Professional Documents
Culture Documents
A serial entrepreneur and investor with several successful exits, Doyle was familiar with these
types of recruiting calls but less familiar with GasBuddy. He and
website were . He also recalled
, if measured in tech industry years. Doyle could not
help but think that spending even a few minutes discussing the possibility of joining a 15-year-old
company focused on cheap gas prices would be a few minutes too many,
many especially given the icy
gauntlet he faced on his ride home.
Retail Services Organization. In that position, he helped PayPal client Cumberland Farms bring
SmartPay to market and had become keenly interes
interested in the payments industry.
From his work with Cumberland Farms, Doyle also knew that convenience stores (c-stores)
often co-located
located with fuel stations represented a strong and rapidly growing opportunity. C-store
retailers were desperate to boost pump-to-store traffic. Current attempts were largely fragmented
by brand and by independent dealers within brands. If GasBuddy made good decisions and
executed these we well,
ll, it could evolve its popular app into a leading platform for the pit-stop
ecosystem, serving consumers, gasoline
gasoli suppliers, c-store chains, and beyond.
Copyright © 2018 Babson College and licensed for publication to Harvard Business Publishing. All rights reserved.
No part of this publication may be reproduced, stored, or transmitted in any form or by any means without prior
written permission of Babson College.
GasBuddy: Fueling Its Digital Platform for Agility and Growth
BAB420 MARCH 2018
Doyle was also intrigued by the challenge of transforming a maturee company into a startup
startup,
though one that would come with a large and passionate consumer base and a steady
teady stream of
revenue. As he hung up the phone to face his long ride home, Doyle wondered, CCould
ould this
this 15-
15
year-old company be the next startup I was in search of?
To incent timely and accurate reporting of gas prices, GasBuddy held a quarterly electric scooter
give-away.
away. Each time a user reported gas prices, the user would earn points that would convert to
chances on the scooter drawing.
drawing. However, despite the incentive and the best of consumer
intentions, there was a practical limitation to timel
timely and accurate reporting. Most consumers did
not have access to the GasBuddy website while in their cars, forcing a gas-price reporting delay.
The reporting delay meant that some prices were outdated by the time they were reported or the
prices were not reported at all
all. A website-centered
consumers.. Consumers would
would have to plan ahead in order to take advantage of the competitive
pricing information.
GasBuddy
Buddy also offered a range of free tools to help further engage consumers and build the
GasBuddy brand:
Gas Price List By far its most popular tool for both local drivers and those on road trips.
Trip Cost Calculator More likely to be used by those planning road trips.
Heat Map Popular with news outlets and price-sensitive travelers.
Gas Price Charts Popular with news outlets and price-sensitive travelers.
2
3 https://www.gasbuddy.com/NewsRoom/PressRelease/9?fvm=1 , accessed January 2018.
4 https://en.wikipedia.org/wiki/GasBuddy, accessed October 2017.
https://en.wikipedia.org/wiki/GasBuddy
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In addition, GasBuddy built a team of well-regarded fuel analysts who studied fuel industry
information, including the data reported by consumers. News outlets often quoted the
the analysts.
analysts
With its free website tools and the brand exposure earned by its analysts, a growing number of
consumers and companies came to rely upon the GasBuddy data.
Within its first year, GasBuddy.com had spawned 110 regionally focused sites across the US and
Canada that crowdsourced and reported gas price information within local
local markets
markets.. This number
would eventually grow to more than 250 sites including bostongasprices.com,
bostongasprices.com
sanfransiscogasprices.com, and so on. 5 To sustain these websites and its free services to
consumers, GasBuddy sold ads on its corporate and regional websites.
websites
tes
In 2008,
DoublClick,6 to sell ads programmatically. With the addition of programmatic exchanges
exchan to the
manual efforts of its sale team, business grew to new levels
levels.7
In 2009, GasBuddy launched OpenStore, a white-label website and mobile app development and
digital marketing service. Through OpenStore, GasBuddy helped convenience
c stores and chain
brands reach and engage with consumers. Its first OpenStore business
also its first convenience store customer.8
5 Levi Hamilton, GasBuddy Vice President of Product Management and General Manager of Canada, telephone
interview by Clare Gillan, Babson College, August 8, 2017.
interview
6 https://www.wired.com/2008/03/google
https://www.wired.com/2008/03/google-seals-do/, accessed October 2017.
7 Levi Hamilton, telephone interview by Clare Gillan, Babson College, August 8, 2017.
8 Ibid.
9 http://mashable.com/2010/07/02/ios
http://mashable.com/2010/07/02/ios-android-developer-stats/#n3Ztxwo9E5qu, accessed October 2017.
