The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20Growth: Uber's Expansion Playbook for Scaling from 10 Cities to $10BN in Revenue | How Uber Acquired 1M Drivers | How Uber Solved the Chicken and The Egg Problem in New Markets and What Uber Would Be Like with Travis Still There with Scott Gorlick
Fri, 30 Aug 2024
Scott Gorlick was employee #99 at Uber. Over 6 years, Scott built Uber in Atlanta and helped the company scale from 10 cities to $10B in revenue. Scott is also a prolific angel investor having written early checks into Lime and Standard Cognition to name a few. In Today's Episode with Scott Gorlick We Discuss: 1. The Driver Acquisition Playbook: Scaling to 1M Drivers How did Uber acquire 1M drivers? What was the playbook? What worked? What did not work? How much of a role did driver-to-driver referral payments have in driver acquisition? What did Lyft do on the driver acquisition side that Uber should have done? What did the retention look like for drivers on a 30, 60 and 90 day period? 2. The City Expansion Playbook: What was the expansion playbook that Uber used for new cities? What worked in ramping demand in a new city? What did not work? How much of a role did promotions and discounting play? Lessons from them? Why did Uber often let Lyft launch in a new market first? What was the benefit of this? How did Scott see the maturation rate change with new markets opening? How fast did each subsequent market reach profitability? 3. Travis Kalanick and What Uber Could Have Been: How would Uber be different today if Travis was still in charge? What are the biggest mistakes that Dara has made with their M&A strategy? What are some of Scott's biggest leadership lessons from working with Travis? How did Travis create such strong followership and cult around him? What were the single biggest management mistakes made by Travis?
So at Uber, we saw almost every city as its own startup. The right team that we were hiring for three roles. One was we sent in a launcher and the launcher would be responsible for hiring a team. In a general market, we would want a general manager who acted as like the CEO of the city, overseeing both driver and rider. And then the
The second role that we hired was an operations manager that would oversee sort of the driver area of the operation and be responsible for growing that. And we'd also work on getting a marketing manager that would oversee the rider side, BD, partnerships, building out the early grassroots efforts in the community.
This is 20 Growth with me, Harry Stebbings. Now, on 20 Growth, we sit down with the best growth leaders in the world to unpack their playbooks for scaling incredible products and communities. Today, we're joined by Scott Gawlik, employee number 99 at Uber. And today, he unpacks two incredible playbooks that Uber had.
He unpacks their driver acquisition playbook that allowed them to scale to a million drivers. And then he unpacks their city expansion playbook that allowed them to scale from 10 cities to $10 billion in revenue. Scott's also a prolific angel investor, having written early checks into Lime and Standard Cognition, to name a few. And this episode is incredibly granular.
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Thanks, Harry. Excited to be here.
Now, I would love to start just with a little bit of context before we dive into the incredible stories that are coming. Tell me, how did you make your way into the world of growth, join Uber, I believe as employee number 99?
Harry, it's a crazy story. So I finished up school in 2011. And when I finished up school, there were really only two things that people did. They either went to investment banking or they went to consulting. I chose consulting. And very early on, I realized that it wasn't for me. probably on like week three.
But the silver lining of the experience was on the weekends, I could go out and fly to San Francisco as long as I was back at the client site on Monday morning. So this was 2011, 2012, and I was going out and meeting companies like Airbnb, Square fairly early, along with like 50 other companies. But nothing really clicked until I was in Chicago one night.
I was trying to get to a work dinner, and I was trying to find a taxi. It was raining. And I had heard about this app where if you press the button, you can get a ride. So I downloaded the app. And two minutes later, my first Uber showed up. It was an Escalade. And I was immediately in love. Absolutely magical experience.
So that night was working on a deck pretty late at night, probably wrapped around midnight or 1 a.m. And had this Jerry Maguire moment where I was like, huh, I need to be a part of this Uber thing. What's the most simple thing to do? So I decided to email Travis at Uber.com, not thinking that I would hear anything. And I got an email back.
