March 19, 2017
“SeamlessWeb launched in April of 2000 and ran right into the teeth of the dot-com bust. Finger raised less than half a million dollars, paltry by the overcaffeinated standards that came later, but the service caught on quickly with the employees at several high-powered law firms and investment banks. SeamlessWeb contracted with hundreds of Manhattan restaurants and gave its corporate customers and their employees a way to browse menus and place orders over a website, expense meals to the company, and coordinate the flurry of deliveries.”
March 19, 2017
“Seamless Meals, as he called it, was going to be one service. He also had another idea, which he dubbed Seamless Wheels.
The notion was to create an easy way to book and expense town cars, the same way the company had made it easy to order food. Finger registered the URL SeamlessWheels.com in 2003 and over the next few years started introducing the service to blue-chip law firms like Dewey and LeBoeuf, White and Case, and Debevoise and Plimpton.
The investors he approached about Wheels were wary.
“Every institutional investor I spoke with was like, ‘Black cars are niche, it’s only New York City, it’s only bankers, there are long-standing relationships with companies, there is no opportunity in the consumer market,’” Finger says.”
March 19, 2017
“It has long since been deleted, but both he and his wife, Stefanie, who also worked at SeamlessWeb and listened to the message, recall it the same way:
Jason, we understand you’ve been pitching a car service to large enterprises in the New York City area. We don’t think that would be a good idea. You’ve got such a beautiful family. Why don’t you spend more time with your beautiful baby daughter? You’ve got such a good thing going with your food business. Why would you want to broaden into other areas?”
March 19, 2017
“Seamless Wheels continued working with the same law firms for a few more years, but after that voice mail, Finger largely gave up on developing it further. The food business grew and expanded to serve regular people at their homes as well as companies. In 2006, the food services company Aramark acquired SeamlessWeb and put pressure on Finger to focus on the food business, which was growing rapidly outside of New York City. Eventually he shut down Seamless Wheels.
The story has a happy ending, though. Finger raised private equity and spun SeamlessWeb out of Aramark in 2011, then shortened its name to Seamless. Two years later, it merged with a newer and smaller rival, Grubhub, and is now the leading online food-delivery company in the United States.”
March 19, 2017
“ordering cabs and submitting those tiny paper receipts for reimbursement was an expensive, time-consuming scourge in the business world and an obvious problem that technology could solve.”
March 19, 2017
“There were other problems in the world of taxis aside from general technical cluelessness. The drivers were often at war with their fleet owners over wages and employment status. The fleets were at war with one another for market share in each city. No one cared much about riders because the companies didn’t have a permanent relationship with them (when passengers are standing on the side of the road hailing a cab, all taxi companies are equal). There were no penalties for bad service; as long as a driver paid the company somewhere between one hundred and two hundred dollars to take a car out for twelve hours, the fleet owner was happy—even if the cabbie did nothing but speak to friends on the phone while driving like a maniac.”
March 19, 2017
“An original backer of the online reservation company OpenTable, Gurley, who stands six feet nine inches tall, had been looking for a similar car service that could impose simplicity and efficiency on the archaic world of ground transportation.
George Arison recalls Gurley sitting in their Virginia office many times over the course of several weeks, poring over spreadsheets, talking to Partee about the taxi industry, and negotiating with DePasquale about investment terms.”
April 1, 2017
“Of all the random companies that tried to beat Uber to the transportation revolution, the unlikeliest emerged from the U.S. electronics chain Best Buy. In 2008, after Seamless Wheels had died and just as Taxi Magic was pulling out of the garage, the electronics retailer opened an in-house incubator for new business ideas. Store employees around the country were encouraged to step forward and share their startup dreams. If an employee’s idea was selected, he or she got to leave the showroom floor and live and work for two months in the Park La Brea Apartments in Los Angeles. Best Buy optimistically called the project UpStart”
April 1, 2017
“The program was nine weeks long, and halfway through, Garcia and his colleagues realized their idea wasn’t all that interesting. The creator of UpStart, an IBM veteran named John Wolpert, suggested they apply the technology to the taxi industry and allow cabs to be tracked on a map in the same way. Later, one of the interns, a USC graduate named Tal Flanchraych, was talking about the new Scrabble-like app Scrabulous and came up with a riff on the name: Cabulous”
April 1, 2017
“Unlike Uber, Cabulous did not automatically facilitate payments; riders still had to manually pay the driver based on the fare listed on the meter. And at first, Cabulous didn’t give iPhones to drivers. Wolpert had informally polled the city’s cabbies one afternoon by giving away doughnuts and coffee at Bob’s Donuts on Polk Street and concluded that a good percentage already owned iPhones. He didn’t realize that many of those phones were jail-broken; that is, altered so they could work off AT&T’s then-shaky wireless network. As a result, the app performed poorly or not at all on those phones.”
April 1, 2017
“What he found even more objectionable was that Uber was using the iPhone as a taximeter to calculate fares. Meters are traditionally calibrated and closely monitored by cities’ weights and measures departments to protect customers from price gouging. He and Graves, who had been friendly since their first meeting and had attended some MTA meetings together, argued about it over the phone. “Hey, let’s completely disregard decades of regulation!” Wolpert shouted at him. “How is this a good idea?”
“I guess we don’t have anything left to talk about,” Graves said, and hung up. They never spoke again.
Wolpert left Cabulous in 2011 after Uber was starting to drive laps around it, ceding the fight to a more experienced CEO.”
April 1, 2017
“An online home-sharing service called Couchsurfing won devotees and attention five years before the rise of Airbnb. It wasn’t bad timing, stubbornness, or chronic niceness that doomed it, but something just as deadly in the cutthroat world of business: idealism.”
