Duran: "The big problem with a driving school is instructors not being used"

The founder of Hoy Voy argues that keeping almost 100% of the vehicles in use is one of the keys to five years of sustained growth

Carlos Duran, fundador de la firma Hoy Voy
Carlos Duran, fundador de la firma Hoy Voy
They have just completed five years and have already taught more than 20,000 people to drive. The Hoy Voy driving schools have revolutionised a sector until now dominated by small family businesses. And they have done so by seducing the public, mostly young people, through technology and marketing. One of the founders, Carlos Duran, spoke to VIA Empresa about how the original idea of a low-cost driving school has ended up (so far) with some 15 franchises and a turnover of 4.7 million euros.

Hoy Voy has just completed five years. What is your overview?
It has been an intense five years. What we wanted to do and what we have done have nothing to do with each other. We wanted to set up a different driving school, based on a low cost model with algorithms and dynamic fees. It was something that had never been done up to that point. But what happened to us is that we had a great reception in Barcelona. We thought we would have between 300 and 400 pupils a year but we found out that our way of working generated much more demand. What's more, we had two instructors who told us that they also wanted to set up a Hoy Voy. And this is where it all began. We opened a driving school in Granollers with them and we began to test the possibility of opening more schools under a franchise model. We now have 15 and are in the process of opening more.

You began in an economically complicated year, 2012...
We teach people how to drive and, to one extent or another, it is just about a basic necessity. It is also true that starting during the height of the crisis meant we had no experience of what it had been like before. Our model lives alongside a market that has improved and the driving licence market grew in 2016 compared to the previous year. A lot of people who had put off getting a licence, now that things are not quite so bad, are doing it now.

You have been a disruptive force in such a traditional sector as that of driving schools. What is your relationship with the rest of the players in the market?
When we began we had three things very clear. We wanted it to be more fun, easier and cheaper. At the beginning the sector perhaps underestimated our perspectives a little. But then neither did we expect a great reception. However, we were convinced about what we were doing, we put a lot of effort into it, a lot resources and a lot of technology. It is a sector that is very fragmented, and not used to a player with more ambition. And it is strange that it is a traditional sector addressing a public that is not there. But they are family businesses, local... When we put this model into operation, as we began to grow and get pupils during a crisis, no doubt we did not fit comfortably into the sector.

That has not stopped you...
As we have grown we have continued to put in resources and we now have a structure in central services with an amazing team. There is a technical department with five engineers, a marketing department with seven or eight people. That is unimaginable in a driving school. We also have a business intelligence department for algorithms, fees, rate of usage, average prices, study of demand, etc. And a financial and a quality department.

Photo: Lali Álvarez

Why choose the franchise model?
Because we are convinced that the only way of creating value is sharing it. If we want to specialise in the management of driving schools we should not be worried with their day-to-day. We create self-sufficient teams with an involvement that gains its own life. We train them and help them, but from there on we maintain an emotional distance in order to watch the indicators of the business.

What expansion plans do you have?
We are planning between 10 and 12 openings this year. So far this year we have opened Barcelona-Sagrera and we will soon open Cornellà and Lleida. We are now looking for spaces in Reus, Mollet and Vilanova i la Geltrú. Our plan is to have a driving school in all cities of at least 50,000 inhabitants. We just have Rubí and Manresa and we will have finished. We ruled out Sant Boi, Viladecans and Castelldefels for market reasons. Now we have to go outside Catalonia and will do so according to distance. We are looking into cities in Valencia, Palma de Mallorca, Aragon and looking at possiblitlies in Madrid and Castile for openings a little further away.

A good part of Hoy Voy's success comes from the technology. How do you protect it?
There are three pillars to the company: the team, the brand and the technology. We have spent a long time on this technology. In fact, we recently assessed it to pass on the know-how to the franchises and it is now valued at more than four million euros. In fact, it is incorporated into the company's capital and we have to protect it at all levels. To begin with, the team has signed strict confidentiality agreements. Our franchises do not have access to the source code, although they can use it. In the franchise contract, using this know-how for other purposes comes with a penalty of a million euros. Therefore, you would have to be very brave to take the risk. What's more, every year it is deposited with a notary.

What does this technology do?
It has become very complicated, we have different algorithms that have been improved and take a great many things into account. The system attempts to maintain a high level of use, like Vueling does with its planes. We have carried out 400,000 sessions, so imagine the information we have! We know advanced sales, average prices, hours of purchase, behaviour, resources per centre... All of that we get in real time on a monitor. There are automatic systems that three times a day review going prices in terms of demand and forecasts of demand. We ended January with a 99% rate of use and 2016 with 97%. In the end, the instructors earn the same, whether they have a lesson or not. The big problem of a driving school is having an instructor out of use because 80% of the turnover comes from the lessons.

Photo: Lali Álvarez

Moving on to the brand. Have you found the key to seducing the young public?
We ask ourselves the same question: is it the Minis? The iPads? The prices? For me, as I am obsessed with metrics, the key data is that 49% of those who sign up to Hoy Voy come recommended by someone without us putting in a single euro. We think that there is nothing purer. Yet, what do we do with pupils so that they recommend us? The best marketing campaign we can do is to treat people with respect and not to look down on them. If we treat the team well, it is happy and will treat the pupils well.

What role do social media play?
Obviously they play a key role. It is a space in which pupils share their experience. We are very active in campaigns on Google, Instagram, Facebook, Twitter... and occasionally we work with the radio.

What is this young consumer like?
What I see with our pupils is ephemeral communication. The new generations want a use and throw away communication. Instagram Stories or Snapchat are videos that self-destruct in 24 hours; what matters today, does not tomorrow. And if the communication is ephemeral, the people are too. If you treat someone badly, it is goodbye. But there are still companies out there who do not value their clients.

Has that changed since you began in 2012?
We have gone from the wall to the video. In 2012 there were no videos on Facebook. The whole subject of apps has changed. What were native apps are now mobile websites. We have not made an app because we believe that the native component will not end up being important. You can work as if you had an app within a website. What is required is to be very attentive, which is why we do a lot of surveys and we measure everything. With 700 people who respond you have an enormous sample base.
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