Startup Helper | Employee #99 @Uber | gorlick.co
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Today, Uber is a $140B company with more than 6 million drivers.
But in the early days, we had to overcome the same chicken and egg problem many startups face:
Without drivers ➡️ riders couldn’t get a car
And without riders ➡️drivers couldn’t make $
Here’s how we solved it:
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In 2 years, Uber went from being in just a few cities to more than 100.
How did Uber grow so quickly? We recruited hundreds of thousands of drivers.
I get asked a lot about how we did it, so here are some lessons that might be helpful to other startups 👇👇👇
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In 2012, I joined Uber as employee #99.
Our biggest challenge? Finding drivers.
Here’s how we signed up the first 1M drivers at Uber:
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Today, Uber is a $155B company with 7M drivers.
But in the early days, we had a big problem:
Most drivers didn’t have smartphones to use Uber.
Here’s the inside story of how Uber accidentally became the world’s largest buyer of iPhones...
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In 6 years, we grew Uber from 10 cities to $10B in revenue.
How’d we grow so fast? We hired local teams in every city.
This was our playbook:
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We solved the chicken and egg problem at Uber by doing 3 things:
1. Paying drivers hourly until we had enough riders
2. Positioning cars in busy areas for faster pickup times
3. Encouraging riders to refer their friends
And then the growth flywheel really started to spin.
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From my time scaling @Uber, I’ve seen that the right people working on the right thing at the right time can change the world.
Every startup is different, but the tactics we used to grow can be applied at other companies.
I’m breaking down the best ones on X for free :)
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1/ When we launched a new city, we didn’t have 100s of people requesting rides on Day 1.
But we had a few.
Since we wanted riders to see cars on the road 24/7, we paid drivers $30/hr to be online even if Uber wasn’t busy.
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2/ On weekends, we’d put cars close to bars + restaurants where we thought people would be.
When you requested an Uber and a black Lincoln Town Car rolled up 2 minutes later, it felt like magic.
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Before @Uber switched to @zoom_us in 2014, we tried every meeting software. All of them failed miserably.
From Day 1, Zoom "just worked.”
With > 20k employees in 100s of offices, Zoom helped us communicate better & scale globally.
Thank you Zoom & major congrats on your S-1!
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3/ If a friend was riding with you who hadn’t tried Uber yet, we made it easy for you to refer them.
Each of you would get $10 off your next ride.
And your friends would refer their friends.
Word spread fast.
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We tested everything. Some things worked, some didn’t.
But we didn’t know until we tried.
If you want to hear more, sign up to get my newsletter where I’ll occasionally share my thoughts on tech & other interesting nuggets about my time at Uber.
scottgorlick.substack.com/
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Here's how we signed up the first 1M drivers at Uber:
1. We cold called
2. We had a clear pitch
3. We asked for referrals
4. We went where driers were
5. We doubled down on Craigslist
6. We helped drivers make more money
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1/ We cold called 📞
When we launched a city, we’d go on Yelp and get a list of all limo companies in the area.
We would cold call, meet and recruit drivers to join. I’m pretty sure every taxi / limo driver in Atlanta had my phone number (I still get calls to this day).
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3/ We removed friction ⚡️
We made it as easy as possible to get started w Uber so we removed all obstacles to joining.
In the earlier years (‘10-‘14), we literally gave out iPhones and accessories to drivers.
Later, we onboarded drivers remotely & sent out “Get Started” kits.
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4/ We guaranteed driver earnings 💰
Because we didn’t have riders at launch, we’d offer drivers an hourly rate even when Uber wasn’t busy.
This allowed riders to see cars on the road 24/7.
As Uber got busier, drivers started making more money and we removed the hourly rate.
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2/ Our pitch to drivers was simple💡
While you may be busy for some of the week, Uber is a great way to fill your downtime and make extra money.
There was no downside to giving us a shot.
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In any marketplace, one of the most important things you have to do is solve the chicken and egg problem. For Uber, that meant finding the right balance of drivers and riders.
Not enough drivers ➡️ riders can't get a car
Not enough riders ➡️ drivers can’t make $
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Marketplaces are beautiful businesses.
But they're incredibly hard to build.
One thing that can make it easier: picking a good market.
If I was looking to build the next billion dollar marketplace, here's what I'd want to know:
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6/ Referrals were super effective 🤝
We asked drivers, “Do you have any friends who also want to drive?”
Drivers referred friends & we paid out incentives once thresholds were met.
Power drivers (who did lots of trips) referred people who were likely to become power drivers.
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2/ Our pitch to drivers was simple.
When we met drivers, we talked about Uber like this:
We know you're busy with your clients, but Uber's a great way to fill your downtime.
Since it didn't cost anything to get started, most drivers were willing to give us a shot.
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1/ We cold called.
