Summary and Analysis of The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley are Changing the World

Based on the Book by Brad Stone

• Publisher: Worth Books
• Year: 2017
• ISBN:
  9781504046473
• Topic: Business
• Subtopic: IT Industry
• Index: Business

So much to read, so little time? This brief overview of The Upstarts tells you what you need to know—before or after you read Brad Stone's book. Crafted and edited with care, Worth Books set the standard for quality and give you the tools you need to be a well-informed reader. This short summary and analysis of The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World includes:

• Chapter-by-chapter overviews
• Character profiles
• Detailed timeline of events
• Important quotes
• Fascinating trivia
• Glossary of terms
• Supporting material to enhance your understanding of the original work

About The Upstarts by Brad Stone: Brad Stone's The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World is a detailed account of the founding of Uber and Airbnb, as well as each company's climb from small startup to transportation and hospitality powerhouse. The Upstarts provides insight into the early lives of entrepreneurs Travis Kalanick and Brian Chesky, including their forays into new business ventures, some successful, most of them not. Stone points out the amazing parallels between the two tech companies as they fight for startup capital, wrestle to find the right framework for their products and organizations, and bring in the talent and technology needed to support those offerings. The summary and analysis in this ebook are intended to complement your reading experience and bring you closer to a great work of nonfiction.

Summary

Introduction

Author Brad Stone introduces his subjects, Uber and Airbnb, through an anecdote about how the founders of both attended Barack Obama’s first inauguration in 2009, when each company was new. Since then, both have grown beyond all expectations, though they have met resistance from all sides.

Part I: Side Projects

Chapter 1: The Trough of Sorrow

The Early Years of Airbnb

Airbnb began as a side project in 2007 as Airbedandbreakfast.com. Brian Chesky and Joe Gebbia, recent graduates of the Rhode Island School of Design, had landed day jobs, but found them deeply unsatisfying. Together, they looked for a business idea that would make a difference in the world. Nathan Blecharczyk, a former roommate of Gebbia’s, joined the team and brought his programming talent and entrepreneurial drive to the venture.

After launching the company’s first website, built with the platform Wordpress, Chesky headed to Austin for the South by Southwest Conference. He stayed at an AirBed & Breakfast, one the two that had signed up from the many he’d solicited via Craigslist. While in Austin, Chesky met Michael Seibel, a Silicon Valley entrepreneur who would later serve as their first mentor in navigating the investment community.

For the 2008 Democratic Convention in Denver, they built a new website—this time, focusing on ease of booking and payment. With several new listings, roughly eighty people used the service for the event. TechCrunch and U.S. News and World Report followed with press exposure. Chesky and Gebbia met Greg McAdoo from the venture capital firm Sequoia Capital. He was to become a vital investor, but not yet.

Running out of money and collecting extensive debt, Chesky and Gebbia entered the “Trough of Sorrow,” where a new business idea runs out of novelty and needs to start performing. They countered with a breakfast cereal for guests linked to the presidential campaign. There were boxes of Obama O’s, the breakfast of change, and Cap’n McCains, a maverick in every bite. They sent a sample to every media company, and the resulting exposure generated enough sales to recoup their costs and pay off most of their credit cards.

That year, they applied to the Y Combinator startup school for seventeen thousand dollars and a 7% stake in the company. When they pitched their company to Paul Graham, the program’s cofounder, he called them cockroaches: they just wouldn’t die.

Need to Know: Paul Graham and Greg McAdoo state that mental and emotional toughness, which help you overcome the challenges and negative reactions to anything new, are the most important aspects of any startup. Chesky, Gebbia, and Blecharczyk had it in spades.

Chapter 2: Jam Sessions

The Early Years of Uber

Garrett Camp became a millionaire by cofounding the website discovery engine StumbleUpon, which eBay purchased for seventy-five million dollars. Wealthy and living in San Francisco, he was using town cars to avoid taxis when he began to dream of a company that could mimic a scene from Casino Royale: a car your phone could see in real time as it headed towards you.

In 2008, he registered UberCab.com and established UberCab LLC in California. He called on Oscar Salazar, his old friend from the University of Calgary, to develop a prototype iPhone app that could be used to call cabs, meter the charge per mile, and make effortless payments from a credit card on file. By this time, Camp’s idea included buying a small fleet of cars to provide the ride services.

Camp recruited Travis Kalanick, an entrepreneur and investor who had sold a streaming-video company, Red Swoosh, to a larger competitor, Akamai, and was looking for his next opportunity. When they attended LeWeb, a technology conference in Paris, they found the taxi service there even more frustrating.

While the iPhone and mobile apps opened the path for Uber, the implementation of GPS locator services made it work. Now, they could locate the passenger and the nearest car, provide that information on a map to the passenger and driver, and bring them together.

Camp and Kalanick were more interested in using the service rather than running it, so they hired Ryan Graves to manage it. With a degree in economics, experience in General Electric’s management training program, along with a business development internship at FourSquare, Graves knew he wanted to join the Internet economy and run an organization by himself.

Camp and Kalanick already knew how to find investment capital. Bill Gurley, a partner at Benchmark, helped find seed capital and invested himself in 2009. The seed investors included Chris Sacca, a former Google executive; Mitch Kapor, creator of IBM’s Lotus Notes; and Jason Calacanis, founder of several Internet startups. Many others, concerned about battles with regulators and entrenched interests, declined.

Need to Know: The startup journey for Uber wasn’t quite as challenging as that of Airbnb. Its founders used existing contacts and experience in the investment community to find the capital needed to support their early development. Their challenge would be dealing with growth, regulatory agencies, and battles with existing taxicab services in every city they entered.

Chapter 3: The Nonstarters

SeamlessWeb, Taxi Magic, Cabulous, Couchsurfing, Zimride

Around the same time Airbnb and Uber were making their way to the market, five similar startups were also trying to make their mark. SeamlessWeb focused on delivering meals to corporate customers from hundreds of restaurants in Manhattan. They provided menus, ordering, delivery, and expensing. The company toyed with SeamlessWheels, which would provide the same s...