3
GasBuddy: Fueling Its Digital Platform for Agility and Growth
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which made the other data we were able to capture all that much more valuable to our business
customers. 10
Thee popularity of the smartphone and the improved GasBuddy customer experience
experience, combined
with historically high growth in gasoline retail prices in North America (see
see Exhibit 1,
see 1, Gas Retail
Price History), pushed consumer interest in GasBuddy to new levels. By May 2011, six million
people had downloaded the app and it was number two on the most popular list for the entire
Google Android app store. 11 With its expanding consumer base, GasBuddy signed on a large
banking client, securing its first multi-million dollar, multi-year
year advertising contract.12
During first six years in the app market, the GasBuddy app continued performing
well, especially within travel app categories,13 and won several awards including Time Magazine
Top 50 iPhone Apps.14
The company continued to add features to the app through occasional updates. The features better
accommodated the ads business, and improved navigation and overall user experience. The app
also began to capture and present information beyond gas prices. For instance, it iincluded
information on amenities, such as restrooms and coffee, that could be found at fuel station
locations.15
Threats Loom
, it remained largely based upon the original design and
infrastructure. During peak demand periods, the GasBuddy
GasBud app could experience outages. It was
not unusual for someone somewhere to complain that they were unable to access updated
GasBuddy information.16 Also, competitive
etitive pressure was building from n
navigational services such
as Google Maps Waze17 posed a serious threat. Not only were
these services backed by deep development and marketing pockets, but they already had wider
access to similar audiences.
udiences It was certain that these services would attempt to deepen
engagement with GasBuddy consumers and compete with GasBuddy for its business customers
as well. To secure its future, GasBuddy would need to stand for more than just cheap gas.
10 Levi Hamilton, telephone interview by Clare Gillan, Babson College, August 8, 2017.
11 https://www.inc.com/articles/201105/small-business-success-stories-gasbuddy.html, accessed October 2017.
https://
12 Levi Hamilton, telephone interview by Clare Gillan, Babson College, August 8, 2017.
13 AppAnnie, http
https://www.appannie.com/dashboard/home/, accessed October 2017.
14 https://archiveblog.gasbuddy.com/posts/Time
https://archiveblog.gasbuddy.com/posts/Time-Magazine-GasBuddy-One-of-Top-50-Apps-for-iPhone/1715-
574036-2487.aspx,
574036-
574036 -2487.aspx accessed October 2017.
15 Levi Hamilton, telephone interview by Clare Gillan, Babson College, August 8, 2017.
16 Levi Hamilton, telephone interview by Clare Gillan, Babson College, August 8, 2017.
17 https://techcrunch.com/2013/06/11/its
https://techcrunch.com/2013/06/11/its-official-google-buys-waze-giving-a-social-data-boost-to-its-location-and-
mapping-business/, accessed January 2018.
mapping
4
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a combined total of 549.8B. 18 By comparison, US online retail sales were $394.9B.19 Doyle aimed
to play a more central role in this multi-sided opportunity, which spanned convenience stores,
fuel suppliers, and consumers. In addition to boosting pump-to-store traffic, GasBuddy would
collaborate with c-stores to improve the in-store
store consumer experience and collect valuable
consumer intelligence related to overall pit-stop
stop behavior and experience
experience.. In Doyle words,
are going to take this company from Ted Nugent to Jimmy Neutron. What
What Yelp
Yelp is to small business
and hospitality, we will be to convenience stores and fuel. 20
To achieve this vision, Doyle determined that GasBuddy had to do five things:
1. Change the culture of GasBuddy from that of a 15-year-old, ld, single-product
single product company with
a large and loyal customer base to a startup-minded
minded company in pursuit of a new,
new multi-
sided ecosystem-driving business model.
2. Rebrand the company to stand for more than cheap gas and redesign its aging app to keep
its value to the consumer base strong and growing.
3. Drive business-side de revenue through more efficient teams, a strong advertising business
business,
and the addition of business-side products aligned with the pump-to-store pit-stop
opportunity.
4. Update the aging digital platform for agility, scalability,
scalability and security.
5. Move to payments as quickly as possible to open up new consumer monetization
possibilities.
During his first several months, Doyle would focus on culture, organization, and building out the
strategy behind his vision for the company. His near-
near
near-term
-term goals included having 80% of revenue
coming from annual recurring revenue (ARR),
(ARR), multi
multi-year agreements
agreements, and programmatic selling
of ad inventory by thee end of 2017.
