In our latest episode of the Build Versus Buy podcast, we had the opportunity to sit down with Evan Goldin, co-founder and CEO of Parkade, and former product manager at Lyft. This conversation dives deep into a critical decision Evan and his team faced at Lyft: whether to build an internal applicant tracking system (ATS) or buy an existing solution to streamline their driver onboarding process.
Understanding Lyft's Core Needs
As Lyft was rapidly expanding back in 2012, the company faced a supply constraint — particularly in onboarding new drivers efficiently. Evan shared insights into how they needed to onboard drivers quickly to meet increasing ride demand. Speed was crucial, not only to match the demand but also to maintain drivers’ interest and excitement in joining Lyft. This led to internal deliberations about whether the ATS and driver onboarding were core functions at Lyft. The team had to answer essential questions: Is our core business providing rides, or does it include onboarding systems for drivers as well? The conclusion they reached drove significant strategic decisions.
The Case for Building Internally
After exploring various options, including modifying Salesforce or acquiring existing solutions, Lyft decided to build a custom ATS. The decision to build was not made lightly. Evan highlighted an inspiring visit to Cherry, a startup with a seamlessly working onboarding system. This visit proved pivotal, showing that a custom solution could yield substantial efficiency gains. By designing an internal ATS, Lyft was able to customize their onboarding to trigger actions like DMV checks the moment a prospective driver submitted their information. This innovation reduced their onboarding process from 21 days to under seven, making their operations significantly more efficient.
Beyond the Build
Building their ATS wasn't just about overcoming operational hurdles; it was also about maintaining a competitive edge. By developing a system tailored to their unique needs, Lyft could innovate further with features like the mentor program, allowing seasoned drivers to help onboard new ones. Even though the ATS was born out of necessity, its development tapped into wider industry needs. Subsequently, companies like Fountain emerged, offering ATS solutions tailored for the on-demand workforce, showing how Lyft's early innovations pre-dated broader market trends.
Lessons from Lyft’s Journey
Evan's story offers several takeaways for companies facing their own build versus buy dilemmas:
- Define Core Processes: Determine what functions are central to your business. For Lyft, providing drivers was as crucial as providing rides.
- Evaluate Market Solutions: Thoroughly understand available tools and their fit within your ecosystem. Sometimes, existing solutions might not meet specific, mission-critical needs.
- Measure Impact on the Business: Building internal systems should significantly improve operational efficiency and competitive positioning.
- Consider Future Needs: An immediate solution should also be adaptable for future growth and innovation.
Looking Forward
As Evan continues his journey with Parkade, now focusing on solving parking challenges, he brings forward the lessons learned from past build versus buy decisions. This story is a reminder that the pathways companies choose can manifest in substantial operational enhancements and market innovations. Stay tuned for more episodes where we delve into strategic decisions that shape companies. For those interested in exploring or improving parking efficiencies, Evan invites you to connect and explore opportunities at Parkade.
Evan's insights remind us that the choices between building and buying are not merely transactional—they're transformative. Here’s to making the right call on your journey.
