Why Google Should Buy Uber

What if we all gave up our cars for a 24/7 driverless Uber service?

Much has been written about autonomous cars and the implications they might have for our future. I find most of these musings to be fun and fairly obvious: safer roadways that handle more traffic because computers will drive with more precision than distracted humans; cars that navigate themselves to empty parking spaces; relaxing in splendor in a car that looks more like an office, so you can dedicate another hour of your day to sending emails.

We're missing the point.

Driverless cars will entirely respin the fabric of our communities in ways that play out for many decades

Let me start with a question: if Uber could reliably pick you up anywhere with only 5 minutes notice, in a vehicle entirely suited to your transportation needs of the moment, and deliver you to your destination (anywhere in the country) on average 25% faster than you can drive yourself, would you own a car? And how much would you pay for such a service? $500 per month? Think about it: No car payments. No repair. No insurance. No gas. 5 minute pickup - to anywhere. Would you pay $1000 per month?

Interesting. But its more fun to think about what if we ALL did it  - or at least a large fraction of us. What would our communities begin to look like?

Lets start with our homes:

No garages. Who needs a garage when you don't have a car? How about a free exercise room for every American family instead. Or at a minimum, garages could be used as they are here in the Bay Area: as storage rooms. We'd certainly design them differently.

Driveways for dropoff. No need to make room for your buddies to park at your house for your superbowl party. Just a convenient little curbside dropoff by the street will do the trick.

No on-street parking. That ugly car parked in front of your house by your annoying neighbor? Gone. City dwellers waking up early to move your car on street cleaning days? Gone.

The implications for our towns and cities are probably even greater. A report from MIT Media Lab states that about 40 percent of gasoline usage in urban centers is people looking for parking places. No more. How much time and gas would we save? Well, at least 40%. But maybe a lot more.

Come to the think of it, who needs parking spaces? Or parking garages? Even moderately dense communities could be served by a fleet of vehicles that is perpetually in motion, assigned by an algorithm to scurry silently and efficiently to the next assignment. Only in rural or sparse suburban communities might there be the need for a small cache of vehicles stored in order to ensure a reliable and responsive quality of service.

Next time you're in a plane, look out on your departure city as you take off and notice the fraction of your city’s square footage that is dedicated to temporary storage of vehicles. Imagine if 90% of those vehicles - and the associated storage space - were gone. Some might actually become parks or urban farms.

Speaking of planes, what about airports? No parking garages, no shuttles, no watching the rental car agent type stuff  into her OS2 computer for 30 minutes.

Carpools? That's easy. The software can do that. And your wallet is credited for your willingness to share space with your friends and coworkers.

These fleets of shared vehicles would naturally be mostly electric. A driverless Uber service would solve the basic challenges associated with today's electric vehicles (limited range and recharging time). Cars would be recharged as necessary by the algorithm, and assigned tasks based on remaining battery life. Longer journeys might be assigned to special vehicles designed for that purpose - either longer-range electric cars or maybe good old fashioned hybrids.

For the first time since the invention of the automobile, we might actually reverse the incessant paving over of America. Our communities would be safer, cleaner, and more beautiful. No more gas stations on every street corner. Shopping areas could be redesigned as pedestrian-only thoroughfares, where pickup/dropoff points are placed here and there to maximize access and minimize impact. From my own vantage point, there isn’t a reason in the world why University Ave in Palo Alto should have cars on it. We would have access to personal transportation when we need it - and only when we need it - in vehicles that are quieter, cleaner, and entirely suited to our task of the moment.

Now how much would you pay?

Last thought: Who could actually pull this off? Car manufacturers? Um yeah. IBM? Not so much. Apple? No sir. There is one company in the world with the technology, the resources, the influence, the passion, and the kahunas to pull this off. That would be my former employer, Google.

For 8 years, I worked at Google to bring about the revolution known as cloud computing, the impact of which the world is just beginning to understand. But I think the potential of driverless Uber cars is even greater - think of it as cloud commuting.

Posted by Dave Girouard, Upstart founder

Post-MBA Start-up Dreams Deferred

I attended Yale School of Management because I am passionate about change, particularly through entrepreneurship. Throughout my MBA experience, I was quite pleased to be surrounded by many other aspiring world changers. Many of us had well thought-out plans on how we would use our education and experience to launch ventures to address important problems for business and society. Some of us created business plans. Some of us even launched businesses. Most of us, however, joined traditional recruiting lines – finance, consulting, etc. – thereby deferring our true post-MBA aspirations of full-time entrepreneurship. Instead of leading change, many of us simply offered more of the same solutions.

During my second year, I explored this issue in greater detail. Through an independent study, I examined the economic incentive structure and overall thought process that prevents willing and able MBAs from making the leap into full-time entrepreneurship upon graduation. Once word spread about the project, over 100 of my classmates participated. Together, we challenged a few popular myths:

Myth #1: Most MBAs are risk averse and therefore choose “safer” career paths.