And over the next few weeks, I got to know the team, eventually took an analytics test, took a creative test, and then flew out to meet the team probably a couple of weeks later. And because I was so young when I got in the room, I said, don't worry, guys, I'm old enough. They seemed to think that was really funny. I was 23 and didn't know anything.
But they sent me back to Atlanta to launch Uber's roughly 10th city as employee number 99.
So I didn't know the context there when I asked that question. I did not know that it was like a direct cold email to Travis. That is awesome. And that's also a lot of responsibility on the shoulders of a 23-year-old to open a city. How did you build in Atlanta then? You go back, take me to that. Yeah.
Yeah, so it was an incredible experience. I was living in Atlanta at the same time, so I didn't really have to move. But when I got back to Atlanta to launch Uber, it was really about building the operation from scratch. When you're starting a marketplace, you really need to do two things. You need to get supply and you need to get demand.
So for Uber, the hardest thing was the driver side and we need to get a lot of drivers very quickly. So when we went into the initial market, we got a Yelp list of all the drivers in the city and sort of like called through and tried to get them to sign up with Uber and got our initial list of drivers that way and launched a few weeks later with something we call a rider zero.
What did you say to them when you called them up? What did they say? What percent said yes? Just take me to that.
So I'd be like, hey, this is Scott. I work at Uber in Atlanta. We're starting a new ride sharing service where, you know, you can pick up riders between your trips to the airport. And, you know, we help you fill your downtime. Is this something you might be interested in? Right. And, you know, most drivers hadn't heard of Uber and were a little bit skeptical.
They were willing to give us a shot because it didn't cost them anything to join. They would come to our office and we'd give them an iPhone, which is a story at some point. When we give them the iPhone, they'd be able to pick up a rider 20 minutes later. So we'd say, hey, if you don't like this, bring it back and no skin off our back.
So you call up, say, 100. What percent say yes?
Probably like 75.
Okay, so we're onboarding our first 10, 20. Take me to the onboarding of the drivers. You fix supply and then demand just floods in the door? Just take me to that.
Yeah, so we onboarded the drivers. They'd show up at the office. We'd do a 60-minute onboarding. We'd check out their cars. We'd tell them a little bit about the company. And then we would take them through the training on how to use the app. And then we'd put them out there. And for the first two or three weeks of the city, dude, I was nervous.
It was 0 out of 10 cars utilized, 1 out of 10, 2 out of 10. And then one Friday night, I was out. And I think I was actually out of town at an Uber-related summit. And I'm sitting next to some other guys that are at different cities. And they're like, it's going to happen. It's going to happen.
And within like 10 minutes span, we went from like two out of 10 cars utilized to all 10 cars utilized and like 100 people opening the app. And it just totally flipped. And from that point forward, we just needed more cars. It wasn't about the demand side. Yes, we had to do the partnerships. Yes, we had to integrate ourselves in the community.
But it was really about getting as many drivers on board as possible.
How did you retain the drivers when it was one out of 10, two out of 10? Because the whole thing is like the symmetry of timing, making sure it's aligned. How did you keep them when there was nothing coming?
Yeah, so we solved what I guess people call the chicken and egg problem or the cold start problem in marketplaces by doing a couple of things. In the early days, we wanted to make sure that drivers, when they were sitting around, were paid for that time. So in the early days, we paid a driver $20 or $30 an hour to sit there. And this lasted probably 60 or 90 days into a market launch.
And then after it became clear that the driver was making more than $20 or $30 an hour, We removed that guarantee and sort of let the marketplace float naturally, right? We also did things like we put drivers near places where we knew would have high demand in cities. And then we made it really easy on the demand side to work for your friends.
So if you were riding in a car with somebody and they hadn't used Uber yet, by the time you got out of the car, you would have referred them and you each would have gotten like $10 off your next ride.
You have this moment where you're like, holy shit, we have 100 people on the app. We're fully utilized. How do you ramp supply at scale then? And are you doing paid marketing at this point?
No. So in terms of scaling up drivers, we did things that didn't scale for a lot longer than people would think.
