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Uber Whats Fueling Ubers Growth Engine?

Uber Co-Founder and CEO Travis Kalanick explains, In


the beginning, it was a lifestyle company. You push a button
and a black car comes up. Whos the baller? It was a baller
move to get a black car to arrive in 8 minutes. (Source)
But what began in 2009 as a luxury car service in San Francisco is now valued at $3.76 billion
and operates in more than 35 cities worldwide. As of August of this year, Google Ventures has
officially cast their vote of confidence in the startup with a $258 million investmenta full 86%
of their $300 million annual budgetand for good reason. (Source) Ubers revenue is up 18%
month over month, and in the past year alone theyve grown from just 75 employees to more
than 300. (Source)
In fact, at Disrupt NY 2013, Bill Gurley of Benchmarkinvestor for both eBay and Uber
claimed, Uber is growing faster than eBay did [it] is probably the fastest growing company
that weve ever had. (Source)
How did Uber do it? As a multi-sided marketplace business model, how did they crack the
chicken-and-egg problem that so many marketplace startups struggle with? Much like Belly,
Uber used intense market focus to create local network effects in their launch city, San
Francisco, while fueling word of mouth growth through targeting of the early adopting Bay Area
techset.

The Need for Uber

If on the outside chance youre not familiar with Uber, the basics are as follows:
In the past, when you needed to get somewhere, hailing a cab was a nightmare. You either stood
outsidewind, rain, sleet, snow, or shinewaving your hand in the air until you could hail a
cab, or you called a taxi dispatch (if you had their number) and had to wait 20 minutes until a car
arrived.
Once you arrived at your destination, you fumbled to count out the right amount of cash plus a
tip, negotiate with the driver who never had the right change, or who forgot to start their meter,
or whose credit card machine was broken.
All told, very few people viewed finding and using taxi service as something enjoyableit was
simply something that they dealt with due to the lack of an alternative. Before Uber you were
beholden to an entrenched, monopolistic entity, whose sloppy execution and lack of regard for
the customer experience was evident at every touch point.
This poor experience and a perceived lack of ability to change anything about it created pent up
frustration and demand from consumers who were eager to find anything better. Uber tapped into
that frustration and demand exceptionally well.
Uber is completely changing the way getting private transportation is done in several key ways.
First, their smartphone app is integrated with Google maps so that you can see how far away the
nearest cars are, set a meeting point on the screen, and hail a car to meet you there. You can even
see your drivers information (including ratings) as you watch the car get closer to your location.
Uber drivers call or text to confirm that theyre on the way, giving you peace of mind that your
order was received. Once your car arrives (usually within a few minutes), the driver greets you

by name and you hop in. The cars are black cars and SUVs. Uber X, a lower cost version of the
service, is made up of a fleet of well maintained sedans.
Once you arrive at your destination, the app charges your card, and youre free to go on about
your day. Theres no need to deal with cash, change, tips, or receipts. You just hop out. (Source)
Uber has removed the friction from the typical taxi cab transaction, and made it highly enjoyable
in the process.
Bill Gurley sees Ubers key to growth as a simple one: Uber offers a great product. He explains,
The product is so good, there is no one spending hundreds of thousands of dollars on
marketing. (Source) While this is certainly the case, it isnt the only factor driving growth at
Uber. First, lets go back to the beginning and look at some of Ubers early tipping points.

Early Traction

Though the company was founded in 2009, Uber didnt officially launch until June 2010. In
January 2011, just six months later, they had had between 3,000 and 6,000 users and had already
done between 10,000 and 20,000 rides. (Source) So what got them there?

Completely Solves Problems for Riders


First and foremost (as Gurley points out, and as with Square), Uber provides a solution to a real
problem that impacts millions of people. In all sense of the word they have disrupted the
monopoly of taxi cab transportation that exists in many cities and reinvented the experience from
top to bottom.
Among the many problems Uber is tackling are: poor cab infrastructure in some cities, poor
service and fulfillmentincluding dirty cabs, poor customer experience, late cars, drivers
unwilling to accept credit cards, and more.
Uber set out to reimagine the entire experience to make it seamless and enjoyable across the
board. They didnt fix one aspect of the system (e.g. mobile payments for the existing taxi
infrastructure), they tackled the whole experience from mobile hailing, seamless payments, better
cars, to no tips and driver ratings.
By avoiding the trap of smaller thinking, and iterating on one element of the taxi experience (say,
by making credit card payments more accessible in the car) they were able to create a wow
experience that has totally redefined what it means to use a car service, sparking an avalanche of
word of mouth and press.

