Killer apps that shook the world

The Upstarts

How Uber, Airbnb and the Killer Companies of the New Silicon Valley are Changing the World

Brad Stone

Bantam Press 

372 pages; £13.99

The first guest to use Airbnb was an Indian, Amol Surve, who arrived at the company’s first rental while attending the World Design Congress in October 2007 in San Francisco. At that time, no one knew, least of all its founders, how Airbnb would one day become more valuable than some of the biggest hotel chains in the world combined.

But the founders of Airbnb, led by Brian Chesky & Joe Gebbia, were clear about one one thing: They had to make a “dent in the universe” Steve Jobs style.

Cab-hailing company Uber was born out of sheer frustration with San Franci-sco’s taxi service. Entrepreneur Garrett Camp spent hours trying to summon the city’s yellow cabs so he could make it for his dates on time. He even began calling all the cab companies to send cars to his location and then taking the first one that arrived. They didn’t like it.

James Bond in Casino Royale was an important trigger. Not Bond, but the image Bond saw on the phone of his car moving on a map. So what actor Daniel Craig saw while looking at a now obsolete Sony Ericsson phone inspired the ubiquitous Uber App, which shows cars moving towards you.

Technology journalist Brad Stone’s Upstarts: How Uber Airbnb and the Killer Companies of the New Silicon Valley Are Changing the World is a riveting account of the winners and losers of the last decade of innovation in the valley.

The book is useful for businesses and start-ups but more insightful if you are trying to understand how the forces of tectonic change work in an internet era.

Both Uber and Airbnb were born around 2007-08, just as the iPhone was making its way into the world. The iPhone had an accelerometer so it actually worked like a taximeter. One of Uber’s USPs was thus built upon the iPhone’s existing capabilities, combined with, of course, the ubiquitous internet and smartphones.

Similarly, the internet’s growing reach convinced Airbnb’s founders they could use the world wide web to match accommodation-seeking individuals with hosts willing to sublet their apartments.

But the simplicity of the idea and how it started is equally critical to understand what lies behind technology start-ups. 

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Brian, I thought of a way to make a few bucks — turning our place into a designer’s bed and breakfast — offering young designers who come into town a place to crash during the four-day event, complete with wireless internet, a small desk space, sleeping mat, and breakfast each morning. Ha! – Joe.

It took Mr Chesky and Mr Gebbia three days to put together the first Airbedandbreakfast.com website (precursor to Airbnb) using the free tools on blogging website WordPress. 

The founders then mailed their site to the city’s design blogs and began soliciting business. And Mr Surve turned up from Mumbai.

For those not in the know, both companies did not take off like rocket. Travis Kalanick, now CEO of Uber, came into the company hesitatingly in the beginning because he had just sold another company and was trying to figure out life.

Mr Stone’s book  tells you how the initial falter turned to firm conviction for these founders and the hurdles they faced along the way.

Both Uber and Airbnb have tested — and continue to — the laws of the land they operate in as well as battle well entrenched businesses like taxi drivers in New York and Mumbai. 

The beauty of a great idea, as Stone brings out at several points in the book, is it’s ability to challenge regulatory status quo in a manner that no one could ever expect.

Which brings us to the Travis Law:

“Politicians accountable to the people can be pressured to accommodate any service that is markedly better than the alternative.”

Both Airbnb and Uber have worked on the (largely accurate) premise that the services they provide are at highly affordable prices and, thus, they cannot be held to traditional regulation which protects the incumbent, whether licenced taxis or strictly regulated hotel properties.

The ability to rewrite and rewire regulation, while using technology to break down decades-old walls, is another cornerstone of innovation in the last decade.

But technology must march quickly, as Airbnb, for instance, graduated from being a simple anyone can do it WordPress blog. 

Uber’s success lays in not just physically getting taxi drivers in the world’s big cities sign up — a herculean task by itself — but also mining real-time data to ensure taxis turned up when people were looking for them. And of course getting smarter at it all the while.

 There is a reason why the founders of these two companies have succeeded so far. It is because of a heady mixture of blinding belief, razor sharp focus, superior skills, talent, arrogance and of course some luck as well.

Could we see more such companies come up? Yes and no. Some great companies are a product of a certain age…in this case the 2007-10 period. As were Microsoft and Apple once upon a time.

But the hard lessons of entrepreneurial determination, the ability to deal with failure and build on success quickly don’t change. 

In Silicon Valley or in India.