What did you do that didn't scale? I'm just intrigued.
Yeah. So for probably the first million drivers that we onboarded, a lot of our processes were manual. So we weren't doing a lot of paid spend on Facebook. We were doing a little bit on Craigslist. We weren't doing a ton on Google. But it was really the operational teams going out and finding drivers. It was that cold calling.
It was getting drivers to show up at the office and batching onboardings first with one driver at a time, then five, then 10. then you would basically get a conference room at a hotel to onboard 25 drivers at a time or 100 drivers at a time. And it just scaled up. Other things that we did that I think were super effective were we'd go where the drivers were.
We knew that we had a captive audience on Monday mornings and Thursday afternoons when drivers picked up and dropped off people from the airport. And we knew that if we went there with snacks or coffee or rented a conference room where they could chill out between rides, we could pitch them on driving Uber. And we saw it as a very incremental to what they were building.
So every city at Uber was kind of like running a playbook. If we found something that worked in one city, we'd bring it everywhere else too.
What were the biggest things that worked in cities that you brought everywhere? So renting a hotel room, giving it to them for downtime and then pitching. What else?
Honestly, people underestimate how effective cold calling was. Cold calling was an incredible mechanism to get people through the door. And then the other thing, Harry, that worked super well is referrals. When we started doing referrals of drivers, we would pay like a $25 or $50 bonus for a driver to bring their friend.
And then when they completed their first 10 trips, we pay out the bonus on both sides. Obviously, as the business scaled up, the referral amount piece got quite a bit bigger. But we found that when we tapped into a specific driver community, they all kind of knew each other. And we're very happy to refer each other because Uber allowed them to buy more cars and expand their business.
And it really just helped them grow as sort of a business at large.
Can I ask, what didn't work? What were some early mistakes in driver acquisition, specifically actually, that were like, oh, that was a bad one?
Yeah. So we made a lot of mistakes. So I would say the number one mistake we made in a lot of cities is we probably got kicked out of every office that we joined early because we were renting space in co-working spaces. And a lot of these co-working spaces weren't too happy with drivers coming by like all hours of the day and sort of disrupting the flow.
So I think that was sort of a major error that we made early on. I think other things that we did that were kind of a little bit challenging in markets is I think that... Where we messed up was it was a very like 24-7, 365 operation. There were people in cars every single hour of the day. And we probably understaffed a little in the early days, right?
So, you know, for the first year in Atlanta, I was the only person handling the driver side. We had Keith overseeing the city as a general manager. He was incredible. And we had a marketing manager. I probably had like 1,000 or 1,500 drivers that were just me. And like, you know, we didn't have any of the AI tools that we did today. It was just like...
All on a Google voice and sort of back and forth texting Zendesk. We let a lot of things slip through the cracks, but the business on the foundation was working.
Were you concerned at the time that the economics were upside down? Obviously, when you start a city, the economics are always going to be pretty ugly in the early days. It takes a while for these new cities to mature. Were you concerned in the day to day that the economics did not look good?
I think when we talk about unit economics, I think like at scale, we always kind of knew that the margins would correct themselves at scale if we could kind of rationalize the competitive playing environment, right?
Can I ask you in terms of those kind of margin improvements, how did you see margins and economics change as the company progressed in new cities? Like did the maturation rate become much quicker? What were some lessons from that? I'm just intrigued.
Yeah, so I would say the biggest difference on the unit economics over time was we had to play the game on the field. There were a lot of competitors in different markets. And at the same time as we were raising money, SoftBank was pouring money into all the different competitors, right? So even though we were in 2014 and the business was five years long,
like the unit economics as we launched UberX and had more competitors actually got worse over time because you started spending so much money to acquire drivers, to acquire riders. And until the competitive market like rationalized, right? And SoftBank sort of like pulled back a little bit or decided or Uber decided exactly like where we wanted to play.
It was very challenging to basically be like, hey, Harry, we're going to cut all driver incentives tomorrow. We're going to cut all rider incentives because we would have seen that market share reflected and that would have stopped our growth.
