Car sharing meets car rentals. I love Zipcar (www.zipcar.com) because it changes the game. It creates green pastures of new business opportunity and growth, while it helps solve two pain points – car ownership & car rentals. The Cambridge, MA based company just announced the acquisition of Seattle based competitor Flexcar making it the only national car share company.

Zipcar excites me because they are solving consumer problems. We’ve all been through the hassles of trying to rent a car and know what a unpleasant time consuming process can be. For those living in a big city or attending a University know the troubles with car ownership and the simple task of parking. Zipcar solves both problems and in the process changes the rental car industry.

To join Zipcar all you need to do is become a member. You pay a low yearly fee ($50) and in return receive access to the zipcar online reservation system. In most cases Zipcar secures permanent parking spaces in parking lots or on campus where cars can be picked up and returned. You can rent the cars by the hour or the day and everything including gas and insurance is included in the membership.

In the last five years Zipcar revenue has soared from $2 million to $100 million. A recent INC. magazine article broke down the company’s road to success and I’d like to highlight a few points.

Before you grow – find your profit point. Zipcar figured it would need 40 members per car. To get it’s founding three cities profitable it would need 20,000 members. To get to these membership levels the company asked consumers what they required. The answer – better locations, better reliability. Zipcar answered by breaking each city into zones. Once they got one zone to work they would move to the next. They took a bigger problem, broke it up into little pieces and focused on making each piece work.

Get technical. Too often companies forget how important technical systems are to their growth. If your technical systems can’t scale with your growth, you’re done for. Make sure your tech works when you’re small and can scale when you get big. Zip car chose to go with the Japanese quality process Kaizen. Whichever operations approach you choose – follow it through.

Customize your branding to your customer segments. Zipcar highlights and places fleets of Prius hybrids in bohemian neighborhoods and BMW’s in upscale neighborhoods. Knowing your customer and delivering the right message to that customer is a key foundation for growth

Power, profits and rewards to those actually working. Give your managers and employees the power to make decisions and share in the profit and rewards. Zipcar puts its city managers in charge of their own profit and loss. This creates a competitive environment between city managers and sense of entrepreneurship. Each city figures out what promotions, events and service is most important to that specific city. Plus each manager has a cash incentive to keep things growing.

Expose your competitors weakness. Zipcar gladly allows consumers under 25 to become members. Traditional car rental companies charge huge fees or don’t allow rentals for insurance reasons. Zipcar knows college students paired with a sense of ownership means better driving records and lower insurance rates. The company also likes the Apple model of getting product into consumers hands quicker in the hopes they become lifelong customers later.

Prove you’re ready for the prime time. Zipcar didn’t raise money until they could prove the concept worked. This meant technology, cars, service, managers…all the things highlighted in this post. Once your company or product has proven it can scale, then raise money and scale like crazy. $2 million to $100 million in five years is proof in this continual growth through scale approach.

Zipcar plans to go from $100 million to $1 billion and based on how well they’ve executed to this point I wouldn’t doubt it. Zipcar is Changing the Game. Zipcar is a New Revolutionary.