Evaluate Chase’s strengths and weaknesses as a leader, focusing on how they relate to the

development of her mission, team, and pricing model.

Influenced by her parents and education, Chase has developed several essential characteristics
and strengths as a leader. She understands the importance of “respecting all people, regardless
of income and skill levels” from her father, and “being flexible and making do with the inputs at
hand” from her mother (Ancona & Reavis, 2014). She also believes that people can master any
subject if they want to from her experience of mastering the finance course work (Ancona &
Reavis, 2014). These mindsets directly affected how she assembled the initial team members
and forming the “can-do, non-complainers who were ingenious and innovative” hiring
philosophy of the company. Chase’s initial team members were basically her immediate
resources at hand (family members, neighbors, and friends) and the team continuously to grew
and learned necessary skillsets along the way to tackle the challenges when building the
business.

Upon deciding to start the car-sharing venture, Chase was willing to maintain and expand her
channels of networking to absorb as much information as she can from experts including
policymakers, parking lot owners, car manufacturers and rental companies, EPA, engineers,
academics, entrepreneurs, and investors (Ancona & Reavis, 2014) which later on allowed her to
acquire the knowledge she needed and speak the same language when dealing with external
partners and looking for supports from these resources that are relevant to develop the
business. Her willingness to network also extended to the customer side, which allowed direct
feedback from members and the team can quickly revise the pricing mode.

Her weaknesses, in my opinion, are actually linked to the abovementioned strengths. She built
the team based on the belief that “people can master the subjects if they work hard on them”.
This allowed her to inspire and put together a team that worked well and grew together and
eventually can get things done. This worked well to start a business and get through the proof-
of-concept stage. However, this might not be a team that is efficient enough to sustain a fast-
growing company. Eventually an addition of subject matter experts (SME) in critical areas like
engineering, operation, marketing, ... etc. would be required to further scale-up.

The fact that Chase spent enormous time and effort to build a pricing model herself suggests
that she might not be as mastery as she thought even though she could work hard to beat
everyone in the class. Granted that the car-sharing business was not mature at the time and
there were little data to guide the modeling, there were still examples (both good and bad) and
various modeling methods that Chase could have considered (and should be knowledgeable
about) to build the initial pricing model that reflects the actual use cases.
What do you think led to her miscalculation?

As discussed in the last section, Chase might have overestimated her capability and knowledge
required to establish the initial pricing model for the car-sharing venture in addition to the
insufficient real-world data to support the calculation, not to mention this could be the first
time she developed a pricing model by herself. In the end she eventually “guessed” the number
so there should be little to no surprise that the results from the first four months of data did not
turn out positive. It is not a big deal to see low utilization rate in the beginning as this is a newly
developed market, which would increase as the business model evolves and customers adapt
to the convenience of car-sharing overtime. However, what she missed was the higher-than-
expected percentage of daily rentals (or lower-than-expected hourly rentals), which was the
main variable that threw all her calculation off. This is something Chase (or her team, if she had
a hand to help looking at the data as soon as it came in) could have caught at earlier time and
adjust the pricing accordingly. Also, the initial pricing model was unnecessarily complicated due
to the different rate calculation methods (Mochari, 2001), which could confuse the early users
and lead to low utilization especially on the hourly/per-mile rental, as the charge from renting
daily was likely more straightforward.

Put yourself in Chase’s position and discuss how you would have acted as CEO. How would your
approach have differed, and why?

If I were in Chase’s position, I need to realize that although I can be trained to do anything, it
does not mean I have to do everything myself. Efficiency, the time required to complete the
tasks correctly, is equally critical for a start-up company that does not have much time to lose. I
would recognize building the pricing model for the new market is not my strong suit as I
stumbled through the process. This is where a consultant with car rental industry or even car-
sharing business experience comes in handy. Knowing the model will likely be modified down
the road, it might make better sense to work with the consultant and quickly converge to a
simplified pricing model first. Note that the consultant may utter the same breath as Hertz or
Avis (Ancona & Reavis, 2014), but I am still the one in control to develop the model that is
aligned with the vision and mission of the company. With the model being taken care of, I
would have more bandwidth to tackle other challenges, such as securing funding and resources
required to develop the technology and grow the fleet.

I would agree with the advisers to hire someone with corporate experience and bring credibility
to the management team, which is beneficial for both internal management and increasing the
confidence of external investors. However, I would be very cautious when looking for the
candidates, as any misalignment would cost not only significant amount of resources but also
investors’ confidence (Hart, 2005). This person will need to at least show successful track record
bringing one or more start-up companies to exits, so he or she understand what it takes to
effectively manage and grow a team with limited funds and resources.

As the service started launching, I would consider hiring a full-time data analyst or data scientist
to continuously monitoring the data coming in. It was not a good move to wait for four months
(launch in June and data review in October) and have an intern who might not have practical
experience at the time to help looking at all the data with the intention to check if the business
model works (Ancona & Reavis, 2014). Afterall this is a tech company and thus a lot of decision-
making processes need to be data-driven. If there were an analyst/scientist who have access to
the data since day one the service launched, any interim findings that indicate the business
model is based on false assumptions could have alarmed the team, and thus trigger necessary
adjustment early without increasing too much back-end engineering efforts.

To recap, building up and sustain a business is not a one-man job. It is very important for a
leader to continuously reflect and identify the gaps in the organization and act accordingly to
keep on the right track. This “Robin Chase and Zipcar” case highlights the importance of getting
right resources at the right time can avoid unnecessary challenges and catch surprises early.

Reference:
Deborah Ancona and Cate Reavis, “Robin Chase, Zipcar, and an Inconvenient Discovery,” the
MIT Sloan School of Management, July 25, 2014: Case No. 14-153.

Myra Hart, “Zipcar,” Harvard Business School, August 24, 2005: Case No. 9-802-085.

Ilan Mochari, “Deals on Wheels,” Inc., February 1, 2001.