The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World by Brad Stone
In THE UPSTARTS, author Brad Stone explores how Uber and Airbnb (and a few other "also-rans") drastically increased their business (and market value). This book caught my attention because both of the two big firms in this book are located pretty closed to me. I was vaguely familiar with the history of each company, but didn't really know much detail. Well, I know a LOT more now.
What's really amazing is how quickly Uber and Airbnb blasted-off: "How did they maneuver past entrenched, politically savvy incumbents to succeed where others had failed and build large companies in a staggeringly short amount of time?"
The author notes something really interesting about both Uber and Airbnb. They each have huge market value, but don't really have many assets: "Airbnb can be considered the biggest hotel company on the planet, yet it possesses no actual hotel rooms. Uber is among the world’s largest car services, yet it doesn’t employ any professional drivers or own any vehicles."
Much of the book details the long, bitter fights with regulatory commissions. I did not find these sections terribly interesting, but of course, regulatory battles figure prominently in the history of each firm. (FYI: In my area, San Francisco, the city enacted regulations hugely restricting how often owners can rent out rooms.)
Especially with Uber, the internal fighting and strategizing plays a big part of the book. The contention with Uber founder Kalanick reminds me a lot of Steve Jobs. The bizarre work atmosphere at Uber in the early years reminds me of Jobs cracking the whip on his elite team at Apple.
One really zany story regards one of Uber's original managers, Matthew Kochman. He became so fed up with Kalanick that he left behind 50,000 shares of stock. He has ample reason to regret this: "in just a few years, those shares would be worth more than a hundred million dollars."
As recently as 2010, Uber was puny--just a handful of employees and a score of drivers. Now, some estimates put Uber at $70 billion market capitalization. I had not realized the huge ramp-up in Uber business. In 2014, Uber had UberX in 26 cities. By 2017, Uber was in 500 major cities worldwide.
Both Uber and Airbnb made early missteps and paid the price in negative publicity. Uber had trouble getting enough drivers to meet wildly changing demand. (This led to the "surge pricing" idea.) I found the story of Uber's "surge pricing" fascinating. For instance, at one point, surge pricing caused massive spikes in the cost of a ride: "After midnight, prices spiked seven times the normal rate in New York and San Francisco. Passengers were paying more than a hundred dollars for relatively short rides."
Airbnb suffered horrific publicity of a different sort, when a blogger detailed how her home was wrecked by an Airbnb renter. This news spread quickly: "The tech-news sites piled on— Airbnb was bringing strangers together in homes without ensuring a safe experience." Obviously, this was a massive PR issue: "If this host’s home had been vulnerable to such methodical destruction, what could be in store for other people?" (The home-wrecker was later arrested in San Francisco on charges of possession of stolen property.)
All in all, I found THE UPSTARTS to be an interesting read on the history of two big players. The internal strategizing was fascinating; I thought the bitter fights over regulations was tiresome at times, but I understand the story would not be complete without these chapters. To be honest, I never thought Uber would "win" that regulatory battle, especially in the San Francisco Bay Area.
Advance Review Copy courtesy of the publisher. Photos courtesy of Pexels.