Early Adopter Advocacy


In many cases, the importance of the early adopter tech community can be overstated. In Ubers
case it cannot. Uber knew that launching in San Francisco meant that they would be interacting
regularly with the tech community who are continually looking for new tools and services that
improve their quality of life. Uber took aim at those people by sponsoring tech events, providing
free rides, and in general driving awareness among this audience.
San Francisco, with its notoriously spotty cab service served as the perfect foil for the launch.
As early adopters, completely fed up with the taxi situation in the city, tried Uber, they took to
blogs, social media and every other way possible to tell their friends about this new way to ride.
The Uber experience became a vector for growth as early adopters in the know impressed their
friends with the ability to call a black car from their phone with a couple taps. These new riders
were immediately wowd by the experience and became new users and advocates within the span
of a single car ride.
So how did Uber reach those early adopters? One distinct channel was event sponsorship. Uber
was highly active at local-area tech and venture capital events and provided free rides to
attendees. Uber knew that these attendees were well connected and highly likely to share their
experiences with friends, tech press, and social media audiences after trying Uber.

By seeding this audience, they were able to create a growth engine that hinged on the fact that
these adopters would show their friends, who would become new users after their first Uber
experience. Leading to a growing network of passionate customers.

Word of Mouth from Satisfied Customers


Much of Ubers success can be attributed, as mentioned above, to the fact that it is totally mind
blowing compared to the frustrating and broken taxi experience. Max Crowley of Uber Chicago
explains:
Weve found that our growth is driven substantially by word of mouth. When someone sees the
ease of use, the fact that they press a button on their phone and in under 5 minutes a car appears,
they inevitably become a brand advocate. (Source)
According to Kalanick, Uber relies almost exclusively on word of mouth, spending virtually
nothing on marketing. He explains, Im talking old school word of mouth, you know at the
water cooler in the office, at a restaurant when youre paying the bill, at a party with friends
Whos Ubering home? 95% of all our riders have heard about Uber from other Uber riders. In
fact, for every 7 Uber rides, word of mouth generates a new Uber user. (Source)
Uber has even gotten attention from the likes of comedian Dave Chappelle, actor Edward
Norton, venture capitalist Marc Andreessenwho calls it a killer experience,and AirBnB
CEO Brian Cheskywho claims that Uber makes it very easy to not own a car. (Source)
This word of mouth is as much todays growth engine as it was in early days. Uber doesnt need
to do traditional marketing to drive users, they simply find ways to fan the flame of that first trial
to reach new people and grow their user base.

Leverage Distinct Growth Opportunities


In addition to providing an overwhelmingly superior solution, Uber has also leveraged some real
life situations to spur growth, which Kalanick refers to as accelerants. These accelerants
indicate a concentrated, temporary need for Ubers services. These include:
1.
2.
3.
4.

Restaurants and Nightlife


Holidays and events
Weather
Sports (Source)

Each of these factors makes driving yourself problematic at best (and in some cases downright
impossible), and cities in which they coexist are especially receptive to Ubers services. Uber
focused on executing in cities where those problems are near constants to drive accelerated

adoption. For example, In Chicagoa city with great nightlife, intense weather, and tons of
sporting events Ubers initial viral growth was double whats typical for them (see viral
growth numbers cited below).
Special events and holidays also provide an opportunity to showcase Ubers model, and the
company was able to deliver on key nights like New Years Eve in San Franciscoa city
notorious for a lack of taxiswhich drove buzz for the new service. These events created intense
demand and pressure to get new users to take their first Uber ride, driving spikes in new riders
and total rides.

