WEBVTT - Mike Isaac Is SUPER PUMPED To Talk All Things Uber 0:00:00.360 --> 0:00:03.920 Uber. The name itself means superlative, the most of something, 0:00:04.200 --> 0:00:08.479 super top extreme. My guess is you don't name your 0:00:08.480 --> 0:00:11.160 company Uber if you're planning to play by all the rules, 0:00:11.320 --> 0:00:15.280 make decisions by committee, and be everyone's friend. Unlike many 0:00:15.280 --> 0:00:18.800 Silicon Valley companies promising to revolutionize the world, Uber has 0:00:18.840 --> 0:00:21.760 actually done it. The eighty two billion dollar company has 0:00:21.840 --> 0:00:24.239 changed the way we move people through the world. It 0:00:24.320 --> 0:00:26.560 certainly changed the way I moved through the world, and 0:00:26.680 --> 0:00:29.040 has done it so well and with such market dominance 0:00:29.120 --> 0:00:31.880 that Uber is now that most special of brand achievements, 0:00:32.040 --> 0:00:35.080 a verb on top of which many believe Uber when 0:00:35.080 --> 0:00:37.760 they say they are just getting started and that ridehailing 0:00:37.880 --> 0:00:40.440 was merely the first feature of a much broader platform. 0:00:40.920 --> 0:00:44.839 Is dar Kazbrashahi Uber's knew as in not. Travis Kalinich, 0:00:45.120 --> 0:00:48.320 CEO said cars are to us what books were to Amazon. 0:00:48.920 --> 0:00:51.320 Let that sink in for a second. Can you imagine 0:00:51.360 --> 0:00:55.440 if Amazon still only sold books for nearly a decade? 0:00:55.480 --> 0:00:58.800 What was driving Uber's innovation was a growth at any cost. 0:00:58.880 --> 0:01:03.160 Culture and today's podcast guest Mike Isaac calls the superpumped 0:01:03.160 --> 0:01:06.840 egos of founders who were worshiped as demigods. This led 0:01:06.880 --> 0:01:08.760 to a period of time at Uber that was so 0:01:08.880 --> 0:01:11.679 turbulent the company and its goal of an IPO were 0:01:11.720 --> 0:01:15.800 nearly derailed entirely. Here's what I wonder, is Uber two 0:01:15.840 --> 0:01:18.280 point o for real or has a dark seed been 0:01:18.319 --> 0:01:21.120 planted that is going to metastasize at some point in 0:01:21.120 --> 0:01:24.560 the future. Could you have had the success without that 0:01:24.680 --> 0:01:27.720 dark side? Is this kind of behavior emblematic of the 0:01:27.760 --> 0:01:31.840 overinflated valuations and perhaps underinflated core values of a new 0:01:31.880 --> 0:01:34.800 generation of Unicorns? Or is it just part of the 0:01:34.800 --> 0:01:37.240 coming of age story of a tech startup with Uber 0:01:37.240 --> 0:01:40.800 sized dreams. I get to chat today with Mike Isaac, 0:01:41.000 --> 0:01:43.479 who covers Uber for The New York Times. He's written 0:01:43.480 --> 0:01:46.280 about the company extensively for the past bunch of years 0:01:46.520 --> 0:01:49.440 and also wrote the great book super Pumped, The Battle 0:01:49.440 --> 0:01:52.840 for Uber. So let's start with the title of your book, 0:01:53.120 --> 0:01:55.760 super Pumped. What did that come to mean to Kalenik 0:01:56.360 --> 0:02:00.680 In twenty fifteen, Travis had this real obsession with Amazon. 0:02:00.960 --> 0:02:03.680 He always sort of looked up to Amazon as the 0:02:03.680 --> 0:02:06.240 company he wanted Uber to look like to be. And 0:02:06.360 --> 0:02:09.600 Amazon has this list of fourteen values. A lot of 0:02:09.639 --> 0:02:12.000 them have to do with customer obsession and like a 0:02:12.000 --> 0:02:14.320 lot of this sort of typical platitudes of Silicon Valley, 0:02:14.840 --> 0:02:19.120 And so Travis translated that into probably a bro speak 0:02:19.200 --> 0:02:22.760 version of his own fourteen values, and super Pumped Nois 0:02:23.080 --> 0:02:26.280 was one of those that eventually became something. They evaluated 0:02:26.320 --> 0:02:30.480 people on their job performance, and it embodied this idea 0:02:30.560 --> 0:02:33.520 that they could do anything, they could take on the world, 0:02:33.600 --> 0:02:37.120 and being super pumped meant you were like ready to 0:02:37.160 --> 0:02:40.080 fight or be in the trenches