How I Built This with Guy Raz - Lyft: John Zimmer (2017)

Episode Date: June 25, 2018

In 2006, John Zimmer was a college student and ride-hailing wasn't yet "a thing." But a class on green cities got him thinking about the glut of underused cars on the road. Eventually, he co-founded Lyft, a company that has helped make ride-hailing a fixture of American urban living. PLUS in our postscript "How You Built That," an update with Kyle Ewing, who almost set fire to his living room making Terraslate, a tough waterproof paper. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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walking distance from so much of the city, made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com host. Hey, everyone. We're gearing up for our first ever how I built the summit in San Francisco in October, supported by American Express. And we've just confirmed some great news, which is that 10% of the tickets for, for the summit will be absolutely free.

We're calling it the How I Built This Fellowship. If you want to apply for a free ticket, you can join our new community group. Go to Facebook and search for how you built that. And once you're there, the application is pinned to the top of the page. And applications are due soon, July 9th. So join How You Built That on Facebook ASAP. So here's a question. Have you ever wondered why Lyft is spelled with a Y instead of an I?

Well, John Zimmer wasn't really trying to grab attention when he named the company. He was just trying to solve a problem, which you will hear about in this episode, which first ran last February, and it's a really great one. So hope you enjoy it. One of the kind of funny things we had to figure out was how to quickly market to the college campus. And so one of our early purchases was a frog and beaver costume that we put on. I went to Cornell. I was actually going to Cornell on a recruiting tree. for Lehman. And I was standing on the quad in this ridiculous costume, handing out cards about

this carpooling service. Is this a frog costume or the beaver costume? I was the beaver. You were the beaver? Okay. And at that next day at the Lehman recruiting event, a girl came up to me and said, did I see you in a beaver costume yesterday? From NPR, it's how I built this, a show about innovators, entrepreneurs, idealists, and stories behind the movements they don't. I'm Guy Raz, and on today's show, how John Zimmer made private cars work like taxis, and in the process helped build a service now worth billions. So, do you actually remember the days of walking onto the sidewalk, sticking out your hand,

inhaling a taxi? I mean, it feels like ancient history, right? But still, even though this world of instant car rides is just a few years old, We're so used to it that if you're like me, you start to get really antsy and anxious when the Uber or Lyft app says you have to wait for three minutes for your ride. And just think about how quickly ride-sharing apps like Uber and Lyft have totally transformed transportation in many cities around the world, how in most places they've become indispensable, which has also meant that the competition between the two companies has been really fierce since 2012. when both of them launched a service that turned private cars into public taxis. But the amazing thing is, is even though Lyft is just a fraction the size of Uber, it is still valued at more than $5 billion.

And one of the guys behind it, John Zimmer, he never thought that ride-sharing would be his life's work. He actually studied hotel management at Cornell, but his interests really started to change during his senior year. I took a course that was really, really important to me called Green Cities. And I had this amazing professor. His first lecture is the history of the world in 30 minutes, kind of like the book Guns, Germs and Steel.

And he ended the lecture saying that we're at a really important time in world history, where population density is rising rapidly in our cities as more and more people move there. And resources and infrastructures that were built decades ago are becoming more and more And he kind of challenged us at the end of the class and said, if you don't make this class the most important thing you do this semester, then I don't want to teach you because if we don't fix these problems, we're going to have major economic, environmental, and social problems. And that kind of set me on a path, which eventually led to lift.

But being that I grew up in the East Coast and in Connecticut and New York, I did feel like I had to have a finance experience. And so after graduating, I went and worked at Lehman, Brombrough. in 2006. Wow. Lehman Brothers in 2006. Like when we look back on that in a hundred years, we'll be like, wow, that was just, whoo, that was like the decline and fall right there. So you go to Lehman Brothers in 2006 and what did you do there? So I was doing real estate finance. So I was right in the heart of where everything happened. And as you said, right at that moment from 2006 to 2008 was my two-year analyst program. Was it interesting? It was interesting for a few

months, but I got to say my interest declined probably after just about a year. And so I started thinking what else I could do. And it was actually about a year into it that I was on Facebook one night and saw Logan, who is now my co-founder, who I didn't know at the time, posted on a mutual friend's Facebook page saying that he was starting a website called Zimride. And what was it? What was his story? So Logan's background is that he grew up in L.A., hating traffic. He then went to UC Santa Barbara and made an experiment of himself, so he didn't bring a car to school. And he wanted to see how he could survive without a car.