With the increase in competition and increasing cash to competition, did you actively see it become harder to acquire drivers?
Yeah. There was a point in San Francisco, and don't quote me on this number, is over time, right, like we were paying $25 or $50 for referrals in Atlanta. And then we started paying like $250 to each side, the driver that referred and the driver that signed up. And then we escalated to 500, 500.
And I think there was a point in time where in San Francisco and a couple of other very competitive cities, we were paying $1,000 to each side. So $2,000 for driver acquisition. We would put some sort of thresholds around that, right? The new driver would have to do X amount of trips and maintain this quality rating and do this sort of acceptance rate.
But there was a period of time, probably like 2014, 2015, 2016, where things got very gnarly.
How did you define a retained user? You know, with Facebook, they always said it's like after five friends, then you're a retained user. What was the metric to understand user satisfaction retention as a core North Star?
Yeah. So I think on the rider side, we were looking at like total spend, right? Like what's the monthly spend and sort of how is that growing over time? And we would look at like rides per week and rides per month and be able to understand like how we're mapping into their day-to-day routines.
I would argue that rider spend is not a true reflection. I could take one long trip and it doesn't mean that I really love Uber, but if I do velocity of trips, 10 trips, it means that I do. Which one did you really focus on?
I would say rides per month is probably the most important and understanding rides per week and sort of how it maps to people's routine. Because some days, like you said, you might have like a long airport trip and that might distort the co-work hours over time. And then on the driver side for retention, what we were looking at is like, hey, how far are they retaining it?
Like 28 days, you know, 56 days, 96 days. And just understanding like if a driver stays with us for three months, they're likely to stay with us longer. And sort of looking at the underlying trip metrics, how many trips they're doing per week, how many, like what their ratings are. And then also like how many hours they're putting in, right? Some people, this is a full-time thing.
And for like 90% of drivers, it's very part-time, right? Less than like 10 hours a week.
What was good retention on the driver side? Say 28, 60, 90 days. How did that vary?
I would say if you started the year with 100 drivers, I think you would probably have 25 or 30 of them left at the end of the year. That would be good.
Not hugely dissimilar to consumer subscription, to be honest. How did the product offering look when you were doing Atlanta and the subsequent city rollout in terms of the different tiers of Ubers in terms of luxury? What did that look like?
Yeah. So when I started at Uber, we were only black cars. And what was challenging about that is there are only a certain number of black cars in a given city, right? Like in Atlanta, there might have been a thousand black cars. And while you can create more and get more on board, you're never going to build like a massive TAM business unless you open it up for UberX.
So we started launching UberX more probably in late 2012, late... early 2013. And then sort of as we started rolling out UberX in more markets, that was probably 2013, 2014. That's when the business really started to explode.
Well, did it explode from pretty much day one? Like was there immediate product market fit on UberX?
There was a media product market fit on UberX. And what was really interesting about UberX is when we launched UberX, and this was an operational nightmare, in a lot of cities, we actually did free UberX week. So for an entire week, we would do free UberX. It was a marketing expense, right? And we were basically running at probably 80, 90, 100% utilization all the time.
And we knew that when we did it, that it would be hard to kind of fill that demand. But people were really excited about UberX and like a better, faster, cheaper option to use Uber. Over time, we were able to build more supply, right?
That is impressive. How much money did that cost? But the idea is then you get a habit in the consumer, they build a habit of forming exercise with it and then retain.
Yeah, the idea in terms of like ROI on free UberX week was previously Uber was just a black car product. And by launching UberX, we could do better, faster, cheaper than a taxi. And we kind of wanted to come out with a bang, right? And to be able to do that, we were comfortable saying, hey, this free UberX week is going to cost us X trips in a week times X dollars.
And, you know, we were comfortable with that spend because if we look forward six months, this is going to be a lot bigger.
Would you say now with the benefit of hindsight, free UberX week was incredibly, incredibly instrumental to the success of UberX?
