In my negotiation class at Stanford, we ran an exercise where we bargained contracts with one supplier, two suppliers, three suppliers, etc. The contracts were all different and randomized, so both sides didn’t know what each wanted and valued. However, one thing quickly became clear — even with just two suppliers, the probability of getting a good deal skyrocketed compared to dealing with just one. The more competition, the better for a customer.
That’s common sense of course, but it was illuminating to see it work first hand.
That’s why I have doubts about Uber becoming the next Google even with its amazing revenue growth. You may have heard it’s trying to raise $1 billion at a $17 billion valuation.
It’s impossible to determine Uber’s fair value without concrete numbers, but I do know this: Uber will face intense competition and struggle against it.
THE CORNERPLAY 