And he started a car sharing program similar to Zipcar first using university fleet vehicles. And he got the attention of the local transit board. And the local transit board elected him as the youngest member ever to be on this transit board. This is in Santa Barbara? in Santa Barbara. And he quickly grew to realize the challenges in public transportation and came to the conclusion that across the country, when you pay to get on the bus,

you're really only covering about 30% of the operating cost. So what that means is a $3 bus fare actually cost the government 10. And as the lines get more busy, they get harder to fund and harder to add service levels. So they actually, the more busy they get, the worse they get. So he came to the conclusion that public transportation was broken, and while the promise of public transit is phenomenal, the reality was not.

And so he then traveled to Zimbabwe, where he saw people sharing rides out of necessity and got inspired to build a website that would connect people going the same way to be able to sell a seat in their car. And that's why he called the website Zimride. After Zimbabwe. Yeah. So Logan was basically trying to build a website that was like, Hey, I'm going this way, like a sort of a car sharing website.

Like, it used to be that you would just advertise on, like, Craigslist or put something on a pinboard and, like, on college campuses saying driving from, you know, L.A. to San Francisco, do you need a ride? But he was basically trying to take that concept and put it online. Exactly, yeah. So, like you said, we had these physical bulletin boards or digital bulletin boards for people going along the same way if they're going home for spring break or fall break. But there was no identity or ratings behind that. And so it was limited in how many people actually use them. And so we thought, how can we make a safer system? And, you know, if you tied something to a social network like Facebook,

you could have a profile of the individual you're going to share a ride with and follow up with ratings of how that ride experience was, which would create a safer and more broadly used environment for carpooling on college campuses. So what happens to you guys then? Like at this stage, you and Logan still had met, right? So do you email him or do you call him or what? So we got on a call, I believe, and he said that he was actually going to be in New York City in a few weeks. And so we ended up meeting up and talking a lot about carpooling.

And I shared some of the thoughts that I had from that course I took at Cornell. We realized that we were both so passionate about solving the same problem and began working together. right after that trip in New York. And did you guys just hit it off right away? You liked each other? Yeah. Yeah, we've become my best friend. He was best man in my wedding.

He's also a very focused, calm and thoughtful person. There's this funny story when he was a kid. I think he was about eight years old. His parents had just gotten a TV. And I guess a few weeks later, he said, he asked his parents to remove the TV from the house because it was distracting him. So I think that, that just speaks to his

level of focus and I've really enjoyed working with him because of that both passion, focus and thoughtfulness. Okay, so you guys start working on Zimride together. And at this point, you're still at Lian brothers, right?

Right. And what's Logan doing at this point? So he's at UC Santa Barbara as a sustainability coordinator after he's graduated. He's working on Zimride as a side project. He actually did a lot of the original coding of the website. And we didn't know whether it was a big business. We thought it could be. But before we were going to jump all the way in, we wanted to start working on it.

So we spent nights and weekends working on Zimride. Just like remotely, you were in New York and he was in Santa Barbara and you were just like emailing and like Skyping and stuff all the time. Yeah, yeah. We'd have late night Skype and every maybe month or two we try to get together. and on Logan's end, he's, you know, working on building the website. On my end, I'm figuring out, how do we get enough people using the platform so that it works? It was really like a chicken or egg problem where the idea of having a lot of seats to choose from on your way home from, say, Cornell in upstate New York, to go to New York City was exciting. You know, there's very few bus routes, not everyone owned a car or had a car on campus. And so if I could go on, you know, Zimride Cornell edition and buy. You know, a seat in someone else's car for $20 or $30, that would be really exciting. But it had to be there, it had to be available. We had to create both sides of the marketplace. So the idea was like how Facebook originally launched, which was you would just have these

sites at university so students could figure out like who they could hitch ride with. Exactly. And so one of the kind of funny things we had to figure out was how to quickly market to the college campus. And so this is kind of strange. We wanted to put on costumes on campus and hand out information about this service. One of our early purchases was a frog and beaver costume that we put on. I went to Cornell.