2017 Then he would turn his attention towards building strategic
partnerships in the areas of payments, data, and large c-store
c chains. Beyond this, his plans were
less well-defined. According to Doyle
had to fix the culture and make sure our consumers are being well-served.
well Then we need to see.
The decisions one makes for a sale in 1 2 years may be different than the decision one makes for
a longer- 21
Culture
Doyle first priority was to transform the many layers of GasBuddy to be more like a startup,
He knew this could take a full year. The executives he
brought in all had startup experience or had demonstrated a startup mindset within a larger
company.
decade. For some it was the only company they ever knew.
The development
development team would be responsible for an evolved digital platform that would support
. The team also made up 55
was essential that the team become highly motivated, agile, and tuned for value creation. Doyle
enlisted
isted the assistance of Bob Brez
Breznak, who had joined GasBuddy as the Director of Engineering.
Breznak had headed up engineering at Doyle , and joined Doyle at
18 http://www.convenience.org//Media/Press_Releases/2017/Pages/PR040517.aspx#.WnDFwqinE2x, accessed
http://www.convenience.org//Media/Press_Releases/2017/Pages/PR040517.aspx#.WnDFwqinE2x
January 2018
2018.
19 https://www.digitalcommerce360.com/2017/02/17/us
https://www.digitalcommerce360.com/2017/02/17/us-e-commerce-sales-grow-156-2016/, accessed January 2018.
20 Walt Doyle, GasBuddy CEO, interview by Clare Gillan, Babson College, Boston MA, August 9, 2017.
21 Ibid.
5
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brand was most experienced. Since the app was overdue for a major new desig
design, the branding and
app redesign efforts were closely aligned.
was at a crossroads
crossroads, and there was a difference of opinion about how growth would occur. 25
consumers pay less for
2017.
25 Sarah McCrary, GasBuddy COO, telephone interview by Clare Gillan, Babson College, Boston M MA, July 25, 2017.
6
GasBuddy: Fueling Its Digital Platform for Agility and Growth
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gas. However, its services remained entirely free to consumer-sideside users. GasBuddy struggled to
cover the cost of these free services through its advertising business,, selling pricing data to a third
party, and the bit of revenue it made though OpenStore. However, GasBuddy future growth
would require both continued growth in consumers and stronger growth in business-side
business side services
in order to fund consumer expansion and sustain GasBuddy as a company.
customers were predominantly advertisers. While this business would no doubt grow as
anger for GasBuddy would be in business
intelligence products and helping to orchestrate the relationship between businesses and
GasBuddy consumers.
The new brand and the new app release would therefore need to represent the evolving interests
of both consumers and business customers. The executive team was painfully aware that serving
both consumer and business-side
side audiences meant that, from time to time, they would have to
make difficult decisions at the intersection of competing interests
interests. For instance, through
programmatic selling and the efforts of its sales team, GasBuddy was selling an increasing number
of ads. However, the company was in a dangerous cycle. The more ads the team sold, the more
ads had to be accommodated in the app, and the more this encroached upon the app user
experience, the more this could deter consumerr use, and consumer
audience and related services could become to business customers.
As part of the new brand and app launch, GasBuddy decided d ecided to reduce ad inventory while
increasing the price per ad. By reducing ad inventory against the same audience, the value of
impressions would grow, which GasBuddy would leverage to justify a rate increase. At the same
time that GasBuddy moved to reduce the number of ads it would sell,
sell it also had to tread carefully
in terms of type of ads.26 According to Miri Bauman, Vice President of UI/UX,
Reducing product inventory is generally not welcomed news to a sales team. Could they really
justify higher prices to offset fewer sales, especially while pushing back on formats loved by
advertisers?
ertisers? Doyle calculated that this would become a win for all involved parties. By the end of
2016, increased ad revenues would prove him right.
Another challenging decision was how to capture a widening range of information on consumers
in order to build out its business
business-side services. Initially driven by business-side interests,
GasBuddy decided it would add ratings to its app. Consumers would provide more information
only if there were a strong return for them in doing so. When making feature and design
recommendations, Bauman applies this principle
principle:
28
7
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Consumer-side advocates within GasBuddy were skeptical about the addition of ratings, ratings
expressing concerns that 90% of customers simply wanted gas prices. Even if consumers wanted
this information, they added, the more information captured and provisioned within the app, the
bigger the risks would be. Concerns included busy screens, slower-loading
loading pages, possible data
charges for consumers
nsumers on limited data plans, and too many clicks for a user to get to the desired
return. Nevertheless, GasBuddy decided it would move forward with its its plans to add ratings,
attempting to make the addition as valuable to consumers as to businesses throug through careful
attention to UI/UX and attention to the types of information that users would also find valuable
(see Exhibit 2, What Do GasBuddy Consumer Customers Care About?).
