset and that experience to these early-stage companies. And angel investing was my sort of my way into that door. It was through those experiences, those relationships, that I was introduced to the Vice President of Operations at Lyft. And at the time, I knew I needed to leave. I needed to make a clean break from consulting. And this was like late 2014, early 2015. So rideshare was a thing. Um, and Lyft at the time, I think had 150, maybe 200 employees and they were just starting to shift their operating model from everything being orchestrated and operated from San Francisco, where the majority of their growth was happening to local markets. So I was the third or fourth employee at Lyft hired outside of the San Francisco area. I was hired to lead the market in DC, which eventually became the Mid-Atlantic. And the great part about that experience was, uh, I was essentially— this is going to get to your question about the path to COO— was I was doing everything that a COO does in this role as a general manager leading a city. And this was, you know, hiring a team from the ground up, local marketing, branding, uh, running a full P&L, uh, public policy. You know, we had Basically all the responsibilities of a chief operating officer at a large company, I had that responsibility in my relatively small market at the time back in 2015, and then spent the next 4 years at Lyft building that, building up that skill. And when we took the company public in 2019 and I knew I was ready for my next challenge, I knew that it had to be a chief operating officer role. It had to be something with the amount of responsibility, the amount of autonomy that I was afforded at Lyft. So after leaving Lyft, I joined a small startup company out of Baltimore. We had about 20 employees. The company had raised about $6 million in funding. Soon after I joined, we were acquired by Assurant, this global risk management firm. When that acquisition occurred, I knew I didn't want to be at a large company. I then became the chief operating officer at Big Health, a digital therapeutics company based in the Bay Area. Was there for about 9 months and left to co-found Hip Train, where I'm currently at.

Michael Koenig: That's a truly remarkable journey. And I'm just trying to think back to Georgetown and the admissions office and getting an application from a military guy who's stationed at the White House. I mean, that must have been a pretty easy decision. I hope you used some stationery for your entry essays. But What I find interesting, and I want to maybe take a deeper step into your military career, is, you know, what is the influence that that had on you as an operator? I mean, the US military is an operational marvel at mobilizing and deploying assets around the world, really at the drop of a hat, with the efficiency and, and precision of— I mean, I don't even know what to compare to, maybe the world's most precise clock. You add in your 3-year stint at the White House, where you mentioned you were responsible for the presidential and vice presidential emergency plans. Like, what effect did that have on you once you transitioned to the private sector? And how has that experience manifested itself as an operations executive?

Steve Taylor: Yeah, I think my experience in the military, more than anything, it showed me at a relatively young age, um, what I was good at and, and the kind of work I preferred to do. And, um, you know, I was a— I was, like I mentioned, I was a naval flight officer, spent 3 years at a squadron base in Japan. Um, and it was, it was in— it was during that tour that, that I learned that I I need a lot of responsibility and I need a lot of autonomy. And so, the great thing about being in Japan and being in a squadron is you would be handed, as a 24, 25-year-old, you'd be handed the keys to this multimillion-dollar aircraft and you'd be flying it around with your crew. And there was a lot of autonomy that you were given. You were given— so there was a directive to carry out a specific mission, but oftentimes how you carried out that mission was up to you, the planning of it, the execution of it, was given to you and the crew that you had. And so, I learned that I thrived in that kind of environment. I didn't want a lot of prescription. I wanted to understand what the mission was, and then I wanted to figure out myself how to execute that mission. And I think that was one of the challenges I had when I got to consulting, is that a lot of things were prescribed. And I didn't have, while there was a, you know, a mild amount of responsibility, at least in the role that I was at, at the level that I was at, but I didn't feel any agency. I didn't feel that I had, that I feel I was empowered to make decisions or to, you know, to really move the needle in a way that I thought would be beneficial. So I think that's what I've really enjoyed about early-stage startup companies at every level, and especially at the COO level. You have complete agency, a lot of responsibility, and a lot of empowerment. And, you know, that's the way I like to lead. It's the way I like to step into roles, the kinds of roles that I like to step into.

