9 ms·

Just like Amazon at its IPO.

duxup 7y ago
Maybe I don't remember it well enough but Amazon's business model seemed a lot more ... tangible than Uber's don't you think?
- dymk 7y ago
  In the 1997, Amazon's proposition of "Online retailer" was also pretty far fetched. It wasn't obvious that their model was going to make them one of the largest retailers in the world.
  - duxup 7y ago
    I duno, buying stuff online seemed like the way of the future at the time IMO. When, how much and etc was just a matter of timing.
    - atemerev 7y ago
      So is gig economy. Jobs will continue to decline.
    - trynewideas 7y ago
      TechCrunch did a good job looking back at Amazon's IPO and it's a good read to clarify what Amazon was when it went public (a bookseller, not general retail), how insane its growth was (revenue up about 3,000% YoY from 1996 to 1997, more revenue in the quarter before its IPO than the entire previous year), and how fast the IPO came together (12 days to S-1). Even for all that growth, revenue was still around $15M. It was a minnow but it played all of its cards about as right as it could for an IPO. https://techcrunch.com/2017/06/28/a-look-back-at-amazons-1997-ipo/ https://techcrunch.com/2017/06/28/a-look-back-at-amazons-199...
    - NewsAware 7y ago
      The idea of "people won't buy things they can't judge by holding it in their hands" was still strong back then. That's why Amazon was successful selling books where quality was trusted implicitly without that physical judgment being necessary.
    - paulddraper 7y ago
      Doesn't ride sharing seem like the way of the future in your opinion?
      - duxup 7y ago
        Not necessarily.
      - visarga 7y ago
        Who's doing ride sharing? Certainly not Uber
        paulddraper 7y ago
        > Uber Technologies Inc. is a transportation network company (TNC) offering services that include peer-to-peer ridesharing, ride service hailing, food delivery, and a bicycle-sharing system. https://en.wikipedia.org/wiki/Uber https://en.wikipedia.org/wiki/Uber
  - fullshark 7y ago
    Online retailers wasn't far-fetched at all. It wasn't obvious they were going to become the everything store and dominate the market, but it wasn't like people were perplexed by a business plan of selling books online and sending them to consumers. If people are perplexed by uber today it's because the unit economics look horrible, and it doesn't seem like they will improve without a major technological advance. Edit: TBF, I was curious so I checked out AMZN's first year of trading: https://finance.yahoo.com/quote/AMZN/history?period1=852883200&period2=894783600&interval=1d&filter=history&frequency=1d https://finance.yahoo.com/quote/AMZN/history?period1=8528832... They dropped 20% on day one. I don't think that reflects investor skepticism re: shopping online, but skepticism re: the myriad risks they faced as one of many money losing online retailers.
    - SeanAppleby 7y ago
      Even with a major technical advance it's not obvious that they'll have a moat to defend their margins. All of the ride sharing platforms might just end up competing to the death on price without anything else to differentiate on, and in that future I'd imagine the person with the cheapest supply chain will win, and I don't see why that would be Uber.
  - guelo 7y ago
    It wasn't farfetched, everyone had the same idea, there were dozens of online retailers that IPO'd in those years. Amazon was just better managed so it was one of the few that survived the dotcom crash.
    - fullshark 7y ago
      They also started with selling media, which is the perfect industry to get people comfortable with shopping online as quality is nearly assured.
  - Animats 7y ago
    Right. At the time, I thought Sears would dominate that business. They had the big-catalog fulfillment thing down, and had for a century. All they needed to do was take it online. But Sears gave up on general mail order in 1993, when they discontinued their huge print catalog. They thought WalMart and the malls had won.
- malvosenior 7y ago
  As a heavy early Amazon and Uber user, I'd say not really. Both are pretty revolutionary and I certainly have been paying Uber a lot more than I was paying Amazon when they just sold books.
  - nonaime 7y ago
    I get how Amazon can be seen as revolutionary, but not how Uber (or even Lyft) is. I mean, when I think of catching a taxi back in the day, the only difference is that I made a phonecall instead of using an app to get the service. If it's the "gig economy-ness" of it, we had hacks in my hometown. Maybe there was a license requirement to be a hack, but it always felt like hacks were just regular schmoes who would charge a flat fee to take you somewhere.
    - malvosenior 7y ago
