This is my last story about Travis Kalanick
This is my last story about Uber CEO Travis Kalanick.
If you are a long time Pando reader-- since, say, 2012-- you know why that is a momentous statement for everyone here who has struggled to keep going emotionally and financially amid years of Travis Kalanick and his henchbro Emil Michael trying to destroy my family, my professional reputation, and of course Pando’s business.
I won’t rehash all that here. I’ve already written countless thousands of words about how I was targeted personally, what it says about the universal playbook bros use to bring “nasty women” down, and where their strategy went wrong. (If you’re arriving really late to the party, there’s a whole chapter explaining every horrible detail in my next book, but you’ll have to wait til November to read that.)
Instead, I want to focus on what this means for Uber going forward, particularly those who have a financial stake in the company, whether employees or investors. There has never before been a private company in Silicon Valley history valued so highly. Tens of billions of dollars in paper is stunned at the unraveling of Kalanick’s untouchable, do-no-wrong hero worship, wondering “Well, what the fuck now?”
Pando has a five year track record of saying what’s about to happen to Uber at least six months (sometimes much longer) before the rest of the press. Indeed, I said at the time of Josh Mohrer’s departure that something had changed. The A-team was no longer untouchable. I said when Emil Michael left that the investors had finally split Kalanick from Uber in their minds, and Bill Gurley was belatedly seizing the “responsible board member” mantle. And I said when the company announced tipping would be added into the app, he no longer had a grip on the product vision either.
So if you hold stock in Uber, here’s my take on your lot. First off: The sooner you can acknowledge that this company is not worth anything like $70 billion, the better. By my math, Uber’s true value puts it as number four in the global market, behind Didi Chuxing, Waymo, and Tesla, who will become a future competitor should Uber make it to the autonomous future.
If I were Uber’s new CEO, I would embrace this reality. I would do a round that recaps the company immediately. Issue new stock to employees. Start at a clean and reasonable slate. Reset expectations and redefine what a successful IPO would be. Take the hit now, rather than having it continue to hang over this company until the end of time.
We know Uber is worth billions-- its existing business and stake in Didi alone are worth that. But let’s get a true north of what that number is, and where employees and the board work can try to grow it from from here.
Investors and employees have gotten only one clear unequivocal benefit from Kalanick’s departure: One of the big fears has been what will come out next. Brothel visits, more plots to smear rape victims, ugly oppo research gambits, any other technology stolen from competitors, that parade of skeletons that we all know are still in Uber’s closet waiting to come out… finally the board and the company have a credible answer to those future scandals. Because “I’m sorry” “I need to grow up” “It never happened” and more smear attempts of victims have not worked. Now they can say two simple words: Previous administration.
There will be a court of public opinion reset.
And that is valuable. That may help Uber hire again. That may stop the devastating body blow of scandals in the press. At least the calls for Kalanick’s ouster-- from even August publications like the Economist and the Financial Times-- are done. The news cycle will, for many, move on.
But that’s the only real clear win. The question is where Uber goes from here and it seems to me there are three paths:
Travis-lite. Look at the board: Arianna Huffington and Garrett Camp have continued to be Kalanick apologists, supporting him in lock step until the very end. Camp wrote a Medium post yesterday bemoaning how Uber’s toxic culture was simply the result of growing so fast and neglecting important things like… I dunno… treating people with dignity. Bullshit. This wasn’t neglect, Uber actively did bad things.
Creating a “Game of Thrones” culture isn’t essential for a rapidly growing company, nor is refusing to buy female engineers leather jackets, nor is threatening journalists. Many of these actions were not only morally wrong, but illegal. And not the good kind of “disruption!” illegal.
But while Camp’s Medium post was bullshit, it’s interesting that Kalanick’s long-silent partner seems to have sprung to life here. Camp has long been happy to have huge ownership and power over Uber, while taking none of the heat. He has tacitly endorsed every single thing Kalanick has done from the shadows. At one point, he didn’t even list being an Uber co-founder on his LinkedIn page. Given how many tangential, small angel investors sought to steal Uber’s glory during those days, that always struck me as strange. (It’s there now.)
We’ve long speculated our own version of Uber fan fiction in the Pando offices that Camp might be running the world’s longest game: That he would silently enable Kalanick until he self-immolated and then Camp would ride in and save the day. (Fun fact -- Paul is so entertained/delighted by that theory that he almost used an exaggerated, fictionalized version of it as a subplot in his upcoming novel.)
Now, Camp-as-evil-genius is too conspiracy theory even for me to believe. But where the votes of Camp and Huffington and Graves and Kalanick himself go will say a lot about what the next act of Uber is. Choosing anyone who has been an enabler of Kalanick becoming CEO will not represent a fresh start. And it will mean that Uber 2.0 is actually weaker than Kalanick’s Uber.
For all of Kalanick’s many-- MANY-- flaws, he had strengths. This isn’t an accident the company is valued at $70 billion. The problem is his flaws and strengths were indivisible. I’d submit there’s not more brilliant jerk than Kalanick if “brilliant jerk” is the route you are going. Putting in a Travis-lite means nothing changes in the culture, and you don’t have his strengths. The culture will never be reset, in fact it could become resentful and more bro-y. Uber will Yahoo/Groupon away into something that eventually has an exit in the billions, but low billions. It will be deemed a failure, even as it makes a lot of early insiders rich.
