Startup Case Studies: Sidecar
We all talk about Uber's rise to success - but what about those that they crushed along the way? Do we even remember them? In this post we analyze the crushing defeat of Sidecar. Sidecar was the first real-time ridesharing company and competed directly with Uber and Lyft. Founded in 2011, Sidecar ended operations in 2015.
Animated Startup Case Study: Watch Sidecar's Loss to UBER
A Classic Failed Startup Case Study - Sidecar
Need a cab? If you’re like most of us -- you’re probably just going to call an Uber.
Uber has become SO popular that the brand name is slowly but surely becoming a generic term. “Hey, let’s Uber there!” isn’t uncommon to hear.
We celebrate the victors, but We don’t hear much about the competition they crushed. But hey, there’s a lot to be learned from tails of defeat! So let’s talk about SIDECAR - A rideshare service -- And 3 reasons why they lost the battle to Uber.
Reason #1: Sidecar's Case of Featuritis
Sidecar Features
In terms of technical features -- Sidecar was actually in the lead. Sidecar was sporting several features that Uber hadn’t even implemented yet.
But all these bells and whistles actually turned out to work AGAINST Sidecar. While Uber allowed a passenger to hail a cab with ONE-CLICK, Sidecar’s filtering and selection process seemed like way too much work in contrast. When users were in a need for a quick ride -- they just leaned toward convenience: and Uber was the answer.
Reason #2: Sidecar Got Strong-Armed
Sidecar vs Competitor Funding
They got out-funded…massively . Uber raised 8.7 Billion dollars , to Sidecars 35 Million -- which seems like a measly amount in comparison.
This allowed Uber to offer several discounts and fare-cuts in order to steal market-share. Sidecar just couldn’t keep up .
Reason #3 : The Network Effect Crushed Sidecar
The Network Effect
Now to get a good understanding of the “Network Effect” you need to know about metcalfes law, which states
Metcalfes Law: The value of a network system is proportional, exponentially, to the number of users ON the network.
Essentially, the more users that are using your network -- the more value to all the users. The more users you lose -- the more VALUE you lose. Uber understood this -- and the race was on.
They were so relentless in gaining market share that They were willing to sustain $870 million in losses. The Network Effect was crushing -- Sidecar got pushed out the market.
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