As Uber appoints its new CEO, Expedia’s Dara Khosrowshahi, it’s the right time to reminisce about the early days of the company, as a mental exercise for imagining where it could go next.
What don’t you know when you found a start-up? A lot. When people look at leviathans like Google, Facebook or Uber today, they often see the negative impact of their dominant market positions. They forget that these firms started small, and, in Uber’s case, with bad PowerPoint. Garrett Camp, the other founder of Uber, released the firm’s seed round pitch deck from 2009.
It’s a must read if you care about startups.
And a must read if you’re opining on how regulators or consumers should deal with firms like Uber. The initial plan pitches UberCab (under the slogan One-click cab) as a New York and SF limousine service whose ”Best-Case Scenario [is to] become market leader, $1B+ in yearly revenue.”
The next moves outlined in the deck include raising money, buying three vehicles to start with — S-class Sedans and Lexus GS450h or E320 — develop the app and launch demo.
Deck touches upon UberCab’s benefits for the drivers themselves, including being underpaid. Fair pay has been an issue raised by Uber drivers in the past couple of years, including through several lawsuits filed against the company.
What you don’t know when you found a startup, eh? What you can’t know unless you go on that voyage.
To put that all in context, Uber’s revenues hit $8.7bn for the second quarter of 2017, more than double the same period last year. The number of trips is up 150% y-on-y driven mostly by developing markets, despite setbacks in China, Russia, and in the Middle East, against Careem, and in Indonesia, against Go Jek. (Leaked revenue details here.)
Uber’s also softening its hard-as-nails Ayn Rand-ian image. It has introduced driver tips. In the first two months, driver tips totalled some $50m. Uber is estimated to have 2m drivers globally but tipping has been rolled out progressively so it is too early to say what the monthly per driver tip benchmark will be.
Jessica Lessin covered last week Uber’s CEO conundrum which includes an insightful comment by Roger McNamee. He “cannot see a “high growth” path out of this mess. The smart strategy is to retrench, conserve cash, try to make the model work and grow from there.”
Perhaps, this is why many of Uber’s later stage investors are marking down the companies stock by as much as 15%.
What will Uber look like in eight years time, under its new leadership? What will be the same and what will be different to the original investment pitch?
*note: major part of the piece was written before Uber picked its new CEO.
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