New Brand
To help the company unify under one strong brand
direction, GasBuddy
Buddy hired an outside consultant. With the help of its consultant, GasBuddy
eventually settled on the tagline . As explained in a GasBuddy press release
announcing its new brand and focus,
Enhanced Filters
To make it easier for consumers
consumers to find the fuel station that best fits his or her needs, GasBuddy
introduced these filters:
SmartSort , a
feature current
location by distance (half a mile, one mile, two miles, and three miles) and then by price.
Brand If a consumer prefers
prefer a certain brand of fuel or c-store, the consumer can filter it so
only those will show up on their search list.
Amenities Consumers could now search for stations with specific amenities such as ATM
machines, lottery ticket sales, bathrooms, and more.
29 After More Than 60 Million Downloads, GasBuddy Pivots to the Future with Reimagined Brand and
https://www.gasbuddy.com/NewsRoom/PressRelease/122?fvm=1,
accessed October 2017.
8
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Soon after, a feature was added enabling consumers to leave a comment. The comment would be
shared with convenience store owners through a new product, Business Pages, that GasBuddy had
in development. Through the integration of these efforts, consumers would
uld now be empowered to
share experiences they felt strongly about with other consumers, or privately with convenience
store owners. In turn, owners would gain valuable information and a way to reply directly to
unhappy customers, when permission to do so was granted.
Cleaner Interface
Accommodating the growing list of features within the app was challenging from a UI/UX design
perspective. The design team spent countless hours reviewing the shapes, sizes, and placements
of visual elements and testing designs
igns with consumers. In the end, the new app offered a cleaner
interface and icons allowing for easier viewing. Actionable information was easier to see, making
it easier for consumers to navigate with fewer distractions.
Home Screen
The initial GasBuddy app had a home screen, but it was rarely used, often bypassed when users
home screen or not was
one of the more challenging design decisions, being greatly debated within the company.
company On one
side of the debate was the desire to help consumers access cheap gas prices as directly and
efficiently as possible. Eighty percent of GasBuddy users
users were day-trippers
day who, at the time,
seemed most interested in finding cheap gas. Plus, a home screen
scr featuring content and services
would add to the complexity of information GasBuddy was already sstruggling to present on small
smartphone screens, s, most commonly navigated by a single thumb
thumb. On the other side of the debate
was the desire to build awareness for and Shortly
before launch, designers decided to update the current home screen rather than eliminate it. ItI
would be easier for GasBuddy users to acclimate to an updated home screen than to lose the home
screen and have to re-acclimate
acclimate later.
As a placeholder for services to come, GasBuddy filled the home screen with content it hoped
users would find valuable. For instance, it a
added a brand new My Community card to the home
screen to let consumers know
Within a few months of launch, the home scre
screen offered the following features:
Find Gas Near You access aat-a-glance gas prices, still the most popular part of the app.
My Favorites access favorite fuel stations.
Up for the Challenge access the most important current challenge near consumers.
Free Gas Drawings redeem points and enter the daily prize drawing.
To improve the user experience (often referred to as UI/UX), GasBuddy added home screen
personalization. This enabled a consumer to access features from the home screen that he or she
found to be most useful.
Gamification
From inception, GasBuddy depended on enthusiastic user loyalty to keep its gas price database
up to date. Still a crowdsourced model, it would be nothing without the time and effort of its users.
GasBuddy users were intrinsically motivated by a shared passion to help one another avoid
overpaying at the pump and putti
putting pressure on stations to charge fair prices by fueling price
competition via community
community-wide price reporting and sharing. However, while gas prices can vary
9
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by as much as 10 20% from station to station, they tend not to change wildly from day to day
within a commutable region unless there is an unusual crisis such as a storm, operational issue,
or political development that influences the fuel supply chain. Since the majority of GasBuddy
users are daily commuters, and familiar with the stations along their commute, the majority of
them would not be compelled to post daily if it were not for the strength of its Gamification (see
Exhibit 3 for an example of a gamification challenge). One reviewer wrote the following:
following
are around me, and the map feature shows you which stations are closest
vacation and need to return a rental car. The app can help you avoid those
high-priced
priced stations around the airport that feed on uninformed tourists.30
The success of its gamification, however, introduced a quandary. The users went crazy for the
leader board and challenges. Points grew into the millions for some users, beyond what could be
translated into daily gas card drawings . With the new app release, GasBuddy
introduced
oduced the offer of achievements that could be earned by completing daily, weekly,weekly and
monthly challenges. Unlike points, achievements offered recognition but no expectation for
infinite growth of value. According to Hamilton, sers just like to collect things,
31
Beta Forum
In addition, GasBuddy created a beta s most dedicated
users.. Together these users submitted nearly half of the gas price information
information. The forum was an
opportunity for
or these active and influential users to provide advice but also to complain about
planned changes they did not like. This gave GasBuddy the chance to explain the rationale behind
the changes, such as the benefit of a home screen
screen, as the company added consumer services.
