Ideas are worthless. I used to think that startup founders are a unique type of people who have this brilliant idea that guarantees their success. In reality, even a unique idea will go nowhere without the right execution. Planet42’s “idea” is not unique: we buy vehicles for customers who make monthly installment to us. What’s unique is our team’s ability to execute on this idea by constantly experimenting, learning, and improving.
As part of my series about “individuals and organizations making an important social impact”, I had the pleasure of interviewing Eerik Oja, CEO and co-founder of Planet42. He is based in Cape Town and never shuts up about how the winding mountain roads there are perfect for riding motorbikes.
Eerik grew up in rural Estonia and got his Bachelor’s degree at the Stockholm School of Economics in Riga. After moving back to Tallinn, Eerik worked as an investor relations Specialist for farming organization Agromino, and as an analyst and business development specialist at funding management firm Trigon Capital. In 2014, he became Country Manager of Estonia for financial services firm Mogo Finance, a role that saw him turn the Estonian business into the best-performing branch for the group. In 2017 Eerik co-founded Planet42 together with Marten Orgna with the goal of democratizing mobility and helping provide financing for personal vehicles for people left behind by banks.
Eerik is motivated by the significant impact Planet42 brings to people unfairly ignored by banks. His aim is to lead a balanced life in which he can contribute to the world being a better place than it would be without him.
Thank you so much for doing this with us! Can you tell us the story about what brought you to this specific career path?
I spent some years working in an funding bank and then at an alternative car financing company in my home country of Estonia, but I felt that my work wasn’t really making a meaningful difference to the world. After all, vehicle finance in well-off countries is little more than a way for people to get a fancier car than they could otherwise afford.
Then in 2017, Marten Orgna, a friend from college who had worked in Africa for some years, convinced me to fly to South Africa to evaluate the idea of launching a company that would buy cars for people who otherwise had no access to reliable transportation. I was intrigued enough to take a trip to Johannesburg, and that’s all it took. I quit my job and Planet42 was born.
Our plan was (and still is) to democratize mobility by enabling people who are ignored by the banks to get access to a personal vehicle. Vehicle finance may seem like a non-issue to people in Europe or the US. However, in many emerging markets people with stable incomes still have to buy a car in cash because most of the population is deemed too “risky” to provide finance to in the eyes of the banks. For us, it makes no sense that a teacher who earns 25k dollars annually cannot get a bank to buy a car for her. If something doesn’t make sense then there’s a fair chance that a new business can be built — this was one of those cases. We couldn’t pass up the opportunity to build something from scratch on the other side of the world, something that we already see making a difference and which we know can have a massive impact on financial inclusion globally.
Can you share the most interesting story that happened to you since you began leading Planet42?
After moving to South Africa, it took us 9 months to buy the first car for our first customer. We spent most of this time getting our core IT system up and running. We were very proud of our all-digital approach: Planet42 does not physically see the customer nor the car we buy for them. Of course, the application form was fully digital as well. All the dealership had to do was fill in a few fields about the customer using our intuitive web portal and we would do the rest.
But the application volumes were pitiful. After some on-site monitoring at a dealership we discovered the reason why. It turned out we were “too digital.” The customers and salespeople were used to filling out 4-page paper application forms supplied by the banks, and then loading them on to a computer system. But Planet42’s “application form” only had 6 fields and was fully online. Our “fix” was to print out 100 application form templates and drop them off at the dealerships. This worked like a charm, as we saw an immediate increase in applications after making our digital process a little bit more analog.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
When we started building Planet42 we were constantly told by both European investors and South African advisors that we were crazy to buy 10-year old cars for “blacklisted” clients. Their reasoning was that these cars would be stolen immediately. So the first time a customer told us that his car had been stolen, we were onto it quickly — it is well known that car thieves find and remove GPS trackers within minutes of stealing the car. But the tracking platform showed that the car was “online” and parked in front of a residential building. When we sent the address to the customer, he stopped responding to us. After more prodding, the customer admitted that he knew the address because that’s where his girlfriend lived. Apparently, they had broken up the previous day and his girlfriend had taken the car as compensation for his unfaithfulness. So we ended up having to negotiate the safe return of the car with the understandably dismayed girlfriend.
We’ve now delivered 2,000 cars to clients and what we’ve learned is that angry spouses are more troublesome than criminals.
Can you describe how you or your organization is making a significant social impact?
Personal mobility is taken for granted in Europe and North America. The motor vehicle is the ultimate symbol of freedom in the US, while in Europe, with its more compact cities and well-developed infrastructure, there is a bit more focus on public transport. But in many parts of the world, getting from A to B is a lot more challenging, if not impossible.
Without a personal vehicle, everyday activities like commuting or taking the kids to school can be needlessly time-consuming as people are forced to use unreliable public transport. This is a major obstacle to prosperity, limiting access to employment and educational opportunities, and ultimately hampering financial inclusion.
At the moment, financial exclusion and the mobility gap reinforce each other. When an individual is unable to get to the places they need to in order to build their careers, they also have fewer opportunities to prove their creditworthiness to banks. At the same time, a lot of these financially excluded people can actually afford to make monthly installment for a vehicle. We fill this “mobility gap” by putting cars in the hands of the people who need them and can afford them, but are not served by the banks.
