Another Boston Consumer Tech Success Story, Langley Steinert and CarGurus Bring Transparency to the Car Buying Experience
Get to know CarGurus Founder & CEO, Langley Steinert – the under-the-radar entrepreneur behind two of Boston’s most successful consumer tech companies.
Last month auto-shopping website, CarGurus, moved into a posh new office outside of Kendall Square in Cambridge. Nearly 50,000 square feet of awesomeness, the new headquarters houses the company’s roughly 170 employees, including engineering, sales and client service, ad ops, content, marketing and internal operations staff.. Employees enjoy catered lunch five days a week, a fully loaded game room, automated standing desks, beautiful views of the Boston skyline and many other workplace perks. A workspace like this, however, wasn’t always such a luxury.
Launched in 2006 by Langley Steinert, CarGurus experienced its early growth out of a small town house on Mount Auburn Street in Harvard Square. “We had 20 of us working out of this house… It was time to move on,” Steinert said. The company spent two subsequent years with its team spread across three offices in Cambridge until the move to 2 Canal Park.
Steinert, a Manchester, MA native, was also a co-founder of TripAdvisor. A graduate of Georgetown, he went on to Dartmouth’s Amos Tuck Business School in New Hampshire. Soon after B-school was when Steinert got his first taste of startup life. He first served as Vice President, General Manager at Papyrus, which was acquired by Sierra On-Line in 1996. From there Steinert went on to a role as VP Marketing at Viaweb, which was acquired by Yahoo two years later. A nice early track record.
After a short stint as a Venture Partner with Flagship Ventures, Steinert joined forces with Steve Kaufer in 2000 to launch TripAdvisor, now the largest online travel site. After Expedia acquired TripAdvisor in 2005, Steinert moved on – telling me, “I didn’t want to work for someone else again.”
So, after leaving his Chairman post at one of the world’s largest travel websites, Steinert has gone on to build one of the world’s largest auto-shopping websites, which sees more than 15 million unique visitors per month and has been profitable for six years – a fact Steinert is clear to point out.
So, how has Steinert done this? His simplest answer to me was; “Perseverance.”
A look inside the new CarGurus Cambridge Headquarters [Office Tour]
CarGurus - the product. What makes the engine run so smoothly?
Ok, now you know the man behind the company, so let’s dig into the actual product.
CarGurus is your go-to spot to buy a car, but why? Transparency.
The site analyzes millions of car listings daily and ranks shoppers’ search results according to a proprietary algorithm that takes into account vehicle specs, price and users’ dealership reputation ratings. Transparency, Steinert says, “is the key differentiator” for CarGurus. In fact, it’s one reason he went into the industry to begin with.
“Netflix is doing it for entertainment. Zillow and Trulia are doing it for real estate. We’re doing it for auto shopping and improving a task that has bothered consumers for decades.”
What stood out for me is that CarGurus makes it so easy for shoppers to see how car listings stack up in their given marketplace. Using the mounds of data the company collects – from both sides of the marketplace – they tell the shopper what the best deals are, then help them connect with the selling dealership.
As Steinert puts it, “Our position is to help consumers find great deals from great dealers.”
The recommendations the site provides go beyond just pricing as well. We all know the car-buying experience can be a grind so CarGurus leads shoppers to dealerships who are consistently viewed as pleasant and provide a welcome experience.
Steinert funded CarGurus with $4.5 million. That money came from himself and a cast of friends (including Kaufer) and family, but zero from venture capitalists. While Steinert realizes he was in a fortunate and rare situation, his stance on venture funding was clear – “Stay away if you can. If you must raise from VC’s take as little as possible.”
The fact that CarGurus has no venture funding is one reason the company has yet to and is not being pressured to go public. That will come, Steinert admits, but more rapid growth will come first.
While CarGurus has been growing steadily (remember, they’ve been profitable for six years) it wasn’t until more recently where traction took to a new level.
At the end of 2014, Steinert reached out to longtime friend, Sam Zales, who previously held leadership and Board positions at several Boston success stories, such as BuyerZone (acquired by Reed Business), Performable (acquired by HubSpot), Locu (acquired by GoDaddy) and ClickSquared (acquired by Zeta Interactive). Like most successful entrepreneurs, Steinert is a good recruiter and got Zales to head up dealership sales and International growth.
A year later, CarGurus has increased its dealer customer base from 2,500 to 9,000 and increased new customer revenue 4X. Dealers partner with CarGurus with subscription packages that connect them with customers in the local market and gain additional marketing exposure for their dealership. 2015 revenue, I’m told, is projected to surpass nine figures.
I spent some time with Zales to learn more about dealer operations and International growth. The modest Connecticut native was quick to lay off credit to his team:
“I’m lucky enough to be surrounded by great leadership and a team, from top down, who energizes me on a daily basis. They do the hard work - I just implement a process.”
That team Zales hit so much on has also grown immensely under his watch. Sales and service had roughly 35 employees when he joined and that group is now over 100.
Zales, whose positivity and energy is contagious itself, is now taking the growth operation outside of the US. They’ve quietly been in beta mode in Canada and will just this week turn on the revenue stream in our neighboring country.
An impassioned Zales explained the process:
“For a few months we’ve had dealers signing up for free trials in Canada. Since then, we’ve had dealers asking for more, but we wanted the same quality user experience as we have in the U.S. We had data to gather and needed both sides of the marketplace operating at scale. Now, it’s optimal and we can turn on our paid programs.”
With its first non-domestic country up and running, they’re not far from the next. Zales tells me within a couple of weeks they’ll be launching a presence in the UK. Details were kept at bay, buy the expansion beyond America is well under way.
So what does the future hold for this Cambridge-based company and its founder who stands clear in the face of the ‘Boston can’t do consumer rhetoric?’ Well, an IPO is inevitable, but the timing is unclear. Steinert, admitting CarGurus will go public at some point, couldn’t commit to any timeline, but knows it’ll be the liquidity event his employees will want and appreciate.
In the more immediate future, Steinert and his leadership team are focused on their biggest challenge. Not the International expansion itself, but finding the best and right talent to join them at CarGurus to enable that growth at scale.
As for that whole Boston doing consumer dispute, Steinert can’t quite wrap his head around it.
“I don’t understand the argument. If I were to start a company, it would always be in Boston.”
With Steinert’s track record, who can argue?