I was actually going to Cornell on a recruiting trip for Lehman. But I went a few days early. And I was standing on the quad in this ridiculous costume handing out cards about this carpooling service. frog costume or the beaver costume? I was the beaver. You were the beaver? Yeah. Yeah.

And where were you doing out flyers? Yeah. So we needed to get a critical mass of, let's call it a thousand people offering their seats so that those that went on to look for a seat could find one. And it worked. And at that next day at the Lehman recruiting event, a girl came up to me while I was surrounded by a lot of our managing directors and said, did I see you in a beaver costume yesterday? You know, the next step was, let's sell a private network to the various universities. And we were able to, over a few year period, sell to 150 universities and companies that would pay us an annual fee for this private carpooling network.

Oh, wow. So you weren't taking a cut off the fee that people would charge to share a ride. Correct. Not at that time. The business model was, let's sell these universities, like on a subscription model. And you sold it to 100. So you were personally calling universities and pitching this to them? Yeah. So I was personally calling and traveling to probably visited hundreds of universities in those first few years. How did you do this in the beginning and work at Lehman Brothers full time?

So in the first year, it was more about getting the products did up. up and having a proof point and that being kind of Cornell. And so the majority, virtually all of those sales came once I went full time in 2008. You were like, you know what? I'm going to do this. I'm not leave Lehman Brothers. Yeah, so it was early 2008 and had made the decision. And my best friend's mother actually worked in the same building as me when I was at Lehman Brothers. And I told her what I wanted to do. And she said, how could you leave a sure thing like Lehman to do a crazy carpal startup? How many people said that to you, by the way? How many people said, you're leaving Lehman Brothers in 2008 to go do some internet thing?

Yeah, several people said that to me. And then three months later, Lehman was bankrupt. That's crazy. We knew there were challenges going on at Lehman, but I could not have predicted that three months later they would have been bankrupt. So you moved to Silicon Valley in 2008 to go full time on Zimrod. with Logan Green? Yes.

Did Zimride get become profitable? Yep, it did. Like hugely profitable or respectively profitable? I'd say respectively profitable. So it was a pretty, you know, robust company. And did you see this as this was going to be your thing? This is what you were going to do with your life? Yeah, I mean, the dream was to start a business that had a major and important impact on our world

and specifically on the way that our cities are designed. And so, you know, I think from an early period, we consider this our life's work. I mean, you were going to basically transform carpooling. You were going to do for carpooling sort of what Airbnb has done for accommodations. Exactly. So what happened?

How did you shift from like this concept of carpooling to what would eventually become lift? So in the middle of 2012, It's like four years in now. Yeah, about four years of doing it full time. Yeah. And we stop and look at ourselves and say, you know, how are things going? And what would we do if we were starting over today?

I think that's a really helpful exercise. And what was true in 2012, that was not true when we started, was the proliferation of smartphones and operating systems that would enable more short-term planning and short distance transportation. Because with Zimride, you had to go on a website and you had to find the date and the person going, right? And you had to sort of do it, I guess, at least a day in advance, right? Exactly, yeah. So once the technology shifted, that would enable more instant decision making to happen, our thought process shifted. And you guys started to think, maybe we should

focus on something else? Yeah. So we had seen Uber had. had started kind of limos on demand. The black car, right? Yeah, and we said, you know, that's interesting from a, you know, using, you know, mobile technology, but it wasn't that interesting to us from, you know, picking, you know, a small population of people that can afford kind of a private driver type experience. Because Uber was like an elite service at the beginning. It was just these black cars and it was sort of their kind of fancy.