Winning support prior to launch proved to be valuable. At the time of roll out, beta forum
participants often defended against complaints made in public forums.33
participant
A/B Testing
Heavy use of A/B testing fine-tuned the new design and solved the occasional internal debate
involving an app decision
decision. For its A/B tests, GasBuddy would create two experiences within a beta
version of its app and then watch the data. For example, in test A, one version of the beta app
forced one set of new users to fill out three screens of registration information. In test B, another
10
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version of the beta app allowed a different set of new users to skip the three screens. Registrations
to downloads was 26% in test A and 19% in test B, so GasBuddy decided to continue with the
required three-screen registration.
Panel Testing
GasBuddy also put beta versions of its new app onto usertesting.com, which provides access to a
large panel of user-experience app testers. Using usertesting.com,
usertesting.com, GasBuddy was able to
understand the experience of first-time GasBuddy app users as well as that of GasBuddy users
who would be simply upgrading to the new app.
Launch Results
GasBuddy expected it would lose 20% of its audience upon the transition to the new app.
However, the loss of monthly mobile active users, a key measure for GasBuddy
GasBuddy, was less than 5%.
Though its monthly mobile active users (MMAUs)
( continued to trail downward, after February
2017, with some additional updates, its MMAUs rebounded
rebounded. By September 2017, it had achieved
over 70 million downloads of the GasBuddy app and regained its pre-launch MMAU levels of over
five million monthly active users
users. In 2017, these users contributed 665 million fuel price reports
and 2,900 daily ratings.
ratings 36 ((See
See Exhibit 4 for GasBuddy MMAUs and Downloads; see Exhibit 5
for .)37
34 After More Than 60 Million Downloads, GasBuddy Pivots to the Future with Reimagined Brand and
https://www.gasbuddy.com/NewsRoom/PressRelease/122?fvm=1,
accessed October 2017.
35 Levi Hamilton, telephone interview by Clare Gillan, Babson College, August 8, 2017.
36
37 Levi Hamilton, interview by Clare Gillan, Babson College, Boston MA, September 22, 2017.
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On October 12, 2016, just one month following the launch of the new app and brand, GasBuddy
introduced Business Pages for fuel retailers and convenience stores. 38 The SaaS
SaaS-based service
provided the following:
Marketshare intelligence
Reputation management
Loyalty promotion and integration
Listings management
Because of its independent position, GasBuddy had the potential to gather more data and insights
than any single fuel or convenience store brand. Business Pages would give fuel retailers and
convenience store owners access to real-time
time immediate, accurate, and actionable insights in an
easy-to-use dashboard. For instance, Business Pages usedused precise location data to show where
customers were moving within stores, allowing managers to optimize their product lay layout. To
help the brands continue to feel connected to actual people, the platform would also provide direct
communications with an individual or select groups of consumers, though access and permissions
would be managed by GasBuddy to assure individuals did di not receive unwanted communication.
Over time, the new platform would be capable of processing payments.