When we launched a new market, we’d go to Yelp and make a spreadsheet with every limo company in the city.
Then, we’d hit the phones.
Some drivers said no, but most were interested enough to take a meeting.
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3/ We asked for referrals.
Once a driver had the first few trips under their belt, we asked:
"Do you have any friends who want to drive?"
Referrals for new drivers flooded in and showed up at the office.
When the new driver completed a certain # of trips, we paid a bonus.
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5/ We went where drivers were 🛫
Limo and taxi drivers spent a lot of time waiting in parking lots around the airport. So we spent a lot of time down at the airport.
We’d rent conference rooms where drivers could get to know us, have coffee, sign up and get started driving.
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As humans:
* When something good happens, we tend to attribute it to skill.
* When something bad happens, we say it was bad luck.
This is why we rarely learn from our experiences.
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4/ We went where drivers were.
So that we could meet drivers, we'd rent out conference rooms at hotels near the airport.
Drivers could grab coffee & learn more while they waited for their clients to land.
Since the hotels weren't busy, we could get space for ~$250 (or less).
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During my 6 years at Uber, we grew from 10 cities to $10B in annual revenue.
While every startup is different, a lot of the tactics we used to grow Uber work well at other companies.
I’m sharing the best ones on X to help startups scale up.
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On New Year's Eve, millions of people open their Uber app to request a ride.
But in the early years of Uber, this wasn't just another night— this was our Super Bowl.
500+ cities. 24 hours. Record demand.
Here's how it all went down...
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3/ When we launched new cities, sometimes we didn’t have an office.
No shipping address? No problem.
We’d stuff 100 iPhones in a backpack and fly down.
As you can imagine, we got some pretty interesting questions from TSA.
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7/ Uber flipped the industry model on its head ✌️
Word spread that Uber changed the game for drivers.
If you drove for a limo/taxi co, you'd keep only 30% of your fares or have to rent a car for $500/week.
Drivers left limo cos, bought cars & started making more money w Uber
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5/ We doubled down on Craigslist.
When we launched UberX, Craigslist was a major driver of our growth.
In 2013, we could post a job listing for $5 in a city and get hundreds of new driver signups.
As we scaled, we added more traditional channels.
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1999: Telemarketers call to interrupt your dinner
2019: Robots dial 1000s of numbers at once and interrupt you 24/7
It's no secret that I'm generally for less regulation, but this robocall business is out of control. Someone needs to do something.
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12/ We never stopped optimizing the funnel 🔬
Early on, a change that made a 20-30% conversion improvement was common. At scale, a change in the driver sign up flow that made a 3% improvement was incredible.
Little things can make a big difference.
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During my 6 years at Uber, we scaled from 10 cities to $10B in revenue.
While every startup is a bit different, a lot of the tactics we used to grow Uber work well at other companies.
I'm sharing the best ones on X to help startups scale up.
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8/ We unlocked new supply 🔓
Driving UberBlack required a limo license & commercial insurance.
So we helped drivers get all the necessary permits.
When UberX launched, we unlocked an even wider pool of supply by allowing millions of ppl to drive their own cars & make money.
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1/ Every city started with 3 people in a tiny room.
A GM as the CEO.
An Operations Manager who worked with drivers.
And a Community Manager to grow ridership.
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9/ We went hard on Craigslist 📑
There was a golden era on Craigslist where you could post and get hundreds of signups in a city for free or very little money ($5 per post).
This was important as we rolled out UberX in 2013.
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1/ To get drivers on the road, we needed iPhones.
So every city ordered hundreds of phones at a time from HQ in a Google Form.
When the phones came, we’d unbox & set up each one.
It was manual, took hours & stretched deep into the night.
But it worked.
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thank you - means a lot!
marketplaces are hard to build, but are incredible businesses at scale.
if I were to write more about marketplaces, what other info would be helpful?
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So what did this mean for Uber? 🤷🏻♂️
Because the number of riders was growing exponentially and there were a limited pool of drivers, Uber always needed more cars.
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11/ We tried to get ahead of demand 📈
NYE, Halloween, Big Events (Final 4) & concerts (Jay Z) were busiest.
For these times, we onboarded more drivers & created incentives to get more cars on the road.
With 1000s of ppl looking for rides, you could never have too many cars.
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8/ Going BYOD helped Uber onboard millions of drivers without spending billions of dollars on iPhones.
With BYOD, we could add new drivers at lightning speed at a fraction of the cost.
But without those early iPhones, Uber wouldn’t be the $155B company that it is today.
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6/ Uber changed the economics for taxi and limo drivers.
If you were a taxi or limo driver, you might only keep 30% of your fares or have to pay $500 per week to rent your car.
When Uber launched, drivers could buy their own cars and make more money.
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6/ By mid-2014, we were spending more than $100 million a year on iPhones.
But we no longer needed to.