Yeah, so the average American household spends over $9,000 every year. on owning and operating a car. It equates to over $2 trillion annually in the U.S., and the car sits parked 96% of the time. And so we said, how could we take these personal vehicles that are parked at all times and expensive to their owners and make better use of them? And so the idea was to create an app

where you could request someone's personal vehicle on demand. But the platform really at that point was just, hey, I have a car sitting here and I'm going to make it available to kind of rent out for an hour. No. It was, hey, I have a car and I have time. And I'm going to go drive other people around for a payment. And it goes back to kind of my hospitality experience of how do we create something that was centered around service about treating driver and passenger with respect. But also you've got to remember what is now accepted as normal of getting into someone else's vehicle was not at all normal at the time. In fact, we had to work to change people's behavior. And in the early day suggesting people sit up front and creating this your friend with a car hospitality environment, we felt that one, it opened the audience to a larger set of drivers.

If you go in a room of our, a hundred of our friends and you ask, how many of you are willing to do? drive a taxi, a couple hands maybe go up. When you say, how many of you are willing to share a ride, you know, 75 hands would go up. And so we wanted to create the experience around that because after many, many years of being, you know, told not to do this behavior and many, many years of seeing a yellow vehicle and thinking that that is safe just because it's yellow, we had a lot of behavior change to kind of push through. John Zimmer, co-founder of Lyft. After the break, how the state of California almost killed his company.

Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR. It's How I Built This from NPR. I'm Guy Raz. So it's 2012, and John and Logan were still working on this carpool concept called Zimride, and they were doing pretty well. They'd pitched a bunch of investors in the United. Silicon Valley, they got some money.

But around this time, they decided to change course and focus on other ways they could make car sharing accessible to millions of people, basically an early version of what eventually would become Lyft. But before they could really launch the app, they needed to test it out, so they got in touch with a bunch of drivers. So the first set of drivers, we actually emailed a bunch of Zimride users. and we said, hey, we have this new project we're trying out, and we'd love you to try it out. Then we invited them over to the office and walked through kind of the whole experience that we were working.

They were all in San Francisco area? Yes. And what did you tell them to do to just drive around the city? Well, we first kind of walked through how the app works, all the safety standards that we had, and we let them know that what, What's going to happen is that you're going to get a request on your phone, and it's going to let you know where that passenger is,

that they could go pick up that passenger and take them where they needed to go, and that the app would kind of help them navigate and do all those pickup and drop off. And at the time, there was a suggested donation at the end of the ride that the passenger could make through their credit card that was attached to their profile. Oh, so this was going to be free if you wanted to be free? It was in the early days. You got to remember, again, one that this was very, very new and not normal and, you know, I'd say would fall in a regulatory gray area. And so one of the ways that we saw around that was to say, to make it optional for payment in the early days, until we had forged through the right regulatory structure. So at what point did you come up with a new name? Like, when did it go from being called Zimri? to lift. Before we launched it, the working title was Zimbride Instant, but while going through

it was actually really a three-week period that the Lyft app, the original Lyft app, was built. It was very, very fast. Wow. And the brand Lyft was thought of during that period as well, along with the logo and everything. So lift as in, give me a lift. Yeah, except you couldn't get LIFT because that was probably taken. Yeah, LIFT.com is owned by Otis Elevators. Okay, fair enough. Yeah, right? So you got YFT. Yeah, in the middle of 2012, again, over a three-week period, the team moved incredibly fast to build the app, come up with the branding, and meet and background check and onboard the first set of drivers. And then we invited a few friends, and it was, we got an incredible response. So this is only in San Francisco at this point, right? Yeah. And so how long did it

take before, you know, you open this up. You made this into, into something anybody could use. So I'd say it was probably the second half of 2012, where we, you know, it started to take off. We started to divert resources from Zimride over to Lyft. And then really in January of 2013, we said, okay, we need to go all in on this. This is a massive opportunity. This has been incredibly successful with a small amount of focus. But that was a really, in many ways, a tough moment because we had worked for four or five years on ZimRide. And we were deciding to divert all of our attention to an entirely new model. So you guys sold ZimRide? Exactly, yeah. So we sold ZimRide to Enterprise Rent a Car and basically the assets, the contracts with the universities, and retained the