I think it would have worked no matter what. I think we had strong product market fit. But I think what was particularly interesting about free UberX Week, looking back on it 10 years later, in hindsight, was the competitive dynamics. So in a lot of ways, when we launched UberX, the main competitor was Lyft. And Lyft's flagship product was UberX.
And what a lot of people don't know about Lyft is when we started launching UberX, we let Lyft go first. And we had a policy that said, hey, if Lyft launches in a city, we are going to wait 30 days to see if the law enforcement comes after them. And then we're going to launch after that.
So as you probably know from Uber, that was a very abrupt, it was a very different tack that we had taken on other launches and it didn't last very long, right? We probably did that for like three or four or five cities and then we just started launching at the same time.
So when we launched UberX, it was about market share and it was about getting as many drivers as possible, as quickly as possible so that we could win that market and carve out a position that we felt really confident.
Was it very clear when you were winning a market early on?
I think what was interesting about the Uber-Lyft dynamic is when we went into a market like Atlanta, we had been operating for 18 months before we launched UberX or 12 or 18 months. And Lyft was kind of new on the scene. So they didn't necessarily have the brand that we did. So for us, it was a brand extension. of saying, hey, now it's the same Uber, but better, faster, and cheaper.
And Lyft had to come in and sort of build that brand equity. So I think that was challenging in Atlanta for them and some of the markets where Uber was more established. But if you go to a place like the center of the country, where both services are launching at the same time, like in Oklahoma City. It was more of a dogfight in the early days.
And we certainly cranked up our spend to make sure that we were winning early market share and getting the drivers quicker. I think the big differentiation in Uber versus Lyft is that we had on-the-ground teams in every market. We had an Atlanta City team. We had a Philadelphia team. We had a Chicago team. And Lyft operated completely out of San Francisco.
So while they would fly in launchers to a city who would stay for a couple of weeks or a month or kind of like pop in and pop out, we were with the drivers every single day and sort of working closely with them. So I think our speed and proximity to them gave us the edge because Harriet wasn't really about like growth marketing in terms of like growing the rider side.
It was just how many drivers can you get? And that sort of drove the network effect and helped you get bigger.
Talking about the differentiator there, being on the ground, being in person, when you launch a new city, can you just talk me through that city playbook rollout? Do you just pick random people and send them? How many do you pick? What's the organization? Can you just walk me through that?
Yeah. So at Uber, we saw almost every city as its own startup. That was an incredibly free thing for people that were young in their 20s and 30s to kind of go into a market and create it from scratch. And the playbook was probably 180 steps. We should probably open source it at some point. It's on an Asana checklist somewhere. How we thought about it was we wanted the right team.
For us, the right team meant we were hiring for three roles. One was we sent in a launcher that would kind of pop around from city to city. We had launchers that started out in LA, then did Philadelphia, then did Atlanta. And sort of the profile of the launcher was, uh, MBA type private equity banking. And, you know, the launcher would be responsible for hiring a team.
So in a general market, we would want a general manager who acted as like the CEO of the city overseeing both driver and rider. And that person was, uh, very similar background to the launcher, banking, private equity, consulting, MBA. Stanford class of 2012 was very good to us. And then the second role that we hired was an operations manager.
And that was more like banker consultant types like me that would oversee sort of the driver area of the operation and be responsible for growing that. And then we'd also work on getting a marketing manager that would oversee the rider side, BD, partnerships, building out the early grassroots efforts in the community.
Okay, so they're sitting in an office day to day and they have complete free reign over the city. How does that control and decision making look like from their perspective?
Yeah, so everything was pretty autonomous, right? In the early days, every city had the freedom to experiment and try things. And I think we had a pretty flat work structure in the early days. Everybody reported into Graves, who was the first CEO and later became the COO. And what's really interesting about that is... We all kept each other accountable, right?
We were all doing really hard things. And every week we would get on like a city call where an all hands call and every city would go down the list and say how much gross bookings you did it last week, how many trips you completed, how many drivers you onboarded and sort of general highlights from the city. And we had everything in a dashboard.