Benefits for Uber Drivers


Not only does Uber transform the experience for riders, but its also good for drivers. Discussing
Ubers expansion to D.C., Kalanick explains,
There are a lot of drivers in this city who are out of work. Because of that, there are a lot of
drivers and limo companies that are coming to us to basically help their drivers make a living.
(Source)
Uber doesnt employ drivers. Instead, the service acts as a liaison between people who need rides
to drivers who are in the area. This arrangement can bring in more than $500 a day, which
amounts to a week of work for some cab drivers. (Source) Like any good service, its a win-win
for all parties involved, and this is certainly another factor contributing to Ubers growth.

Todays Growth Engine


Now, lets examine todays growth engine a bit more thoroughly. In addition to the points
mentioned abovewhich are still very much driving forcesUbers growth engine is comprised
of several related, moving parts, including:

Intensely Local, City-by-City Expansion


But perhaps the reason Uber has expanded so quickly is because they acknowledge that growth
is not one-size-fits-all. What worked for San Francisco may not be whats right for Chicago or
New York, which is why they take it city by city, with local efforts tailored to each new location.
Because of the politics, regulations, and interests that make up each city, Uber needs to adapt
their launch plans to suit the unique topology of each new market. Its this ability to go into a
market, understand who the suppliers are, who the special interests are, and account for those
dynamics that makes Uber successful right from the start in new cities.
Kalanick explains: We think that cities deserve to have another transportation alternative. It
sounds crazy to have to say that but you have to do that because you have incumbent interests
which are often trying to curtail innovation and curtail sort of transportation alternatives that
might compete with their existing business. And, because of that, it requires us to take a very
local approach to how we go after a city. We have launchers that go into [cities] and turn
nothing into something. I like to say they drop in with parachutes and machetes [and] get highly
involved with the suppliers, people who own cars and run car services, and really just make sure
that we can launch a service that is high quality from the start. Being local and speaking with

local voice is important when youre doing transportation and means you know whats going on
for the city. (Source)
A city in which Uber has seen unprecedented growth is Washington D.C. Kalanick explains,
Were not really sure exactly why, but D.C. really, really likes our product a lot. That is
reflected in our growth, and the sort of overall demand weve seen has been unprecedented. He
claims that, month over month, growth is in the 30 to 40 percent range. When asked if this
growth in D.C. reflects that people are not happy with their alternatives, Kalanick replies, I
think one can make that conclusion. (Source)
Update: As reflected by Noah in the comments, the effort of Uber to support these city launches
is massive and all encompassing, from local events, industry partnerships, business development
and more. Uber makes sure that their marketing and business efforts are in full support of fueling
that word of mouth engine, driving local growth.

Huge Potential to Disrupt Transportation


A major factor contributing to Ubers growth is its potential. Not only is the company changing
the way a lot of cities are hiring cars, but theyre doing so in a way that stands to transform car
ownership and transportation in generaltaking an established infrastructure and utilizing it in a
totally new way.
Michael Wolfe, an entrepreneur and frequent technology commentator explains:
If you think of Uber as a town car company operating in a few cities, it is not big.
If you think of Uber as dominating and even growing the town car market in dozens of
cities, it gets bigger. (Data point: there are now more Uber black cars in San Francisco
than there were ALL black cars before Uber started).
If you think of Uber as absorbing the taxi markets, it gets pretty huge.
If you think of Uber bringing taxis to parts of the world that did not have them before
because of insufficient density, it gets even larger.
If you think of Uber as a personal logistics service that can drive your kids to school and
back, take you to work, pick up your parents at the airport, drive you to date night so you
can get your drinks on, it gets very very large.
If you think of Uber as delivering both people as well as things (packages, dry cleaning,
groceries) it gets even larger.
If you think of Uber as a replacement for your car, it gets even larger.
If you mix in a fleet of self-driving cars, orchestrated by Uber, it grows again.
If you think of Uber as a giant supercomputer orchestrating the delivery of millions of
people and items all over the world (the Cisco of the physical world), you get what could
be one of the largest companies in the world. (Source)
This potential is the primary reason that Uber has garnered so much attention from investors. The
economic, environmental, and everyday implications are huge. They are changing the way that