Michael Koenig: It's so interesting because you mentioned they hand you the keys to a multimillion-dollar aircraft, and that created that sense of responsibility to you. But I also don't necessarily associate the military with autonomy and agency. So it's also very interesting. And part of me can't help but think that you also wanted to maybe break out and have even more autonomy and responsibility there. So in terms of Lift very early on. You, you talked about how you made your way there, um, through, through your angel investing, how you made that connection. Beyond that though, what is it that drew you to Lyft?

Steve Taylor: I mean, I was an active user at the time. I was living in downtown DC, uh, I was single, I was, I was using rideshare a lot, um, not using my car, leaving my car parked. And I was like, this is fascinating, this is a consumer product that is truly changing the way I live in the city, the way I interact with the city, and the choices that I'm making. So, it was a brand that I loved, and it was a service that I was using all the time. So, when the opportunity came up, I thought, "Wow, this is an amazing brand. It's an amazing service." And when I met the team and I met the, you know, I met the founder, and I met the— I flew out to San Francisco and met like the larger team from marketing to operations. To partnerships, I was like, these are the kinds of people that I want to work with. They have the kinds of attitude and perspective and ambition that I want to be associated with.

Michael Koenig: That's so interesting. Now, Steve, I do have a question for you from the audience, which is actually a first for this podcast. Neil Shah, the former CMO of Venmo, Verizon, and now an executive at Two Cows, asks, when you were at Lyft, what did you hypothesize would happen And how did that track with what played out?

Steve Taylor: Hmm. Interesting. So what I think would happen, I felt very confident from the moment that I joined that Lyft would be a successful company. And what I mean by successful, I knew that we would have an impact on people's lives. And I knew that, and remember at the time, we were also, like Uber was and still is a huge competitor. And we were a distant second. Back in 2014, 2015. They had raised, you know, 30 times more than we had. And I knew that we would be successful. I remember knowing this because I remember meeting with John

Michael Koenig: That's, that's a lesson that I learned as well. You can't fixate on what the competition is doing. And while it's important to pay attention to the competition, you can't make decisions and let that dominate your thought process.. And so it's, it's kind of drawing back that focus back internally and, and also as a leader exhibiting that focus, leading by example for the team so that they don't get distracted by, oh, Uber just raised $5 billion more and Travis did this crazy thing these days. So that's, that's particularly interesting that John had that focus that early on, especially when, I mean, you mentioned a distant second. It was the rideshare wars were, you know, quite fascinating to follow around. And then the proliferation of the pink mustaches, right? As you saw more and more of them, you started to think, oh, okay, Lyft, Lyft has really arrived. And there's no pun intended there. So you were responsible for the East Coast, for D.C., for New York City. Can you give us an idea of what it's like to have that responsibility for some of the largest, most regulated, and most strategically important rideshare territories? What's that role like? How did you go into it, and then how did you come out the other side successful?

Steve Taylor: Yeah, how, how I went into it, um, I mean, at the time I was managing just the Mid-Atlantic, and, and that was a fairly large undertaking. I, I had fortunately built a great team around me. And so when the opportunity came up to take over New York as well, to your point, I mean, largest— strategically most important, largest, uh, and most complicated from a policy perspective territory to run— when the opportunity came up, I was like, this is fantastic. I feel confident and comfortable letting the team run the Mid-Atlantic while I spend a little bit more time up in New York, physically up in New York, and a lot more of my brain space taking, you know, looking at New York and working, ensuring that we're able to successfully navigate some of the policy challenges, the product challenges, and the growth challenge that we were having in New York. Doing that, the execution was really difficult. You know, I was on a train every week, splitting my time between D.C. and New York. My team was— I had 200+ people on the team at the time. The executive team was extremely focused on New York and the regulatory challenges that we had there. So, it was by far the most challenging time that I had at Lyft. And, you know, if you want to call that period of time successful, I was only successful because I had an amazing team up in New York. An amazing team in the Mid-Atlantic and a very, very supportive executive team in San Francisco providing me the feedback and the support that I needed to successfully lead both of those large territories.

Michael Koenig: And you said, quote, just the Mid-Atlantic. So I can't help but think that that type of attitude also helped you walk in and take over New York where, oh yeah, this is just a Just a minute, Atlantic, we can handle this. It's no— they're no big deal, but we can handle it.

