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The author fails to mention Uber is creating a new market, and shouldn't be valued at the size of the existing market it is disrupting. Aaron Levie had a good

by jasondc 12y ago

The author fails to mention Uber is creating a new market, and shouldn't be valued at the size of the existing market it is disrupting. Aaron Levie had a good tweet about this: "Sizing the market for a disruptor based on an incumbent's market is like sizing the car industry off how many horses there were in 1910."

mscarborough 12y ago
Let's not get ahead of ourselves. We've had taxis and black cars for decades, it's nothing new. What happens when every existing taxi company has an app? Because that's what's happening. Then what we have is Uber/Lyft/whatever trying to avoid any regulation, while everyone else with the same thing are actually doing it. So disruptive!
- deleted 12y ago
  [deleted]
- pbiggar 12y ago
  > We've had taxis and black cars for decades, it's nothing new. People drank coffee before starbucks.
  - andyroid 12y ago
    Not sure about the point you're trying to make, but if you somehow think Starbucks is "disrupting" coffee consumption, please think again. http://en.m.wikipedia.org/wiki/List_of_countries_by_coffee_consumption_per_capita http://en.m.wikipedia.org/wiki/List_of_countries_by_coffee_c...
deleted 12y ago
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- antidaily 12y ago
  Ok, but why male models?
beering 12y ago
I think the author hit this point by accounting for an accelerated growth of the "underserved" taxi market. He puts it at 6% YOY - what do you estimate it to be?
- deleted 12y ago
  [deleted]
- fraserharris 12y ago
  SF (Uber's most mature market) has grown 20%+ YOY from 2009 - 2014 based on some rough math: "When we got this company started (in 2009) we were pitching the seed round and we pulled a bunch of research from this report that showed that San Francisco total spend on taxi and limo was like 120 million bucks. But we’re a very healthy multiple bigger than that right now, just Uber in SF. So it’s not about the market that exists, it’s about the market we’re creating." - Travis Kalanick [1] http://blogs.wsj.com/digits/2014/06/06/uber-ceo-travis-kalanick-were-doubling-revenue-every-six-months/ http://blogs.wsj.com/digits/2014/06/06/uber-ceo-travis-kalan...
vikramhaer 12y ago
I feel like this comment was made without reading the post. "Uber’s growth potential rests not only on being able to claim a larger share of the car-service market but also on expanding this market by attracting those who use public transportation or drive their own cars." He even mentions that his base case is assuming uber remains in the car-service related business.
Pxtl 12y ago
Except that Uber is, currently, a car-service. Now, you can argue that Uber has the potential to be more than a car service, but right now Uber's product is a car service. And there's only so much market for a car service. It's a new kind of car service, but still a car service.
aetherson 12y ago
How many horses were there in 1910? Serious question.
xivzgrev 12y ago
I respect Aaron a lot, but that's an unhelpful comment. An investor is trying to think through a fair valuation. If we can't value off of the horse & buggy market, then what are we going to? Henry Ford's H&D (hopes & dreams)? I think for any company, especially those attacking an established industry, that those markets that have a higher probability of being attacked should be valued higher. So yes I would say the horse & buggy market, at that time, SHOULD comprise the majority of the valuation for Henry Ford. There are other use cases that could be imagined, but I'd discount heavily. Then as time goes on, and people start figuring out NEW uses for cars that were not even possible with horses and/or expanding the market, then we can begin weighting those components more heavily. Eventually, the horse & buggy portion will be a minority part of the valuation.
cjf4 12y ago
Aaron Levie would seem to be an expert on how to create massive valuations from relatively tiny revenues.

by jasondc 12y ago

mscarborough 12y ago

Let's not get ahead of ourselves. We've had taxis and black cars for decades, it's nothing new. What happens when every existing taxi company has an app? Because that's what's happening. Then what we have is Uber/Lyft/whatever trying to avoid any regulation, while everyone else with the same thing are actually doing it. So disruptive!

deleted 12y ago
[deleted]
pbiggar 12y ago
> We've had taxis and black cars for decades, it's nothing new. People drank coffee before starbucks.
- andyroid 12y ago
  Not sure about the point you're trying to make, but if you somehow think Starbucks is "disrupting" coffee consumption, please think again. http://en.m.wikipedia.org/wiki/List_of_countries_by_coffee_consumption_per_capita http://en.m.wikipedia.org/wiki/List_of_countries_by_coffee_c...

deleted 12y ago

[deleted]

antidaily 12y ago
Ok, but why male models?

beering 12y ago

I think the author hit this point by accounting for an accelerated growth of the "underserved" taxi market. He puts it at 6% YOY - what do you estimate it to be?

deleted 12y ago
[deleted]
fraserharris 12y ago
SF (Uber's most mature market) has grown 20%+ YOY from 2009 - 2014 based on some rough math: "When we got this company started (in 2009) we were pitching the seed round and we pulled a bunch of research from this report that showed that San Francisco total spend on taxi and limo was like 120 million bucks. But we’re a very healthy multiple bigger than that right now, just Uber in SF. So it’s not about the market that exists, it’s about the market we’re creating." - Travis Kalanick [1] http://blogs.wsj.com/digits/2014/06/06/uber-ceo-travis-kalanick-were-doubling-revenue-every-six-months/ http://blogs.wsj.com/digits/2014/06/06/uber-ceo-travis-kalan...

vikramhaer 12y ago

I feel like this comment was made without reading the post. "Uber’s growth potential rests not only on being able to claim a larger share of the car-service market but also on expanding this market by attracting those who use public transportation or drive their own cars." He even mentions that his base case is assuming uber remains in the car-service related business.

Pxtl 12y ago

Except that Uber is, currently, a car-service. Now, you can argue that Uber has the potential to be more than a car service, but right now Uber's product is a car service. And there's only so much market for a car service. It's a new kind of car service, but still a car service.

aetherson 12y ago

How many horses were there in 1910? Serious question.

xivzgrev 12y ago

I respect Aaron a lot, but that's an unhelpful comment. An investor is trying to think through a fair valuation. If we can't value off of the horse & buggy market, then what are we going to? Henry Ford's H&D (hopes & dreams)? I think for any company, especially those attacking an established industry, that those markets that have a higher probability of being attacked should be valued higher. So yes I would say the horse & buggy market, at that time, SHOULD comprise the majority of the valuation for Henry Ford. There are other use cases that could be imagined, but I'd discount heavily. Then as time goes on, and people start figuring out NEW uses for cars that were not even possible with horses and/or expanding the market, then we can begin weighting those components more heavily. Eventually, the horse & buggy portion will be a minority part of the valuation.

cjf4 12y ago

Aaron Levie would seem to be an expert on how to create massive valuations from relatively tiny revenues.