Lessons From Uber’s Rise

Why Read: Gain insights from Uber's transformative journey, understanding the importance of extreme effort, innovative capital strategies, and independent thinking in the face of criticism and media narratives.

Featuring: Jared Hecht (@jaredhecht), Venture Partner at Union Square Ventures

Link to Article: “Uber Appreciation”

Key Concepts and Tactics:

• Appreciating Transformative Innovation:

  • Point: Recognize and appreciate groundbreaking innovations that significantly impact everyday life.

  • "What Uber has accomplished over the past 15 years is nothing short of miraculous. I remember sitting outside TechCrunch Disrupt in San Francisco in 2010 when Travis pulled out his phone and showed Steve and me (and anyone else in a 2-mile radius who would pay attention) how he was calling a black car to pick him up. The app was clunky and the wait time was something like 20 minutes for a ride. Today I wait less than five minutes for a ride that is cheaper and safer than a taxi and available to me through the same app in virtually every city in the world."

• Understanding the Importance of Extreme Effort:

  • Point: Acknowledge that extraordinary outcomes often require extraordinary levels of commitment and work.

  • "Super outcomes require superhuman effort. Emil Michael, Uber's chief business officer, has been a long-time friend of mine and was an advisor to both my companies. I watched him as he helped to build Uber from a company that had recently achieved product-market fit to a global behemoth. I've founded two companies and I've never worked as hard as he did when he built Uber. Absolute commitment to winning was part of the culture of the company."

• Recognizing Innovative Capital Strategies:

  • Point: Be open to unconventional funding strategies that can create competitive advantages.

  • "Another underappreciated aspect of Uber was its bold and innovative "capital as a moat" strategy, rapidly raising billions of dollars round after round. They were criticized for their lack of profitability and for using equity capital to block their competitors from markets and investor pools. They were deemed a capital-inefficient business that was never going to work. But they took that capital and built out physical infrastructure across the world in one decade in a way that had never been done before and at a speed that, in retrospect, seems unfathomable."

• Thinking Independently Amidst Media Narratives:

  • Point: Develop the ability to form your own opinions and not be swayed by prevailing media narratives.

  • "Think for yourself, and don't get swooped up by media narratives. Uber caught an infinite amount of flack as it was coming up. It was as if the world, particularly the media, was rooting for its downfall. During the moment, its hard-charging culture and agglomerate-all-the-cash strategy seemed like a recipe for disaster. At least that's what the public narrative portrayed. But look at it now."

• Embracing Necessary Disruption for Growth:

  • Point: Understand that significant growth and innovation often involve challenging established norms.

  • "Yes, absolutely Dara has done an exceptional job as CEO, shepherding the company as a public institution. But you don't get to a place where you can hire a CEO like Dara without breaking some eggs along the way."

• Maintaining Perspective on Controversial Growth Strategies:

  • Point: Avoid rushing to judgment on companies employing unconventional or controversial growth strategies.

  • "It's easy to sour on companies as they are growing for doing things differently and for making mistakes publicly. But you don't go from nothing to iconic without trekking through many gray areas. It's important not to rush to judgment when the narrative and public sentiment turn."

• Recognizing Potential in Unconventional Approaches:

  • Point: Be open to the possibility that approaches that initially seem problematic may turn out to be significant advantages.

  • "Sometimes, things that are different that ruffle our feathers end up being true superpowers. I'm trying to be more conscious of that."

Balance Branding and Performance Marketing

Why Read: Understand the critical balance between performance marketing and long-term brand building, emphasizing the importance of human attention and trust in creating sustainable business value.

Featuring: Human Ventures (@Human_Ventures) , an NYC-based early stage venture fund and startup studio.

Link: “Brand Trust - Why Human Attention Beats Algorithm: Joe Marchese for AdAge”

Key Concepts and Tactics:

• Understanding the Limitations of Performance Marketing:

  • Point: Recognize that overreliance on performance marketing can hinder brand building and long-term success.

  • "The more dependent you are on performance marketing, the harder it is to build your brand. Building your brand is the only way to reduce customer acquisition costs over time; without brand affinity/differentiation, margin will eventually go to zero."

• Acknowledging the Complexity of Consumer Decisions:

  • Point: Understand that consumer decisions are influenced by a wide range of emotional and cultural factors beyond simple online interactions.

  • "Consumer decisions are governed by a much wider range of factors, including memories, anxieties, stereotypes, cultural differences, associations and trust built up over years and even decades. These emotional factors are what give brands permission to curate cultural moments, and they're what drive our decision to buy just about anything."

• Recognizing the Long-Term Nature of Brand Building:

  • Point: Invest in long-term brand building strategies that focus on storytelling and cultural relevance.

  • "Brands take years, if not decades, to build but are easy to destroy. Advertisers that rely primarily on performance marketing are ignoring this—sometimes with disastrous results."

• Balancing Performance Marketing with Brand Building:

  • Point: Use performance marketing strategically while still investing in long-term brand engagement and cultural storytelling.

  • "This is not to say that brands should avoid performance marketing. It is nearly impossible to do so, and they should strive to be experts in how to use performance marketing. But it is to caution that overreliance will come at a price, and it is as important to invest in engaging consumers and culture for which returns will occur on much longer horizons."

• Prioritizing Human Attention and Trust:

  • Point: Focus on earning and leveraging human attention through powerful storytelling and cultural alignment.

  • "As someone who has spent time in media, tech and venture capital, it is clear that it is as important to focus on how you will earn human attention and what you will do with it, as it is to focus on the AI and algorithms that help you access it."

• Emphasizing Brand Building for Long-Term Success:

  • Point: Recognize that a strong brand is the key to reducing customer acquisition costs over time.

  • "The only thing that reduces customer acquisition cost over time is brand. Our most successful CEOs and founders get this basic fact—what we give our attention to shapes the people we become and ultimately the products that we purchase."