people think about transportation, making it less about everyone purchasing his or her own car
and more about purchasing rides (like water or electricity) as we need them.
Understanding this potential, Kalanick envisions Uber as an instant gratification service
giving people what they need, when they need it, whether thats a ride or some other delivery.
As to what this other delivery might be, the possibilities are pretty limitless. (Source)
Kalanick explains, What were doing right now is were in the experimentation phase where
you sort of find some interesting ways to do promotions like Uber ice cream. He continues, Its
very straightforward for us to basically give [drivers] a phone with an app on it and say, Look,
when the thing is blinking, hit the screen and go to where the map tells you to go. And you dont
have to pick them up and take them anywhere, just give them ice cream. (Source)
In fact, so far the company has experimented with:
on-demand Uber Ice Cream
on-demand roses for Valentines day
on-demand barbecue in Texas
DeLorean rides in San Francisco
UberCHOPPER helicopter rides to the Hamptons
partnership with the NFL Players Association to promote safe rides for NFL players
as well as more standard promotional efforts, such as $10 off coupons and the like.
Though these are primarily marketing promotions, they are also ways to test the market for
demand, and they hint at the companys potential direction for growth. Though nothing is set in
stone, many interpret Google Ventures whopping investment in Uber as an indication of whats
to come. Google is, after all, in the process of making the self-driving car a reality, which means
the prospect of a fleet of driverless cars shuttling us to and from work, school, fun, errands, and
home is no longer purely in the realm of science fiction.

Controversy and Press


Ubers word of mouth engine is fueled not only through word of mouth; the company is fast
becoming public relations experts. As Uber rolls out into new cities, they face myriad lawsuits
from existing interests, challenges to their legality from state and local lawmakers, and varying
degrees of support or resistance from drivers.
The company has done a masterful job of turning these dust ups into a platform to tell their proconsumer story. Uber has taken what could be seen as a massive business hurdlelitigation
and turned it into an asset that drives growth.
As Uber launches into market after market, these controversies are played out in the court of
public opinion, and the power of Uber advocates and the quality of the experience, create an
outpouring of local public support for the company. This support changes laws, helps pave the

way for Uber in new cities, and the local and national press coverage helps Uber reach more
potential users who hear about an innovative new company recreating a transportation
experience that is nearly universally disliked by people everywhere.

Low Risk Trials


Uber knows that once you ride Uber, itll be your preferred mode of getting around from that
moment forward. That insight and confidence makes it easy to make the first ride a free trial. The
company routinely hands out $20 first ride credits that let new users take a free Uber ride to try
them out. This incentive removes any barriers that new riders may have and after experiencing
Uber they are exceptionally likely to become a long-term customer.

The Remaining Pieces of Ubers Growth Engine


Uber is by all measures a growth machine, and while it is easy to sit back and point to the press
theyve received as the main driver, its clear that the big idea, executed flawlessly is the true
engine. The company has smartly built its team to fuel that growth engine to the full extent
possible.
From public perception management, to lobbying, to relationship building with established taxi
commissions and car drivers, to brand advocates and community managers who fan the word of
mouth flames, to special promotions that highlight the potential that is Uber, the company spread
the word, Uber has built not just a sustainable engine, but one powered by rocket fuel.
Now with a war chest of funds, and a powerful model, Ubers job is to continue to execute and
do the hard work of overcoming existing legislation and models to create the environment for
them to excel. Uber is just getting started, and tenacious execution is what stands between them
and their ultimate vision.
Uber is a fascinating case study because it is one of those truly disruptive ideas that completely
redefine an industry and change the way people consider long-entrenched beliefs and habits. In
addition, their success in a highly political arena, building a multi-sided marketplace among
many disparate and entrenched interests is a model for anyone looking to take a moonshot with
their startup idea.
We hope this case study helps startup founders and entrepreneurs who are looking to disrupt
legacy marketplaces in formulating their growth strategy. While fighting political and entrenched
special interests is very difficult, we believe that Uber shows that building a pro-consumer
product that completely reinvents the experience can lead to sustainable growth and a lasting
business success. Whether youre tackling healthcare, government, transportation, or other well
established marketplace, Ubers growth provides insights on what it takes to find the growth
youre looking for.