      I've had very extensive and very negative taxi experiences around the world. Uber is night and day from a UX perspective. Being able to see where the car is when it's on the way, pre-inputting your destination, paying through the app... The gig economy aspect was definitely revolutionary as well. It's essentially changing the nature of work (love it or hate it). As much as I love Amazon and always have, in the early days it was "just" ordering books online. Yes, that was great and again the UX was great but it didn't seem as revolutionary as Uber.
      - semi-extrinsic 7y ago
        I don't see how the UX thing is so revolutionary. I live in a city with 120k people, and the app of the local taxi company here does all of those things as well.
        malvosenior 7y ago
        That's not been my experience and definitely not before Uber existed and forced people to start copying them.
- tinco 7y ago
  You don't think selling taxi rides is a tangible business model?
  - duxup 7y ago
    The traditional system did, I don't see Uber doing it.
  - EpicEng 7y ago
    At a loss without any notion of how to make it profitable in the near future? No, I don't.
    - lkbm 7y ago
      I see no evidence that they lack a notion of how to make it profitable. Are they doing it in the near future? No, but why do they need to? There are clearly plenty of people happy to fund for the long-term payout. From what I saw in the S-1, their core platform -- which I assume is ride hailing -- was profitable until Q4 2018. They offer heavy incentives in order to compete, but once they're sufficiently established in a market, looks like they can become profitable on that front by no longer offering promotions in order to fight Lyft/whoever. They just need to stay solvent longer than the competitors, and being in more markets than the competition should help with that. Their R&D is also massive, but they could stop most of that if they needed to.
mrnobody_67 7y ago
Amazon was cashflow positive from the early days and raised less than $100m in its entire existence.
Naac 7y ago
Can you elaborate?
pastor_elm 7y ago
Amazon stock success has always been built on AWS.
- kgwgk 7y ago
  It went from $18 to $106 in 1997-1999 and it was not due to AWS.
- bdcravens 7y ago
  Amazon was a public company for almost 10 years before AWS was a product.
rtempaccount1 7y ago
My feeling though is that Amazon had a much larger moat to build, with distribution networks, warehouses, logistics etc. With Uber, what's their moat, so that when they raise prices to become profitable users don't just move away? Lyft/local taxi companies/public transport, all have the infrastructure to provide the service that uber provides.
- chrshawkes 7y ago
  I would personally pay twice the rate I pay for an Uber to be honest.
- throwaway082729 7y ago
  Lyft has to be in business till then. Local taxi companies are more expensive than Uber and inconvenient. Public transport is barely used. Uber is providing a subsidized public service while employing a lot of people. The moat is there but the question is one of diversification and sustenance as a public company. In the coming days, there'll be a massive internal push to reduce costs, diversify and become profitable. If the foundation of the company is strong, they'll be able to get through this period. Instead, if most of the early employees jump ship (which I strongly suspect is likely to happen), it's going to meander. For Uber's own sake, having a mature and repentant Travis back might not be a bad thing. They'll need a second wind at some point.
  - rtempaccount1 7y ago
    Local taxis are perhaps only more expensive due to Uber burning VC cash to compete? Public transport is barely used in the USA perhaps but that's not the only market Uber needs to compete in to succeed. And this isn't taking into account Uber's many run-ins with local authorities, which are dragging on , costing money and have the possibility to shut them out of some markets. From what I understand Uber's main answer to this is "autonomous taxis" but to me that's a long way from being a viable business model.
  - matthewaveryusa 7y ago
    Oh lyft will be in business until then. How do you think Google is planning on selling their Waymo rides?
kgwgk 7y ago
To be fair, AMZN was valued at $400mn at the IPO and not $80bn (only in 2011 did Amazon reach that valuation).
deleted 7y ago
[deleted]
aetherson 7y ago
Amazon went public in 1997 with revenue of $16M in Q1 of that year. Its revenue was up a startling 1,800% or so YoY. Its losses were about $3M, so about 19% of revenue. Its market value at launch was about $438M, about 27x quarterly revenue. Uber's Q4 2018 revenue was about $3B, up about 25% YoY. Its losses are a little hard to parse due to some tax shenanigans, but maybe $865M is about right (or maybe it should be worse), so 28% of revenue. Its market cap right now is around $85B, about 28x quarterly revenue.
ronaru 7y ago
Amazon was cash flow positive within few years (6?). Uber still isn't