GasBuddy advertising offers and Business Pages services were both designed for corporate
customers. However,, GasBuddy determined that the buyers of Business Pages and future
business-to-business
business (B2B) platform services would be different than buyers of advertising and
brand sponsorships within
within To support its evolving
business-side
side strategy, GasBuddy created two divisions within the sales team. One division was
dedicated to ad sales,
sales, which continued to grow. A second division was dedicated to Business Pages
and creating services and products from its rich and expanding base o of consumer data. To better
align with its emerging multi
multi- Buddy for
12
GasBuddy: Fueling Its Digital Platform for Agility and Growth
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,
would continue to accumulate data directly and through strategic relationships.41 In August of
2017, GasBuddy announced new Business Pages contracts with Gulf Oil42 and Philips66,
Philips66 43 and a
strategic alliance with ZenDrive, a mobile driver analytics company. ZenDrive
44 Drive would be the first
in a series of partnerships GasBuddy would develop to further monetize consumer relationships
and leverage its consumer base. At the time of the announced alliance,
alliance, ZenDrive
ZenD
ZenD
Drive
rive had analyzed
more than 15 billion miles and millions of drivers to understand dangerous driving habits such as
hard braking, fast acceleration,
leration, speeding, and others. Its customers would use this data
dat to better
understand driver safety, risk, and cost savings. For instance, business fleets used ZenDrive to
better protect drivers and lower insurance costs. The strategic alliance between GasBuddy and
ZenDrive would focus on saving consumers money, the first irst time that ZenDrive data would be
used in this way.
The deal not only commitment to helping millions of drivers save money
and align with another source of data, it allowed GasBuddy to explore advanced technologies,
such as artificial intelligence, that could help unlock additional value for its consumer and
business customers. According to Sarah McCrary,
-party
party technology partner like Zen
ZenDrive, was proof that
previous investment in the consumer mobile app technology and design upgrades directly enabled
GasBuddy to begin expanding the value we offer to our consumer base, resulting in new
monetization possibilities that we will focus [on developing]
developing] 45
GasBuddy has transformed over the past two years from a single
single-purpose
app built on a rigid back
back-end to a more dynamic platform that is becoming
the only platform of scale in the convenience and fuel retail market that
connects and serves value to consumers, brands, and retailers. With the
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addition of pay capabilities, GasBuddy can directly link the consumer and
their purchases with the retailers, and help those retailers compete more
effectively for the consumer business. We are stepping up to be critical
digital connective tissue in this marketplace.46
Max Metral, Chief Technology Officer,, would lead this digital tran
trans
transformation.
sformation He and
Doyle met when they were together at PayPal. In April 2011, shortly after acquiring Doyle
company, PayPal acquired Fig Card, a mobile payments company that Metral had founded. founded The
two men worked together on a number of projects, including Cumberland Farms SmartPay. When
Doyle left PayPal to join GasBuddy, Metral soon followed.
Metral was building GasBuddy path towards wards a modernized digital platform for
GasBuddy products and services.47 Att the core of this strategy was a new stack, that is, a set of
integrated technologies that GasBuddy would use to power a new microservices-based
architecture. The current stack scaled vertically, meaning that capacity was increased by adding
more resources such as additional CPU or memory. This often required downtim downtime, and the
capacity that could be added was limited by the hardware. The primary goal of the new stack was
efficiency and the ability to scale horizontally, enabling GasBuddy to increase computing capacity
by adding smaller machines as needed and, theoreti
theoretically
theoretically,
cally,, without downtime or limits to capacity.
Metral estimated that if GasBuddy were to pick up its infrastructure and place it in Amazon Web
Services (AWS), it could cost $80,000 00 per month.
month.48 would not be good
value for the money, scaling plans.49 Also, GasBuddy
usage would occasionally spike, for instance, in the case of significant fuel price changes or fuel
shortages. In the current
nt scenario, costs could unexpectedly jump to $250,000 or more.50 A bigger
problem depended upon a non-horizontally scalable Microsoft
SQL Server database. Without
ithout major application changes
changes, GasBuddy could not scale to the level
it would soon need to scale to, even with big money.
Max and his team settled on a set of core components and patterns that they hoped would set
GasBuddy up for long-term
term success,
success, while providing a path for short-term
short improvement.
According to GasBuddy CTO Max Metral It is not a goal or a reasonable expectation to just
. We will continue to improve our existing services but look for opportunities
to gain meaningful production experience with what we believe to be the right long
long-term platform
choices. 51
46 tober 7, 2017.
47
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Containers A container platform would enable the development team to orchestrate the
microservices as very small and manageable deployment units. Using Docker, Kubernetes (aka
k8s), and additional tools, GasBuddy would be able to version all its infrastructure,
rastructure, making it easier
to spin-up more accurate production-like environments for the purpose of quality assurance and
more.
perform the best (Joyent and GCE claim to be a lot better); but pretty much anything you want to
do with AWS has bee 52
should endure 53
Metral and
Breznak worked with team member memberss to
t publish ,
nfrastructure in making lives easier for team members and the
responsibilities to one another in making that a reality.
