The $0 Marketing Strategy That Built an $11 Billion Business

The idea of ​​standing on the side of the road anxiously waiting for a stranger to pick you up was once more synonymous with a scene from a horror movie than an $11 billion tech startup. . Only a decade ago this might have been considered hitchhiking. So when Uber set out to build a peer-to-peer (P2P) ride-sharing startup, it wasn’t just faced with the standard chicken-or-egg dilemma that every P2P faces. , but in the grim reality that he had no chance of success, he needed more than to acquire both producers (drivers) and consumers (passengers).

The pervasive and deep-rooted fear surrounding the idea of ​​getting into a stranger’s car had to be eliminated.

Even though the founders, Garrett Camp and Travis Kalanick, probably knew that the risk was, in reality, very low and hardly any different from getting into a taxi, they recognized that until they could create a brand image known to provide a safe form of transportation, consumers’ minds would imagine vans offering free candy or puppies, and the danger of not just talking to strangers, but putting their lives in their hands by getting into their car .

In their understanding of how consumers perceive the market, Camp and Kalanick came up with a brilliant idea that allowed Uber to transform the public mind and create a billion-dollar business. They decided to pretend.

Despite the fact that building a peer-to-peer marketplace depends on the public to deliver the services and buy the services, Uber decided not to let the public drive for Uber from its inception. Although they assumed it would be safe for their passengers, they knew it would be a dangerous route for their business.

By hiring professional drivers from private transport companies, he successfully normalized the idea of ​​getting into a stranger’s car. Because, well, getting into a chauffeur-driven car was not just a normal concept, but an appealing concept. But that’s not all he did.

It also meant that Uber could launch a product and focus on marketing to acquire customers – which is what most P2P startups struggle with because you can’t get customers until you have suppliers, but nobody does not want to be a supplier in a market without customers. By eliminating the need for drivers, she was able to focus on marketing on one side of the market, which allowed her to market more effectively.

More importantly, it also ensured that customers would have a good, and very safe, experience by presenting Uber in a positive light. In other words, it not only eliminated the need to invest in driver acquisition, but it also mitigated risk and built a brand rooted in quality rides.

As the startup built its brand and demand, it slowly released new ride options. Since its launch in 2009, Uber has grown from high-end luxury rides (equivalent to what is now Uber Exec) to Uber Pool five years later, where you meet strangers at a specific location and share a ride with them. So while many believe that the path to mass market adoption lies in offering an affordable and accessible product to the masses, Uber started out as a luxury service aimed at a narrow market and has grown in size. developing in cost-effective services for the mass market.

Uber’s success was largely based on two major achievements that guided the strategy. First, there would be widespread hesitation towards carpooling which would need to be addressed before there is a chance of market adoption. Second, to create a product that will appeal to the masses, you had to start with a high-end supplier, even if the initial concept was to offer a more affordable means of transport.

To date, Uber remains the preferred choice in the ride-sharing market, with over 70% of the total market share, despite a growing number of direct competitors. So while others, like Lyft, generally have more competitive prices than Uber, Uber is still the go-to choice for most of the US market.

Wildly successful startups aren’t just the ones with the best idea, but the best execution strategy. In a notoriously tough market, Uber struck gold by understanding that the market wasn’t necessarily ready for what it was introducing. Many founders don’t see the potential for failure because their vision is different from that of the average person, which is necessary to become a successful entrepreneur. But the most successful entrepreneurs don’t just have the vision, they also have the ability to see from their audience’s perspective.

With this, founders can develop a strategy to lower or even remove barriers to entry, grow a brand, and build a successful startup like Uber did.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

William L. Hart