Book SummaryThe Upstarts, by Brad Stone

1-Page Summary1-Page Book Summary of The Upstarts

In The Upstarts, published in 2017, Brad Stone covers the history of both companies, from their founding in 2008 to the time of his writing. He shows that each company started as just a side project, gathered momentum, and grew exponentially throughout the world.

As a journalist, Stone has focused largely on technology news and how it relates to business. In addition to The Upstarts, he’s written books about Amazon (The Everything Store and Amazon Unbound). In 2024, Stone became the editor of Bloomberg Businessweek.

In this guide, we’ll cover the history of each company individually, starting with Uber and following with Airbnb. We’ll then compare the two companies’ paths to success and highlight what they share in common. We’ll also explore the controversies both companies dealt with, from regulators and businesses they disrupted, to local communities and their own customers.

The Rise of Uber

In May 2007, software engineer Garrett Camp came into a fortune when eBay acquired his search engine StumbleUpon. He started living large, but he regularly ran into frictions with San Francisco taxi drivers. He tried workarounds like calling multiple dispatchers at once or renting cars for the entire night, but none of his solutions were fully satisfying. Meanwhile, he became enamored with a James Bond movie scene where Bond tracks a car coming to him on a phone. The seed of an idea was planted, and it would sprout the next year, when Apple announced the iPhone with its corresponding app store.

Near the end of 2008, Camp registered “UberCab” as an LLC and started doing market research on cabs and chauffeured transportation. Not long after, he signed Oscar Salazar, a friend from grad school, to be the startup’s first engineer, and he brought on future cofounder Travis Kalanick as an advisor. It was Kalanick’s idea that instead of buying its own fleet of taxis, UberCab should distribute its app to drivers who own their own cars.

By the fall of 2010, Uber was going viral in the San Francisco area, so much that the city gave Uber a cease-and-desist order for operating a taxi business without a license, threatening penalties of $5,000 per ride and 90 days in jail for each day the company remained operating. This fight brought Kalanick to Uber full time, with a 23% stake in the business, to help it negotiate its legal troubles. Ultimately, the government agreed that Uber was merely an intermediary between drivers and riders, not an actual fleet operator.

Uber Expands

In early 2011, Uber launched its first expansion outside of San Francisco, starting in New York City, where at first it was plagued with problems such as a shortage of drivers compared to demand. Later that year, Uber launched in Seattle. Across all three cities, its customer base grew to 9,000 active users, generating $9 million in fares (of which Uber kept $1.8 million in commissions). By New Year’s Eve, Uber introduced a new feature—automated surge pricing—which causes fares to skyrocket in peak holiday hours, a move that didn’t please customers who were suddenly billed for $100 rides.

Despite early hiccups, Uber was in a dozen cities by early 2012. Its legal hurdles continued as well, including an outright ban in Washington, DC. Even so, its business in that city grew by 30-40% each month, hitting $7 million in fares by April. By the end of the year, popular demand forced DC lawmakers to relent. At the same time Uber’s surge pricing showed strong returns as well, since drivers earning higher fares stayed online longer during peak times, increasing the total driver supply and bringing down the number of unfulfilled ride requests.

Uber Marches On

At the start of 2013, Uber and its rideshare competitors (Lyft and Sidecar) reached an agreement with the state of California regarding basic safety requirements, insurance, and background checks for drivers. This let them expand even more quickly into new cities. By the fall, Uber was growing by 20% each month, and its UberX service was 25% less expensive than taxis, cutting heavily into the traditional market. However, in December, California and Massachusetts both sued Uber for misclassifying its drivers as contractors, not employees. This bad press was compounded when, on New Year’s Eve, an Uber driver hit and killed a young girl. This prompted Uber and Lyft to introduce $100k in supplementary insurance for drivers.

Despite these headwinds, Uber had booked 200 million rides by the start of 2014. It was also going international, undercutting rideshare startups in other countries. On the homefront, Uber cut fares by 30% in select markets, hoping to grow past Lyft. Lyft representatives approached Uber about merging, but the deal fell apart when they couldn’t agree on what share Lyft would have in the company. Further regulatory challenges and competitor complaints plagued the company in London, New York, and Paris, among other...

The Upstarts Summary Shortform Introduction

The Upstarts alternates chapters between Uber and Airbnb and moves chronologically through time. To simplify the story, we created separate timelines for each company. We then created an exclusive chapter, discussing commonalities between both companies.

While the many timeline entries can seem a bit tedious, the fun way to read...

The Upstarts Summary Uber History

2007-2009: Uber Begins

May 2007: eBay acquires Garrett Camp’s StumbleUpon. He starts living large and running into frictions with taxis in SF. He tries workarounds like calling multiple dispatchers at once, keeping a rolodex of gypsy cabs, and renting town cars for the entire night. He becomes enamored with a scene from a Bond film where Bond tracks a car coming to him on a phone.

Summer 2008: Apple announces the iPhone and the app store.

