At the top it’s hard to know where else to go.
In an interview on Harry Stebbings’ 20VC podcast, published on Monday, Andrew MacdonaldUber’s chief operating officer and president said finding new businesses can be a challenge when the company’s core business is already so large.
Call it the ‘classic’ the innovator’s dilemma” he said.
“What you’ve already built is so big that it’s consuming your organizational capacity to do anything else,” Macdonald said. “And even if you can support other companies, it’s impossible for those companies to get the resources, the attention, the distribution, the marketing dollars and the technical capacity — whatever it is, it just gets swallowed up by the hole.”
Macdonald said Uber has nearly $250 billion in gross bookings annually. At that scale, he said, a new product would need a plausible path to becoming a multi-billion dollar company before it would be compelling enough for the company.
“It actually limits your thinking a little bit,” Macdonald said.
Uber operates on a formidable scale. The company reported $58 billion in gross bookings and $14.2 billion in revenue in the most recent quarter. Uber said the platform averaged 208 million monthly active platform consumers.
The company is still making big bets.
Autonomous vehiclessaid Macdonald, are now Uber’s “largest area of investment.” The company has partnered with a range of robotaxi platforms, including Alphabet’s Waymo, and earlier this year launched Uber Autonomous Solutions – a suite of services aimed at helping AV companies commercialize their technology. The Financial Times estimated in an April report that the company has committed more than $10 billion to investments in AV companies and spending on robotaxi fleets.
On Monday, Uber also unveiled a partnership with Drone delivery startup Zipline to allow Uber Eats customers to receive drone deliveries starting later this year. The companies said they were targeting one million daily drone deliveries by the end of 2029.
The partnership includes a “strategic investment” in Zipline by Uber.
Macdonald said on the podcast that the company is trying to incubate new ideas through a program called “Growth Bets,” in which Uber deploys employees to new projects rather than having people manage existing businesses at the same time.
Even then, Macdonald said big companies that pour a lot of money into new projects often move more slowly than startups because people are “getting fat over resources.”
The advantage for Uber, he said, is that if a new idea works, the company can pitch it to more than 200 million people.
Not a bad lead.
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