Dan Park credits his professional success to both luck and skill, two things the聽CEO of Canadian online used car marketplace Clutch needed in abundance to navigate recent challenges in both the tech and used car industries.
The Yellowknife native says he pursued a mathematics degree at McGill University because he was good with numbers , had a French immersion background, and wanted to experience Big City life in Eastern Canada.
There, Park鈥檚 classmates introduced him to investment banking, an industry he admits having never heard of before.
鈥淚t was a series of fortunate events in the sense that I met some friends that convinced me that these things were interesting, and I jumped into it,鈥 he says. 鈥淭urns out, they were right.鈥
After switching majors and graduating with a bachelor of commerce degree in 2003, Park began a career in investment banking, first at BMO in 海角社区官网and then at Deutsche Bank in New York, where he helped structure investment and聽merger and acquisition deals for tech companies.
Park then started a tech-focussed advisory firm with a former colleague, which led to a role managing the Canadian investments of San Francisco-based venture capital firm Azure Capital Partners.
In 2016, Park got his first opportunity to lead a venture of his own, when he applied to manage a newly created food delivery business within Uber as the concept was being developed in Canada. 聽聽
鈥淚 think I got the job because no one else wanted it,鈥 he jokes. 鈥淚 had never run a team before, and as much as I think Uber took a bet on me, I also took a bet on Uber in the sense that food delivery was so nascent at the time.鈥
After helping turn Uber Eats into one of the company鈥檚 major revenue drivers, Park was introduced to Clutch founder Stephen Seibel, who offered him the opportunity to run the online used car marketplace he founded in 2016.
Park accepted the CEO job in late 2019 unaware that the next few years would be some of the toughest the tech and automotive industries had seen in generations as a result of the pandemic and the economic and supply chain-related aftereffects. After multiple rounds of difficult聽staff cuts, Park says the fight for survival is finally over, as the company shifts its focus toward expansion.
Today, Clutch facilitates the sale of thousands of used cars each quarter and helps roughly 150,000 subscribers track the value of their vehicle for free. The company has grown by 3,000 per cent since Park signed on five years ago, and just opened a new 19-acre facility at the former site of the Blue Jays training grounds in Mississauga.
Park spoke with the Star from Clutch鈥檚 head office in 海角社区官网about the business鈥檚 recent rollercoaster ride, tech’s impact in changing how Canadians buy and sell used vehicles, and why there could be a shortage of used cars聽over the next few years. 聽
Were you always interested in transportation, or did that start with Uber?
I was interested in creating consumer products that had a meaningfully impact on people’s lives, but do I have a passion for food delivery? No.
At the time, the Eats business was the black sheep of the company, because we would take drivers away from the Rides business. We were just this weird team of folks working on food delivery in one corner of the building.
What interests me is disrupting industries that haven鈥檛 seen a lot of innovation and building consumer brands. I was introduced to Clutch by one of its board members, who I had met during my venture capital days. I investigated it and what really struck me was how Canada doesn鈥檛 really have a national brand for used cars, unlike other markets like the United States, so what I got excited about was the white space for consumers.
To what do you attribute stereotypes about used car salespeople?
Every year Gallup in terms of perceived honesty and ethics, and for the last 10 years or so car salespeople have landed at the bottom along with Member of Congress, but I saw that as an opportunity to build trust with consumers.
We wanted to develop that trust by offering a consistent standard. That means every car has an oil change, new air filters, and meets a high standard for tire tread depth, for breaks. And then we have a very seamless online purchase experience for the consumer, and we have a brand and customer experience that backs it up.
Why do you think Seibel trusted you to run his company?
I think we really complement each other. We are very like-minded in how we approach business, but we have very different interests and strengths, which allows us to bring different things to the table.
Steve founded the company when he was 24, so he wanted someone with experience to help him recruit, raise capital, and scale the business. I think luck is a big part of it too. We just happened to get along well, and then over the years, have built an incredible amount of trust. Steve and I have been working together for five years now, and I consider him one of my closest friends.
What was it like navigating the pandemic just six months after starting as CEO?
I was thinking, 鈥渄id I make the biggest mistake my life?鈥
We were low on cash, and when I joined, we were only operating in Halifax, because that was the only place we could get a license. We were working with the government to try and get licensed in Ontario, and finally were successful in January of 2020. Fortunately, we had started raising capital around then, and we closed just as the pandemic started, but our sales evaporated to zero, and we had to basically shut everything down.
This was when we were still disinfecting groceries and thought we鈥檇 never leave the house again, but after about two months people started going stir crazy; they didn鈥檛 trust public transit, they didn鈥檛 want to get into an Uber with another human, and demand for used cars went through the roof.
We grew five-times our size in 2021 and another three in 2022, riding the rocket ship of super low interest rates and the availability of capital, because that was the game everyone was playing at the time; raise as much as you can, and grow as fast as you can, because if you stopped you wouldn鈥檛 be able to attract more capital. So we in early 2021 and another a few months later. 聽
That very aggressive pursuit of growth worked until it didn鈥檛, and by the end of 2022 the cracks started forming. From 2023 up until earlier this year, the game was just survival; you survive, you win.
How did you survive when so many others didn鈥檛?
The mentality at the time was, if you鈥檙e going to cut, just do it once, and make sure its deep enough, because the worst thing you can do is drag cuts out over months. In 2022 we cut 95 jobs, which was a lot for a company of 300, and we thought that was it.
Then, at the end of last year, we had a $95 million financing round that was supposed to close in January. We signed the term sheet, and the lead investor called us about two weeks before close and told us the investment committee was no longer feeling the deal. Then we were really in survival mode. We cut 65% of our staff and withdrew out of Vancouver and Calgary, because those markets were new and not yet profitable, and it really was a matter of 鈥渋f we don鈥檛 do this, there will be no more company.鈥
What鈥檚 the state of the business today?
By refocussing on the fundamentals, we are now a profitable company that is no longer reliant on venture capital. We鈥檙e fully in control of our destiny.
Will Clutch return to Vancouver and Calgary?
We鈥檙e mostly in Ontario and Atlantic Canada, and we鈥檙e sticking with our core markets for now. We have ambitions to go back out west, and we probably will next year. 聽
What services does Clutch offer in Ontario?
If you鈥檙e in Ontario and you put your license plate into our system it will spit out a firm offer for your vehicle that updates every week, and we do that for about 150,000 vehicles. We stand by these offers; if we say your car is worth $25,000, and you鈥檙e honest about the quality and condition of the vehicle, we will give you $25,000. Either you come in and drop it off, or we pick it up, and that money will be in your bank account that day.
From there, we will take it to our new Mississauga facility where we process and recondition vehicles at scale, and we put it through our production process to bring it up to our standards. If there鈥檚 a crack in the windshield, we鈥檒l replace it; we鈥檒l do a wheel realignment, oil change, and we鈥檒l check that it meets all our standards, so that when you see a car on our website you know it鈥檚 gone through that process.
Are pandemic-era vehicles shortages behind us?
The market has normalized, so inventory isn鈥檛 a major problem. For used cars specially though, we could start seeing less inventory starting this year, because there were fewer new cars sold in 2021 and 2022.
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