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That money meant Zipcar could expand, adding more U.S. cities and its first international location, Toronto. Griffith had long seen Zipcar as a global brand, but he was determined to move slowly. Toronto was a perfect test case--close enough to be manageable but with a different currency, telecommunications network, and customer base. Succeeding in Canada would prove that Zipcar could be a truly international company--making it more valuable in the eyes of investors. The approach proved smart. In November 2006, when Zipcar raised $25 million from Globespan Capital Partners, Greylock Partners, and Benchmark, the company's valuation had increased more than four times compared with the year-earlier round. The company has since launched in Vancouver and London.

7 Know When to Say No. And When to Say Yes

In spring 2005, Steve Case, the co-founder of AOL, was about to announce the launch of a new venture, a holding company called Revolution, which would acquire early- and midstage companies and have a heavy hand in management. One sector of the company, Revolution Living, was examining prospects in the consumer space, specifically businesses that promoted environmental values and healthful living. Case lived in Washington, where Zipcar and its Seattle-based competitor, Flexcar, both had offices, and after seeing car-sharing in action, Case decided it would be a good fit for Revolution. He called Griffith to discuss acquiring Zipcar. Griffith was flattered but reluctant. He and the board thought the timing for a sale wasn't right. The company was about to close the financing round from Benchmark. It wasn't clear how Case would fit into the deal.

Case instead bought 55 percent of Flexcar, in August 2005; a year later, he upped his stake to 85 percent. Though the two companies went head to head in only two markets, they had been fierce competitors, each one claiming superior cars, technology, and service. Still, Zipcar had met on several occasions with Flexcar execs to discuss merging. Each time, Zipcar insisted on being the acquirer, and each time, Flexcar refused. But by spring 2006, when Zipcar was definitively the larger company and Flexcar had a new owner, Griffith decided to check in again. He sent Case a friendly e-mail. Case responded, saying perhaps it was time to talk about Zipcar and Flexcar again.

In November, Zipcar announced it was acquiring Flexcar; in a vote of confidence for Griffith, Case took his payment in the form of shares in the merged company. (Revolution is now Zipcar's single largest shareholder, though it has a minority stake.) Flexcar's CEO, Mark Norman, moved to Cambridge and took the role of COO. He began the process of switching the Flexcar fleet and customers to the Zipcar brand and system.

The point of the merger, Griffith says, was to get to scale. While some of Zipcar's cities are profitable, the company as a whole is not. It won't be until the company gets bigger. The success of the Zipcar for Business effort, in particular, depends on having enough cars to serve corporate customers. Scale will also help Zipcar negotiate better rates on parking and maintenance. The company also wants to begin buying, rather than leasing, cars, which will save it at least $2.5 million a year. The merger gives Zipcar a presence in 15 cities, with 180,000 members and 5,500 cars. Griffith is eyeing an IPO within a couple of years and believes revenue can hit $1 billion.

Promising such a massive increase in revenue puts Griffith in much the same spot he found himself in five years ago, when Zipcar was pulling in a mere $2 million. But now, as always, Griffith is nothing less than systematic. The first challenge, he says, will be to shift his focus from setting strategy and obsessing over the numbers to managing his executives, working more closely with the board, and developing Zipcar's culture. "My role has changed from $2 million to $100 million," he says, "and it will change again as we go toward $1 billion." The fundamentals, he says, are in place, and Zipcar has nothing but potential. "It feels," he says, "like we're skimming the surface."

Stephanie Clifford is Inc.'s senior writer.

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