Steve Taylor: So if I'm saying just a minute, yeah, it's not because it wasn't daunting. It's just an amazing team underneath me.

Michael Koenig: Yeah, of course, of course. I can— so Lyft goes through the $20 billion IPO. You stay on for a little bit longer before taking the COO role at Fixd, which then you helped exit to Assurant. Can you tell us a little bit about that experience? How did the deal come together? What was it like going through the diligence process with a public company and their likely very expensive and talented lawyers?

Steve Taylor: Yeah. I mean, I'll start off by saying that transition from Lyft to Fix was super interesting. I was impressed by how well prepared I was for that role, that Chief Operating Officer role, after leaving Lyft. Because of the, the amount of responsibility I had had during my 4 or 5 years at Lyft, right? Again, retail operations, local partnerships, marketing, policy, running a full P&L. And so when I stepped into this role at Fix, this much, much smaller company, again, only 20 people, and, you know, they'd raised a $6 million Series A, I felt extremely well prepared to tackle, you know, the growth challenges of this company. The interesting thing is it was my third day on the job, we received a letter of intent to be acquired by Assurant. So I entered the role knowing that there was a possibility, knowing that there was a partner that we had, and the founder was very transparent about this. There's a partner that we had that was interested in acquiring us. And, but he said, listen, this may happen. This is not the first time I've had a conversation with a partner about an acquisition over the last 6 years. So this may or may not happen. And so I was aware of the possibility, but didn't think it was— I didn't understand, I didn't know the likelihood. Well, the Wednesday after the Monday that I took the job, we received the letter of intent, and then I spent the next 6 months, 9 months or so working through the due diligence. The challenge of that period of time was not only was I learning the job, learning the role, gaining the trust of the team. I was also co-leading the due diligence process with the founder and the head of product. That was challenging. The actuaries— I mean, this is again a Fortune 300 company, so the amount of lawyers and actuaries they had in our books and in our spreadsheets was overwhelming at times. But it was— I mean, they're a great company, extremely professional, and while they were very demanding in terms of what they wanted to see, they were very accommodating and understanding, and, um, that we were a small company and had limited resources. And by the way, that we were also continuing to grow, because the, the thing that I learned in this process is that the acquisition is not the finish line. You have to sprint through the finish line, which is the acquisition, because there are goals and targets and milestones you have to hit after that acquisition. And so I was also, you know, learning this job, uh, you know, month 1, month 2, month 4, 5, 6 also, uh, working on the due diligence while also helping the company retain and grow the number of clients that we had because we had to be successful. There were milestones that we had to hit after we, uh, after the acquisition. Um, and by the way, we also wanted to make sure it was really important to the founder, Luke Cooper, at the time to retain all of our talent. That was like a top priority of his, you know. And when these acquisitions happen, oftentimes it's, uh, there's, there's, there's talent redundancy. And so the acquiring company will will at times, sometimes lay off some of those employees after the acquisition is complete. And it was really important to Luke and myself that that didn't happen, that we found a soft landing for all the employees at Fixd. And so there was a lot of moving parts, um, and it was a lot of stress. But, and, and at the end of the day, and I think you could probably— the story rings true for anybody who's been through an acquisition, um, there's never really a finish line. You just sort of sprint through the letter of intent, you sprint through the announcement of the acquisition because just beyond that horizon where you think the finish line is, there's just more milestones and more things that you're responsible for taking care of. And so it was an amazing experience, not the growth opportunity that I thought it would be. While we did grow during that period, it really was an education though in M&A and post-integration or post-acquisition integration.

Michael Koenig: That's fascinating. And the experience that you had going through major transitions and milestones at companies prior to this, I mean, let's talk about, you mentioned the management consulting firm that you had that you sold to PwC and then taking Lyft through an IPO and now going through M&A again must have certainly prepared you to be able to lead a team through not only the excitement that comes with that, but also the uncertainty that comes with that. So diving a little bit deeper, you've now been a part of 3 businesses that take analog experiences and digitize them. First with Lyft, then with Big Health, where you made mental health accessible online, and now HipTrain, where you've taken personal fitness online. Can you speak about those experiences? What are the challenges in changing behavior patterns and shifting people from those in-person experiences to digital experiences?

