The Uber Startup Metric - 1

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The Uber Startup Metric - 1
City councils and taxi commissions trying to regulate Uber was interesting. For about a week. When it went on for over a year in Washington DC, I started to feel stagnant just reading about it.

I wonder how many taxis could have been fitted with televisions and backseat jacuzzis using the dollars spent on lobbyists during the dispute. Or how many could have been revamped to, I don't know, accept credit cards. I like the Season 6 taxi edition comeback of Pimp My Ride, though.

Yeah, I know. Someone let that show run for 5 seasons.

Dallas and Miami-Dade are fighting the Uber fight now. My interest is waning at this point though, because Uber has already inspired my new startup metric. It measures how many people, who aren't your customers or employees, are trying to stop or limit you.

The higher the number, the more likely you're onto something.

I call it the Uber Startup Metric, abbreviated USM (easier to hashtag, obviously), and it can be applied to a host of tech startups that have recently had beef with other entities -- local governments, other companies, or patent trolls to name common second parties.

I'm not saying that I side with the startup in every dispute. But I am viewing these battles from a founder's perspective -- because that's what I do. And there are too just many disputes to analyze each one in this article.

The USM bears the Uber name because the company's history demonstrates the metric in action. Over and over again.

For example, when a Dallas official proposes a legal limitation on the speed and convenience of your car service (i.e. cars must take at least 30 minutes to show up and smartphones cannot calculate fares), you've clearly caused a disruption in the marketplace. And isn't that a goal at any startup?

Uber gets USM points for the Dallas happenings.

When Washington DC government officials try to make your car service charge higher prices, it's probably because you've taken customers away from another, now unhappy group (i.e. taxi companies). I doubt your customers are the ones averse to those crazy lower prices.

Uber's USM levels up again from the Washington DC disputes.

If people told me that my startup's service is too fast, too convenient, and too cheap -- while I was seeing profits roll in -- I'd probably let slip one of those laughs that actually sounds more like some kind of animal snorting. Once I realized that they were serious, I would head into battle, guns blazing. But not before doing this as my USM went up.

When your USM goes up, it shows that you're likely making an impact that someone thinks you can continue to make. That someone also happens to dislike your impact. So they try to stop or limit it. Or maybe they just want to make a buck off it themselves.

Unfortunately, sometimes fights are more clearly documented than praise.

The USM concept is becoming increasingly applicable as more and more startups face push back from a host of sources.

For example, Airbnb is currently being targeted by the New York Attorney General. As the company issues reasons for not turning over data to the AG, its USM is on the rise. It actually gets upped two levels because Airbnb hosts signed a petition supporting the company (bonus points issued when your customers are willing to fight for you).

There are also cases in which a founder's former employer claims to own a piece of his startup. In these cases, the startup probably has something that's worth trying to claim.

Then there are patent troll threats and lawsuits. A lot of them. A report released in October by Dr. Colleen Chien of Santa Clara Law, states that 75% of VCs -- and 90% of tech VCs -- say that at least some of their portfolio has been affected by patent troll demands. USMs are going up all over the place for venture-backed companies, particularly in the software sector. The House of Representatives actually just passed an act this week that aims to limit patent troll demands.

Finally, industry giants can come after your startup. Think 3D Systems suing FormLabs, which just raised a $19M Series A. If I were on team FormLabs, I wouldn't be happy about the lawsuit, but I'd count it as additional validation.

That's what a rising USM can signify -- validation that comes with nasty side effects.

While we all hope to revolutionize industries while sidestepping Uber-like battles, the USM has become relevant because more and more tech startups aren't able to sidestep these battles.

So naturally, I wanted to turn all of this into some sort of data (at least conceptually) that we can store and never really figure out how to use.

It's not a metric used when raising money or attracting employees -- it's for the founders themselves. I appreciate the enormous frustration -- and even destruction -- that fights with others can cause startups. Amidst the frustration, the concept of this metric can hopefully help represent some kind of value being fought for as dollars and energy are poured into the battle.

Finally, just so I'm clear, I'm not suggesting that startups get into fights for the sole purpose of upping their Uberness. That's artificial metric inflation. No good.

But if others do target you, whether it's through new legislation or litigation, you might deserve to have a beer and celebrate. That is, with the lawyers, or even lobbyists, that you hire to make sure you don't get shut down.