Because almost every new driver had a smartphone.
It was time to let drivers use their own phones and go BYOD (Bring Your Own Device).
Here’s what happened next…
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A question I get frequently:
Why did Uber open hundreds of offices in cities around the world?
Some thoughts on why this worked for Uber and why I think local ops teams can be a massive advantage for high-growth startups 👇👇👇
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2/ Every city was its own startup.
This attracted incredibly entrepreneurial people to Uber.
On Day 1, you were trusted to solve hard problems.
If you had an idea, you ran with it.
And if it worked, you shared it with other cities to help them grow faster.
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In honor of tonight's Game 7, sharing one of my all time favorite memories.
In 1997, I was 8 and my dad (rocking a playoff beard) took me to the Game 7 of the World Series.
The @Marlins were down 2-0 late, tied it up and won it with a walkoff in the 11th inning.
#ThanksDad
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2/ When new drivers came to the office, we’d check out their car.
Then, we'd go through training.
An hour later, we’d hand drivers a new iPhone and they'd pick up their first rider.
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10/ And invested in other paid channels 🔎
As UberX scaled, other paid channels became important.
Because Uber was now reaching out to a much broader range of drivers, FB, Google, Radio and TV all played a major role in the next chapter of growth.
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4/ With UberX rolling out in 2013, we started adding tens of thousands of new drivers a week.
Since we couldn’t meet every driver in person, we started shipping iPhones to drivers.
But we made a big mistake...
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Huge congrats to @jakemiller on his newest album, Silver Lining. Big moves coming out of South Florida 🌴 ☀️ 🌴
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5/ We sent iPhones in plain manila envelopes.
Thieves would slice open the envelope, steal the iPhone and re-seal it.
The new driver got an empty envelope and we had to ship another phone.
It was an expensive lesson, but we got better at shipping.
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3/ We built Uber so that every data point you needed to run the business was at your fingertips.
This made it easy for teams to see their numbers & get real time feedback.
When something worked, you did more of it.
And when something broke, you felt empowered to fix
it.
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7/ Over the next few months, we did 3 things:
1. Engineering & Product cranked out a BYOD app.
2. We rushed to get the app into drivers' hands ASAP.
3. We raced to sell iPhones before Apple dropped the new model.
And then we started to see some pretty crazy results.
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Excited to see more @hqtrivia partnerships like this one.
@ScottRogowsky hosting with @blakeshelton right now. And oh yeah, @Kelly_Clarkson too.
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During my 6 years at Uber, we scaled from 10 cities to $10B in annual revenue.
While every company is a little bit different, a lot of the things we did to scale Uber work incredibly well at other startups.
I’m sharing the best ones on X to help startups scale up.
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5/ To build a business like Uber, you’ve got to have your finger on the pulse of the city.
We did that by being close to drivers and riders 24/7.
You can’t get to know your customers on live chat from 3,000 miles away.
If you want to win, relationships matter.
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When I decided to join Uber, I told my parents:
If things go well, my stock options will pay for business school.
If they don't, I'll have a good story for my application.
Looking back, we always have a good laugh about this.
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From Denver to Delhi, city teams drove Uber's growth because they helped us:
1. Attract world class talent
2. Solve hard problems
3. Move faster
4. Have tight feedback loops
5. Stay close to our customers
Our city teams built a product that people truly loved.
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📢 If you’re in your 20s, highly recommend reading @MatthewBerryTMR’s top 10 pieces of career advice this week.
🏈 And while you’re reading, you might just learn something about fantasy football.
espn.com/fantasy/football/st…
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4/ We could move faster.
We weren’t sitting in San Francisco waiting for last week’s data to roll in from all the cities.
We didn’t have to guess how things were going on the ground in Atlanta.
We knew because we were there.
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2,791 rides, 9,873 miles and over 34 days spent in a car later, it's fair to say that working @Uber has been the ride of my life so far. So after nearly 6 years here, I've decided to take off on my next adventure. medium.com/@sgorlick/https-m…
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If this got you thinking about how to grow your startup, I’d love if it you shared it with others.
And if you want more, head on over to gorlick.co where I share more about growth, startups and operations.
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In 2012, I joined Uber as employee #99.
Over the next 6 years, we grew the business from 10 cities to $10B in revenue.
Last week, I sat down with @HarryStebbings on @twentyminutevc to chat about the early days of Uber
Listen below ⬇️
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At Uber, we gave a take home analytics test to candidates (math, excel, pivot tables, vlookups, etc).
What other companies do something like this as a part of the interview process?
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great q -
every city could see a summary of their #s (completed trips, revenue, etas, ratings, etc) in real time.
we could also see every other city.
every monday, we’d have a call where each city reported out.
definitely a friendly competition to see who could grow fastest.
in terms of incentives, all full time employees got stock options in all of uber.