entire team and went all in on Lyft. So in that first year, how many people downloaded the app? Best guess, tens of thousands. And you guys, your model was you were taking a cut out of every ride, right, like a percentage or something like that. So the rate is calculated based on distance and time. And then Lyft receives a commission off of that, 20 to 25 percent off of the overall rate, the rest goes to the driver, as well as a trust and service fee. So what, so, so when you start this, right, did you, I mean, now we look back and say, oh, of course this is going to work, but presumably like you started to face a lot of backlash and obstacles from cities that had pretty entrenched, you know, taxi cab commissions and drivers

and established regulations about who can pick people up and drive them for money. Yeah. So about a month into launching lift, this was in. later at 2012, we received our first of many cease and desists from various different governments. And it basically said, you need to stop operating. And what did you do? We read the letter, and we had already done our legwork and research on the laws, and we asked for a meeting. And I think that was followed by a second cease and desist, but we eventually got a meeting with who? With the Public Utilities Commission.

Okay. And our approach to regulations is to really understand the motivations and the needs of the regulating entity because we understand they have a very important job. And so we went in and asked that, we said, hey, look, is this a matter of public safety or is this about existing industries? And they said, public safety, of course. And so we said, we don't own vehicles. We don't have employees driving for us. So we don't fall into the category that you currently have. But we've looked at the category that you currently have. but we've looked at your safety regulations since that's the most important thing. And we've gone above and beyond on the background checks, which actually still to this day for limos in California are not required. We've done driving record checks with more strict criteria.

And we've created an insurance policy. That's a million dollars. And theirs is and was $750,000. And we said, so if it's about safety, what we'd love to do with you is to create a new category that, allows you to enforce that we are doing these things that we tell you we're doing, but that we're able to do this in a safe way that brings more affordable transportation to California. I mean, they were threatening to sue you, right?

They were threatening to shut us down, you know, in force against the drivers that we're driving in the community. Were you scared about that possibility? Yes. Because you had sold off Zimride and you put all your eggs in this basket and it could have been shut down. Yeah, I think I literally had a headache for one month. I had to go check and make sure nothing was wrong. But it was an incredibly stressful time because, as you said, we switched all of our focus over from Zimride to lift. And the opportunity was massive. And the regulatory obstacles were just as massive. How long did it take for you to overcome those initial regulatory challenges? Like, was it months, years? I'd say at least a year, probably for that first year, if I was to pick the one thing I spent most of my time on was the government relations and was working to create a new regulatory category for the space. And then, you know, not just doing that in one state, but being able to demonstrate that in multiple cities and states.

So when you started to expand outside of San Francisco and then L.A., how fast were you expanding to other cities? Was it like every month, every day, every week? In that kind of earlier period, it was more every few months. Maybe the most intense moment was April 24th, 2014, when we launched 24 markets on the same day. Wow. Who were your competitors? Because Uber was still doing mainly black cars, right? Yeah, and there really wasn't, there were some other companies that were trying in this kind of peer-to-peer person.

vehicle space, but there wasn't a large amount of competition. There were still so many questions looming around regulatory, frankly, that I think, you know, people were waiting back to see how that played out. Your focus was on this like Airbnb model where you've got a car and it's going to be a community and it's going to be this sharing economy thing. Like what happened when all of a sudden Uber started doing UberX where they basically copied your model? Yeah, so, I mean, we assume that because the opportunity was so large and everything we were seeing, that there would be more competition coming. And so it wasn't a big surprise. And it just, you know, I think over the course of the few years we've been doing this, it's made us better.