or whatever, and that 0:02:40.160 --> 0:02:43.480 became a quality that was very important to him and 0:02:43.720 --> 0:02:46.400 everyone he hired, and that also tended to be a 0:02:46.400 --> 0:02:49.399 lot of twenty something NBA frat boy times he saw 0:02:49.400 --> 0:02:52.880 it is unabashedly a good thing. Absolutely. I mean, I think, 0:02:53.120 --> 0:02:56.000 you know, in the clearer light of day, after the 0:02:56.160 --> 0:02:59.320 federal investigations of past, we might see the downside of that, 0:02:59.480 --> 0:03:01.640 But at the time, you know, like that was he 0:03:01.760 --> 0:03:05.320 hired people like him and super pumped no This was 0:03:05.400 --> 0:03:09.240 part of the criterion even before those investigations come to 0:03:09.360 --> 0:03:11.800 a close. You've come to think about Super Pumped in 0:03:11.840 --> 0:03:15.320 a slightly darker way. Right, My book is pretty critical 0:03:15.400 --> 0:03:18.160 of the company, but I also think that every entrepreneur 0:03:18.600 --> 0:03:22.000 in the Valley especially, is starting from a place of zero, right, 0:03:22.040 --> 0:03:25.400 you have everything against you. No one wants you to win, 0:03:25.520 --> 0:03:27.880 especially if you're taking on an incumbent industry like the 0:03:28.040 --> 0:03:32.160 taxi and limousine and transportation in cities. You know, So 0:03:32.680 --> 0:03:36.280 there's the class half full. Part of it is you 0:03:36.320 --> 0:03:39.880 need to be as as optimistic energetic as possible, and 0:03:39.960 --> 0:03:42.960 I sort of get that. But then where that sort 0:03:42.960 --> 0:03:46.520 of turns is when you know you don't know when 0:03:46.560 --> 0:03:48.120 to rein it back in. You don't know when the 0:03:48.160 --> 0:03:52.560 aggression sort of tips over into alienating yourself from the 0:03:52.600 --> 0:03:55.040 industry or not being able to make friends. And I 0:03:55.040 --> 0:03:57.600 think that's really the story of uber is is going 0:03:57.680 --> 0:04:01.480 hard and really diving into to pushing into an industry 0:04:01.520 --> 0:04:04.640 that had never been disrupted before, and then sort of 0:04:04.680 --> 0:04:07.600 becoming a winner, but not knowing how to go into 0:04:07.640 --> 0:04:09.920 any other mode. We talk a lot about a corporate 0:04:09.920 --> 0:04:13.320 culture on this show, and Andy gross famous quote is 0:04:13.360 --> 0:04:16.960 the former CEO of Intel, Only the paranoid survive that paranoia. 0:04:17.080 --> 0:04:19.040 That sense of being the underdog is supposed to be 0:04:19.080 --> 0:04:20.920 a good thing, but when does it become the When 0:04:20.960 --> 0:04:23.279 does it become a bad thing? When do you need 0:04:23.320 --> 0:04:26.400 to have a broader sense of yourself in the world. Yeah, totally. 0:04:26.839 --> 0:04:28.880 I mean, you know, you have to sort of read 0:04:28.920 --> 0:04:31.960 the room over a period of time. And in twenty fourteen, 0:04:32.000 --> 0:04:34.400 I think is when Uber started becoming a verb rather 0:04:34.440 --> 0:04:35.920 than like an now and if that makes sense, I'm 0:04:35.920 --> 0:04:39.560 going to the ultimate brand achievement. True. Yeah, like Google, 0:04:39.640 --> 0:04:42.320 I'm gonna Google this or Facebook me or whatever people say, 0:04:42.400 --> 0:04:44.880 you know. I think I think Uber probably tipped around then, 0:04:45.440 --> 0:04:49.040 and there was a moment where I think Travis's pr 0:04:49.120 --> 0:04:51.200 tried to rainiment right and tried to say, look, you 0:04:51.240 --> 0:04:53.240 need to start making friends instead of fighting all these 0:04:53.279 --> 0:04:55.880 regulators in Europe because they're going to all come at 0:04:55.960 --> 0:04:59.240 you really hard. And I think he tried. But I 0:04:59.279 --> 0:05:01.599 see him as a tragic character because I don't think 0:05:01.640 --> 0:05:04.120 he's able to operate in any other mode. I don't 0:05:04.120 --> 0:05:07.760 think he's able to really grow and mature like some 0:05:07.839 --> 0:05:10.480 of probably the best CEOs are able to, you know, 0:05:10.600 --> 0:05:13.760 for all their faults. I think Mark Zuckerberg is at 0:05:13.839 --> 0:05:17.200 least entering a new phase where he's trying to change. 