{"id":332,"date":"2023-04-17T19:55:11","date_gmt":"2023-04-17T19:55:11","guid":{"rendered":"https:\/\/ceoww.com\/?p=332"},"modified":"2023-11-20T08:04:55","modified_gmt":"2023-11-20T08:04:55","slug":"silicon-valley-companies-blitzscale","status":"publish","type":"post","link":"https:\/\/ceoww.com\/silicon-valley-companies-blitzscale","title":{"rendered":"The death of Silicon\u2019s Valley blitzscale approach in other countries"},"content":{"rendered":"\n<p>In November 2019, partners and investors at the \u201cSan Pedro Valley\u201d decided to invest in an early stage start-up, VOOR, an app aiming to sell online tickets while eliminating scalping overall, the startup was a finalist at an MIT-<a href=\"https:\/\/ceoww.com\/tag\/brazil\">Brazil<\/a> challenge, it seemed to be the right move. <\/p>\n\n\n\n<p>After postponed its launch due to the worldwide pandemic, they had time to overthink its strategy.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/ceoww.com\/silicon-valley-companies-blitzscale\/#The_urban_mobility_game\" title=\"The urban mobility game\">The urban mobility game<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/ceoww.com\/silicon-valley-companies-blitzscale\/#Bad_or_mad_drivers\" title=\"Bad or mad drivers?\">Bad or mad drivers?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/ceoww.com\/silicon-valley-companies-blitzscale\/#Blitzscaling_blitszcaping\" title=\"Blitzscaling &amp; blitszcaping\">Blitzscaling &amp; blitszcaping<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/ceoww.com\/silicon-valley-companies-blitzscale\/#Hide_beeeep\" title=\"Hide &amp; beeeep!\">Hide &amp; beeeep!<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_urban_mobility_game\"><\/span>The urban mobility game<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>\u201cHow about we integrate our customers with private drivers\u201d&#8230; agreed the strategy team betting on a strong market resurgence. The initial idea was to pose as Uber drivers, C-levels included, all \u201cUberX\u201d requests would be provided by an \u201cUber-Black\u201d car, followed by a script explaining why the startup was giving away such a \u201cprize\u201d.&nbsp;<\/p>\n\n\n\n<p>The campaign was a clear success, but things began to change when the research exposed some dark truth about the \u201curban\u201d mobility game.<\/p>\n\n\n\n<p>After a few weeks the C-level partners posing as drivers had accounted for hundreds of requests not only from Uber, they had the \u201c99\u201d (owned by companies like Didi and Softbank), Indriver and other apps running at the same time!&nbsp; The data being gathered was so impressive that they decided to extend the research for another six months.<\/p>\n\n\n\n<p>\u201cUrban mobility is a major entertainment indicator, when you analyze the data properly, we can see patterns according to what sort of cultural agenda the city is going through. Cities have a very interesting behavior, every day they are born, grow and sleep, some don\u2019t ! \u201d, I said to our team.&nbsp;&nbsp;<\/p>\n\n\n\n<p>To map the city&#8217;s hot spots and time them properly they had to work 7 days a week at different working hours, a 3rd shift had to be in as well!<\/p>\n\n\n\n<p>As weeks go by we noticed a fierce downward spiral from Uber and 99\u2019s requests followed by a sudden increase from inDriver. We kept changing cars from electric to very basic models available, the results were staggering.<\/p>\n\n\n\n<p>But before we get into it, here are some of the research\u2019s rules:<\/p>\n\n\n\n<ul>\n<li>Pay all expenses from real gains (car expenses, rental costs, meals, maintenance, etc.)<\/li>\n\n\n\n<li>Brazilians usually get paid on a monthly basis, thus, depending on the week day the 5th business day is presented, overnight work was required e.g : if on a Friday, would Saturday\u2019s night-life at clubs\u2019 \u201chotspots\u201d be different from other regular paydays?<\/li>\n\n\n\n<li>To \u201cinterview\u201d other drivers at the airport&#8217;s waiting area.<\/li>\n\n\n\n<li>Change working hours each month.<\/li>\n\n\n\n<li>Explore suburban areas up to their limits, reaching out to semi-rural areas.<\/li>\n\n\n\n<li>To set a financial goal and try to profit from it.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bad_or_mad_drivers\"><\/span>Bad or mad drivers?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>They\u2019ve found a general dissatisfaction from customers referring to UberX\u2019s drivers. According to over 94% of the responses, riders complained about how the vast majority of all cars can be found under unbearable conditions, a very different scenario from when Uber and other apps initially started in Brazil.