What did we miss? What else was key to their growth in both the early days and today? Share
your thoughts and insight in the comments, and help us make this the definitive piece on Ubers
meteoric rise.
Found this great nugget on the design of the Uber app. Awesome annecdote:
http://bryce.vc/post/64889707700/most-people-wont
Quoting from an interview with Elle Luna:
So I was using Uber all the time in San Francisco, even though I hated the design. And
then I went to the Crunchies awards ceremony and at a post-ceremony event, where I was
in a ball gown, I saw the CEO of Uber, Travis Kalanick, sitting at the bar. I was three
whiskeys deep at this point and I walked up to him and said, I use Uber all the time and
I absolutely hate the app. I think you should bring me in to fix it. He replied, Oh, yeah?
What are the three things youd fix about it? I said, Id redo the logo, redo the entire
app, and change the rating system. I think there was something about being in a dress
that empowered me to say such things (laughing). And do you know what he said? He
said, Be at the Uber office at 9am on Monday. I told him I couldnt do it alone and he
said hed have a team for me.
I thought the offer was bogus, but I went to Ubers office on Monday at 9am, laughing to
myself, and Travis led me back to a project room with two other designersthey were
from outside of Uber and he had flown them in from New York! We took on the Uber
app and redesigned it in three weeks. In fact, one of the guys he flew in from New York,
Shalin Amin, ended up staying on full-time. The app is gorgeous and last night it won the
Fast Company 2013 Innovation By Design Awards for the transportation category,
beating out Mars Rover and Tesla.
I just want to emphasize the importance of Uber having localized growth teams in each
city. The amount of local events and partner outreach that they partake it is pretty
amazing. Every new city is a new launch and a new community that gets created from the
ground up. While the Uber brand helps, its still on the biz dev/ partner growth teams to
hustle and cultivate growth.
Check out the Uber city blogs to see the array of events and partnerships Uber uses to
spur growth: http://blog.uber.com/cityblogs/
Great point Noah. We probably didnt emphasize the importance of the local
growth teams enough. I agree that they really seem to be relentless in their drive
to create traction in each market.
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o

Morgan Brown (@morgan) October 22, 2013 at 6:17 pm Link

Hey Noah,
Thanks for the comment. I just added your thoughts under our city-by-city roll out
section. Great insight.
Morgan
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Michel Falcon (@michelfalcon) August 25, 2014 at 8:46 pm Link


Hey Morgan,
Where would I find the city-by-city roll out section on the site?
Thanks.
Michel.
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NoahSidman-Gale (@noahsg) October 22, 2013 at 7:23 pm Link


Thanks for the shout-out Morgan. These case studies are incredibly useful.
Looking forward to learning more!
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Sean Ellis (@sean) October 23, 2013 at 10:21 pm Link


I had an illuminating chat with my Uber driver today in San Francisco. I was particularly
surprised to hear how the Lyft pink mustache led him to become an Uber driver
He explained that when he first saw the pink mustache on some cars he asked one of the
drivers what it was. The driver described the Lyft model and said that he was earning
upwards of $500 per day. Prior to Uber this seemed really attractive for my driver, so he
signed up to become a Lyft driver. However, he quickly became frustrated that he wasnt
earning close to what the other driver said (ie, I just saw a Lyft ad that says drivers make
$20/hour). Even worse, he said that Lyft was not transparent with payments (it wasnt a
consistent percentage of the passengers payment). Finally he complained that he often
spent 20 minutes or more waiting between passengers.

He expressed his gripes to a friend who suggested he try signing up for Uber. My driver
said Uber is much more professional toward their drivers and even invites then to attend
events. More importantly, he found that he could get an Uber rider request usually within
a minute or two of dropping off another passenger. In fact his income became so
predictable that he was confident enough to lease a pretty nice Mercedes (which he uses
as an Uber x driver). Contrast this to the only pink mustache car I saw in sf today it was
a crappy old car that looked to be from the late 90s.
Given that Uber is such a positive experience for the drivers, theyve not surprisingly
attracted a pretty large fleet. Our wait for an Uber driver today was about one minute
from the time I ordered it.
Ive often thought that Uber isnt a very defensible business whats stopping a driver
from signing up for multiple services? But after todays conversation I now understand
that it is a winner take all situation. Drivers dont need to have multiple services if Uber
is keeping them busy on its own.
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LincolnMurphy (@lincolnmurphy) October 26, 2013 at 8:47 pm Link