Everybody at the company could see exactly what city was doing what, who is growing fastest. And it became like a really competitive dynamic that all just kind of like pushed each other forward, which was a really interesting approach.
Were there cities that were clearly behind and struggling? And what were the reasons for those struggling cities?
I think there were definitely cities that fell behind. But in a lot of cases, like the teams were just incredible. It was more function of the regs. So a lot of times, you know, if a city was struggling, it would be due to the regulations and the laws. So, you know, they would make it really difficult. to operate, they would take in drivers, they would try to shut us down.
And over time, that regulatory situation cleared up where we were able to operate more freely, or we ended up moving the teams to other cities or working on other projects. But I would say it wasn't like certain markets were underperforming because of underperformance. It was more like external factors that people couldn't control.
When you get a regulatory warning, when you get regulatory controls put on you, how does that feel? What does that look like? Can you take me to one?
South by Southwest, Austin 2014. The mecca for all things tech. In Austin, we were not allowed to operate because there were two rules in Austin that prevented us from doing so. If you ordered a black car in Austin... The minimum fare, whether you're going a block or a mile, was $55.
If you ordered a car and it showed up in one minute, you had to legally stare at it for another 29 minutes before being allowed to get in. It made absolutely no sense, Harry. So what we did in 2014 was we decided that we were going to do South by Southwest, as we'd done the previous years. And this year, we decided to do black cars. And we actually did the $55 minimum fare, which was a bonanza.
A lot of drivers did very well. And we brought in drivers from Austin, from Dallas, from Houston, from San Antonio. And it was incredible. Authorities weren't super concerned about the pre-reservation, like get a car, and then it shows up 29 minutes later. et cetera. But what we did on UberX really inflamed them. So what we decided to do was we decided to do free UberX for all itself by Southwest.
But what ended up happening was that we paid the drivers a set dollar amount per hour. So the drivers were paid. And then we basically said, okay, cool. We're going to let the riders ride for free. So what ended up happening was the regulators ended up targeting some of the cars and requesting specific cars to come to specific places.
And on the way out of the car, the ride would proceed as normal. And on the way out of the car, the rider that was their plant actually left a $20 bill in the car just in the backseat. And then after the driver let the rider out of the car, the cops would come up and cite the driver. So that was an incredibly frustrating experience with regulators among laws that just didn't make sense.
We scrambled our whole team back at the house. We worked with counsel and we were able to make sure that everything worked out okay. But Harry, these laws are absolutely insane and I'm a much bigger fan of smaller government. Did the team view Lyft as a competitor? Yeah, I mean, I think Lyft was an incredible competitor. They did a lot of things right early on.
I think they did a great job on the driver's side building liquidity and, you know, probably did a better job leaning in there from us. What do you think they did that you didn't do that you'd take? one of the things that we probably messed up, we were probably a little bit transactional at times with drivers in terms of scale.
And if I could go back in time, that's something I would have reinvested in. But I think that's something that Lyft got right early on.
We mentioned kind of reckless versus necessary playing the game on the field. How much of an impact did promos have, discounts have? How much of an impact did that have in driving early demand?
Not really much. Once competition came in, you could start to see market share swings based on the specific rider promo that Uber was offering in a city in a given week. And then we'd measure it and understand what Lyft was doing. Or like if we made a pricing move, they would make a pricing move. Like there was a lot of back and forth and we would see those effects in market share.
It wasn't anything to do with the product. It was just pure price.
There's some elements which at the time seems brilliant. And with hindsight, you're like, that was really stupid. What at the time seemed brilliant that you look back on and are like, I can't believe we did that.
We tried to do too much, simply put. Specifically, we were looking at doing a vertical takeoff and landing type helicopter play. We were doing Uber Elevate. There were just a lot of things that became distractions from the core mission of moving people around cities and delivering food that were problematic and hindered Uber's growth.
But at the time, we thought they were actually really smart and we wanted to go all in.
What did Uber get most wrong, do you think? When you look back now, what was the mistake?