&nbsp;<\/p>\n\n\n\n<p>\u201cIt isn&#8217;t uncommon to see a driver work for almost 24 hours\u201d, according to a particular customer&#8230; Even knowing Uber has a 12-hour limit, \u201cshift\u201d drivers are forced to work among other apps to keep up with the expenses, since you can\u2019t make a living out of one single app anymore, according to the research results.&nbsp;<\/p>\n\n\n\n<p>This poses a dangerous threat to riders\u2019 safety, and the problem doesn&#8217;t end here.<\/p>\n\n\n\n<p>If you ask ChatGPT open AI\u2019s platform to write an article about Uber\u2019s profit decline in underdeveloped countries, it will, unfortunately, tell you the far-from- the-truth version.<\/p>\n\n\n\n<p>Uber\u2019s usage decline seems to be much more related to poor\u2019s customer service among its drivers\/ partners, close to 900 drivers were interviewed, and the feeling is unanimous, they don&#8217;t have a sense of belonging and are feeling exploited, maybe it isn&#8217;t a coincidence, Uber hadn\u2019t reported profits for a very long time, when it does, someone else\u2019s cookie jar wakes with crumbs.<\/p>\n\n\n\n<p>\u201cThe algorithm was probably tested at US or another country with a very different landscape\u201d complains Rogerio Drumont, an Uber driver at the airport waiting line,\u201c we have to be here for over 2 to 3 hours waiting a single ride request, and when we see that Uber is taking as much as we do for each request and limits our gains to a very similar amount each hour myself and all my friends just feel very discouraged\u201d.<\/p>\n\n\n\n<p>Uber-like urban mobilities apps don\u2019t account for streets\u2019 inclination, at Belo Horizonte for instance, some counties are replete with streets \u201cclimbing\u201d over 60 degrees, this alone will bring any vehicle\u2019s autonomy to its knees, and if you have over 1 passenger things get weird, some riders reported being at accidents from cars\u2019 losing acceleration and simply \u201cfalling\u201d downhill hitting a public lighting pole or at anything else on its way.<\/p>\n\n\n\n<p>What\u2019s really strange about it is that why wouldn&#8217;t a giant like Uber use a driver&#8217;s phone MEMS (Micro-Electro-Mechanical Systems)\/gyroscopes to compute the challenge and pay them accordingly? Prevent accidents?<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Blitzscaling_blitszcaping\"><\/span>Blitzscaling &amp; blitszcaping<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In Brazil, Uber-like apps are facing a very strong labor law, lawsuits are piling up, and they are <a href=\"https:\/\/www.cnnbrasil.com.br\/business\/uber-e-vinculo-trabalhista-decisao-do-tst-pode-ter-efeito-cascata-diz-advogada\/\" target=\"_blank\" rel=\"noreferrer noopener\">losing them all<\/a>, with a very <a href=\"https:\/\/theintercept.com\/2022\/04\/28\/como-a-uber-se-blinda-para-impedir-que-a-justica-reconheca-vinculo-trabalhista-de-motoristas\/\" target=\"_blank\" rel=\"noreferrer noopener\">few exceptions<\/a>.\u00a0<\/p>\n\n\n\n<p>As I\u2019m typing, Uber has just released a new user\u2019s agreement, an attempt to exempt the urban mobility giant from being identified as a transportation &amp; delivery company. I wonder how Uber riders\u2019 and drivers\u2019 \u201cumbrella\u201d insurance will be dealt with from this point forward, more episodes to be seen I guess. We know users won&#8217;t read it, I believe most of us agree to such agreement\u2019s updates, so we may move forward with the request.&nbsp;<\/p>\n\n\n\n<p>Could this \u201cmiscommunication\u201d malpractice and the lack of reliable communication channel topped with willingness to reach out unhappy user\u2019s be signs to a death of Silicon\u2019s Valley blitzscaling approach?<\/p>\n\n\n\n<p>LadyDriver, the \u201cfemale-only\u201d app, took a stepforward, during its sign up, will have drivers assume they are an independent company and go through an online \u201cwarm-up\u201d course before all the ladies can start offering rides.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Hide_beeeep\"><\/span>Hide &amp; beeeep!<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Suddenly, and now on a weekly basis, drivers are being&nbsp; surprised with tedious surveys from all top tiers service providers. One thing in common, to point out services they believe to be more reliable\u2026 At the competition.