Maybe I don't remember it well enough but Amazon's business model seemed a lot more ... tangible than Uber's don't you think?

dymk 7y ago
In the 1997, Amazon's proposition of "Online retailer" was also pretty far fetched. It wasn't obvious that their model was going to make them one of the largest retailers in the world.
- duxup 7y ago
  I duno, buying stuff online seemed like the way of the future at the time IMO. When, how much and etc was just a matter of timing.
  - atemerev 7y ago
    So is gig economy. Jobs will continue to decline.
  - trynewideas 7y ago
    TechCrunch did a good job looking back at Amazon's IPO and it's a good read to clarify what Amazon was when it went public (a bookseller, not general retail), how insane its growth was (revenue up about 3,000% YoY from 1996 to 1997, more revenue in the quarter before its IPO than the entire previous year), and how fast the IPO came together (12 days to S-1). Even for all that growth, revenue was still around $15M. It was a minnow but it played all of its cards about as right as it could for an IPO. https://techcrunch.com/2017/06/28/a-look-back-at-amazons-1997-ipo/ https://techcrunch.com/2017/06/28/a-look-back-at-amazons-199...
  - NewsAware 7y ago
    The idea of "people won't buy things they can't judge by holding it in their hands" was still strong back then. That's why Amazon was successful selling books where quality was trusted implicitly without that physical judgment being necessary.
  - paulddraper 7y ago
    Doesn't ride sharing seem like the way of the future in your opinion?
    - duxup 7y ago
      Not necessarily.
    - visarga 7y ago
      Who's doing ride sharing? Certainly not Uber
      - paulddraper 7y ago
        > Uber Technologies Inc. is a transportation network company (TNC) offering services that include peer-to-peer ridesharing, ride service hailing, food delivery, and a bicycle-sharing system. https://en.wikipedia.org/wiki/Uber https://en.wikipedia.org/wiki/Uber
- fullshark 7y ago
  Online retailers wasn't far-fetched at all. It wasn't obvious they were going to become the everything store and dominate the market, but it wasn't like people were perplexed by a business plan of selling books online and sending them to consumers. If people are perplexed by uber today it's because the unit economics look horrible, and it doesn't seem like they will improve without a major technological advance. Edit: TBF, I was curious so I checked out AMZN's first year of trading: https://finance.yahoo.com/quote/AMZN/history?period1=852883200&period2=894783600&interval=1d&filter=history&frequency=1d https://finance.yahoo.com/quote/AMZN/history?period1=8528832... They dropped 20% on day one. I don't think that reflects investor skepticism re: shopping online, but skepticism re: the myriad risks they faced as one of many money losing online retailers.
  - SeanAppleby 7y ago
    Even with a major technical advance it's not obvious that they'll have a moat to defend their margins. All of the ride sharing platforms might just end up competing to the death on price without anything else to differentiate on, and in that future I'd imagine the person with the cheapest supply chain will win, and I don't see why that would be Uber.
- guelo 7y ago
  It wasn't farfetched, everyone had the same idea, there were dozens of online retailers that IPO'd in those years. Amazon was just better managed so it was one of the few that survived the dotcom crash.
  - fullshark 7y ago
    They also started with selling media, which is the perfect industry to get people comfortable with shopping online as quality is nearly assured.
- Animats 7y ago
  Right. At the time, I thought Sears would dominate that business. They had the big-catalog fulfillment thing down, and had for a century. All they needed to do was take it online. But Sears gave up on general mail order in 1993, when they discontinued their huge print catalog. They thought WalMart and the malls had won.
malvosenior 7y ago
As a heavy early Amazon and Uber user, I'd say not really. Both are pretty revolutionary and I certainly have been paying Uber a lot more than I was paying Amazon when they just sold books.
- nonaime 7y ago
  I get how Amazon can be seen as revolutionary, but not how Uber (or even Lyft) is. I mean, when I think of catching a taxi back in the day, the only difference is that I made a phonecall instead of using an app to get the service. If it's the "gig economy-ness" of it, we had hacks in my hometown. Maybe there was a license requirement to be a hack, but it always felt like hacks were just regular schmoes who would charge a flat fee to take you somewhere.
  - malvosenior 7y ago
    I've had very extensive and very negative taxi experiences around the world. Uber is night and day from a UX perspective. Being able to see where the car is when it's on the way, pre-inputting your destination, paying through the app... The gig economy aspect was definitely revolutionary as well. It's essentially changing the nature of work (love it or hate it). As much as I love Amazon and always have, in the early days it was "just" ordering books online. Yes, that was great and again the UX was great but it didn't seem as revolutionary as Uber.
    - semi-extrinsic 7y ago
      I don't see how the UX thing is so revolutionary. I live in a city with 120k people, and the app of the local taxi company here does all of those things as well.
      - malvosenior 7y ago
        That's not been my experience and definitely not before Uber existed and forced people to start copying them.
tinco 7y ago
You don't think selling taxi rides is a tangible business model?
- duxup 7y ago
  The traditional system did, I don't see Uber doing it.
- EpicEng 7y ago
  At a loss without any notion of how to make it profitable in the near future? No, I don't.
  - lkbm 7y ago
    I see no evidence that they lack a notion of how to make it profitable. Are they doing it in the near future? No, but why do they need to? There are clearly plenty of people happy to fund for the long-term payout. From what I saw in the S-1, their core platform -- which I assume is ride hailing -- was profitable until Q4 2018. They offer heavy incentives in order to compete, but once they're sufficiently established in a market, looks like they can become profitable on that front by no longer offering promotions in order to fight Lyft/whoever. They just need to stay solvent longer than the competitors, and being in more markets than the competition should help with that. Their R&D is also massive, but they could stop most of that if they needed to.

