How to actually be the “Uber” of your industry – StartupSmart

Describing your new startup as the ‘Uber of’ a certain industry is a rarely correct cliche that requires much more than offering a convenient solution to be true, GreyLock partner Sarah Tavel says.


In a post on Medium, Tavel, a former Pinterest employee, outlines the problem with early-stage tech companies dubbing declaring themselves to be like the ride-sharing giant and what they need to do to actually make it accurate.


“It’s become cliche for startups to describe themselves as ‘Uber for X’,” Tavel writes.


“With Uber as the North Star, the mobile phone became the ‘remote control’ for our life and anything we wanted – groceries, take-out, laundry, our car – was just a tap away.


“The challenge is that many took the wrong lesson from Uber. Yes, convenience is huge but it was only part of the picture.”


But the secret of Uber’s success wasn’t just that it offered a better product, Tavel says, it was that they also offered it at a cheaper price – something that many other startups miss.


“Lowering prices was like throwing gas on a fire,” she says.


“The challenge I see with so many of these services is that most often they are new costs and they don’t fundamentally recast cost structures like Uber did. Instead many of them are an arbitrage on the cost of wealthy people’s time versus the less wealthy.”


For startups hoping to disrupt an industry like Uber did, Tavel offers a “new mantra”: 10 times product and save people money.


“As these businesses scale I’m guessing the hope is that they’ll be able to use their scale to gain cost advantage and move costs from consumers to the local businesses they support. This is the only path to winning the mass-market adoption Uber enjoys.


“It’s possible but it’s a tougher needle to thread. To build an enduring multi-million dollar business, convenience isn’t enough.”


You can read the full piece on Medium here.


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