0:05:17.320 --> 0:05:19.720 He moves, he doesn't just stay the same. He moves. 0:05:19.720 --> 0:05:21.880 We can quibble about whether he's moving fast enough and 0:05:22.279 --> 0:05:24.800 hard enough, but he moves. I totally agree, And I 0:05:24.800 --> 0:05:27.039 think even a lot of the valley now is sort 0:05:27.080 --> 0:05:32.919 of realizing this tech reckoning is happening, and the maybe 0:05:33.000 --> 0:05:35.560 doctor Frankenstein moment of what have we wrought? And how 0:05:35.560 --> 0:05:37.640 do we change that or at least adapt to that? 0:05:37.960 --> 0:05:39.760 But I think that's what the best CEO is doing. 0:05:39.800 --> 0:05:42.040 I don't. I don't know if Travis's has ever been 0:05:42.080 --> 0:05:44.520 able to do that. It's actually another really interesting thing 0:05:44.520 --> 0:05:47.920 about this story that I find goes against Countrarian wisdom, 0:05:48.000 --> 0:05:50.120 or at least what I debatably thought was my wisdom, 0:05:50.320 --> 0:05:52.520 but which is that people like Kellen at Cove had 0:05:52.520 --> 0:05:55.800 failure in their past are more equipped to grow and 0:05:55.880 --> 0:05:58.080 change and to see problems and to listen to other 0:05:58.120 --> 0:06:00.919 people and appreciate difference. And yet it didn't work that 0:06:00.960 --> 0:06:03.360 way for Kalinnik for some reason. Yeah. I mean, he 0:06:03.680 --> 0:06:07.120 did two startups. One of them was a file sharing startup. 0:06:07.240 --> 0:06:10.120 It was basically like a proto version of Napster meets Google, 0:06:10.560 --> 0:06:12.360 and that crash and burn really hard. That was when 0:06:12.360 --> 0:06:14.640 the record industry actually had much more clout than it 0:06:14.680 --> 0:06:17.320 did right now. He did another one that was parlayed 0:06:17.320 --> 0:06:20.120 into a mild success, but not really He made maybe 0:06:20.160 --> 0:06:23.359 like a million dollars, which made him like Silicon Valley 0:06:23.400 --> 0:06:28.160 middle class I guess so, which is another depressing story. 0:06:28.640 --> 0:06:33.159 But I think the reason that some felt he was 0:06:33.279 --> 0:06:36.960 right for Uber after that is that even through all 0:06:37.000 --> 0:06:39.599 the hardship he faced with those two first startups, he 0:06:39.760 --> 0:06:43.360 still kept pushing through it and fighting these really large 0:06:43.800 --> 0:06:46.920 existing companies, you know, to keep going. But I'm not 0:06:46.960 --> 0:06:50.480 sure if he took away, like you said, the exact 0:06:50.520 --> 0:06:52.479 lessons that he might have needed to from the beginning 0:06:53.240 --> 0:06:55.400 things that he went through. I'm thinking as you talk 0:06:55.520 --> 0:06:58.880 that maybe the difference here is between insecurity and paranoia. 0:06:59.240 --> 0:07:01.279 That paranoia it might be a good thing, but a 0:07:01.320 --> 0:07:05.400 fundamental insecurity and a person which might be tell me, 0:07:05.440 --> 0:07:08.040 if you agree with this, what Travis Kalinek has might 0:07:08.080 --> 0:07:10.480 be a very dangerous thing. I try to get into 0:07:10.480 --> 0:07:12.960 his head in this, and he wouldn't talk to me 0:07:13.040 --> 0:07:14.680 for this book, and so I had to sort of 0:07:14.680 --> 0:07:16.560 do a lot of reporting around him, and so I 0:07:16.600 --> 0:07:19.120 think talking to hundreds of people who have dealt with him, 0:07:19.360 --> 0:07:22.480 around him, got a good insight into how he sort 0:07:22.520 --> 0:07:25.520 of operates and a lot of a lot of this posturing, 0:07:25.560 --> 0:07:28.680 this sort of broneness and you know, we're we're the 0:07:28.680 --> 0:07:31.160 ship and we're cool or whatever, and you know we're 0:07:31.160 --> 0:07:34.280 going to take over the world. I think does fundamentally 0:07:34.320 --> 0:07:38.520 stem from this um, this insecurity and his that went 0:07:38.600 --> 0:07:40.720 even in his childhood, that went from