In its first year, SmartPay, available as both a mobile payment app and credit card, had been used
to purchase over one billion dollars worth of gas at Cumberland Farms stations. 55 Though a
promising start for Cumberland Farms, Doyle speculated that the
52 Ibid.
53 Ibid.
54 https://www.cumberlandfarms.com/smartpay/checklink
https://www.cumberlandfarms.com/smartpay/checklink, accessed January 2018.
55 http://www.nacsonline.com/Media/daily/pages/nd1008153.aspx#.WdAQwmhSzzA
http://www.nacsonline.com/Media/daily/pages/nd1008153.aspx#.WdAQwmhSzzA, accessed January 2018.
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The timing for a new payments offer was also good. A few well-entrenched
entrenched credit card companies
and their many bank relationships,, supported by the ACH federated payment syste
system, continued
to dominate the payments industry. 56 Retailers,, with their own store-branded
store branded credit cards,
continued to chip away at the market share held by these few brand-name
rand--name credit card companies.
rand
However, the payments industry and the process by which it served its it customers, remained
largely unchanged. Moreover, payment services were complex, expensive, and lacked the agility
to support innovation. Due to these factors, the payments industry was ripe for disruption. Non-
bank digital startups and established companies, such as Apple Inc. and Google Inc., had begun
pushing into payments and challenging incumbent approaches.
approaches.
Fortuitously for GasBuddy -risk rating prevented it from taking on consumer risk
directly. Just a few months after Doyle called WEX, GasBuddy and WEX Inc. struck a deal. WEX
agreed to rent out its payments network to GasBuddy with favorable terms. In return, GasBuddy
agreed
agreed to take on the consumer risk and would deliver a new stream of revenue to WEX.58
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GasBuddy: Fueling Its Digital Platform for Agility and Growth
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Is Born
-of-its-kind
its-kind
its kind gasoline
savings program giving US drivers a discount on virtually every gallon of gas they buy. The
program was free to join and gave drivers 15 cents per gallon off their first purchase and a
minimum of 5 cents off every subsequent fuel purchase. Pay with GasBuddy was promised to work
at stations nationwide, be completely secure, and require no credit card application.59 According
than $315 billion on gasoline each year. Using Pay with GasBuddy, these US consumers can
collectively save $7.2 billion on the approximately 143.4 billion
ion gallons of gas they will pump in
2017.60 According to Doyle, the launch was well received. Doyle said. We
reached 80,000 enrollments in the four weeks following our general availability launch. T The real
payoff from payments, The churn rate is low in
payments. I 61 plans
for the future, Doyle added, -of-
sale integration block. Moving forward, GasBuddy
asBuddy is going full-on
full on mobile.
mobile 62
While the company was in final stages of preparing for its most exciting product roll-out since its
move to the smartphone
tphone Pay with GasBuddy the National Hurricane Center was tracking
tropical storm Harvey. In anticipation of landfall, Texas Governor Rick Abbott declared a state of
disaster for 30 counties. In the
he days that followed,
followed Texas and parts of Louisiana would be ravaged
by ld grow to fifty-
four.66 Following Harvey, Hurricanes Irma and Maria would ravage parts of Florida, the US Virgin
Islands, and all of Puerto Rico.
59 https://www.appannie.com/apps/ios/app/gasbuddy-find-cheap-gas-prices/details/,
ttps://www.appannie.com/apps/ios/app/gasbuddy accessed October 2017.
60 https://www.gasbuddy.com/NewsRoom/PressRelease/456, accessed October 2017.
https://www.gasbuddy.com/NewsRoom/PressRelease/456
61 https://www.pymnts.com/news/payment
https://www.pymnts.com/news/payment-methods/2017/gasbuddy-retail-convenience-store-hurricane-harvey/,
accessed October 2017.
62 Walt Doyle, GasBuddy CEO, interview by Clare Gillan, Babson College, Boston MA, August 9, 2017.
63 http://mashable.com/2017/09/07/hurricane
http://mashable.com/2017/09/07/hurricane-irma-zello-gasbuddy-app-store/#f4VZNZ1orOqr, accessed October
2017.
2017
64 https://www.appannie.com/apps/ios/app/gasbuddy
https://www.appannie.com/apps/ios/app/gasbuddy-find-cheap-gas-prices/rank-
history/?vtype=day&countries=US&device=iphone&view=rank&legends=22&date=2010-12-17~2017-10-02,
history/?vtype=day&countries=US&device=iphone&view=rank&legends=22&date=2010
accessed October 2017.