mrnobody_67 7y ago

Amazon was cashflow positive from the early days and raised less than $100m in its entire existence.

Naac 7y ago

Can you elaborate?

pastor_elm 7y ago

Amazon stock success has always been built on AWS.

kgwgk 7y ago
It went from $18 to $106 in 1997-1999 and it was not due to AWS.
bdcravens 7y ago
Amazon was a public company for almost 10 years before AWS was a product.

rtempaccount1 7y ago

My feeling though is that Amazon had a much larger moat to build, with distribution networks, warehouses, logistics etc. With Uber, what's their moat, so that when they raise prices to become profitable users don't just move away? Lyft/local taxi companies/public transport, all have the infrastructure to provide the service that uber provides.

chrshawkes 7y ago
I would personally pay twice the rate I pay for an Uber to be honest.
throwaway082729 7y ago
Lyft has to be in business till then. Local taxi companies are more expensive than Uber and inconvenient. Public transport is barely used. Uber is providing a subsidized public service while employing a lot of people. The moat is there but the question is one of diversification and sustenance as a public company. In the coming days, there'll be a massive internal push to reduce costs, diversify and become profitable. If the foundation of the company is strong, they'll be able to get through this period. Instead, if most of the early employees jump ship (which I strongly suspect is likely to happen), it's going to meander. For Uber's own sake, having a mature and repentant Travis back might not be a bad thing. They'll need a second wind at some point.
- rtempaccount1 7y ago
  Local taxis are perhaps only more expensive due to Uber burning VC cash to compete? Public transport is barely used in the USA perhaps but that's not the only market Uber needs to compete in to succeed. And this isn't taking into account Uber's many run-ins with local authorities, which are dragging on , costing money and have the possibility to shut them out of some markets. From what I understand Uber's main answer to this is "autonomous taxis" but to me that's a long way from being a viable business model.
- matthewaveryusa 7y ago
  Oh lyft will be in business until then. How do you think Google is planning on selling their Waymo rides?

kgwgk 7y ago

To be fair, AMZN was valued at $400mn at the IPO and not $80bn (only in 2011 did Amazon reach that valuation).

deleted 7y ago

[deleted]

aetherson 7y ago

Amazon went public in 1997 with revenue of $16M in Q1 of that year. Its revenue was up a startling 1,800% or so YoY. Its losses were about $3M, so about 19% of revenue. Its market value at launch was about $438M, about 27x quarterly revenue. Uber's Q4 2018 revenue was about $3B, up about 25% YoY. Its losses are a little hard to parse due to some tax shenanigans, but maybe $865M is about right (or maybe it should be worse), so 28% of revenue. Its market cap right now is around $85B, about 28x quarterly revenue.

ronaru 7y ago

Amazon was cash flow positive within few years (6?). Uber still isn't