Steve Taylor: Yeah, I first, I first encountered this challenge like head-on at Lyft, um, and, and I, I was introduced to this concept called the Maya principle, which is an idea from industrial design, um, in Maya, M-A-Y-A, most advanced yet acceptable, which essentially means that you're providing users or your customers with enough of what they already know and understand with new features that are easy to adapt to. And so In common speak, what I mean by that is the taxi industry already existed. Your friend picking you up in a car, taking you to the airport already existed. But the idea of opening up a phone, pushing an app, and then having a stranger pick you up in a car that is not yellow, that is not designated as a taxi, you get in the car, they take you safely to your destination, drop you off, and that exchange then, the economic exchange is happening within the app. That's a new concept. And so we knew that to be the case, and we knew that this was— this peer-to-peer ridesharing thing was new. And so, and you mentioned the pink mustache. One of the reasons we did the pink mustache was to make the experience much more fun and friendly and inviting. It's the same reason, if you remember early days at Lyft, you used to sit in the— the passengers were encouraged to sit in the front seat. And when you sat in the front seat next to the driver, you were encouraged to fist pump that driver. And so to this day, when you, when you were talking to a Lyft employee, oftentimes you'll see the bottom like a fist pump. And that was part of this idea of how do we introduce a concept to our users, to our customers that is relatively new and make it acceptable for them. And you think about the things that maybe didn't go that path, like Google Glass or the Segway. These are technologies that are very advanced. But society didn't necessarily take to them. And that was one of the challenges we had at Rysher. How do we take this advanced technology, this advanced idea, and make it, make it very, very accessible for customers? And so that was the idea being the Peak Massage and the fist pumps. And the same thing at Big Health and now at HIITTRAIN. With HIITTRAIN, we've had the good fortune now of, you know, the mega trends that have happened because of COVID things like remote work, people understanding that a lot of services are now provided over digital means, over

Michael Koenig: You mentioned the COVID boost, let's just call it, I suppose. It's an enormous market opportunity that immediately happens because of an externality. I'm assuming like everyone else, it kind of caught everyone off guard. How do you scale? How do you deliver for this new demand so quickly? How did you handle that?

Steve Taylor: I'll speak specifically to Hip Train. Hip Train, we were still relatively early in our journey. We only launched the the service in September. And already in September, we're 18 months, 20 months into the pandemic. And so people were already embracing remote work. People are already building out their home gyms. They're already working out at home. They've already accepted that, as I mentioned before, that goods and services are transferred digitally. And services like telehealth, telemedicine are happening over

Michael Koenig: That's remarkable. Most companies, like you said, you launched in September, but most companies have those early bumps and bruises before that demand comes to you. So you're sort of gradually— and of course you hit that J-curve at some point, and then it's like, oh crap. But you have that history, and suddenly you launch in September and it's demand from the start. Is, is a blessing, and, and probably quite an interesting journey there. Let's talk about building marketplaces. Building marketplace businesses are notoriously difficult. I recall one of Fred Wilson's posts in which he described, and I'm paraphrasing here, marketplaces as having some of the most defensible staying power once they're established, but it's an enormously difficult hill to climb to get there. Now, you had a front row seat into what went into Lyft's marketplace build. How have you approached it with HipTrain in order to avoid what many call the empty room syndrome?