&nbsp;<\/p>\n\n\n\n<p>Something caught my attention though, to name new players in the game seems to be the &#8220;new black&#8221;&#8230; <\/p>\n\n\n\n<p>I&#8217;d probably need&nbsp; another article to expose how the game is rapidly changing around Brazil, Uber is known to focus at major metropolitan areas, but wait, Minas Gerais, a State from the South East region, has 856 municipalities, companies offering white-label apps are popping up everywhere, I guess we know where this \u201ctrain\u201d is coming from and where the next stop is.<\/p>\n\n\n\n<p>In some cities major apps can take over an hour to respond ride requests, and new players are running the show, I could name a handful, as an example Urbano Norte, the closer you get to Betim, the well known industrial town home of the formal <a href=\"https:\/\/www.economist.com\/business\/2019\/06\/06\/a-merger-of-fiat-chrysler-automobiles-and-renault-is-no-more?utm_medium=cpc.adword.pd&amp;utm_source=google&amp;ppccampaignID=19495686130&amp;ppcadID=&amp;utm_campaign=a.22brand_pmax&amp;utm_content=conversion.direct-response.anonymous&amp;gclid=CjwKCAiAoL6eBhA3EiwAXDom5icXO7qp6fKUkbru16KaS6hGriyE9x8HP1c6sGfV2GMj6d9kbrG2nxoCk-oQAvD_BwE&amp;gclsrc=aw.ds\">FIAT<\/a> auto manufacturer, now Stellantis, (you may consider searching for Ferrari\u2019s formal group owner), the harder it gets to find an Uber or 99 Driver, the two predominant players to date, but if you search at your favorite app store with emphasis to the city you\u2019re at, you\u2019re good to go! <\/p>\n\n\n\n<p>New players are offering cash bonuses for the most active riders, thus, competition is coming from many angles, there are hundreds of cities getting familiar with the app offering local customer service and technical support.&nbsp;<\/p>\n\n\n\n<p>Belo Horizonte with its over two and a half million inhabitants (over 6 million if you consider the greater metropolitan region) has only one single physical Uber office to attend special drivers&#8217; concerns and requests. The research also shows unhappiness when bringing this subject to a test.<\/p>\n\n\n\n<p>Stop, look, listen &amp; think \u2026<\/p>\n\n\n\n<p>Now, you may ask why this behavior from this South American country could be so important and a key indicator for some western tech companies? Brazil is one of the most hyper-connected countries in the world, ranking <a href=\"https:\/\/www.statista.com\/statistics\/268136\/top-15-countries-based-on-number-of-facebook-users\/\" target=\"_blank\" rel=\"noreferrer noopener\">4th place <\/a>(down from 3rd) at Facebook\u2019s users volume by country.\u00a0\u00a0<\/p>\n\n\n\n<p>Notwithstanding the country, I\u2019m most familiar with, Uber <a href=\"https:\/\/techcrunch.com\/2018\/03\/25\/gruber-official\/\" target=\"_blank\" rel=\"noreferrer noopener\">got acquired<\/a> by Grab in Asia Pacific, although they will become a stakeholder this could mean they\u2019re losing grip and local competition is winning in the long run, these facts could easily impact quarterly reports shareholders\u2019 valuation perception or worse, real growth reliability.\u00a0<\/p>\n\n\n\n<p>For now, all we can expect, are mad drivers and a growing numbers of unhappy customers around the clock, but don\u2019t get me wrong, everyone is hooked already, we can\u2019t go back to plain-old-fashioned <\/p>\n\n\n\n<p>Taxis, once companies start to compensate drivers accordingly, such as updating rides value as gas price chances in real time and overall additional expenses we may see a brighter future in this \u201cgame of honks\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Why blitzscaling strategy is not scalable in developing countries.<\/p>\n","protected":false},"author":10,"featured_media":337,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[77,79,78,76,75],"_links":{"self":[{"href":"https:\/\/ceoww.com\/wp-json\/wp\/v2\/posts\/332"}],"collection":[{"href":"https:\/\/ceoww.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ceoww.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ceoww.com\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/ceoww.com\/wp-json\/wp\/v2\/comments?post=332"}],"version-history":[{"count":0,"href":"https:\/\/ceoww.com\/wp-json\/wp\/v2\/posts\/332\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ceoww.com\/wp-json\/wp\/v2\/media\/337"}],"wp:attachment":[{"href":"https:\/\/ceoww.com\/wp-json\/wp\/v2\/media?parent=332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ceoww.com\/wp-json\/wp\/v2\/categories?post=332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ceoww.com\/wp-json\/wp\/v2\/tags?post=332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}