Questions

It seems to be one of the fastest growing Internet companies in history.

It is not one of the fastest-growing internet companies in history. It is however, as Bronson points out, the best execution of a city-by-city, mobile service company roll-out. I believe that any localized service provider requires a significant "on-the-ground" presence to succeed and as Bronson articulates, Uber has developed an operational "playbook" that through continuous iteration, has produced great results.

Uber has spent extensively to do this, and has the best execution, but has also had failures where their playbook just hasn't worked, and cities have been abandoned or "postponed."

Uber's total customer acquisition cost is very high, but they have also sold investors on the belief that there is a tremendous lifetime value per customer (I believe this to be true), so they can spend high up-front. But their actual month-over-month growth of net new customers in most cities is not tremendous, nor does it have to be.

It should also be noted that Uber has almost become a verb around mobile-based "one click" service offerings. Companies pitch on the basis of "Uber for x", people (especially in SF) talk about wanting an "Uber for y", so there is tremendous value in the brand they've managed to create.

I think what it's taken for Uber to succeed should be considered a "cautionary tale" for many startups looking to replicate their playbook. The type of talent required and the capital required for a national, or even multi-city service is incredibly daunting. That said, done right, it's one of the most valuable assets.


Answered 8 years ago

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