a sort of 0:07:40.760 --> 0:07:44.200 like nerdy guy trying to like seem like he was cool. 0:07:44.360 --> 0:07:47.600 You know, sometimes that drives people, but I think it 0:07:47.640 --> 0:07:50.320 also has its limits, as we as we see. I 0:07:50.360 --> 0:07:52.840 thought this sentence in your book perhaps sums up his 0:07:52.880 --> 0:07:56.120 inability to grow, and you wrote, Travis Kalenek couldn't figure 0:07:56.120 --> 0:07:59.920 out why everyone hated his guts. So what's your absolute 0:08:00.000 --> 0:08:02.880 favorite Travis Kalinic story. You have so many great anecdotes 0:08:02.920 --> 0:08:04.600 in the book. What's the one that really stood out 0:08:04.640 --> 0:08:06.480 to you that you had that aha moment when you 0:08:06.480 --> 0:08:11.320 were reporting. It's not as sort of sexy as some 0:08:11.360 --> 0:08:14.040 of them, but I think he really he really didn't 0:08:14.120 --> 0:08:17.520 understand drivers super well. One of the things he really 0:08:17.560 --> 0:08:19.280 pushed back on for a very long time was this 0:08:19.360 --> 0:08:24.000 idea that drivers deserved tips, right, and he just he 0:08:24.040 --> 0:08:26.320 was the only stopping block. Literally everyone in the company 0:08:26.480 --> 0:08:28.200 was like, we need to tip these people like it's 0:08:28.200 --> 0:08:32.800 just part of how labor works, right, Like LYFT is 0:08:32.840 --> 0:08:34.960 doing it like this is something that this is a 0:08:35.000 --> 0:08:38.000 table stakes minimum and he didn't get this obsession with 0:08:38.400 --> 0:08:41.080 customer experience and if we add another like thing in 0:08:41.080 --> 0:08:43.160 the app, it's going to make people mad and there's 0:08:43.200 --> 0:08:46.040 too much friction, blah blah blah. And you know, it 0:08:46.080 --> 0:08:48.280 wasn't until he literally was pushed out of the company 0:08:48.320 --> 0:08:50.280 that they were able to add tipping. And it absolutely, 0:08:50.520 --> 0:08:52.720 you know, helped drivers a lot. And I think the 0:08:52.800 --> 0:08:55.360 way you can look at how he saw the people 0:08:55.360 --> 0:08:57.600 who worked for him was he referred to drivers as 0:08:57.679 --> 0:09:02.160 supply instead of people, which is which really just gives 0:09:02.160 --> 0:09:04.160 you a perspective on how he looks at you. An 0:09:04.280 --> 0:09:07.319 entire class of workers that company a little bit of 0:09:07.360 --> 0:09:11.079 an engineering brain, although perhaps that's not fair to most engineers. Yeah, 0:09:11.280 --> 0:09:13.720 there's a quote from another article that I loved that 0:09:13.880 --> 0:09:16.600 the company's new chief HR person I think told you, 0:09:16.720 --> 0:09:19.439 and it was every strength in excess is a weakness. 0:09:19.800 --> 0:09:22.680 What has driven Uber to immense success. It's aggression. The 0:09:22.679 --> 0:09:26.480 hard charging attitude has toppled over. And I thought about 0:09:26.520 --> 0:09:29.640 that slightly differently. Could you have had the success without 0:09:29.640 --> 0:09:33.679 the way Travis was. That I think is the ultimate 0:09:33.760 --> 0:09:38.360 question that even folks who have invested in this company, 0:09:38.400 --> 0:09:41.200 even folks who don't have a relationship with Travis anymore 0:09:41.440 --> 0:09:44.600 and once really cared about him or believed in him, 0:09:44.600 --> 0:09:48.600 but he is now alienated, still are questioning to this day. Right, 0:09:48.679 --> 0:09:52.120 Like one of my verses told me, he was the 0:09:52.200 --> 0:09:55.880 right guy for a certain period of time in the company, 0:09:55.960 --> 0:09:57.720 and then it was clear that he wasn't the right 0:09:57.800 --> 0:10:00.160 guy anymore, and he wasn't able to see that he 0:10:00.240 --> 0:10:02.959 wasn't you know. They tried giving him executive coaching, they 0:10:02.960 --> 0:10:05.480 tried to sort of like put people around him. There's 0:10:05.520 --> 0:10:08.480 this sort of i would say, legendary figure in the valley, 0:10:08.840 --> 0:10:11.760 Bill Campbell, who you probably know who's been on