Uber Valuation Skepticism

Shaan shares a story about how a professor incorrectly analyzed Uber's valuation while never having used the service.

"There's an amazing story about this from Uber. I remember when I was living in San Francisco, Uber had just come out. I think I moved there in 2012, and it was all pretty new then.

I remember reading this Bill Gurley blog post that really changed my thinking. The blog post is called 'How to Miss by a Mile.' Bill Gurley was one of the early and biggest believers and investors in Uber.

He talks about this professor at NYU Stern who teaches finance and economics. This professor had written an article saying 'Uber is not worth 17 billion dollars' when Uber raised at a $17 billion valuation. He was right by the way - Uber was not worth $17 billion, it's actually 10 times more than that. But he was making the opposite argument, claiming Uber was vastly overvalued.

The funniest part of the whole thing is at the end of that professor's blog post. After he wrote this huge valuation tear down of Uber, you know what he wrote? He goes, 'As I attempt to attach value to Uber, I have to confess I just downloaded the app but have not used it yet. I spent most of my life in the suburbs where I go for days without seeing a taxi, or if I'm in New York, I just use the subway.'

So the expert who's making this analysis literally never even used the product."