I just have to add this.
1. Lyft is definitely interesting but I have zero interest in riding with just some
person in their normal car (actually, Lyft is in Dallas now and the cars are even
crappier than what Ive seen in San Francisco) no matter how vetted the driver
is. Just not what Im down for; but Im not the target user for them. In fact, that
leads me to
2. I was telling someone about Uber in my overly-excited way and they asked me
if it was cheaper than a cab. That blew me away I had to stop and think about
that for a minute are they? No. But who cares. You see, Uber doesnt compete
with a cab in my mind (where positioning really takes place, kids).
Uber isnt disrupting cab service for me. They arent an alternative to a taxi
because I wouldnt take a cab most places unless I absolutely had to. I would
drive and pay obnoxious amounts to park or valet. Or I would pre-arrange a
towncar for the airport, but I take Uber because its easier and its cool. And this
is really interesting to me, because I simply dont do many things because theyre
cool, but I do Uber. And thats a big reason at least for me.
Just some random thoughts as we all try to make sense of something like Uber
from the outside.
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AndyHuang (@andalf) October 24, 2013 at 10:54 am Link


Awesome post! One of the best Ive ever read. Any idea what tactics they used to recruit
their drivers?
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Sean Ellis (@sean) July 11, 2014 at 12:25 pm Link


I often interview my Uber drivers and it seems that many find out about it from
their friends.
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SamAshken (@sam-ashken) October 24, 2013 at 3:20 pm Link


Great post!
That Michael Wolfe quote plus the Google Ventures investment really makes you think!
One observation and one question:
1. The name is awesome. Ive been through a fair few naming processes and cant
immediately think of any startup with a better name. Who is not going to enjoy talking or
hearing about. and remembering, a a great new service called Uber??
2. The fact that they have grown so fast outside the dominant taxi companies /
monopolies implies that there is A LOT of spare capacity in terms of drivers and black
cars. This especially surprises me in New York where sometimes, in Manhattan at least,
it seems like about 75% of cars are yellow taxis. So the question: have Uber just very
successfully made use of all this extra capacity among drivers and black cars outside the
dominant taxi companies / monopolies? Or has capacity of these two increased at all
because of Uber?
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Sean Ellis (@sean) October 24, 2013 at 5:21 pm Link


I just noticed a Get Free Rides link in my Uber account. It offers a coupon code that I
can share with friends to give them a $10 credit for trying Uber. Every friend that uses
the $10 credit will credit my account $10 in free rides too. I can earn up to $500 in free
rides. Obviously it means that Uber is happy to pay a $20 customer acquisition cost and
they do spend money on marketing (beyond sponsorships). From my days at Dropbox I
know this type of double incentive referral program can be very effective.

Anyone know if they are only offering it for a short period of time when they seed a new
market? Im based in Orange County, CA and Uber only recently expanded here. Figure
maybe more established markets arent seeing this offer.
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Dylan La Com (@dylan) October 24, 2013 at 8:02 pm Link


The referral promo is a persistent feature of the app everyone gets a promo code
that they can share at any time. Max redemptions is 50 though.
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RaminFarzami (@ramin-farzami) October 30, 2013 at 10:29 am Link
Excellent analysis. Very in-depth and enjoyable to read. One aspect that really stood out
to me was the future potential for Uber to reshape the fundamental ideology of vehicle
ownership. They are changing the way that people think about transportation, making it
less about everyone purchasing his or her own car and more about purchasing rides (like
water or electricity) as we need them. Commoditizing transportation is obviously
nothing new in major cities like NYC that have mass transit infrastructure
(subway/bus/taxi) but in places without efficient mass transit infrastructure like Southern
California, in particular Los Angeles and Orange County this could be huge.
Im personally a car guy and love cars but would gladly ditch the need to actually own
and maintain one if an efficient and enjoyable alternative was available. I do think in an
individual car culture like Southern California transportation being enjoyable would be
an important key factor in evolving the personal nature of having your own car. Its a
regular sight in LA rush-hour traffic to see nearly every single car carrying only 1
occupant. From a pragmatic macro level this is really nonsensical. Unlike other major
cities LA and Orange County are spread out metropolitan areas so travel times/distance
from one location to another in your car are on average longer than for instance going
cross town in NYC. This makes your car a very personal and intimate place to spend your
time. Uber would presumably be able to provide that enjoyable experience users in this
demographic are accustomed to with their fleet options be it luxury or economic vehicle
choices.
Im really interested to see how/if this component of Uber evolves, because one way or
the other areas like Southern California need a realistic alternative to individual cars
being the primary mode of transportation.
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Adam Komarnicki (@akomarnicki) January 26, 2014 at 10:32 am Link