the 0:10:11.800 --> 0:10:14.040 board of Apple, and he's they call him the coach, right, 0:10:14.120 --> 0:10:17.760 and they wanted folks like that to really bring him 0:10:17.760 --> 0:10:23.080 into a new phase of leadership. And he can't do it. 0:10:23.480 --> 0:10:25.600 He really can't do it. I think he's sort of 0:10:26.080 --> 0:10:27.800 the way I wrote this book, I just saw him 0:10:27.800 --> 0:10:30.240 as like a Greek tragic figure where he was he 0:10:30.280 --> 0:10:32.959 flew too close to the sun and then and then 0:10:33.000 --> 0:10:34.960 just sort of fell over because he wasn't able to 0:10:35.360 --> 0:10:37.560 wasn't able to see it himself. Do you think it 0:10:37.679 --> 0:10:41.760 ultimately is a story that says Silicon Valley has to change? 0:10:42.120 --> 0:10:44.280 Or do people look at this and because Uber was 0:10:44.360 --> 0:10:47.120 such a success, do you think there's more emulating of 0:10:47.200 --> 0:10:50.640 him going on. The ending, which people vaguely know, at 0:10:50.720 --> 0:10:54.600 least in the public eye, is that everyone got really rich. Right, yeah, exactly. 0:10:55.160 --> 0:10:57.920 But even if the company, like the company now is 0:10:58.040 --> 0:11:00.559 the funny thing is the IPO didn't go at all 0:11:00.600 --> 0:11:02.080 the way they wanted it to. You know, they had 0:11:02.120 --> 0:11:05.880 a real bust first price that actually opened lower than 0:11:05.920 --> 0:11:08.120 the price they set at the market, which is very 0:11:08.160 --> 0:11:10.559 embarrassing for the for the company, it's just not what 0:11:10.679 --> 0:11:13.080 you want. People didn't make as much money as they 0:11:13.080 --> 0:11:14.960 wanted to. But at the same time, you know, Travis 0:11:15.040 --> 0:11:18.640 is a billionaire right now. Ryan Graves, another longtime employee, 0:11:18.679 --> 0:11:21.080 is a billionaire. Garrett Camp, the guy who came up 0:11:21.080 --> 0:11:24.400 with the idea, is a billionaire, and Bill Gurley a benchmark. 0:11:24.640 --> 0:11:27.240 The main venture capitalist that was involved in the company 0:11:27.440 --> 0:11:29.960 probably made what was considered one of the greatest venture 0:11:30.000 --> 0:11:33.240 capital investments of all time. Everyone quote unquote one in 0:11:33.320 --> 0:11:37.200 a way, and in the like lesson, if I'm being 0:11:37.559 --> 0:11:40.240 super cynical, is is maybe it did work. You know, 0:11:40.280 --> 0:11:44.160 maybe this sort of terrible behavior did works, got rewarded 0:11:44.200 --> 0:11:47.240 and right, even if he lost control of his company, 0:11:47.280 --> 0:11:49.240 he got the money. That's right the way I feel. 0:11:49.320 --> 0:11:51.120 You know, I'm not exactly crying for him in his 0:11:51.160 --> 0:11:54.400 billions of dollars, but I you know, ultimately Uber was 0:11:54.440 --> 0:11:57.360 his baby, and that was more about the company entire life. 0:11:57.480 --> 0:12:01.439 He had a girlfriend, lost her, had a mother, had 0:12:01.440 --> 0:12:04.480 a family, and his mother died tragically and completely out 0:12:04.480 --> 0:12:07.880 of the blue. He really had no one. Even his 0:12:07.960 --> 0:12:11.160 closest friends and colleagues sort of alienated him towards the end. 0:12:11.400 --> 0:12:14.600 So the one thing he had and really the reason 0:12:14.679 --> 0:12:17.560 he started fighting for it so desperately later on, is 0:12:17.920 --> 0:12:21.560 this company. And so you might argue that, you know, 0:12:21.640 --> 0:12:24.679 he did get fabulously wealthy, but he lost one of 0:12:24.679 --> 0:12:26.920 the most important things in his life too. I can 0:12:26.920 --> 0:12:29.160 see why you call it a tragic story in some ways, 0:12:29.160 --> 0:12:32.000 and it'll be interesting to see what the lesson becomes, 0:12:32.120 --> 0:12:35.040 what the valley does with this. So going back to 0:12:35.200 --> 0:12:37.720 the inner workings of Uber, you talk in your book 0:12:37.840 --> 0:12:41.960 about this competitive intelligence and about an uber's case, you 0:12:41.960 --> 0:12:44.800 could argue they crossed the line, but where where is 0:12:44.840 --> 0:12:47.319 the line? Because you also write everyone in Silicon Valley 0:12:47.320 --> 0:12:49.720 has some version of this, So where does it go 0:12:49.840 --> 0:12:52.760 from being okay to being not okay? It's really funny. 