Boxcar Q4 2022 Investor Update
Wow, what an exciting time for Boxcar! We're in the best shape we've been in since our founding, and there's so much going on that it's hard to fit it all into just one update. That's why I'll be sending more focused bulletins to our investors in the coming weeks, to give you all the details on our latest developments and opportunities.
For now, let me give you a quick overview of the quarter and a few extra thoughts. I'm so grateful to have such a fantastic group of investors, friends, and advisors on this distribution list - it's been a huge help to have your feedback over the years, and I can't wait to hear what you think about this update.
Update below and linked.
Financial Update
Q4 2022 Finances:
Q4 Sales: $800k (+110% YoY)
Q4 Gross Profit: $91,000 (+1,300% YoY)
Q4 Net Income: ($34,246) (-81% YoY)
Membership Revenue: $81,000 (+342% YoY)
In Q4 2022 we shed the least amount of money since company formation. We were $35,000 short of profitability, which just happens to be the exact amount of money we lost in Q4 from launching our new Bergen Bullet bus route.
Some charts to highlight this growth in perspective to the last few years.
Charts
2021-2022 Quarterly Revenues/Income
As you can see, another big quarter. Q2 2022 was anomalous with Noe dues processing + the NJ Transit shutdown that led to a massive transit spike so if you ignore those one-time events this was our highest-grossing quarter ever.
Historic Membership Revenue
These monthly dues are 100% gross margin for Boxcar. At present, these membership dues fund over 50% of our monthly operating costs. Goal is to get these to $50k/month by the end of the year.
Monthly revenue by category since founding
Blue is transit, orange is parking - I’ve stripped out Noe Pond Club dues here since they were such low margin.
2023 Projections
I expect we’ll double top line in 2023, led by transit revenue. Parking is harder to predict, because we’re still waiting for this to get back to a stable level of demand before we start investing in expansion of our inventory again.
New Bus Route: The Bergen Bullet!
In Q4 we launched a new bus route from Bergen County, pictured below.
As you can see, compared to our current base of operations for the last 5 years, this might as well have been Mars for Boxcar!
This is the first new bus territory we’ve launched since the pandemic and was chosen after extensive research of towns and consideration as to what we wanted to accomplish as a company. While it’s true that these are great towns for our bus product, so are many others.
So why go so far afield to start from scratch? Why branch out somewhere without a built-in customer base from parking or grocery distribution, that lacks name recognition and local support?
To crib Kennedy, we chose to do this because it was hard. This is going to hone our skills of marketing, municipal partnerships, and operating excellence. This is important because we’re going to be using these skills for a long time.
Secondly, this creates a customer base at the northern bound of our planned NJ bus route map. Rather than expand from the middle out, we’ll be able to establish a northern outpost of devoted customers and start filling in from the top town at the same time we’re going out from the middle.
Filling out the above map would generate between $50M-$70M in annual transit revenue. More importantly, it would create a dense customer base throughout our home turf of New Jersey to whom we could also sell other services.
In 2022 “other services” accounted for 25% of our $2.8m in revenue, so as we add even more it’s quite possible that the above map could generate upwards of $100M in annual revenue.
My goal is to have this map up and running in New Jersey by the end of 2026, while of course expanding regionally outside of New Jersey at the same time.
Balance Sheet and Accounting Update
Balance Sheet
We have plenty of money left for our current burn rate.
Accounting Update
We recently signed on with pilot.com, an AI-powered accounting firm. This is an expensive move for us with nearly $20,000 in initial expense and $26,000 annually, but I believe it’s the right one. Pilot works well with Stripe and quickbooks to expensify and actually received a venture investment from Stripe, our payment processor.
Most importantly, once we are up and running with Pilot and establish a solid cadence, their solution scales to $300M+ in annual revenues. This move is us making a bet that we’re going to slightly over-pay for accounting now because we will need a solution for a larger company in the near future and need to be as good at accounting as we can be.
Some Miscellanea
New Practice: Dynamic Pricing
We are implementing minimum-viable dynamic pricing. My state-of-the-art algorithm is “if this route is selling out, raise the ticket price a dollar. If it’s not selling out, lower the price a dollar.”
Algorithmically defined dynamic pricing is on our roadmap, but Boxcar can accomplish a decent marketplace for prices much more low-tech than companies in the hotel or ridesharing space. We have a regular customer using us every day and the supply side is fixed with our bus providers.
Upcoming Updates
We have some interesting conversations going on in terms of business development and partnerships and there’s a lot more to update you on but I don’t want this to become too lengthy.
In the next few weeks you’ll see emails that will cover additional updates
Parking Update and plan for restarting parking acquisition
2023 Goals and Boxcar’s flywheel effects
Transit Economics and case study
Partnership discussions
Thoughts on raising money vs growing organically
“Thinking Big” and Boxcar’s potential and roadmap as a super-app mapped out.
Customer Acquisition strategy, cost, and payback period
Until next time, thanks for your support!
Best,
Joe