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Startups can be a ‘make or break’ situation, and the early stages are crucial for their success. While launching and running a successful startup, one can face significant challenges that may take months to solve before reaching a solution. Even successful startups face challenges throughout their journey, and the rider app Uber was no different during the initial days. Scott Gorlick, a former senior operations and logistics manager who later headed the strategic projects of the company, shared how the company “overcame the chicken and egg problem” that startups face.
He took to X (formerly Twitter) and wrote, “Today, Uber is a $140 billion 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 money.”
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 carAnd without riders ➡️drivers couldn’t make $
Here’s how we solved it:
— Scott Gorlick (@sgorlick) May 2, 2024
Then, in a series of posts, the former employee leaked insights about how the company solved the chicken and egg problem. He spilled the three key points that helped the company’s growth flywheel to spin.
1- Paying drivers hourly until we had enough riders: When Uber launched in a new city, they didn’t receive requests in bulk on Day 1. The company wanted riders to see cars on the road 24/7, so they paid drivers $30/hr (approximately Rs 2500) to be online even if Uber wasn’t busy.
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.
— Scott Gorlick (@sgorlick) May 2, 2024
2- Positioning cars in busy areas for faster pickup times: Secondly, Gorlick shared how the company built its customer base. He revealed that the tech-giant company used to put cars close to bars + restaurants on weekends where they thought people would be. This way, when a user requested an Uber and a black Lincoln Town Car rolled up 2 minutes later, it felt like magic to them.
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.
— Scott Gorlick (@sgorlick) May 2, 2024
3- Encouraging riders to refer their friends: The former Uber employee revealed the company’s final strategy for spreading the word quickly was by encouraging riders to refer their friends. They planned that if a friend was riding with a customer who hadn’t tried Uber yet, they would give each one of them $10 off on their next ride. This offer made it easier for friends to refer their friends.
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.
— Scott Gorlick (@sgorlick) May 2, 2024
“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 to other companies. I’m breaking down the best ones on X for free,” concluded Gorlick.
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 ????
— Scott Gorlick (@sgorlick) May 2, 2024
Shared a day ago, the post has grabbed the attention of many social media users. They couldn’t stop but react to Gorlick’s thread, thanking him for sharing such valuable information, which will really help other entrepreneurs grow their startups at lightning speed.
“You have no idea how valuable this information is. Thank you so much for sharing. I am a solo founder building a real estate marketplace for my country and like all young marketplaces, it’s going through the chicken and egg problem,” an X user expressed.
You've no idea how valuable this information is. Thank you so much for sharing. Im a solo founder building a real estate marketplace for my country and like all young marketplaces, its going through the chicken and the egg problem.— Suwi Sambo (@SuwiSambo) May 2, 2024
Another commented, “Great way to take matters into your own hands. This is what entrepreneurship is all about—turning the unfeasible into reality!”
Great way to take matters into your own hands. This is what entrepreneurship is all about – turning the unfeasible into reality!— Jesse Pujji (@jspujji) May 2, 2024
“I remember those days. Travelling for work, realising I could use Uber in that city was like magic,” added another.
I remember those days. Traveling for work, realizing I could use Uber in that city was like magic.— Cole Reinhardt (@Cole_Reinhardt) May 2, 2024
An account remarked, “This is a great reminder that to get the ball rolling, you have to roll it yourself. This is where VC support can really help. You have to subsidise one or both sides until things get going.”
This is a great reminder that to get the ball rolling, you have to roll it yourself.This is where VC support can really help. You have to subsidize one or both sides until things get going.
— Nassim Loukil (@naslouki) May 2, 2024
“This is a great post. Takeaway: These are ideas anyone could come up with. A startup like Uber doesn’t have some magic that none of us mortals can achieve. This is empowering. Don’t limit yourself,” posted an individual.
This is a great post. Takeaway: these are ideas anyone could come up with. A startup like Uber doesn’t have some magic none of us mortals can achieve. This is empowering. Don’t limit yourself— Michael (@quahoggy) May 2, 2024
Another individual wrote, “Love this—your insight is spot on. Sharing knowledge like this can really help other entrepreneurs grow their startups at lightning speed. Keep up the great work!”
Love this—Your insight is spot on. sharing knowledge like this can really help other entrepreneurs grow their startups at lightning speed. Keep up the great work!— Growth Labs (@growthhub_) May 2, 2024
Till now, the share has been viewed by 4.2 million viewers, and the post is still counting more.
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