Houston, TX
One cold night in the winter of Paris in December 2008, Travis Kalanick and Garett Camp, unable to access cheap transportation, had an idea, what if they could request a car driver via phone? That was the very start of the Uber company. Uber is nominated as one of the highest-worth start-ups with a net-reported income of $1.1 billion dollars. Why is Uber so valued? How did the start-up create a new market foothold that ensured its success? Let us start with the basics:
What type of start-up is Uber? It is not exactly a taxi service, it is an app that connects a driver with a rider. A simple mechanism that helped unprofessional but experienced drivers earn money. However, in terms of the market fields, back in 2008, it did not categorize in any market. It was a new potential clientele profit, a disruptive platform.
Disruptive platforms may ‘disrupt a market in two ways:
Reshape an existing business model
Create an entirely new market
Using innovation, their objective is to improve and resolve an unmet need using a fresh new approach. It is a very smart tactic used within businesses, as it is more likely to appeal to customers because of its improved methods.
Why are young companies likely to be more successful when creating new disruptive platforms?
Although start-ups have certain disadvantages within markets and reputations, they are involved with fewer risks indicating more flexibility. This allows them to search and seek inexpensive out-of-box products that could possibly become profitable. Compare this to a big company, a disruptive mistake could ruin their reputation, which is why they have certain resentment with the thought of creating a market.
Back to the Uber story, going back to 2009, Garett Camp at the time was the CEO of StumbleUpon, and he started developing Uber as a side project. Together with Travis Kalanick (Convinced to join Camp’s small project), in May 2010, its official launch was taken in San Francisco.
The simplicity of the needed action to order car transportation made the app’s popularity rise quickly. The push of a single button that automatically paid the driver and transported a customer to the needed location was exceptionally convenient. In less than 2 years, it was launched internationally in the city of Paris and had raised $ 37 million in funding from various rich investors (Menlo Ventures, Jeff Bezos, & Goldman Sachs).
Even with all the success and popularity of Uber, it was still a bumpy ride, from start to present. This indicates the importance of understanding the market. The start of a new company may ascend from anywhere, it just takes strategic coordination to smartly invest time in a new project.
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References:
Flentge, B. (2019, July 22). How a Disruptive Business Model Can Help Your Business.
Blystone, D. (2022, October 23). The Story of Uber.
Uber. (2020, January 16). What is Uber all about? Fun Facts about the Uber story.