Jason Droege - Building Uber Eats

Key Takeaways

1. Organizational Buy-In and Risk Taking: Jason's experience in starting Uber Eats shows need for both management buy-in and conviction. This facilitates risk-taking. Jason cited his own freedom to make early mistakes without dire repercussions, epitomized by his remark: "you have to risk career-ending failure to find career-defining success.” Need this culture when creating ventures at larger orgs.
2. Customer-Centricity and Market Research: Uber Eats' initial focus on speed was a misstep, driven by internal biases. The team believed that delivering food quickly was the key, only to realize through customer feedback that restaurant selection was paramount. The pivotal moment came when they expanded their restaurant offerings, resulting in an explosion of business. After launching a version of Uber Eats with a broader range of restaurants, the business saw a sales surge equivalent to the previous four days' sales in just three hours.
3. Launching Strategy and Regional Considerations: In launching new markets, selecting the right restaurants, particularly those that are supply constrained and popular, was necessary.
4. Importance of Fragmentation in Marketplaces: Marketplaces thrive when they aggregate fragmented suppliers. For example, while McDonald's sees 1% of the global population daily, they only constitute a single-digit percentage of the U.S. restaurant market. Starting with smaller restaurants proves the concept of delivery, which then attracts larger chains. The balance between larger providers (who bring demand but may have tighter margins) and smaller providers is crucial. Examples include Instacart's success despite starting with large incumbents and McDonald's early adoption of delivery.
5. Monogamy and Marketplace Dynamics: In marketplaces, the principle of monogamy—where a user sticks with one supplier—varies by industry. For instance, while one might only need a single babysitter, they may order from multiple restaurants. Instacart users, for example, typically shop from 2-3 grocery stores, suggesting just enough variation to keep them on the platform. This contrasts with services like babysitting, where users typically stick to one provider after finding a match.
1. For take-rate businesses, you need polygamy.
6. Execution Over Ideas in Business: Ideas are essential, but their execution determines success.
7. Capital-driven Hypergrowth and Consequences: Jason highlights that businesses like Uber, DoorDash, and Deliveroo were built during a time when problems could be resolved with ample capital. This approach led to rapid growth, but with that came significant challenges. He notes, "Hyper progress is going to come with hyper pain at some point.”
1. He’s referring to over-extending with the backing of excessive capital, classic VC error

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