0:12:52.800 --> 0:12:55.479 There was a saga the other day on the Internet 0:12:55.520 --> 0:12:58.520 about this company that just came out. It was called Superhuman. 0:12:58.720 --> 0:13:01.360 It's an email company. It's it's totally a value thing. 0:13:01.679 --> 0:13:05.680 But basically they use a tracking pixel, which is fairly 0:13:05.679 --> 0:13:08.960 common in email marketing and sort of basically tells you 0:13:09.000 --> 0:13:11.920 when you open an email, but it sends tracking pixels 0:13:11.960 --> 0:13:14.800 to anyone that you send an email for. And so 0:13:14.880 --> 0:13:17.680 the idea is you can tell when you have opened 0:13:17.720 --> 0:13:19.840 an email, if you send it to someone, how many 0:13:19.840 --> 0:13:21.800 times they've read it, where in the world they are 0:13:21.880 --> 0:13:25.040 when they've read it. And the company sort of launched 0:13:25.240 --> 0:13:28.160 thinking that this was an okay thing, right because so 0:13:28.240 --> 0:13:31.840 many other types of services do this, And when someone 0:13:31.920 --> 0:13:33.760 pointed out, like, oh my god, what do you like? 0:13:33.840 --> 0:13:38.080 This is crazy? This is like Fucoldian panopticon, right, like 0:13:38.440 --> 0:13:40.800 why are you doing this? And there was a minor 0:13:40.840 --> 0:13:43.199 freak out. Again it was like a tech thing, but 0:13:43.200 --> 0:13:46.440 but I think we're in a moment right now where 0:13:46.440 --> 0:13:49.760 the norms of what is acceptable in tech is starting 0:13:49.760 --> 0:13:52.000 to at least be questioned, if not changing, you know, 0:13:52.040 --> 0:13:55.880 and I think people are reckoning with the power of 0:13:56.000 --> 0:13:58.840 how tech can shape and transform society. I get in 0:13:58.880 --> 0:14:00.920 my book, like I do think that the moment that 0:14:00.960 --> 0:14:04.160 Trump was elected was this sort of moment that folks said, 0:14:04.160 --> 0:14:07.479 oh my god. You know, immediately everyone turned to Facebook 0:14:07.480 --> 0:14:11.480 and these disinformation campaigns. And there's still question on how 0:14:11.559 --> 0:14:14.640 much that shape things at all, but like the idea, 0:14:14.800 --> 0:14:18.760 just the idea that people were manipulated by ads and 0:14:18.920 --> 0:14:22.320 even fake information on Facebook gave people this idea that, 0:14:22.360 --> 0:14:24.520 oh my god, tech tech has more power than we 0:14:24.560 --> 0:14:27.240 thought it did. And so I think the norms around 0:14:27.280 --> 0:14:30.720 what is acceptable, which is you know, maybe surveillance type 0:14:30.720 --> 0:14:33.880 tech that Uber was doing, or you know, monitoring how 0:14:33.960 --> 0:14:36.720 much people spend on their credit cards per month, monitoring 0:14:36.800 --> 0:14:41.200 what Lift its biggest competitor was doing. Heaven in Hell. Yeah, totally, 0:14:41.200 --> 0:14:44.680 Heaven in Hell. These two really nefarious programs that they 0:14:44.680 --> 0:14:49.160 thought were cool, but we're actually pretty quickly they were sure. 0:14:49.240 --> 0:14:53.000 So Heaven was this internal program at Uber that allowed 0:14:53.840 --> 0:14:56.240 basically for a time, anyone inside the company to see 0:14:56.240 --> 0:14:59.360 where any car and any user was on Earth ever, right, 0:14:59.720 --> 0:15:02.880 and there were no safeguards around it internally, anyone could 0:15:02.920 --> 0:15:06.480 look it up. Like there's one scene where Travis at 0:15:06.480 --> 0:15:08.640 an event with just sort of a bunch of folks 0:15:08.640 --> 0:15:12.360 at a hotel dinner, he displays Heaven on this big 0:15:12.440 --> 0:15:16.080 screen in a room and anyone can just sort of 0:15:16.120 --> 0:15:18.240 look at where all these users are. It's just really 0:15:18.720 --> 0:15:22.200 sort of no care for user privacy