August 2008: Camp registers ubercab.com

November 17, 2008: Camp registers UberCab as an LLC in California. He starts doing market research on cabs and chauffeured transportation. His original plan is to buy five Mercedes and share the cost with friends.

December 2008: Camp meets with engineer Oscar Salazar, friend from grad school, who signs as first engineer. Soon after, Camp meets with Travis Kalanick at LeWeb in Paris.

• This is where Kalanick’s version of the origin story begins. In reality, Kalanick is only mildly interested at this time, having just sold his company Red Swoosh to Akamai and was drifting.
• Kalanick argues that instead of centrally owning cars, UberCab should distribute the app to drivers who own their own...

The Upstarts Summary Airbnb History

2007-2009: Airbnb Begins

Sept 2007: Brian Chesky is in Los Angeles, working at a design firm and making furniture on the side. Joe Gebbia is currently working at a book publisher and making CritBuns cushions on the side. Gebbia sends Chesky a cushion, and Chesky makes up his mind to live in SF. Strapped for cash, Chesky asks if he can rent the couch for $500/mo instead of paying for a bedroom. Gebbia declines, saying Chesky needs to pay for a full bedroom to make bills work.

Sept 22 2007: A design conference in SF is coming up. Gebbia sends Chesky an email proposing a “way to make a few bucks - turning our place into a designer’s bed and breakfast.”

Sept 25 2007: They launch airbedandbreakfast.com with wordpress, and circulate the site to city design blogs.

Oct 2007: Amol Surve, is their first guest. The idea doesn’t immediately strike them as THE idea - they continue brainstorming ideas for new companies over the next three months.

March 2008: For South by Southwest, they launch a new version of the website, with Nathan Blecharczyk as engineer. They email anyone in Austin who listed...

The Upstarts Summary Commonalities Between Uber & Airbnb

In this Shortform exclusive section, we discuss commonalities between Uber and Airbnb. Beyond their similarities in business model as two-sided marketplaces, they also faced similar pressures in early investor skepticism, government regulation, and frictions with drivers (suppliers and hosts).

Both started as side projects, looking for the next big idea.

At Uber, Camp and Kalanick had both recently had their companies acquired. Camp was still busy at StumbleUpon, while Kalanick was enjoying his time away. From incorporation, over a year passed before they hired a CEO and invested real time.

At Airbnb, Chesky and Gebbia started it as a way to pay rent. It’s months before they really pick it as their main idea.

Both were rejected early on with a failure of imagination.

Uber’s potential investors often questioned the size of the black car market, not predicting how it could actually grow to the taxi market and even bigger. Others knew Uber was going to run into hostile local transportation laws. Others were worried about how uninvolved the founders were.

Airbnb investors were concerned about the size of the market, designer founders who didn’t fit the Silicon...

The Upstarts Summary Miscellaneous Notes

Travis Kalanick’s History

• In high school, Kalanick sold Cutco knives and started an SAT training company after graduation.
• In 1998 he dropped out of UCLA senior year to join classmates building Scour.net, a search engine for media files on local networks.
  • In 1999 Scour was getting 1.5 million views a day and 900k visitors in two months.
  • A few “nonlucky” events happened: Michael Ovitz dragged out an investment offer, sued them, and acquired 51% of the company; in 2000, Scour was sued for $250 billion and declared bankruptcy fall of 2000.
• In 2001, Kalanick started Red Swoosh, a company offering to save bandwidth costs for media companies by P2P distribution.
  • Within a year his co-founder left, poached the engineers, and Travis was alone watching deals fall through.
  • In 2005, Mark Cuban invested $1MM, and Travis moved to the Valley.
  • In 2007, he sold the company to Akamai for $18.7MM, netting him several million after years of labor.
• Kalanick wasn’t sure about joining Uber for over a year. He was...

The Upstarts Summary Notable Quotes

“If you want to build a truly great company you have to ride a really big wave. And you’ve got to be able to look at market waves and technology waves in a different way than other folks and see it happening sooner.” - Greg McAdoo, Sequoia

“Everyone is going to give you advice. Ask for the story behind the advice. The story is always more interesting.” - Travis Kalanick

“Don’t worry about competitors; startups usually die of suicide, not homicide.” - Paul Graham.

Kalanick, after Scour went bankrupt: “I was playing the game I call ‘fake it till you make it.’ Basically fighting reality. When you do that too long, when you are in failure state, it will eventually crush you.”

“Bleeding Uber Blood” - Travis Kalanick, in company emails.

“This is what we do. You Americans innovate. Me and my army of ants, we go fast and build great operations.” - Oliver Samwer, head of Rocket Internet, in threat to AirBNB

“They just want to see you suffer. They want an ounce of blood. Just fall on the sword, accept responsibility, and everyone will move on.” - Paul Graham to Chesky, during EJ’s house ransacking ordeal.

“This is going to be the best deal of your life.” - Chesky to...