April 1, 2017
“Couchsurfing opened in 2004 and drew a young, itinerant crowd that was less interested in accumulating wealth than sharing it. Like Airbnb years later, hosts and guests wrote their own profiles on the site and reviewed each other after a stay. One ingenious element of the service was how the company confirmed people’s identity in the years before people could use their Facebook profiles. Couchsurfing asked for a user’s credit card and sent a postcard containing a verification code to the address associated with the card. When the user typed the code into the site, he or she was verified. The company charged twenty-five dollars for the service, and for years it was its only stream of revenue.”
April 1, 2017
“Because of its nonprofit status, Couchsurfing didn’t have employees or a real office. Instead, it had hundreds of nomadic volunteers who roamed the world using the site and slept on one another’s couches. The four founders worked from their disparate homes, with Fenton crashing with Hoffer in Palo Alto for months at a time. Occasionally the most active members of the community would live together for a few months in places such as Thailand, New Zealand, and Costa Rica, churning out improvements to the site.
By 2008, the company had a few dozen paid employees and over two thousand volunteers, all in different time zones and frequently on the move. Not surprisingly, the site was ugly, outdated, and difficult to use. Then AirBed & Breakfast emerged.”
April 1, 2017
“Chesky later told me that he was not impressed by Couchsurfing. “I had done enough product development to know that there could be fifty companies that make chairs but it doesn’t matter. The one who wins is the one who makes the best one.” Couchsurfing, he said, was like an amateurishly made chair; it had a chaotic design, no sense of hospitality, and no payment mechanism. “To me it was a totally different thing,” he says. Comparing them “is like saying every piece of furniture is the same.”
April 1, 2017
“The rest of the Couchsurfing story is not a pretty one. Hoffer replaced Fenton as the CEO of Couchsurfing in 2010. The IRS rejected the 501(c)(3) application on the basis of, well, common sense: the company was saving users money on travel lodgings, not necessarily facilitating an exchange in cultural values or making the world a better place.
Couchsurfing suddenly had to raise capital to finance the expensive shift to for-profit status and to pay its back taxes. It raised $7.6 million from a group of investors led by—who else?—Benchmark Capital, which thought it saw an opportunity to compete with Airbnb in the suddenly fashionable home-sharing category.
Benchmark’s partner on the deal, former Facebook executive Matt Cohler, must have realized that he had placed a bad bet. After the conversion to for-profit status was complete, he fired Hoffer, Fenton, most of the employees, and all of the volunteers. Couchsurfing’s most rabid users unleashed a torrent of vitriol on various online bulletin boards, and the site was overtaken by Airbnb in popularity. The new CEO of Couchsurfing lasted less than two years.”
April 1, 2017
“There remains one big tale left to tell in this account of entrepreneurial also-rans. It’s the story of a company called Zimride.
Just as eBay let sellers hawk unused items from their attics and the stuck-in-time Craigslist allowed people to sell old cars, used futons, or even their spare time to do odd jobs, the founders of Zimride realized the same principle could be applied to the empty seats of cars on long road trips. Zimride never truly captured mainstream attention. But the company would end up playing a significant role in the coming battle royal between the upstarts of Silicon Valley and around the world.
The tale starts with Logan Green, a young, introverted software engineer who grew up amid the transportation chaos that was Los Angeles in the 1990s.”
April 1, 2017
“Green was so disgusted with Southern California traffic that he left his beat-up Volvo at home when he enrolled at the University of California at Santa Barbara, committing himself to public transportation. “I wanted to push myself and to see what it was like getting around,” he said. During his sophomore year in 2002, he learned about the East Coast car-sharing club Zipcar, which allowed members to take out vehicles for flexible periods without owning them.”
April 1, 2017
“In Africa, Green and Van Horn went on a monthlong tour that took them from South Africa through Namibia and Botswana, and to Zimbabwe. It must have been entrepreneurial fate, because the young men were thunderstruck by what they saw in Victoria Falls. Zimbabwe was exceedingly poor and few people owned a car. Instead, people piled into minivans driven by unlicensed taxi drivers. “It wasn’t that well organized but there was such efficiency,” recalls Van Horn. “It didn’t make sense to drive a car unless every seat was filled and everyone was paying a little bit of gas money.”
April 1, 2017
“The company grew nicely for another year, then caught the eye of a partner at Floodgate, the venture capital firm that had missed out on Airbnb when the website crashed during Brian Chesky’s presentation. By then, Floodgate had realized its mistake, and the Zimride duo, aware of Airbnb’s rising reputation, had enough sense to reference the home-sharing startup in their pitch deck. One of the firm’s partners, Ann Miura-Ko, who was attracted by the pair’s passion for the economic and environmental benefits of ridesharing as well as by their steely determination in the face of what had already been a long slog to launch the company, led a $1.2 million round of financing.”
April 1, 2017
“All the lethal mistakes of the other nonstarters were wrapped up in Zimride. The founders were too nice. They were idealistic. Their idea was too early—the great wave of smartphone ubiquity and social networking was just gathering momentum. But they were also pragmatic, and they believed in that Silicon Valley notion referred to as “the pivot.” As long as there is money in the bank, it’s never too late to change business models and seek more profitable pastures.
In early 2012, the founders and their engineers met frequently over a three-week period to discuss what to do next. Impressed by the success of Uber’s black-car business, they got excited about a mobile version of Zimride that would let regular people share their vehicles not on long trips or daily commutes but every day, anytime, from one point to another within big cities.”
April 1, 2017
“At first they referred to the new service as Zimride Instant, then changed the name to something a little catchier: Lyft.”
Notes From: Brad Stone. “The Upstarts.” iBooks.
Check out this book on the iBooks Store: https://itun.es/dk/8nACdb.l