And frankly, I think both companies grow faster. How do you differentiate yourself from them? Like, how do you make the case that actually you should go with us and not them? Yeah, so our focus in the early days was we needed to ensure we solved the two most important things for our customers first, which was reliability. You can get a ride when you want it at the best possible price. Once you have parity on those, and now we do, we've built up enough infrastructure, enough base of driver community that you can get a ride within, on average, three minutes in these cities. Then it's about the experience. In today's world, by treating drivers better than any other company, the ability to have cashless

tips, get paid in the same day, create an environment where drivers are respected by passengers, and that then translates to passengers being treated better than on any other service. Are you a competitive person? Do you look at your competition and really want to beat them? Yes, absolutely. Like, how much does that drive you, that idea? that's a I'd say to a large degree I used to play sports whether it was running track or playing soccer and you know I started running track as just to stay and save for soccer and then I wanted to win the race

and I wanted to go under five minute mile and was able to do that and so I think often now today you know we're in what could be described as a mile four laps and we're in lap two and And, you know, lap three is typically in that race the most critical lap where you set yourself up for victory. And so I think we're making a lot of important moves and decisions now that should allow us to win the race. Do you take it personally? Like, you know, Uber obviously has, you know, been a pretty tough competitor. And at times there have been accusations that they've kind of tried to sabotage you or maybe you guys have to them. And is it personal to you?

Is it something that you really feel emotionally? Yeah, yeah, definitely. I mean, is part of it, well, it's just, this is just business and, you know, in business, there's days where you hate your competitor, but you all still respect them, or is it really like, no, actually, this is really personal, I don't like them. I think we take it, and I take it personally, which drives me, because I believe so strongly in what our team is working on and why we're working on it. We believe that by building what we're building, we can make our city.

designed around people instead of cars. And by having the right values and ethics, we can impact society in a way that's bigger than the transportation we provide. And so I take it personally because we're out to win for the values that we represent. I don't let that distract me. I let that fuel the fire.

And I think in the early days, when I was less mature, it would distract me. But today, I think it just fuels the desire to push harder. How many people work for Lyft today? So at the company, there's about 1,300 people. And then drivers, do you disclose that number? No, we've said several months ago that, you know, last year there was over 300,000. And you can assume that this year that number has grown quite significantly.

And we think about like these ride-sharing companies like Uber and Lyft. as this thing, this permanent thing that we all come to depend on. I've got the apps for both companies on my phone. Sorry, I do have both. And they've become a part of our lives. Like I can't even remember what life was like before Lyft or Uber, right? And yet we have to imagine one day something is going to replace you guys. You know, people are talking about driverless cars, for example.

Do you ever think about that? Sure. I mean, it's that, you know, I saw the rise and fall of Lehman right before my eyes, and I think that that creates the right sense of awareness and when building a company that you've seen something like that. But when you look at the future, you know, you talk about autonomous cars. And autonomous car is not going to drop out of the sky and be able to do 100% of our trips.

That's not real. What's real is that over the next couple years, it'll be able to do a few percent of our trips, 10% of our trips, 10% of our trips, 50% of our trips. And what that means for this opportunity is that we're going to be able to address that ultimate goal we have of ending car ownership and providing a full alternative to owning a car. In fact, what you'll be able to do is by likely a miles plan from us, a monthly subscription, to handle all your transportation needs.

And over the next few years, some of those trips will be done by human drivers and others will be done by autonomous vehicles to the point that we can provide you with amazing hospitality experiences on wheels. John, when you look back at, you know, contacting Logan over Facebook and then working on the side project and moving to Manlo Park

and pouring your heart and soul into Zimride and then starting lift and watching it turn into a company that's valued over $5 billion. Do you sort of look at that and sort of say to yourself, okay, I can, like, breathe out a sigh of relief. Like, we're okay, we've made it, we've gone, we've passed the hump.