A “Marissa.” Last night, in the wake of the New York Times’ scoop, a lot of journalists were throwing out names of Valley folks who are free agents or would be lazy fantasy picks to take over Uber. The Marissa Mayers. The Sheryl Sandbergs.
Sandberg is not leaving Facebook, Kara Swisher has confirmed, and those types of Valley insiders aren’t right for Uber either. Uber is a different kind of company than the software-only Internet companies that the Valley has most often excelled at building. What has always troubled Uber is where that pugnacious “ya gotta break a few eggs!” mentality collided with the real world implications that people are physically getting in cars and hoping they will be safe.
There may be a few names here who could do some good. One I haven’t seen that could be interesting is Jeff Weiner, who might be a free agent, who ran a large public company, who delivered tons of value for shareholders, and took over successfully from another founder CEO, albeit one as different from Kalanick as it’s possible to be. He is also someone who has spoken at length about “compassionate management” and how managing as an asshole is “lazy.” If we are going this route, a Jeff Weiner could be interesting.
But overall this route is a bad one. Kalanick was the cultural fusion of the last twenty years of Valley culture run amok. Let’s go in a different direction…
A boring, operations wizard. Uber is a logistics company that needs an operational wizard, not a product visionary. The bad news for Uber investors is that losing Kalanick creates a massive vacuum of power and resetting this toxic culture will be all but impossible for anyone. However, it’s not like Facebook losing Mark Zuckerberg or Snap losing Evan Spiegel.
Uber does not need a product visionary. (Guarantee no other Valley insider will have that hot take…) It needs an operational, logistical genius. It needs a brand person. It needs a showman. Departed number two Uber executive Jeff Jones was right that Uber needs to stand for something.
Unlike almost all of the Valley’s super unicorns-- whether hardware or software-- Uber is a commodity product. It has an app. It relies on other people’s maps, the same drivers that Lyft also relies on, and other people’s payment systems. Lyft and Uber look almost identical, routinely copy one another’s features, have the same drivers, and cost about the same amount of money and offer mostly the same product experience.
They are Coke and Pepsi. UPS and FedEx.
The differentiators are brand, trust, and price. Especially the latter: Spend more money and you will win market share.
A boring, meticulous tactician of efficiency would be the single best CEO for Uber 2.0. And this person would have to ruthlessly root out everything bro. Dick Costolo had to do a severe cultural reset when he took over Twitter, after not one, but two founder CEOs had been ousted and tribalism was severe.
In many ways, rooting out that cultural dysfunction delayed Twitter’s product development. And perhaps the legacy tax of those internal culture wars are one reason Twitter isn’t a stronger company today. But without Costolo taking that on aggressively within the organization, Twitter wouldn’t have made it to an IPO.
Either way, what you can count on is more of the same over-done pattern matching that Silicon Valley and the journalists who cover it are famous for. Takes like: Just like Steve Jobs, Travis will come back to Uber!
There are so many things wrong with those lazy assumptions and “hot takes.” For one, Jobs and Kalanick are wildly different people with different skills. People also said Jack Dorsey would turn around Twitter while also running Square, because of, well, STEVE JOBS! Arguing anyone in tech can do something “because Steve Jobs” has become somewhat of an unintentional gypsy curse around here.
Beyond that Uber and Apple are very different companies, in very different stages of their lives than when those founders went, and when Jobs returned. It’s lazy analysis.
But worse than that: Lazy pattern recognition is what got us here. The cult of the founder emerged from the tale of Sean Parker, the fucked over founder who Mike Moritz treated like shit. The Legend of Sean Parker (™) was handed down to Mark Zuckerberg, who famously shunned Sequoia as a result. Zuckerberg orchestrated his board and ownership such that he had dominant control. He broke the pattern of the “grown up CEO” for the first time. And because Facebook is such a tremendous company, and he is such a tremendous CEO, that became the new “STEVE JOBS!’ pattern.
But few people are Steve Jobs. Few people are Elon Musk. Few people are Jeff Bezos. Few people are Mark Zuckerberg. Actually, just four people collectively fit that bill. Out of thousands of entrepreneurs funded every year.
You know the rest: The runaway Y-Combinator juiced era of THE CULT OF THE FOUNDER, which Kalanick was the ultimate incarnation of. Consider how many of the defenses of Kalanick have boiled down to comparing him to a pattern.
He’s an asshole. Well so was Steve Jobs!
It’s reckless for a CEO to have zero board accountability. Facebook would have sold to Yahoo if Zuckerberg didn’t have control!
He is financially running this company into the ground. That’s what they said about Jeff Bezos too!
I have heard all this for five years now. And we know now, they were all flat wrong. Kalanick was an asshole, the lack of any governance has devastated this company’s value, and he did waste billions, putting the company in the dangerous valuation trap it is in today.
But if I know one thing about Silicon Valley it’s this: It cannot break its addiction to pattern recognition. That ensures that Kalanick’s ouster will be about more than just Kalanick and more than just Uber for at least the next ten year cultural cycle. If Uber slowly Yahoos out, the story will be about the paramount value of culture in an organization. An asshole will have tanked a great company, simply by being an asshole. If a more boring, operational, responsible CEO saves Uber, the story will become that sometimes even “great founders” have to go.
Travis Kalanick will join the canon of people that future entrepreneurs are compared to -- favorably or unfavorably-- because Uber was the highest valued company of this era, and in Valley history. Only, unlike Bezos, Musk, Jobs, and Zuckerberg, the implicit lazy analysis in “Well, what about Travis Kalanick?” will be that of a cautionary tale.