Hi, sorry for joining this that late, but I have one big doubt about Uber growth that I
would like to share. It refers to their prospects of international growth. I have lived in 10
different cities outside of USA (mostly Europe) and currently live in Santiago (Chile),
where Uber recently launched.
Simply speaking, many of the problems that helped its growth in the US, are not such a
big deal in other places. In Europe getting a nice cab from the street is quite easy, prices
are OK and I feel there is less need to be driven in style. Apart from that, there are
already many apps that help you hail normal cabs, just like Uber.
Does anyone have numbers/ insights about Ubers international growth? I just do not see
what the hype is about, from non-US perspective.
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SeanWilcox (@swilcox) June 22, 2014 at 11:07 pm Link


Great stuff. Thanks for the background. I can see how they grew the buy side. But how
did they grow the sell side, that is, how did they drive drivers to sign up?
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Sunny Juneja (@sunnyrjuneja) October 8, 2014 at 2:20 pm Link


Something Uber has continued to do well is bring drivers to their platform. One great
example of a growth hack was recruiting drivers from other apps by offering them a
bonus and guaranteed compensation.
1. Youve identified a very specific market segment that is easy to identify and has
already shown interest in driving for $$$.
2. It has viral effects baked in since drivers know other drivers on the platform from
events (there is an additional referral bonus).
http://blog.uber.com/500dollars
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marie flack (@areyoukidding) November 5, 2014 at 11:19 pm Link

Why and where are these writers getting their facts in regards to the monies being made
by Uber Partner drivers? There is a reason for Uber hiring 20,000 new drivers per month.
It could be because they are losing that many per month! After a driver realizes that no
matter how they cut it, with only using the 20% Uber retains per ride and the gas paid out
by a driving partner, the driver is netting below MINIMUM WAGE! Perhaps more
writers should ask the drivers current and past what they are in fact pulling in. $4-5 per
hour would be a common response! This figure represents 44 rides, 35 hours, a net after
gas only.$421.00 bucks! Sounds like a pyrimid scam to me! Keep signing up those
driver partners, Uber!
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Sean Ellis (@sean) October 22, 2013 at 3:15 pm Link


Kuddos to Morgan who did most of the work on this study. We had some fun
conversations assembling the growth engine based on the data Morgan was able to
uncover. Ill be curious to hear if other people agree with our assessment. Of course, if
youve come across other growth initiatives from Uber, please share them with us in the
comments.
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BrendanO'Driscoll (@brendanodriscoll) October 23, 2013 at 2:24 am Link


Great article guys a very enjoyable and informative breakdown of Uber. Two points in
particular resonated:
1. Focus on the whole experience not just one piece
2. Uber doesnt need to do traditional marketing to drive users, they simply find ways to
fan the flame of that first trial to reach new people and grow their user base.
Lots of lessons to learn from this.
Brendan
Soundwave CEO
@soundwave
soundwave.com
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AnujAdhiya (@anujadhiya) October 23, 2013 at 3:17 am Link

I had a question with respect to Uber providing event sponsorpship


At what stage was this? In general boostrapped startups cannot afford to sponsor events
etc.
So what this after they had received some funding/backing or did they fund this
themselves (and if yes, what was the extent of this funding)?
The broader question is, are there specific criteria for early stage startups to consider for
hacking growth via sponsorships at relevant events?
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Morgan Brown (@morgan) October 23, 2013 at 10:48 am Link