Or are you constantly worried and vigilant every day? Yeah, no, I don't think there's a sigh of accomplishment. I think there's the bar keeps getting raised, and that's the bar that we raise on ourselves. The goal over the last 10 years for Logan and I hasn't changed. You know, it was Zimride, and then it was Lyft, and then it will have autonomous implications. until we've accomplished the fact that you don't need to own a car in a city,

until we've accomplished the fact that we don't need as many roads and parking lots in our cities, until we allow for our cities to be redesigned around the people living in them instead of the cars that are parked in them, then we're not happy. John Zimmer, co-founder of Lyft. Since we first ran this episode last February, Lyft's valuation has more than doubled to over $11 billion. And by the way, John Zimmer will be joining us live

for how I built this summit in San Francisco on October 16th. There's lots more info and tickets available online at npr.org slash summit. And please do stick around because in just a moment, we're going to hear from you about the things you're building. Hey, thanks so much for sticking around

because it's time now for how you built that. And today we're going to update a story we ran about a year ago. This one comes from Kyle Ewing of Denver, who got his idea for a business in kind of a roundabout way. I got the idea when I was trying to create a product for students traveling abroad. This product was a backup copy of their passport. Kyle was trying to sell backup passports online

that would be as durable as the real thing, but also tearproof and waterproof. The problem was the market for this type of product doesn't yet exist. So I was trying to create the market, which proved to be very difficult, and I was trying to figure out what to do when the phone rang. And the guy on the phone, it was actually somebody who said, hey, Kyle, I love your passports. I even bought four of them for my kids. And he said, all four of my daughters use the SOS World Pass. I love it.

But I have a question for you, can I buy a case of your paper? And at that moment, Kyle realized that the waterproof paper he was using for the passports was actually a better. business idea than just the passports. That moment was me standing up out of my chair and spiking the pencil and doing a touchdown dance because it was an immediate light bulb moment where I realized this failing business just grew legs and all of a sudden I had a million and one ideas of what I could use waterproof paper for. And that is a pretty long list.

Waterproof restaurant menus, waterproof children's books, waterproof maps, field manuals for the U.S. Navy, nautical charts for the U.S. Coast Guard. Now, to back up just a little, Kyle is not an engineer, but when he was working on the passport idea, he made a bunch of calls to chemical experts, and he told them he was looking to make paper that was totally waterproof, much more waterproof than, say, you know, just laminating something. So iteration after iteration, we finally got to paper that's both waterproof and rip-proof, and something that can also receive and hold ink when it's been printed on. He eventually

found a manufacturer in the U.S. to make a polyester pulp that could be pressed and rolled into waterproof paper. But he wanted to tinker with the product himself, so he moved a laser printer into his living room. But when I put it through my home laser printer,

immediately white smoke came out of the printer and it smelled like burning plastic. And the entire printer was trash after that. very supportive wife Ashley came home that night. She smelled the burning smell and she said, Kyle, I love this arts and crafts project you've taken on, but I think it's time to get to a more realistic product or business idea. But one printer and seven iterations later, and Kyle says he came up

with the most waterproof paper on the market, and he has the clients to prove it, including, yes, the U.S. Navy and Air Force, several restaurant and hotel chains, university labs, even Google. A good entrepreneurial day is when you sit back, you look at your sales or you look at the new client you just got and you think, oh my gosh, this is a real business. I'm building something that matters and it actually is a success. Since we last spoke with Kyle last year, his revenue continues to grow. He'd rather not give the specifics, but suffice it to say it is in the millions. He now has a team of 10 employees, and his list of clients is growing too. It includes UPS and the L.A. Kings. If you want to tell us your story, go to build.npr.org.

We love hearing what you're building. And thanks for listening to the show this week. If you want to find out more or hear previous episodes, you can go to how I built this. NPR.org. Please also subscribe to the show at Apple Podcasts or wherever you get your podcasts. And while you're there, please do give us a review. You can also write to us at Hibt at npr.org. And if you want to send a tweet, it's at How I Built This.

Our show is produced this week by Casey Herman, Rumpteen Arablewe composed music. Thanks also to Neva Grant, Sanaz Meshkampur, Nour Kudsi, and Jeff Rogers. Our intern is J.C. Howard. I'm Guy Raz, and you've been listening to How I Built This. from NPR. We all have moments where our limits are tested. What I want to talk about is how we define those limits and what it means to exceed them. I'm Jay Williams.

Check out my show The Limits, where I talk to people who have overcome theirs and achieved great things in business, sports, and culture. Listen to The Limits from NPR.