Creating a Marketplace

Creating a Marketplace

Today I watched an interview of Dara Khosrowshahi by Acquired . This guy is just incredible. An amazing track record for his career. Immigrant, went to an Ivy League, worked at an investment bank, got noticed by one of the most influential businessmen Barry Diller. Led Expedia into an amazing 13 years of growth and becoming a major OTA player and now is the CEO of Uber, taking a company from a survival crisis to a profitable public company.

There are a couple of interesting bits I have picked up from Dara during the interview:

• Booking.com was amazing at amassing hotel supply to its platform and it contributed to its success.
• Hotel business is harder because of its fragmentation but more rewarding when Booking owned that market.
• The supply/demand priming problem (or the chicken and egg problem) to create a marketplace can be solved by focusing on either the hardest side of problem. In the case of travel it was hotels, in the case of ride hailing it is the drivers. The more fragmented and the more you can organize it, the easier it is to build a successful marketplace.
• Uber uses Uber Eats for supply and demand acquisition. This is a pretty nice feature for Uber and presents a great competitive advantage compared to Lyft for ride hailing and Doordash for food delivery. It is hard to get a driver onboarded because of regulation and background check to drive people around but it’s easier to onboard them just to do food delivery. So the driver supply for Eats helps the supply for Ride. On the demand side, Eats gets most of its customers from the riders that use Uber Ride. Uber even does internal charges for Customer acquisitions for customers coming from Ride compared to other channels like social apps or Google. This is again an advantage because Uber can minimize external marketing/paid ads costs.
• Self-driving ride hailing is coming, a lot of people use that currently in SF to almost becoming not surprising seeing cars driving themselves. Challenges  still exist though.
• Regulations are still hard around self driving because we need to decide what will be considered safe. It is just safer than human driving when accounting human accidents or does it need to be 10x or 100x safer to make it ubiquitous.
• Uber has 5.6M earners (drivers), and close to 1M restaurants.
• Uber is the largest source of work in the world, in terms of earners, larger than Walmart.
• Interesting fact, Daniel Ek, the founder of Spotify kinda convinced Dara to join Uber from Expedia.

Also I discovered a nice blog from Bill Gurley https://abovethecrowd.com/  who is a VC investor, one of the largest shareholders of Uber and was a close friend to Travis. The blog has some interesting insights about tech and investing..

Also these guys at Acquired are interesting too, a lot of things to learn from them. Check them out .

What’s next?

• The Nvidia Story: https://www.youtube.com/watch?v=wYUTMgGxZzc 
• The Daniel Ek/Spotify Story: https://www.youtube.com/watch?v=5iLbbuEecJU 
• Discover a great blog about tech products https://stratechery.com/ 

That’s all for now.