Attending business school is a risk. Most full-time MBAs pile on student loans and leave steady paychecks, family, friends, etc. – all for a shot at pursuing their dreams. I tested this myth by including a few questions in my study to gauge the general risk appetite of respondents. In each question, I asked the respondent to select between a higher reward option with lower probability of success (i.e., lower expected outcome) and a lower reward option with higher probability of success (i.e., higher expected outcome). Most of them chose the riskier options despite the lower expected outcomes. Why didn’t they have the same risk appetite when choosing jobs upon graduation? We will get to that shortly.

Myth #2: Most MBAs don’t launch full-time ventures upon graduation because they don’t have the experience and / or don’t think they will succeed. 

The study results proved otherwise: 40% of respondents launched (or helped launch) businesses prior to school; 35% of respondents said they’d consider launching ventures after graduation without additional assistance; and 76% of respondents believed they would succeed as entrepreneurs. Additionally, most business schools offer entrepreneurship classes, business plan competitions, mentorship programs, etc. – all designed to foster an experiential environment. If MBAs don’t know how to start businesses, they have more than enough opportunity to learn and test their ideas prior to graduation. Why then didn’t more respondents launch ventures upon graduation? Good question

The Root Cause 

Ultimately, I found that many willing and able potential MBA entrepreneurs choose safer career paths due primarily to risk of not being able to pay student loans. Most MBAs try to make as much money as possible so they can pay off their loans, build a little savings, and then pursue their dreams. In fact, when I introduced programs to alleviate student loan pressure (e.g., scholarships, loan forgiveness, loan deferral), over twice as many respondents said they’d launch full-time ventures upon graduation. Great results, but how do we figure out a wide-scale solution?

Enter Upstart 
I learned about Upstart almost a year after I graduated and joined the workforce. The more I learn about it, the more I believe in its ability to address the true root causes that prevent many MBAs from launching full-time ventures upon graduation. Not only can Upstart help address student loan risk, but it provides flexibility to use the funds as needed and protection if the upstart should earn less than $30,000 a year. Also, in some cases, the backers even mentor the upstarts. I firmly believe that Upstart is an ideal solution and is poised to change the entrepreneurial landscape. Now, MBAs, JDs…actually, anyone can take that great business plan off the shelf and pursue his or her dream today.

Posted by Corey Harrison, Yale School of Management, MBA Class of 2011

Defining success

A year ago, soon after I started thinking about the concept of Upstart, I was fortunate enough to be introduced to a genius lawyer named Mitch Zuklie, who coincidentally was just named chairman of Orrick (congrats Mitch!). When I explained to Mitch what I wanted to do with Upstart (which wasn't yet called Upstart), he paced around the room, stared at the ceiling, and thought about it for a minute.

Then he looked at me and said "if you're successful, you're going to have a lot of friends, because you're addressing three of the most fundamental challenges our country faces - student debt, job creation, and mentorship." I've carried that statement with me as a motivator ever since and it came back to me again today.

I'm about to fly home from Washington DC after attending the Reboot America conference.  It was inspiring to hear from great leaders from both inside and outside government who want dearly to see entrepreneurship blossom in order to solve some of our country's biggest challenges. Senator Mark Warner from Virginia was incredibly down to earth and pragmatic (and non-partisan!) and AOL founder Steve Case sets the bar for how successful people can give back and make a difference.

I had an opportunity to deliver a keynote about Upstart. I shared our team's ultimate definition of long-term success for our company, which is to help in the creation of a million new businesses in the US over the next decade. It might sound wacky, but that's what we want to do. What struck me today, as I engaged in a lot of discussions about entrepreneurship, access to capital and mentors and other related topics, is what's truly unique about how we're aiming to do this.

In the next 10 years, we want to inject billions (gulp) of dollars of capital into the market in a way that it can have maximum positive impact on our economy. By creating a platform that uses data and analytics to drive hyper-efficient allocation of capital, we can direct those funds to individuals who have the talent, potential, and energy to put them to good use. And we can couple the dollars with the wisdom that comes from backers who have succeeded themselves. Getting this right can unlock the dreams and potential of millions.

Meanwhile, we're in the middle of getting our first couple dozen "upstarts" funded - maybe I'm getting (a little) ahead of myself?

Dave Girouard
Founder

Making Mom proud

My parents are still recovering from a call I made to them when I was in college to tell them that I would no longer fulfill their dream of becoming a doctor.  A year later, they became further distraught when I abandoned their backup wish, that I would pursue a career in engineering.  To this day, I’m not certain how much of my decision can be attributed to my mountain of student debt, further years of educational requirements, youthful indiscretion and confusion, or other intangible factors - but I decided to go to Wall Street and pursue a career in business.

Convincing my parents that working at an investment bank did not involve cashing checks behind a teller window was about as far as I got in explaining the world of high finance.  Over 20 years later, just as my parents have begun to accept that I could survive given my career choice, I recently visited them, and informed them that I had left the finance industry to join a “startup”.

The challenge of explaining what was meant by “joining a startup” led me to long for the days when I formulated explanations for “venture capital” and “private equity”.  Thankfully, my parents are avid readers of chinese news publications.  Yesterday, they sent me the following article:

While I can not read traditional Mandarin (or any Mandarin), my mother’s brief annotations of the article describes www.upstart.com as a popular, new company that helps college students by allowing others to invest in them.  In her note, she congratulated me and mentioned that she was proud.

Scott Wu
Corporate Development Lead