Can you tell us a story about a particular individual who was impacted or helped by your cause?
My favorite customer story from recent times is that of a nurse in Cape Town. She was spending nearly half her income on Uber rides to commute to work because she did not have a car of her own. The banks were unwilling to finance her because her credit record reflected minor installment issues in her past. To the bank she is “blacklisted”, to us she is an essential worker who is clearly in need of a car and, crucially, can afford one too. It was a no-brainer to buy a car for her.
Are there three things the community/society/politicians can do to help you address the root of the problem you are trying to solve?
The problem we are solving is access to mobility. However, clearly the problem cannot be solved by us alone: we’re not going to buy a car for every person on the planet. Governments can help by strengthening public transport systems, which in many parts of the world are inefficient, corrupt, and frankly dangerous. Specifically, governments can invest in infrastructure and build up public transportation solutions in larger cities to reduce congestion and improve mobility. The private sector can help with smart transport solutions that aggregate public transport, car rental, ride-hailing, micromobility, and other means of transportation, reducing the need for personal cars.
How do you define “Leadership”? Can you explain what you mean or give an example?
I believe leadership is mostly about getting out of the way of good people doing great things. It’s less about making heartfelt motivational speeches to rally the troops and more about building a culture and processes that make the company a great place to work. If your team is happy to come to work every day then chances are that the company is doing well. I like Ray Dalio’s take on building a company: “My ultimate goal is to create a machine that works so well that I can just sit back and watch beauty happen.”
What are your “5 things I wish someone told me when I first started” and why. Please share a story or example for each.
I wish I had known that:
- Mistakes don’t really matter and regret is a useless emotion. Nobody cares about your mistakes as much as you do, and you can nearly always try again. Planet42 is not my first venture. I’ve founded and invested in a number of companies that ultimately failed. I look forward to making many more mistakes in the future.
- You don’t need to know the answer to every question. “I don’t know” is a wonderful phrase because it’s nearly always a sign that there’s something new to learn. When I started at my first “proper” job I was wary of admitting that I didn’t know something, to the point that I didn’t feel comfortable asking for advice from more experienced colleagues. This is a hugely inefficient way to operate, so now I am wary of hiring people who don’t like to admit that they don’t know something.
- Ideas are worthless. I used to think that startup founders are a unique type of people who have this brilliant idea that guarantees their success. In reality, even a unique idea will go nowhere without the right execution. Planet42’s “idea” is not unique: we buy vehicles for customers who make monthly installment to us. What’s unique is our team’s ability to execute on this idea by constantly experimenting, learning, and improving.
- Perfection is the enemy of good enough. There are many formulations of this line of thinking, including focusing on the “low-hanging fruits” or the “80/20 rule”, i.e. the Pareto principle. A portfolio of customers who are 100% up to date on their installment is theoretically possible, but achieving this “perfection” would require an inordinate amount of effort. This effort is better spent elsewhere.
- Radical honesty is difficult but ultimately a more rewarding experience for everyone than saying things you think other people want to hear. This is true in professional life but also in personal matters. For example, about 7 years ago my best friend told me point blank that I’m getting fat. This may have been “harsh,” but he was absolutely right! His honesty spurred me to change my unhealthy lifestyle. Since then, I’ve been able to repay him the favor as he was getting a bit flabby too.
If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be?
There are plenty of existing movements that are worthwhile and inspiring, so instead of trying to create a new movement, I would like to use this opportunity to draw attention to Effective Altruism: effectivealtruism.org/.
Increasing inequality is one of the major social issues of our time, and most people reading these words are in a position to contribute to improving the situation through charitable giving to effective organizations. The Effective Altruism movement uses scientific evidence and careful reasoning to work out how to help others as much as possible. The most effective charities can demonstrably save a life for less than 4,000 dollars. It’s difficult to imagine a better use of money than saving lives.
Can you please give us what for you is the most meaningful “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“DON’T PANIC” from the Hitchhiker’s Guide to the Galaxy. This reminds me to relax and remember that most issues are not nearly as important as they initially appear to be. There’s always a solution, and 99% of the time worrying is just pointless suffering because you can’t control what other people do. As an example, this principle has enabled me not to get distracted by the coronavirus that is wreaking havoc on the planet. I’ve been focusing on the things I can actually control. The Planet42 team started to work from home before the lockdown, and we tightened our customer evaluation criteria and developed a comprehensive set of installment relief tools to help our customers through this difficult time. Instead, I could have spent this time refreshing the latest infection figures every five minutes and panic buying canned tuna, but what would have been the use of that?
Is there a person in the world, or in the US, with whom you would like to have a private breakfast or lunch with, and why?
I think it would be interesting to talk to Elon Musk about his journey from growing up in South Africa to founding three (and counting) unicorns in the US. I get the feeling that his thinking process is wholly unique. Also, he just seems like a super fun guy to talk to.
How can our readers follow you on social media?
Twitter @eerikoja. I’m just getting started on Twitter though, so do keep your expectations low if you can.