Uber is now worth more than $60 billion and no wonder, have you ever tried the service? It’s magnificent! Uber ticks all the boxes for a successful start-up.
it’s based around technology (using your mobile phone to hail a cab) it’s disruptive in that it breaks the traditional model of a local taxi firm, who would receive calls centrally and dispatch drivers (assuming they have some available) to your location and effectively charging a fee for that service. So, what Uber does is completely cut out the middleman and allows you to deal directly with the cab driver. The cab driver is self-employed dealing directly with his client and is highly motivated to make sure you have a enjoyable trip. So the taxi is clean, the driver is courteous, sometimes overly so, I recently heard of a Uber driver offering “in car karaoke” at no extra charge! Perfect for that late night drive home.
What is more, the technology will tell you how far away your driver is and display his progress to you on a map. You can even get situations where different drivers will competitively bid for your fare driving prices lower and services up. When I said this disruptive service breaks the traditional model, I was understating, it actually smashes it into tiny little pieces! I recently spoke to an American contact who told me he’d sold his car, because Uber was far more convenient for getting to and from work and travelling around the city, that was in Miami and as Uber usage spreads around the world can expect the disruption to continue.
Have you tried Airbnb, have you heard of Airbnb? Well the business is about to raise cash that will see it valued at $30 billion. Airbnb was started by a couple from San Francisco who recognised that, at certain times of the year, it was virtually impossible to get a hotel room in the city. They wondered, if anyone might pay to rent out an air bed in their loft space. They advertised it online and an Internet sensation was born.
Food delivery service delivery Deliveroo just raised another $275 million taking its total funding to over $500 million.
Dropbox, a service that whilst widely used personally to share files, received a good deal of criticism from the business sector is still valued at more than $10 billion Alternative to dropbox.
So, what’s the pattern here, what can we learn, well principally two things.
Online or Cloud businesses are a good idea; they tend to be popular and widely adopted. The Internet revolution has happened and is continuing to do so. Businesses are connected online, people are connected online and what is more we DO things online. We hail cabs, book hotel rooms, order food, share photos and files and tell the world what we “like” and don’t like.
The other thing that we’ve learned is that bubbles and booms are about greed and fear. It’s the race to back the ultimate winner (and make the biggest amount of cash) leads to the bubble and the potential bursting of said bubble. After the bubble has burst it, the also-rans may still be successful businesses, just not as massively successful as the few true Internet stars. “Ask Jeeves” and “Yahoo” still sold for $2 billion and $5 billion respectively, even though the search engine world now belongs to Google.
So, online good, off-line bad and coming second or even third in the online world still counts as a success by any measure.