The First Few: Uber

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Today, we have the next edition in our series, The First Few, where we look at how successful companies acquired their first customers.

Let’s dive in.

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You must have found yourself on a snowy evening, standing on the sidewalk, freezing and desperate to find a quick ride home, but still for the life of you not being able to get a cab.

Or at least that’s what happened to Travis Kalanick and Garrett Camp when they met in Paris, at LeWeb, the very night the Uber empire began.

Their vision was to offer a new way of transportation, one you could rely on whenever, wherever, at just one click’s distance on your own phone.

So what first started as a limo timeshare service (yes, that was the initial idea) later became UberCab, an app to connect drivers and riders across town.

They launched in 2010 in San Francisco, a city that was well-known for its taxi problem back then.

15 years later, they’re present in pretty much every major city across the country, plus 10,000 more around the world.

It’s hard to imagine life without Uber today. It’s become one of the main players in the transportation industry without even owning any vehicles or garages. It’s made its way into the top 100 most valuable public companies in the whole world.

But all this could only happen after those first few customers.

TIMELINE

• 2010: Launched in San Francisco.

• 2011: Valued at 60 million dollars.

• 2013: 100 million dollars in revenue.

• 2014: 500 million dollars in revenue.

• 2015: This was the first year Uber surpassed 1B dollars in revenue, with $1.5 billion.

• 2016: $6.5 billion in revenue.

• 2018: $11 billion in revenue.

• 2019: $14 billion in revenue.

• 2020: The year of confinement costed Uber a revenue drop to $10.20 billion dollars.

• 2021: $17 billion in revenue.

• 2022: $31 billion in revenue.

• 2023: $37 billion in revenue.

• 2024: Last year brought Uber over $43 billion dollars in total revenue.

HOW UBER ACQUIRED THE FIRST FEW CUSTOMERS

• Referral Program: This was one of Uber’s most powerful strategies to create brand awareness and drive user acquisition in the early days. The referral program included free rides or ‘Uber credits’ to reward users who (you guessed it) referred friends to the app. Not only did this help Uber leverage its existing user base and hopefully bring them back by offering them a good deal, but it was also an easy way to acquire new users at a low cost.

• Rating System: Even from the start, Uber was known for it. The words ‘rate your trip’, along with five star-shaped buttons would show up on your screen every time you made it to your destination. Had a bad trip? Rate your driver one star and their average rating will lower down for everyone to see. This system really made the difference for passengers in terms of safety, because it gave them some sense of control over the experience that they certainly did not have with traditional cabs.

• Digital Marketing: If it’s the year 2010 and you’re creating an app that requires people to have a smartphone, chances are those same people are using said smartphone to go on Facebook and Twitter. Uber was smart to invest in targeted advertising and sponsored content on these social media platforms in order to increase their visibility, get people talking and get new customers.

• Reliability: When it comes to transportation, Uber made it its mission to be the most dependable option out there. That was the main priority even before it all became about the lowest possible fee. To be able to get on your phone, click a few buttons and hop on a car in a matter of minutes was what made the product unique, what offered the most value to any rider considering to try Uber out.

• Word Of Mouth: At first, the Uber app could be downloaded by anyone, but could only be used to request a ride with specific codes that Travis and Garrett gave to their friends to try out. And so those friends told other friends and pretty soon, he says, their inbox was getting full of people who also wanted a code. Guess you should never underestimate the efficiency of good old word of mouth.

KEY TAKEAWAYS

• Uber’s a tech company, not a transportation one. San Francisco at the time didn’t need more cabs, they just needed to be better connected with passengers. Understanding the difference was key to their early success. There were drivers and there were riders all across town, so they took it upon themselves to build the bridge between them- a digital bridge, that is. It saved them a lot of money to let go of the idea of owning the assets, but focus on handling the logistics instead.

• User-centric Platform: Nothing beats simplicity and efficiency. From the beginning the Uber app’s purpose was to eliminate as many steps as possible in the process of calling and waiting for a cab. Even the transaction was already accounted for by filling out your credit card information beforehand. That’s reducing the customer’s journey steps to a minimum for an easier, more straightforward experience of getting a ride. Who wouldn’t want that?

• Exploit Your Biggest Trait: We’ve talked about Uber’s accesibility already, but arguably not enough. This truly made the world of a difference when trying to persuade taxi’s regulars to switch to Uber. So when you identify the thing that sets you apart in whatever industry you’re trying to take over, you just don’t shut up about it.

Learn more about the Uber story:

• Travis Kalanick's Relentless Ambition

• All Hail The Uber Man! How Sharp-Elbowed Salesman Travis Kalanick Became Silicon Valley's Newest Star

• The History Of Uber

• Travis Kalanick on This Week in Startups

In the past nearly two years, I’ve published dozens of deep dives on world-class founders, sharing how they built their companies. These typically take 20-30 hours to research and write. The most recent ones are below:

Best,
Justin

Founder of Just Go Grind

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