and where anyone is. 0:15:22.240 --> 0:15:25.320 It's sensitive information where I take a car in the world, right, 0:15:25.360 --> 0:15:26.840 Like I don't want people knowing where I am all 0:15:26.840 --> 0:15:31.080 the time, right, Yeah. Terrifying and so hell. The counterpoint 0:15:31.120 --> 0:15:34.920 to that hell was Uber's way of monitoring its biggest 0:15:34.960 --> 0:15:38.520 American competitor, Lift, and sort of through a bunch of 0:15:38.760 --> 0:15:41.960 different tracking methods, were able to tell which drivers were 0:15:42.040 --> 0:15:44.920 driving for Lift, how much they were getting paid, so 0:15:45.000 --> 0:15:47.840 Uber would spend slightly more money to get them to 0:15:48.440 --> 0:15:52.320 abandon Lift and come over to Uber. And there's just 0:15:52.440 --> 0:15:55.280 questions around how ethical that was and how much spuying 0:15:55.280 --> 0:15:57.880 on your competitors you should do, and what's acceptable, which 0:15:58.240 --> 0:16:00.520 are big questions. Do you think they felt they were 0:16:00.520 --> 0:16:02.400 crossing the line, or do you think when you tell 0:16:02.440 --> 0:16:04.760 me that story about Travis putting this up on a screen, 0:16:04.800 --> 0:16:07.280 it doesn't seem like it was some big internal secret, right. 0:16:07.440 --> 0:16:09.080 And that's the thing I ran up against in my 0:16:09.120 --> 0:16:12.160 reporting over and over when I would discover something or 0:16:12.160 --> 0:16:15.120 someone else would discover something, employees inside would be like, 0:16:15.560 --> 0:16:17.160 why are you freaking out about this? This is like 0:16:17.200 --> 0:16:18.960 a common thing, or we've had this for years that 0:16:19.080 --> 0:16:22.160 you just very everybody does this, yes, or everyone does it, 0:16:22.240 --> 0:16:24.480 and like that's the thinking that I think is really 0:16:24.520 --> 0:16:28.200 pervasive even now in the valley and really dangerous. And 0:16:28.560 --> 0:16:31.600 I don't think folks in the tech world fully appreciate 0:16:31.720 --> 0:16:35.080 that normal people don't know these things, right. They don't 0:16:35.120 --> 0:16:38.000 really know what norms are or what they're comfortable with. 0:16:38.080 --> 0:16:39.560 And part of that, I think is the failing of 0:16:39.560 --> 0:16:42.880 the media too getting into how these things work that 0:16:42.920 --> 0:16:45.640 we use every every part of our lives, you know, 0:16:45.720 --> 0:16:48.080 are involved in them, and what we're okay with. I 0:16:48.080 --> 0:16:49.920 want to go to the role of the venture capitalists 0:16:50.000 --> 0:16:51.880 and this talk a little bit about Bell Gurley. I 0:16:51.920 --> 0:16:54.480 love this quote you've gotten your book from Gurley about Kalinnik. 0:16:54.640 --> 0:16:56.120 If we let him out of the box at any 0:16:56.120 --> 0:16:58.720 point during the day. He'll destroy the entire world. But 0:16:59.080 --> 0:17:02.760 why couldn't the vcs control Kalinik? I sort of look 0:17:02.800 --> 0:17:05.760 at VC from a few different angles, you know. I 0:17:05.800 --> 0:17:09.400 think part of how VC works shapes how these companies 0:17:09.440 --> 0:17:12.560 have to act the way venture capitalists invest. They don't 0:17:12.560 --> 0:17:15.320 want to flip a company for two x. They need 0:17:15.359 --> 0:17:17.600 to flip it for ten x or whatever. You know. 0:17:17.640 --> 0:17:20.320 They need to make it sell or ipo and make 0:17:20.320 --> 0:17:24.680 their investment really a grand slam. Yeah, because a lot 0:17:24.720 --> 0:17:27.520 of investing is a lot of failures, right, So it's 0:17:27.560 --> 0:17:31.520 pushing harder and Gurley eventually turns on Kalenik. But for 0:17:31.560 --> 0:17:33.440 a lot of the time, you supported all the moves 0:17:33.480 --> 0:17:36.320 that Kalenik was making and was just as aggressive as him. 0:17:36.800 --> 0:17:39.919 And there's a question as to his indemnity in this 0:17:39.960 --> 0:17:42.520 whole thing, and how culpable he is for some of 0:17:42.520 --> 0:17:45.239 the things. Our adventure capitalist part