Founder Story: Amos Haggiag, CEO of Optibus

How Optibus Drives Impact and Revenue in the Domain of Public Transportation

Tell us a bit about how you grew up, what and who inspired/shaped you?

I grew up in Tel Aviv and still live here. I’ve been here all my life except for a few periods when I went to university and lived in America. I’d say there were two aspects that shaped me growing up. The first is my passion for computers. I had access to my first computer when I was seven years old, and I remember having a computer at the time was a big investment. I started spending a lot of time at the computer playing games, but the computers back then were not nearly as efficient as they are now. You had to allocate a lot of time to get it to do what you wanted it to do, so I spent time hacking and writing code. In the beginning, it was just to get my games to work, but eventually it was more just for the fun challenge of writing different scripts.

At some point, I became the neighborhood computer guy when I was just 10 years old. If any person in the neighborhood had an issue — they’d come to me.

So the challenge and my innate passion for computers is something that has stayed with me until today.

The second thing, which is a bit ironic compared to the first, is that I spent a lot of time outside. You can definitely say I was a street kid. I’d come home from school and have fun outside with my friends. We loved doing crazy things, but I think our adventurous spirit really helped me build confidence. The balance between computers and the outdoors really shaped me as a person.

In high school, I started to realize I had a knack for anything related to math, computer science and physics. So I went to study computer science in university and that’s when I met my Co-Founder Eitan Yanovsky. We became good friends quickly and both finished top of our class.

Meeting Eitan at university, is this where the founding story of Optibus starts?

Optibus was founded in 2014, although our story really started in 2004. At the time, my father was the CFO of what eventually became the second-largest public transit company in Israel. Back then the market share in Israel was held by two companies. At the end of 2000, the government decided to open it up for competition and started building more public transit companies.

When I was in my first year of university, I had dinner with my father and he told me about the problem of planning public transportation, and how in his view, it was very inefficient.

This is when I first understood that public transit is very complex. You need to design the routes, timetables, what every bus will do, and which driver will do the shift. All of this was done manually by people using Excel, and my dad would say at the time, the outcome of the work was like a black box.

Every percentage of mistakes or suboptimal assignments was worth tens of millions of dollars. Running a public transit operation, let’s say is somewhere between hundreds of millions to billions of dollars. The cost of operating public transport in London, for example, is $20 billion. The annual budget in New York is like 16 or 17 billion. But even if you take a small city, it can be 30 million.

So in that same discussion, he told me, you’re into computer science and math, maybe it’s a problem you can solve?

At the time I thought… I’m in my first year of university, I couldn’t solve anything. So I’d say that’s when the seed was planted, and I remember telling my friend Eitan about it at the beach on summer vacation.

So, when did this seed sprout?

2004 to 2014 were 10 years that we slowly started to become more invested in the problem. It started with ideas we had for algorithms that could solve the problem. We gathered data from public transit companies and started speaking with them. This is when we truly learned about all the complexities that existed and started crafting and fixing the algorithms. It started with basic complexities like, let’s say we realize an algorithm makes a driver work 15 hours straight without any break. This is an issue, we need to add a break. So we started to add more and more complexity to the algorithms we developed.

We were doing all of that while working full-time jobs. After university, I spent time in the US at Princeton. I was doing some research there in medical imaging. It was machine learning, but similar to what we’re doing today with AI. Then I worked at Microsoft, but in 2014 we made a decision that was very hard at the time — which was to leave our jobs.

We loved our jobs and were nervous to leave and start a company officially without any funding, or full confidence that we were going to succeed. All we knew was that we created something like nothing else that existed at the time, and that there was demand.

It was a hard decision, but we did it, and then we went and raised initially about $1 million in funding investors, and everything took off from there.

Now tell me about the journey from here. What was your biggest challenge and how did you overcome it?

At least from my experience, there is a challenge every day as a founder. It doesn’t matter if the company is super successful, there will always be challenges. The irony is you think the biggest challenges exist only in the beginning, but the truth is that when the company becomes successful, bigger challenges arise because the stakes are higher.

I remember in the beginning when we just started, each challenge didn’t yield such a high cost. Now we have employees and stakeholders, so there is more responsibility.

The challenges vary with the stage of the company. For example today, the main challenges are related to our people and the organizational culture, specifically communication. When you get to a certain larger stage, you don’t have direct communication with every employee in the company. This is something we are actively working on every day.

In terms of challenges at the beginning, we got traction with very large companies early on. The biggest transit companies in Israel, the UK, and the US. You would assume that for a small startup, we’d probably target smaller customers first before going after the giants.

And you would assume that the big companies would not choose to work with a small startup, or want to put all of their public transport mission-critical systems into a startup of like five people, right? But the opposite happened.

I think it happened because for the big companies, the problem was such a pain, that if we could solve that problem for them, the incredible ROI would be worth it. So what happened, was that very early on when Optibus was maybe less than 10 employees, we signed a contract with some of the biggest customers in the world. Which is great, right?

The reality was, at the time, we only had a very basic initial product. It wasn’t nearly as built out as it is now. So once we signed these clients, we realized we had a lot of work to do, and that was definitely challenging. We had some very tough conversations with customers.

What helped us in the end is the value that Optibus brought to the customer was so high, that they couldn’t solve it with a different solution. So customers were more flexible with any issues we had. We essentially had to scale our MVP to an enterprise-ready, high-quality product in a crazy short amount of time. It was very, very hard and required a lot of work over many nights and weekends.

You guys are in a lot of places. Tell us about your global operations. How do you and your team keep things so organized and on track with such a complex solution?

First, I would say our organization is always being optimized. We are scaling all the time, and we are building better processes in parallel with the growth. We are very unique for a SaSS company with how global we are.