65 https://www.appannie.com/apps/google
https://www.appannie.com/apps/google-play/app/gbis.gbandroid/rank-
history/?vtype=day&countries=US&view=rank&legends=222&date=2012-01-01~2017-10-02, accessed October 2017.
history/?vtype=day&countries=US&view=rank&legends=222&date=2012
66 http://www.statesman.com/news/local/state
http://www.statesman.com/news/local/state-disaster-declaration-expanded-counties-including-
bastrop/t5dqocvWCH3BNptuODNNSK/, accessed October 2017.
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GasBuddy: Fueling Its Digital Platform for Agility and Growth
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GasBuddy was closely monitoring fuel supply implications as Harvey headed towards Corpus
Christie, Texas.67 In
the affected regions, fuel stations were running out of gas. Consumers were spending the little gas
they had driving to stations that could not help them, or worse, spending more m ore time than
necessary on dangerous roads. Many of the fuel stations that had fuel began to price gouge,
goug an
go
illegal practice in the United States.
Recognizing several opportunities to help those within the ravaged regions and additional regions
affected by interrupted supply chains, GasBuddy called on large fuel retail chains in the southeast
to actively update their critical station information.68 It also called Apple. It can take weeks for a
new version of an app to be posted in the AppStore. GasBuddy needed a fast fast-track within Apple,
and Apple obliged. During the days that followed, GasBuddy released seve several new versions of its
app, Has Fuel applicable, enabling
drivers to report price gouging and to upload a photo that could be used later by prosecutors, and
adding diesel as a fuel type within the app.
In addition to assisting drivers on the ground, GasBuddy made key functions of GasBuddy
Business Pages available for free during hurricaness Harvey and Irma so that retail chains could
accurately manage and maintain information and data about their stations. Through Business
Pages, retailers were able to update hours of operation, availability of fuel
fuel, fuel prices, power
outages, and information on other essential services.
service To support these emergency support
activities, GasBuddy flew two of its media analysts to Florida to work from a FEMA response
ns and engineering teams
teams. On site with
emergency services, the team could more quickly accommodate the most urgent needs for
information. For two weeks, GasBuddy employees worked around the clock to support emergency
services and help news stations and government
government officials get the word out on where and how to
find gas. By that time, the company knewnew how to work efficiently with coordinated agility and
those services available on the new stack were able to accommodate the explosive demand
demand.69
GasBuddy Ahead
For GasBuddy, helping drivers make smarter decisions and save money would continue to be a
guiding mission. However, the company would need to build deeper relationships with business
customers in order to fund this mission and sustain a strong future for the company. Already the
company had encountered difficult decisions that force
forced trade-offs when trying to create value for
both sets of customers. They would undoubtedly encounter more trade-offs. Despite the obstacles
It would navigate obstacles with its
newly acquired
acquired agility and build a sustainable business
business, serving the needs of all who would benefit
from a perfect pit stop.
stop.
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GasBuddy: Fueling Its Digital Platform for Agility and Growth
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Exhibit 1
Gas Retail Price History
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GasBuddy: Fueling Its Digital Platform for Agility and Growth
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Exhibit 2
What Do GasBuddy Consumer Customers Care About?
Source: GasBuddy
Gillan, July 27, 2017. Used with permission.
Exhibit 3
GasBuddy Gamification Example
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GasBuddy: Fueling Its Digital Platform for Agility and Growth
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Exhibit 4
GasBuddy Downloads and MMAUs
Source: GasBuddy, Levi Hamilton, provided during interview by Clare Gillan, Babson College, Boston MA,
September 22, 2017. Used with permission.
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GasBuddy: Fueling Its Digital Platform for Agility and Growth
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Exhibit 5
GasBuddy Consumer Mix and App Metrics
As of 2017, GasBuddy segmented its consumers as follows:
80% were commuters or daily drivers, though some users were more active than others.
20% were road trippers and, by definition, occasional users.
They further segment their users into a funnel with Seekers (searching for data) at the top,
Players (giving data) in the
he middle, and Payers (using payments product[s])
product[s at the bottom.
Many metrics are used to track the business, but its two most important metrics are as follows:
Monthly Mobile Active Users (MMAUs)
Monthly Downloads
Note: Daily metrics will become more important as user base and speed of new user
acquisitions increase.
Source: GasBuddy, Levi Hamilton, interview by Clare Gillan, Babson College, Boston MA, September 22,
2017.
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GasBuddy: Fueling Its Digital Platform for Agility and Growth
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Exhibit 6
w
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GasBuddy: Fueling Its Digital Platform for Agility and Growth
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Exhibit 7
GasBuddy Timeline of Major Events Discussed within
ithin This
Case
25