of the problem in 0:17:45.280 --> 0:17:48.119 the valley. If you ask an entrepreneur who has raised 0:17:48.200 --> 0:17:51.320 VC again, I don't pity them too much once they 0:17:51.320 --> 0:17:54.320 say it's a series A worth thirty million dollars or whatever, 0:17:54.400 --> 0:17:57.360 because you just get a lot of these damn, investors 0:17:57.400 --> 0:18:01.720 are trying to make me do something. But but but 0:18:02.440 --> 0:18:05.160 that puts you on a trajectory and you have to grow. 0:18:05.320 --> 0:18:07.639 It's grow or guy, you can't do anything but go 0:18:07.800 --> 0:18:10.159 up into the left on your charts when you have 0:18:10.200 --> 0:18:13.960 to make your presentations to vcs and to get there, 0:18:14.040 --> 0:18:16.800 that means doing anything you can, and a lot of 0:18:16.840 --> 0:18:20.760 the times that means shady, subversive practices. You know, whether 0:18:20.800 --> 0:18:24.080 it's in like social networking and sharing phone book contact 0:18:24.080 --> 0:18:27.120 lists without people's knowledge, or in ride hailing where you're 0:18:27.520 --> 0:18:30.440 doing sort of shady tracking mechanisms or even thinking of 0:18:30.720 --> 0:18:34.680 ways to track other drivers or even passengers. I think 0:18:34.680 --> 0:18:38.360 it perverts the idea that you should in some entrepreneurs, 0:18:38.400 --> 0:18:41.000 at least who don't have like a fully formed moral compass. 0:18:41.040 --> 0:18:43.439 It just it sort of makes you think you have 0:18:43.480 --> 0:18:46.080 to grow at all costs, and sometimes that means going 0:18:46.119 --> 0:18:48.600 into the darker side of how how growth works. And 0:18:48.760 --> 0:18:51.920 it's making me think that the venture capitalists don't always 0:18:51.960 --> 0:18:53.840 have they're not always the adult in the room either. 0:18:53.960 --> 0:18:57.600 They don't always have the moral compass. Ideally, you have 0:18:57.640 --> 0:19:00.359 someone that's very involved and can guide you. But I 0:19:00.359 --> 0:19:01.920 don't think that's the case at the end of the day, 0:19:01.960 --> 0:19:03.840 they need to make this company worth a lot of 0:19:03.880 --> 0:19:06.879 money and sell it, either take it to IPO or 0:19:06.920 --> 0:19:09.920 sell it to Facebook, Google, microsore one of the big 0:19:09.920 --> 0:19:11.960 five companies that end up buying a lot of these 0:19:11.960 --> 0:19:15.560 companies anyway. And that's that's a motivation, right and that 0:19:16.080 --> 0:19:19.480 provides perverse incentives over time, and a lot of the 0:19:19.560 --> 0:19:23.920 time vcs vcs are just as aggressive as any entrepreneur. 0:19:24.040 --> 0:19:26.000 And do you think that's changed over time? I mean, 0:19:26.040 --> 0:19:28.240 do you think was there a mythical period in the past, 0:19:28.280 --> 0:19:32.760 speaking of myths, where venture capitalists were all about creation 0:19:32.840 --> 0:19:35.520 and all about building a company and the money kind 0:19:35.520 --> 0:19:37.360 of came second, or do you think it's always been 0:19:37.400 --> 0:19:39.520 all about the money and the big cash out day. 0:19:39.680 --> 0:19:43.159 The rise of MBA business culture, I think kind of 0:19:43.240 --> 0:19:45.680 changed how people think and work a lot. Once the 0:19:46.200 --> 0:19:49.640 finance guys started flooding into tech companies. I think that 0:19:49.640 --> 0:19:52.920 that kind of just changed how these companies work. That's 0:19:52.920 --> 0:19:56.560 why engineers are still so vaunted and because like the 0:19:56.680 --> 0:20:00.920 roots of the valley are about building and cre and tinkering. 0:20:01.040 --> 0:20:04.120 Steve Jobs is this still mythical figure because he cared 0:20:04.160 --> 0:20:08.520 about users and the user experience, and it's really about computing, right, 0:20:08.520 --> 0:20:11.000 And I think earlier on it was about building a 0:20:11.080 --> 0:20:13.520 computer in a garage and worshiping that, and now it's 0:20:13.560 --> 0:20:16.399 really about the Internet and software, and you see different 0:20:16.400 --> 0:20:18.640