Our software is implemented in 35 countries, and I don’t say that lightly. Every country is a very significant operation.

We power a significant portion of public transit in the UK, 70% of all the buses in the country and many in London. We have huge operations in Germany, Austria, France, Italy, Spain and Portugal. We’re even in Turkey, the Middle East, Africa, Japan, Singapore and Scandinavia. In the US, we’re in 46 states plus Washington, DC. We are growing very fast in Brazil, Chile, Mexico and the Dominican Republic.

Because we’re very global now, we have employees in many different locations, speaking different languages, and different subsidiaries so we can work with governments in every location. You need the right infrastructure in place for regulation. It’s very challenging from a legal, finance, people and go-to-market perspective. To build a large company successfully, you need to be in all the right spaces, and because of that, we’ve invested in placing people inside the regions, and having them get initial references.

There are also regional dynamics. Let’s say you go to a company in Germany, for example, a German public transit company will not buy a mission-critical system if they don’t see that it works in Germany. Even if you work with the largest in the US and the largest in the UK, they want to see that you know, the German rules the German union, the German way of working. So it takes time to get those initial references and initial customers.

You need to find early adopters, which are those companies that are looking to advance technologically and are willing to take more risks.

What trends do you see in the public transit domain?

The electrification of public transport is a really big trend.

It’s regulated that almost all around the world, public transport will move to 100% zero emissions in the next 10 to 15 years. So that means in order to get there in 15 years time, you already need to get to 10%-20% now.

It’s quite a massive change because it means all the buses that are polluting like diesel buses, even hybrid buses, will all be replaced by electric buses or hydrogen. There’s a lot of investment required in doing something like that. So Santiago is one example of a city in Chile where already about 30 or 40% of all public transport is zero emission. By the way, since 2022, London has also implemented a mandate that every new bus purchased must be zero emissions. So they don’t buy any more diesel and they don’t buy hybrids. Only 100% zero emissions, so that eventually all the buses will be replaced with electric.

That’s a massive thing that’s happening right now, and the rate of adoption is much faster than with private vehicles. Personal cars are not regulated in a way that requires new purchases to be electric, whereas public transport is regulated.

We’re so happy to see that sustainability and ESG practices are emerging stronger than ever, we’d love to hear from you on the ESG initiatives of Optibus.

From day one, impact was something very strongly embedded in our approach and is one of our core values. We are building a company that is financially profitable, but that also generates something more than that: a social return on investment. We are making a significant, positive impact on people and the world. Public transport by itself is something that brings people together in a more efficient way. It’s more equitable, doesn’t pollute, and doesn’t take up as much space as private cars.

Public transit is also vastly safer than private vehicles. When using public transit, a person is twenty times less likely to be involved in a traffic accident. Public transit enables freedom of movement for people who lack access to a car or cannot drive and otherwise have no other way of getting to school, a hospital, or work.

In Africa, the average rate of car ownership is less than 5%. Most cities there don’t have any formal transit systems, and the average person walks 1.5 hours to work. The only other way to move from A to B is a shared taxi that’s privately owned. But the price always changes, and many of these vehicles are highly polluting.

There are many countries and cities that are building public transit networks for the first time, which is super exciting. Imagine the situation in the city of Kampala, Uganda, where they are using Optibus to build the city’s first public transit network. People now have buses that can take them where they need to go, expanding opportunity in many ways, dramatically increasing access to jobs, healthcare, and education, versus only having the option of reaching places by walking.

We’ve also done a lot of work with ESG, and have collaborated a lot with Cecile Blilious from Pitango. She has helped us quite a lot. We started by assessing Optibus internally. How much CO2 Optibus is generating, and how much we are recycling. We have improved our practices a lot over time and implemented about seven ESG protocols across the company.

Once we did that, we worked with one of the biggest ESG rating companies to analyze where we stood in terms of sustainability, and we ranked in the top 5%. This doesn’t even include the external impact of Optibus, just the internal.

Let’s talk about leadership. Optibus has grown tremendously. How do you continue to keep everyone motivated as a leader?

As the company grows, eventually you don’t have the luxury of having everyone in one room. So it’s important to convey the vision, mission, values and strategy, much better than we did in the beginning. When you’re at the start, you don’t have to convey the mission all the time because people know everything that’s going on. They sit in one room so they can talk to you every day. Now the company is in so many offices and so many places.

So we defined values for Optibus within the vision and mission, and we communicate it to our employees all the time. When we’re doing our monthly all-hands meetings, I always start with our vision, mission and values. We present initiatives and projects that are happening across the company in different departments, so people can have more insight into what’s happening globally. I also visit the offices frequently and do roundtables with employees.

I think the most important thing for a company of this size is having a leadership and mid-management team that can communicate in a similar way you do. You’re not able to speak with everyone every day, so the way you communicate to your management team is the way they communicate downwards. They become the face of the company for their employees. So it starts with hiring the best talent that matches the values of the company, but it also continues with coaching them and communicating well. It’s something we’re always improving.

If you could give one piece of advice to founders to help them succeed, like your best piece of advice, you know, pick one what would it be?

Ignore competitors. If you see too many customers dealing with the same problem, then it means there is a problem that others didn’t solve. It doesn’t matter what the others are doing. It doesn’t matter what they’re showing at conferences, or if they’ve been around for 40 years.

Many people want to solve a problem, but then see there are others already doing it. So they think well… if so many are doing it then there is no need for me to do that too.

Bottom line, if there are others ‘solving’ it but you still see the pain, they’re clearly not solving it well enough. So just stay focused on your vision, and the issues you want to solve, and go for it.