Steve Taylor: Yeah. So, we've started off by solving this problem by really focusing on supply. Supply is oftentimes the most critical element, the most difficult element to build out. And we've been really lucky. We've been tapping into the personal training labor market in Latin America. So, the majority of our trainers right now are in Buenos Aires, Argentina, and now Mexico City.. And so we've been looking at, uh, different programs, different personal training certification programs. We've been tackling the typical, um, you know, Facebook groups and building out our network of, of personal trainers. And then through word of mouth, um, this kind of goes back to like how you build up supply at Let Lift. Um, you, you go through some very tried and true means of, of acquiring drivers, and then you just make sure you're paying them well, you're communicating with them proactively, and you're building a strong community. And we've done that. In these local markets in Latin America. And now through word of mouth, we're gaining more and more traction on the supply side. On the demand side, you know, as I mentioned before, these macro trends, one of which is this, people are now prioritizing their mental health and physical health in a way they weren't doing before. And they're looking for ways of exercising without having to go to the gym. They're looking for ways, or they were looking for ways to supplement their gym exercise with at-home workouts. And so we're finding now ways of getting in front of these consumers. We're also dabbling with B2B and business-to-business enterprise opportunities right now. And again, we're still early and these conversations are ongoing, but right now I think the biggest unlock is let's, I think we've got a solid lock on how to gain supply in these markets in Latin America. And now our main focus is on how do we continue to grow sustainable demand in the United States to make sure that we have a balanced marketplace.

Michael Koenig: You mentioned your entrance into the Latin American market. Was that by design, going there first instead of North America? Because it's usually the other way around with US companies.

Steve Taylor: Yeah, yeah, it was very deliberate. So, so my co-founder Josh, our CEO, has spent the majority of his career operating in Latin America. So he ran partnerships for Uber in Latin America while living in Mexico City, and he also spent a lot of time in Argentina. And so part of the thesis here is that we can leverage personal trainers in Latin America. We could pay them double what they make in their home country and provide amazing service through our app to members in the United States., and those members are able to pay about a tenth of what they would pay for personal training in the United States. So using, leveraging this global labor arbitrage and tapping into these markets in Latin America is how we're starting and is how we're, is our competitive advantage at this point.

Michael Koenig: That's incredibly interesting. It's also part of the power of remote. One of the things that I think I kind of stole from Matt Mullenweg, the founder of Automattic when I was there, is he always said, don't discriminate based on geolocation. Take the best talent wherever they are, let them work from wherever they are, and great things happen. So this is an interesting take on that in terms of connecting supply and demand in that capacity. So very interesting, very, very cool what you all are doing.

Steve Taylor: And if I could, I will say this. So, right now we have 11 employees, only 3 of which are in the United States. The other members of our team are spread between Argentina, Mexico, Guatemala, Costa Rica, and Italy. So, our employees are all over the map. Our trainers are now in 3 countries. We just acquired a new trainer in Germany. And we're also now finding there's interest on the trainer side in the United States. So, there are people that are training— this woman I spoke to yesterday, she's in Idaho, and she wants to use our platform to find new members. So, we're not gonna be limiting ourselves just to Latin America. We are exploring the option of bringing in trainers that are also U.S.-based as well.

Michael Koenig: Okay, time for my last and favorite question for you. We've all had those moments where you have a new problem and you've thought, "Well, never thought I'd see that." You've certainly had a lot of experiences that would have thrown you into those situations. Do you have one that comes to mind that you can share with us?

Steve Taylor: I mean, I think I, I, it's the walking into my first Chief Operating Officer role at Fixd and on day 3 finding out Nope. Instead of just growing, you're going to be responsible for growing, retaining, and going through due diligence because we just received a letter to be acquired. That was, that was crazy. That was crazy. And that made that time at Fixd just really, really special. So I learned a lot about another marketplace that was different from the mobility space that I had been in, made some amazing friends. Learned what life is like at an earlier stage company than what Lyft was at. This was, again, an early stage Baltimore-based Series A company. And then going through this M&A experience with this large Fortune 300 company, it was just an incredible experience. And I don't think I'll ever experience that again, where I walk in and the first week receive a letter of intent to get acquired.

Michael Koenig: Yeah, that's amazing. We should really see who else is out there that has gone through that experience and we can create a club because it's probably pretty exclusive. So, and what, what better way to get familiar with a company than going through the diligence process? I mean, really going under the hood and being there with the acquirer to learn everything and know the company better than you, right? Because that's, that's what they're going for. Well, Steve, this has been Absolutely awesome. Love this conversation and thank you so much for coming on the podcast. Where can people go to keep up with you and learn more about Hip Train?

Steve Taylor: Yeah, you could find me on LinkedIn at Stephen with a P-H-E-N Taylor, on Twitter @StephenHTaylor, and Hip Train, simplyhiptrain.com.