Book review: The Upstarts by Brad Stone
My 16th read of 2017 was The Upstarts: How Uber, Airbnb and the Killer Companies of the New Silicon Valley are Changing the World, by Brad Stone.
This is the story of how Airbnb and Uber were created, grew and became the companies they are today. It’s a fascinating read.
Using the approach of the two (very different) CEOs of these companies as a common thread, Stone weaves the story at the same pace these startups have exploded to become the ‘unicorns’ of the modern tech world.
One of the most surprising elements of their journey, for me at least, was the existence of other businesses doing broadly the same things as Uber and Airbnb for several years before they were created. Stone shares what differentiates successful startups from failures or also-rans.
Stone is an excellent storyteller. He’s an author and journalist who focuses on Silicon Valley. In 2013, he published The Everything Store: Jeff Bezos and the Age of Amazon, a New York Times and Wall Street Journal bestseller.
As senior executive editor for technology at Bloomberg News, Stone has access to the movers and shakers in Silicon Valley who help him illustrate the story of these two ‘upstarts’ in his new book.
As I was reading The Upstarts on my Kindle, I highlighted several passages:
Airbnb can be considered the biggest hotel company on the planet, yet it possesses no actual hotel rooms. Uber is among the world’s largest car services, yet it doesn’t employ any professional drivers or own any vehicles (save for a small, experimental fleet of self-driving cars).
Every great startup starts as a side project that isn’t anybody’s main priority.
Silicon Valley’s startup scientists have a name for this phase in a company’s gestation; they call it the Trough of Sorrow, when the novelty of a new business idea wears off and the founders are left trying to jump-start an actual business.
McAdoo and Graham were discussing that most essential characteristic of great entrepreneurs: mental toughness, the ability to overcome the hurdles and negativity that typically accompany something new.
Most of Silicon Valley’s best and brightest passed on the deal, just as they had with Airbnb. They said no because Ryan Graves wasn’t experienced enough or because the two founders weren’t involved enough or because they saw the concept as an extravagant indulgence for wealthy urbanites.
“We are living in an era of robber barons. If you have enough money and can make the right phone call, you can disregard whatever rules are in place and then use that as a way of getting PR. And you can win.”
“Never ask the question ‘Can it be done?’ ” he was fond of saying at the time, recalls one employee. “Only question how it can be done.”
Both were unleashing changes in communities’ behavior whose full impact on society they couldn’t possibly hope to understand. And each believed that the best tactic was simply to grow, harnessing the political influence of their user base to become too big to regulate.
The first thing you need to do is grow really, really fast. You either want to be below the radar or big enough that you are an institution. The worst is being somewhere in between. All your opposition knows about you but you are not a big enough community that people will listen to you yet.
Didi would prove a powerful incumbent, capable of raising billions of dollars of venture capital and going head to head with Uber to entice Chinese drivers and riders with discounts. It was going to be a global mega-unicorn death match — over the largest transportation market in the world.
They didn’t really invent their companies’ respective ideas back then, but they honed them nearly to perfection, and then through acumen, fortitude, and sheer force of will, they enlisted large communities of users and persuaded at least some governments to step aside.
Next up, I’m reading Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, by Kate Raworth. I interviewed Kate for my podcast earlier this week and our conversation has prompted me to read her book in full.
Here are links to the reviews of the books I’ve read to date in 2017:
Book review #1 — Misbehaving: The Making of Behavioural Economics by Richard H Thaler
Book review #3 — Reinvent Yourself by James Altucher
Book review #10 — Messy: How to Be Creative and Resilient in a Tidy-Minded World, by Tim Harford.
Book review #11 — Stealing Fire, by Steven Kotler & Jamie Wheal
Book review #12 — Hit Makers: How Things Become Popular, by Derek Thompson.
Book review #13 — Never Quit, by Jimmy Settle
Book review #14 — Who Stole My Spear, by Tim Samuels
Book review #15 — Too Fast to Think, by Chris Lewis