This weekend my wife and I had friends visiting from Merced, a small town in the Central Valley about two hours east of San Francisco. It was a perfect weekend that combined the best of everything the Bay Area has to offer— cloudless and spectacular 68° weather, a long hike off Skyline Boulevard down to Half Moon Bay and some amazing Greek food in Los Altos.
On Saturday night we decided to go out for drinks and a nice dinner in San Carlos and, naturally, my first thought was to fire up my Uber app and get the evening’s transportation dialed in (I’ve vowed to never take a traditional cab again, when possible). “Have you guys heard of Uber?” I asked as I was making Moscow mules for our guests. “What’s Uber?” they replied. I immediately shifted into VC-pitch mode, explaining how Uber may be the coolest thing to come out of Silicon Valley in a decade and how it will transform how people and things are moved on-demand, with just the push of a button. They immediately got it.
As I hit the “set pick up location” button for our trip, we marveled at the simultaneous simplicity and intricacy of the app, watching in real-time as our driver, Fadi, made a left turn in his black Chevy Suburban off the 101 freeway and hopped on the 92 towards our house. Then I said “you guys realize this is just the beginning for Uber, right?” I described the company’s crazy growth trajectory from having just one driver in San Francisco back in 2009 to now processing tens of thousands of rides per week in cities all over the United States and in countries all over the world, while growing at roughly 20 percent month-over-month. This statement sparked an entire conversation about all the pain points Uber could solve and how great it is that we get to “live in the future”.
We talked about a future where unreliable public transportation that gets shut down by strikes is disrupted by a more cost effective and human alternative (Uber’s fare splitting feature actually makes it cheaper to take Uber X than BART in many cases). We talked about a future where physical goods can be transported from point A to point B with just a few taps, as a network of drivers (or drones) bid in real-time to deliver your package in a matter of hours, making next-day delivery outmoded. We talked about a future where self-driving cars take the wheel, moving people and things with increased safety and efficiency, and your Uber driver transforms into an Uber concierge, focused on the critical human aspects of these transportation transactions. This was a future we all wanted to live in.
As we hopped in our blacked-out SUV for the night—feeling like the President walking off Air Force One, flanked by Fadi the Secret Service Agent—it really hit me why I’m so long on Uber:
When I showed our friends the app, it felt like I was showing them a magic trick—and they reacted as if I had. I am struggling to think of another time where I’ve shown someone a product and got a similar response (maybe when I got my first iPhone in 2007?). Showing Uber for the first time is like traveling in a time machine and showing someone what the future looks like. It’s hard to overstate how big of a differentiator this is and it’s part of the magic that comes with nailing product/market fit.
The fact that this couple only lives two hours from Uber’s headquarters in San Francisco and had never heard of the company before shows you that Uber is just at the tip of the iceberg in terms of growth. The size of the opportunity for being “everyone’s personal driver” is in-and-of-itself massive, notwithstanding all the other vertical markets that Uber will eventually capture.
Uber has nailed the end-to-end experience in the real world the way the best software companies have in the digital one. Uber’s ability to fully bridge the online and offline and harness the power of pixels in the physical realm has allowed them to forge a space their brand can clearly own. It’s no small feat that every Uber driver I’ve ever had has been friendly, professional and excited to be part of this emerging ecosystem.
I recently finished Ben Horowitz’ book The Hard Thing About Hard Thingsand in it he talks about a very simple formula for determining whether a company should be subsumed by a larger organization or remain independent and go all the way. Ben posits that if A) the size of the market is massive and B) you have a good chance of taking the market, you shouldn’t sell. In Uber’s case, the market for moving people and things is so massive that it’s almost hard to fathom, and as long as they continue to field the best team in their space, they should never sell.
The best companies aren’t really companies at all—they’re movements. From fighting tooth-and-nail with entrenched taxi cab interests and local governments to sending teams across the globe to expand the product’s footprint, Uber is one of those special companies that comes along once in a generation. Movement-companies can become self-fulfilling prophecies of success and growth because they attract the type of people who believe in the mission and make winning even more inevitable. And unlike so many high-growth startups in Silicon Valley, Uber is a cash machine, paying out millions of dollars to drivers every week and generating tons of revenue.
Some things Uber could do to continue winning big:
Uber could partner with Apple and have their app come default on every iOS device that ships, much like Google maps did originally. This will further establish Uber as the logistics and transportation platform of record, just as Google is the dominant player in the search market. I could also envision a deeper integration with Apple Maps that surfaces Uber “mass transit” pick up points and drop-off/delivery points for packages.
Uber could take Apple or Google maps integration a step beyond surfacing nearby Uber Transit and Uber Delivery outposts. Imagine a prompt in the lower right corner that shows you how far away an Uber driver is from your current location at any given time. Apple users who don’t have the Uber app yet could even pay for their ride through iTunes—the trade-off of course being losing some control over the customer graph in exchange for access to 200M Apple customer’s credit cards.
Uber could activate iBeacon within their app to create a mesh network of beacons across the platform, both within cars when drivers come online and amongst users. The network could be used to let customers know when rates are low or surging, cars are available nearby or packages are en route—even when the app is closed.
Uber could create a “Give Uber” feature that allows a user to pay for a ride or delivery for someone else. Imagine paying for a ride for a homeless man to a job interview or creating a Kickstarter campaign that funds transportation for elderly home residents to the SF Moma. The kind of good that can be done with Uber is unlimited if the ability to give the gift of Uber becomes real.
As a Marketing Manager, I give props to whoever nailed the “moving people” positioning for Uber. These two words encompass so much of what the company’s future can be and the longterm value they can build. Creating a global transportation fleet powered by humans is such a monumental and worthwhile undertaking that it’s hard to even put a valuation on it. In the next five to ten years, I think we will see an Uber that becomes embedded in our lives, our cities and our communities and stands tall with companies like Google and Apple as one of the skyscrapers of the Internet Age.
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