People, could we please cut out the BS about Uber being a flop?
Geoffrey Moore
![Geoffrey Moore]()
Geoffrey Moore
Author, speaker, advisor, best known for Crossing the Chasm, Zone to Win and The Infinite Staircase. Board Member of nLight, WorkFusion, and Phaidra. Chairman Emeritus Chasm Group & Chasm Institute.
Uber has a market cap of around $70B. That is not a flop. What is a flop is the absurd valuations that prior private equity investors put on companies like Uber. In their search for alpha returns, they talk each other into hallucinations that the public markets, prosaic as they are, simply won’t buy. Don’t blame management for that.
That’s what I think. What do you think??
Follow Geoff on LinkedIn | Geoffrey Moore Mailing List
______________________________________________________________________
Geoffrey Moore | Zone to Win | Geoffrey Moore Twitter | Geoffrey Moore YouTube
Corporate Controller | FP&A Director| M&A Consultant| Aerospace, Consumer Product Manufacturing, Gaming, Entertainment, High Tech, Financial Services, Public and Private multinationals, PE-owned companies.??????
5 年Good point. I still hope that one day Benjamin Graham’s ideas will be back in fashion.
Retired - Cyber Security Program Manager at Raytheon Technologies
5 年Obviously it’s a transformative service, now let’s see how long it will take before they become profitable.
Software architect at Comnisen
5 年Splunk is a flop not Uber. And whoever made decisions and didn’t keep an eye on it has a lot of explaining to do.
Educator and speaker || Strategy and innovation consultant || Equity research || INSEAD || London Business School
5 年Total money put into Uber is 25B (source: Crunchbase) and the current market cap it 67B. This is clearly value creation. The sales figures shows there is demand for the product.?Uber has also effectively raised funds using the low interest rate environment. The later rounds of funding are under water. Good for Uber What about pricing power? One estimate is that Lyft and Uber has 88% of the total market for "taxi"-rides (source: Schaller Consulting). If true, the US market is really a duopoly with a market leader.? Countless industrial organisation examples show that such market are quite cozy once companies get to know each other. Compare with the soft competition between Coca-Cola and Pepsi-Cola.?The taxi market is not a winner take it all market as there are substantial variable costs involved in the business. So I predict that Lyft and Uber will soon learn to coexist happily. Prices will go up and subsidies will go down. If there is a shortage of drivers prices will go up further to cover the higher salary cost. Bottom-line: A great business model, but I have no clue how much the company is worth. Still I am pretty sure it is worth more than 25B. If not the investment bankers are really idiots.