I think our aggressive stance with riders and politicians clearly worked because we were able to create a lot of fans of Uber. But if I could go back or we could go back and do it all over again, I think we would have found a way to present our image in a way that was less combative. especially with media. I wish that we could have built like a better story. We had a lot of bravado.
We had a lot of swagger. I think when you come out like that, everybody wants to build you up on the way up and then they want to tear you down on the way down. And I think, you know, I probably would have been combative in the areas that we were with like writers and politicians, but a little bit more humble and gentle with sort of media.
In the maturation of Uber as a company, With the transition of TK out and Dara in, do you think they slowly ingratiated that the regulator is our friend, friendly face?
If you look at where Uber got to, it never would have become what it was without Travis. Travis is such an incredible operator, one of the best CEOs of the generation. Uber would not have become the $150 billion company that it is today without him.
I think over time, what would have happened is when a company goes public and when a company matures, the young upstart company that you are has to be a lot more mature. And I think a lot of that transition probably happened under Dara and over the last few years since COVID.
What's your favorite lesson from working with Travis? You saw him across different stages, across different expansion segments. When you look back, what was your biggest takeaway or lesson from seeing him operate?
I think what Travis is really good at is speed. Here's a quote that's, fear is the disease, hustle is the antidote. What he did better than anybody else and does better than anybody else is he sees something and he moves quickly. It's, hey, like, let's try this out. If it works, amazing. We're going to pour more gasoline on it. And if it doesn't, we're going to keep trying until we figure it out.
And I think what's really unique about Travis as a CEO, his level of understanding across product and operations is very unmatched. He could dive into the weeds with engineering, but then he could nerd out with you on positioning cars in different cities and talking to drivers 30 seconds later.
The context switching and just the ability to create things at speed and empower his teams to think that they can run through walls was unmatched.
Do you think it was the right thing for him to move on? I don't think so. Where would it be now if he was still there?
I'm a big fan of founder-led businesses. And I think Travis is an incredible founder who should have been given the opportunity to lead Uber into the next generation. It's really unfortunate how things happened and played out.
And I think that while Dara and the team have done a good job building the business, and it's a $150 billion company today, I think that founder-led businesses do better over the long term. I'm really encouraged by what I've seen from Dara and the team. But I do think, you know, you lose some of that founder's edge without Travis and some of that magic. And I think the speed slows down.
How do you think it would have been different though? Do you think it would be more products? Do you think it would be more countries, different brands? How do you think about a Travis versus a Dara in terms of how it would be different?
Yeah, I think things probably would have been different had Travis stayed. I think specific things would have been on the M&A side. There were some deals we did in 2020, 2021 that didn't make a lot of sense. I know Emil talked about postmates. I think the Drizzly acquisition probably didn't make much sense either.
And some of the tie-ups that we did strategically in different regions probably weren't the right bet. And then I think that on the Eats side of the business, things would have been different. When we launched Eats, it was growing really fast. But if you look at DoorDash versus Eats in the US, the market share is pretty pronounced. I think DoorDash has something in the 60s.
Uber has something in the 20s. Well, Uber Eats is still like the top food delivery brand worldwide. I think we missed a big opportunity and were distracted by everything that was going on when Travis left to really execute. And like, I think the narrative is really around the DoorDash focused on the suburbs and Uber focused on the cities. And I think part of that is true.
But I also think we were probably going, we were going through a really hard time. And it was hard to grow that business at a fast rate when all the change around us was happening.
Did it feel leaderless at the time?
A little bit. I think when a company loses its founder, it's a very different situation. We had a deep bench of people that had been at the company for a very long time. We trusted them to run the business. But when you have a committee or a team of 12 people running a business that had gone through a really challenging year, it's going to feel the effects of that.
Can I just ask one final one on Travis? And then I do want to move to a more broad startup advice where we do a quick fire. He inspired this like followership. I think the best founders inspire followership. You see it with the Collisons, Toby Lutker at Shopify, Travis, where I know many early Uber employees and they just fucking love him and they love each other.
And it's like this intense familial sentiment, which is really special. What did Travis do to generate this followership?