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If this thread got you thinking about how to grow your startup, I've got more to share.
Sign up for my email list below and I'll send you the PDF playbook we used at Uber to crack the chicken and egg problem.
gorlick.co/scaling
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This post by @sarthakgh is an absolute masterclass in how to get the most out of twitter.
medium.com/startup-grind/twi…
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In the early days, @Uber delivered roses to riders in limos for Valentine's Day. Here's a picture of our Atlanta operation in 2013 (originally posted on Path).
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That's how I tried Uber for the first time :)
I was on a project in Chicago and was trying to find a taxi to get to a client dinner.
I had heard about this app where if you pressed a button you could get a ride.
Two minutes later, my first Uber showed up :)
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Recently read Atomic Habits by @JamesClear on how to build good habits and break bad ones. This book changed how I think, so highly recommend picking it up if you haven't gotten a chance to read it yet.
amazon.com/Atomic-Habits-Pro…
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I’m consistently amazed at how much money companies waste because they are lazy or fail to run a good process for vendor selection.
@jason nails what teams should do with "The Three Vendor Rule" bit.ly/2scDSXN
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5 years ago today, an early screenshot of the @Uber app in Atlanta
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It's 2019 and I think it's weird that we can't schedule text messages.
Know that enterprise solutions exist for this, but am surprised that it hasn't come to consumers at scale.
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Highlights from Uber Q2 Earnings:
📈 $39.9B in gross bookings (21% YoY)
💰 $10.7B in revenue (16% YoY)
🚗 2.76B trips (21% YoY)
🌍 156M monthly active users (14% YoY)
🤑 $0.47 EPS (est. $0.31)
And $4.8B in free cash flow over the last 12 months.
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One of the ?s that pops up when I talk to ppl looking to learn more about tech:
How do I find out about the companies & people doing cool things?
These are the places I go for the latest in tech and I hope they are as helpful for you as they are for me.
medium.com/@sgorlick/breakin…
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Incredible to think about - "Internet ad spend will be greater than TV ad spend within next 6 months" - @kpcb 2017 internet trends report
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Don’t ask people if you have a “good idea.” Everyone will lie to you.
If you’re doing any kind of customer research, you should immediately stop whatever you’re doing & read The Mom Test by @RobFitz.
Read it recently, so wanted to share a few takeaways 👇👇👇
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I think my #1 learning is that if you have the right people working on the right thing at the right time, you can change the world.
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Just 2 decades ago, sequencing a human genome would have cost $20M.
This week, @Nucleusgenomics launched to offer this for $399.
So pumped for @KianSadeghi5 + team on a very exciting launch that has the potential to completely change how we think about healthcare.
Introducing Nucleus, the health platform for your DNA.
After 1,404 days of building, I’m proud to say @Nucleusgenomics provides the most complete look into your genetic risk for diseases that's ever been available.
bit.ly/3xjemET
Optimize your health by starting at its foundation →
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What’s the best book you’ve read during quarantine?
Upcoming road trip. Would love recs.
📚🤓🙏
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Based on the way the world is going, here are things my future kids may not do:
📝 Handwrite notes
⌨️ Type
🚘 Drive a car
🏬 Go to the mall
☑️ Vote in person
✉️ Get the mail
💵 Use Cash
🏦Go to a bank
📰 Read a physical book/newspaper
What else are we missing? #SundayMorning
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Great q... it was definitely a problem.
We tried to take a deposit on the phones so that if the driver wasn't using it, they'd bring it back.
The phones were locked down so that the only thing that could really be used on it was the Uber Driver App.
But jailbreaking :/
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“Why would you leave a consulting firm that will pay for your MBA in a couple of years for some taxi company (@Uber)?” - mutiple people in early 2012
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Had a blast sitting down to chat about the early days of Uber with @HarryStebbings.
Have a listen here and let us know what you think...
The scaling story of Uber is one of the greatest of the last 10 years.
Today we go behind the scenes revealing their expansion playbook.
💰 10 cities to $10BN revenue
🚘 How Uber scaled to 10m drivers
🏆 How Uber acquired demand in each subsequent city
My 5 key takeaways with @sgorlick 👇
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An old 2009 email from Sean Parker to Spotify founder Dan Ek:
- "I've been playing around with Spotify. You've built an amazing experience."
- "Ever since Napster, I've dreamed of building a product similar to Spotify."
scribd.com/doc/67465758/Sean…
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A few weeks ago, I started to share more about how we scaled Uber from 10 cities to $10B in revenue.
While I thought a few people might be interested, I've been blown away by the response.
I'm getting a lot of messages asking:
- How did Uber do X?
- Do you think you could help us with Y?
I love helping companies become incredible at operations.
So that's why I'm opening up my calendar for calls on @useintro.
If you want to scale up your startup, let's chat: intro.co/scottgorlick
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