Parkofon: Bright Road Ahead!
2018 was a brilliant year for Parkofon. Although I am usually future-oriented and no level of success is ever enough for me, I should admit that we have accomplished a lot in these past 12 months.
There is much more to come in 2019, and I am very excited about it. I look forward to serving many new and existing customers and meeting and working with a lot of professional, knowledgeable, and smart people as we enter the new phase of our growth.
Here is how last year shaped for Parkofon.
We started 2018 at Conscious Venture Lab learning and working side by side with other courageous entrepreneurs and friends on making our businesses socially responsible and innovative. My brother Vlad came over from Russia for his first trip abroad to help finish product development and present Parkofon to the wider community. Our prototype was big but functional. It would still take us months of tests, pilots and feedback before we put it to market. Yet, the business started to take shape as we dived into the revenue model and the go-to-market strategy.
One challenge has been shadowing us: while our fully automated parking payment and guidance platform provides tremendous value to over 43 million U.S. drivers parking on the street and wasting over $73 billion worth of fuel and time every year, it requires a reasonable number of cars to be equipped with our device for real-time space availability to be operational. In other words, network effect is key to our success.
One way we pursued early on is automotive partnerships: the best way to reach network effect is to build Parkofon into the vehicle on-board electronic system. Thankfully, most modern cars already have telematics modules, and any such integration would be mostly software-based. A major concern continues to bother us — location accuracy. While many new cars strive to build the base for future autonomous vehicles, their geonavigation solution might not be specific to our parking use case capturing all parking events in deep urban canyons. To overcome these issues, we have invented and patented our low-cost, high-accuracy platform integrating multi-constellation GNSS, inertial navigation system and road alignment. To find the most optimal solution, we worked and continue to work with top-class academic partners in Canada and Germany, and are glad to share that the platform captures almost all parking events accurately in any urban conditions including downtown Brooklyn and Manhattan.
Next, we applied to mobility programs and reached out to fleet channel partners. We were lucky to get into the RocketSpace and BP’s Mobility Tech Innovation Collaborative and started working with smart and innovative partners at Avis Budget Group. This ongoing collaboration helps us understand the value of Parkofon technology to rental drivers and explore seamless fleet integration.
From Parkofon’s perspective, fleets offer an efficient way to reach network effect for real-time parking space availability and mobility optimization. Our primary objective is to maximize non-rental revenue for our partners and attract new customers who would otherwise take Uber or Lyft from the airport because they do not want to worry about parking. Cheap, easy, accessible parking can likely become the feature that can both establish competitive edge and attract new renters visiting an unfamiliar city.
Finally, we figured out unique customer value: $4 an hour guaranteed garage parking in New York. This is new to market and generally unheard of before. Garage market is rather fragmented in New York and owners cannot guarantee customer turnover to offer low-price parking. Overnight parking can reach $60 a night at some locations. I heard multiple stories of people wasting 20–30 minutes and stress looking for on-street space to get into a 30-minute or 1-hour meeting. These drivers often end up paying a fortune to park for just a couple of hours in a garage. What it tells meis that the market is suboptimal; it cannot serve big demand of people looking for limited on-street parking supply. In fact, 30% of traffic are drivers searching for parking. How about that market to serve?
Our first pilot was in nearby Arlington, VA. While not drastically bad for GPS accuracy, Arlington has both suburban and urban districts with severe multi-path effect and satellite signal contamination. We installed Parkofon devices in a couple of vehicles and circled around to see whether the system can effectively capture all parking events and send information to the mobile app prototype. This data collection mostly focused on improving the technology rather than getting customer feedback but we managed to identify and correct important usability issues and see how Parkofon can integrate into the smart city data system.
Next, we partnered with researchers at New York University’s C2SMART research center to conduct a detailed parking pilot in downtown Brooklyn, NY. We put our devices into several vehicles and circled around the area to understand trends in parking availability and how Parkofon can help detect open spaces and offer an automated parking reservation system for commercial vehicles. In parallel, I talked to New York City’s Deputy Commissioner for Transportation and Chief Technology Officer of NYC DOT to learn about their agenda and offer help that Parkofon can bring with tremendous amounts of data about traffic movement and parking usage. This ongoing P3 collaboration is an important element of everything we do in New York as we seek to help every citizen and visitor enjoy the city as best as possible.
Based on these pilot results, we were able to join the RocketSpace and BP’s Mobility Tech Innovation Collaborative to start working with Avis Budget Group. As mentioned above, this big project is still under way and we cannot publicly share many details but it provides us with a great opportunity to test, pilot and deploy our automated parking technology on a large fleet.
Partnerships and Awards
Parkofon won several world-class awards in 2018 and established important industry partnerships and connections. First, Parkofon won the PlanetM Mobility Services award at Detroit Auto Show. We were among 6 startups receiving this prestigious award from Michigan Governor Rick Snyder in January 2018.
In April 2018, our next big recognition came from the Global Automotive and Mobility Innovation Challenge (GAMIC) at the Society for Automotive Engineers World Congress. Besides the cash prize, we received almost $90,000 of in-kind services. Until today, GAMIC leaders and judges continue to provide valuable advice and support in our technological and market development based on their experience, connections, and knowledge.