Hi Anuj,
Great question. I know that some of their early sponsorships were for VC events,
which may have been given to them courtesy of their backers, or cost very little
money.
I also know that many events are happy to work with Uber to give free rides to
their attendees due to the convenience factor alone, and dont charge Uber
anything on top. So they get free sponsorship in exchange for the rides they
provide.
I will do some more digging and see if I can find some additional context for you.
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RachelMurray (@remtheory) October 23, 2013 at 4:05 am Link


Nicely done! I am a total Uber-evangelist. As a Bostonian, for me Uber has completely
revolutionized the horrible monopolies existing taxi companies had in a town where the
subways shut down earlier than the bars, the city isnt like NYC with taxis on every
corner and its, well, cold here a lot of the time. It makes going out at night safe,
comfortable and all around awesome. Thanks for highlighting this revolutionary
company. Its nice to see wow-companies win!
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Morgan Brown (@morgan) October 23, 2013 at 10:46 am Link

Thanks for the feedback Rachelwere with you, we love Uber. Theyve totally
changed the game.
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LincolnMurphy (@lincolnmurphy) October 23, 2013 at 6:40 pm Link


Okay. so Uber is yet another company with a fantastic customer experience (or product
or service). Great.
What Im looking for are case studies on products/services that arent great, arent
innovative, dont really meet any big need for a massive market, and have no natural or
inherent network effects to exploit but that have had massive viral and word-of-mouth
growth.
Where are those case studies? You guys picked the easy ones. ;-)
Before Uber arrived in Dallas, my special lady friend met me in San Francisco and we
took an Uber roughly 1 block from the hotel to dinner just so she could experience
this service that Id been raving about. Oh, and that Im willing to waste $15 at the drop
of a hat.
The driver said that was not the first time thats happened. In Dallas drivers have told me
people will take their friends around the block several times just to show them the
service.
Every driver Ive ever talked to San Francisco, NYC, Dallas, wherever has said Uber
has been awesome for them one driver said his business was up 40% this year (most
dont give me exact numbers like, but that sounds good).
On the driver-side here in Dallas, one guy told me that he loves Uber because he knows
who hes picking up (and their rating). Apparently he was robbed one time so Uber is
also a safety measure here.
Uber is also getting beaten up by the Taxi companies here in Dallas who are tight with
the city council. There were even undercover police taking Uber rides recently, looking
for violations to try to shut em down. Apparently all other crime has been eradicated in
Dallas (good to know).
Great Case Study guys
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Morgan Brown (@morgan) October 23, 2013 at 6:46 pm Link


Thanks Lincolnthrow down the gauntlet and name a few companies. Well see
what we can do!
In all seriousness, Belly is kind of an under-the-radar success, and well have
more cases of products that dont benefit from network effects; but I would be
surprised if great product that drives word of mouth is missing from many that
we do. It just speaks to the importance of product and must-have experience in
finding success.
Thanks for all your contributions to the community. It keeps us going!
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LincolnMurphy (@lincolnmurphy) October 23, 2013 at 7:07 pm
Link
Not sure youll find too many that fit my criteria because well my
criteria was stupid.
But, I did vote for Evernote, though. Thats an interesting growth story
since Phil Lebin has stated they explicitly avoided being social for the
longest time but still achieved massive growth. Why did that happen?
Clearly they have a great product, but that lack of an obvious network to
exploit is interesting.
I often encounter companies who say their top customer acquisition
method is word of mouth but when I ask how they know or even more,
what theyre doing to facilitate that they dont have an answer.
So Im always interested in how companies orchestrate that process both
directly (i.e. tell a friend) and indirectly (i.e. creating an amazing
experience like Uber).
And honestly, I had never heard of Belly before the case study so thats
cool.
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Morgan Brown (@morgan) October 24, 2013 at 9:59 pm Link

@Lincoln, I wouldnt be too surprised to see Evernote up here in


the near future. But youre rightwe do want to cover different
types of business models in different markets to uncover how their
growth engines differ from some of the well known companies.
I do think that most growth engines will include a version of the
must have product element too them. There are plenty of
businesses with OK products that because of awesome distribution
they went big with a so-so product. Usually they have a ton of cash
or get a sweetheart deal, like being bundled with Windows, etc.
Thanks for the encouragement and feedback!
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