The best founders built cults and their cult leaders. Travis, what he was really good at was inspiring a team. We would look left, we would look right. We would all have a lot of work on our plate, but we knew that If we put our heads down and did it, there would be an incredible journey on sort of the other side. And Travis was really good of explaining what and the why behind everything.
And I think like Travis was always willing to roll up his sleeves, dive in and figure out the answers to the messiest problems. The best idea always won with Travis. And we were all kind of like going to war together every day on this like mission together. And that felt really good. And that's what built the Lifelong Bonds.
Dude, I would love to do a quick fire with you. So I say a short statement. You give me your immediate thoughts. Does that sound okay?
Let's do it.
Okay. So what's the most common, expensive, deadly mistake you see founders making?
I think the biggest mistake that I see founders making day to day is not having handle on their metrics, right? Everybody measures metrics in like a different way. And I think we've kind of entered an era of death by a thousand dashboards. And I would love if everybody sort of said, hey, here are the three or four most important metrics for our business and align around that.
What's the hardest part of the Uber business today? The area I have the most questions about today is on autonomous vehicles and what the strategy is there. What should the strategy be there? I think the notion that Uber was a hardware company and building cars is probably hard for a software company.
So I think the decision to partner with the leading AV players in the space, doing things with the Waymos and the Cruzes of the world, and trying to bring their fleets out to Uber is the right long-term strategy. I guess my question's around, hey, how far out is AVs? What does it look like? And what does the business look like?
What's the number one reason that Uber beat Lyft?
I think it comes back to really being close and in the cities where we operated. When we could be with drivers one-on-one 24 hours a day, seven days a week versus being in San Francisco and flying in like a couple times a month. Being close to your customers is such a big edge.
What element of the Uber business is amazing but not discussed enough?
I think the ads business is a monster because it's, I think, in a billion dollar run right now. And what's really interesting is if you think about Uber as a platform, it's the app where you go from point A to point B. It knows where you're going. It knows what shops you're visiting, what restaurants you like, etc. And if you have that knowledge, you can then push ads to somebody in the app.
And whether it's like video or text or a promotion for a movie or the US Open. There are a lot of things that you can do with that data and I think they're just barely starting to scratch the surface. What would you most like to change about the world of growth? Alignment on metrics. I think across companies we have very different definitions of what revenue means, right? Is it annual run rate?
Is it annual recurring revenue? Is it gross bookings? Is it net revenue? Is it total payment volume? And I think if we all started speaking the same language, the world would be a lot better place. It would make it easier for growth investors.
For me, it's like input and output metrics. The amount of times it's like, hey, revenues are metric. And I'm like, no, number of rides per week is our metric. I don't care about the revenue. That is the output metric. Final one. What's the best growth strategy that you've seen in the last 12 months? And why have you been so impressed by that one?
I'm a huge perplexity user. I think it's an amazing product. Huge fanboy, to use your language. You know, I think one of the things they've done recently that's really interesting is they're offering a free pro membership to anybody with a LinkedIn premium account or an Uber One membership.
So instead of spending $20 a month or $250 a year, you plug in your info and they'll give you the free usage. So they basically kind of locked in people for a year.
And if you believe that perplexity could be like the next Google search, you're happy to pay that CAC or sort of that free membership and sort of the GPUs over the year to acquire those users and generate stickiness when a lot of tools are facing high churn.
I love that. I totally agree. I saw that partnership and I was like, I haven't smart my man. So yes, I agree with that. This has been so much fun. As I said at the beginning, for me, the best is when you have stories that then are very tied to lessons. I mean, the stories are incredible. I still can't get over the first email to Travis at, but thank you so much for joining me.
And I've so enjoyed this.
Harry, thanks so much. It was a pleasure.
I mean, some of those stories are just fantastic. That South by Southwest one is just awesome to hear and incredible to hear the hustle of the early team in those early Uber days. If you want to watch the full interview, you can find it on YouTube by searching for 20VC. That's 2-0 VC. But before we leave you today, let me tell you about Outgrow. Let's get real for a second.
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