In October 2018, Parkofon was among just 64 startups selected globally to present at Mondial Tech Paris Motor Show. Notably, only 3 of these startups including Parkofon were invited from the United States, which is certainly expected at a major European event. 8 companies presented in front of Renault’s leaders who showed obvious interest in developing a parking solution that will be most competitive to serve their customers.
Parkofon’s high-level awards demonstrate recognition that our technology is a definite interest to the automotive and transportation industry. Leading global corporations work on providing the best parking experience to their customers and look for the next big thing that will give the advantage in competitive automotive market.
Among others, it is illustrative that our colleagues at Valeo and Bosch have extensive parking technology teams and divisions looking into various sensor-based systems to detect and communicate open parking space information to drivers and provide automated park-assist experience so that users do not need to worry how to park their car when they arrive to their destination, be it a garage or a lot. These systems are still expensive and require additional testing but definitely show increasing attention to parking automation in the connected and autonomous vehicle development.
Parkofon is open to collaboration with OEM and Tier 1 automotive companies and is proud to be a member of PlanetM Landing Zone in Detroit where we meet the major car manufacturers and identify partnership opportunities. To top it up, we are among just 6 startups to pitch on stage of next month’s Detroit Auto Show and have been invited to present to 75+ tech scouts and mobility investors at the Autotech Council March meeting in San Francisco.
Parkofon is live in Brooklyn, NY. I can’t be more thrilled. My baby is out in the wild helping drivers in New York to find cheaper, easier and faster parking in one of the most congested cities in the world. We get subscribers from all across the city looking for free parking maps, street cleaning alerts, and open spaces. Visitors from Vermont, Pennsylvania, and New Jersey reach out to tell that they are terrified by driving to New York to visit their friends and struggle to find parking in an unfamiliar city. I am shipping the device to first customer in Fort Greene, next to our main garage, who likely looks for easier parking when he returns from work at night, tired and struggling to find a space. This is a good start. And much more has to be done with the help of my excellent team and valuable partners in 2019.
By the end of 2019 (and hopefully sooner) Parkofon will be Series A-ready. This means we will have at least $100K monthly recurring revenue. Reaching this objective requires a few important things:
- Marketing: active awareness campaign and consumer education are critical for Parkofon’s success at this stage. No-one is used to $4 an hour guaranteed garage parking in New York. No-one is used to knowing exactly where the next open space will be in the residential district struggling to avoid over 4 million street cleaning parking tickets issued by NYPD every year. No-one is used to just booking a cheap, safe, and accessible garage with two simple taps in the mobile app. Our extremely low-budget December start already shows there is a lot of interest in solving the parking conundrum in New York but it does require a fair bit of marketing and explanation to get people used to this new Parkofon reality.
- Garage space acquisition: Parkofon currently has spaces at two garages in downtown Brooklyn: 180 Ashland Place and 100 Myrtle Ave. These facilities are location-constrained. I am already getting inquiries from interested customers: “I am staying with friends at Bushwick, do you have garages there?” or “I work at Kings County Hospital. Parking is a nightmare. Can you provide your service here?”. We do not need to acquire full garages or lots but start with a modest number of spaces. We can test locations that work well for our customers cheaply and efficiently. But to do that we need to lease a few spaces in multiple facilities at once.
- Team: however excellent our team is (and they are really the most hard-working and committed people I’ve ever worked with), we need to grow. Parkofon needs B2C expertise along with sales and customer support. Our technology is complex but fully functional. We do not need much more development at this stage but thinking forward would really help us out if we could hire at least 1 or 2 technology staff.
- New York location: our business is in New York. However much I like Washington, DC and Detroit we have to have permanent presence in New York. It is for this reason I am most interested in New York-based investors who feel our customers’ parking pain themselves and understand how we can dramatically improve their own city with our data-driven approach. Many thanks to our corporate friends and colleagues who have already shared helpful contacts and advice.
To accomplish these goals we certainly need capital. Ideally, New York-based and B2C-experienced. Once we get through the current round, things will move much faster, and our future will look even brighter than it seems now.
P.S. This story contains a lot of important business information, some may seem sensitive. Why do I share it openly? I am an innovation scholar and I understand that only open collaboration, interactive learning and competence building can help us solve complex social problems. Urban mobility and transportation are an intricate, multi-faceted industry that requires building partnerships and providing win-win-win solutions. I watch a lot of companies who dramatically changed the city landscape including Uber, Lyft and a plethora of e-scooter and bike share startups. Many of them struggle with making their enterprises profitable. Why? Value brings money, and money brings more value. I feel like these technology companies are too isolated and were too late to start working with cities and communities, many of whom appear to be losers in this game. Vehicle miles travelled increase, public transit is in disarray, city governments hastily adopt new regulations, new mobility options did not necessarily improve accessibility and livelihood for underprivileged population. Parkofon spent quite a bit of time building initial partnerships with a wide network of corporations, cities and universities. We hope that our data and approach can help improve mobility for everyone.