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Travis Kalanick, Uber and the value of being unreasonable

Aug 17, 2017

Uber, the company known as the quintessential Silicon Valley unicorn (a company valued at over $1 Billion), is one of the few tech companies that truly has changed the way we live. Many tech companies and products are associated with adjectives such as, ‘fun’, ‘addictive’ and ‘convenient’, but are essential gimmicky and have not altered behaviour patterns. Like Google, we often think, how did we actually function without Uber? This author can clearly remember the first time he heard of Uber. It was at a typical Saturday evening braai, it was already late and a mate said he had just ordered a taxi and that it would be here in 5 minutes. These were the days where one needed to order a taxi at least 2 hours before and waiting times were frequently 30 to 45 minutes after the time quoted, if they arrived at all. The friend explained the app and how it worked. The natural response was, firstly, if it’s true at all, that’s incredible, and secondly, it must be extraordinarily expensive. The fact that it was cheaper left me in utter disbelief.

Less than a decade later and Uber is now in 613 cities around the world and it’s hard to find someone with access to a smartphone that doesn’t have the app. The man behind it all, until recently, was Travis Kalanick. Kalanick is a serial entrepreneur and, according to most, is competitive and aggressive in character. A winner. Many would say that these are traits that are necessary to grow an idea into a $70 Billion company in just 8 years. Yet, he has lost two battles which have led him to lose the war, and be forced to resign by his Board.

There has been a rebellion of late against Silicon Valley’s ‘bro culture’. The tech industry is particularly male heavy and the few female engineers have generally found the culture difficult to navigate. Kalanick’s style and Uber’s culture was said to have been the epitome of this and has come under harsh criticism of late. Employees have spoken out about how managers were competing directly with each other and deliberated undermining and even sabotaging other projects so theirs would ‘win’. A start-up’s culture often closely reflects the character of its founders, so it is not entirely surprising that Uber has adopted his Darwinian and win-at-all-costs attitude. Is the price of winning worth it, is the next question.

The only market that Uber has not been able to successfully tackle is China. There they were beaten and eventually acquired by Didi, China’s largest ride-hailing service. Didi’s CEO’s reputation is the antithesis of Kalanick’s. Jean Liu is known as a collaborator and has even gone so far as to mentor competitors such as Anthony Tan of Grab, a major player in the South-East Asian market. Kalanick was known as having an authoritarian style where his investors and board were even fearful of him, so Liu knew when she needed to be tough and fight fire-with-fire. Both companies were burning through cash at a rapid rate to claim market share. Liu ultimately got the better of Kalanick by holding her nerve longer than he was able to. She had enormous confidence to raise a staggering amount of money, only to burn through it in front of here investors eyes.

Kalanick has beaten off all other major competition around the world. What is commonly misunderstood is that Lyft, their most direct competitor, started around the same time as Uber. Uber has comprehensively dominated Lyft, without the head start that most people assumed they had, and this must be largely credited to Kalanick and his competitiveness. This is most aptly described by the renown Silicon Valley commentator, Kara Swisher. She has been one of the harshest critics of Uber’s culture, but did make a starting admission. After meeting both Kalanick and Logan Green, Lyft’s founder, in the early stages of both companies, she is said to have said that Kalanick was going to destroy Green.

This leads us to an interesting point; Silicon Valley has long protected its founders. They are often young and inexperienced, thus are given a bit more leeway to make mistakes and ‘grow-up’. Indeed, when they have chosen to part ways with their founders the long-run outcome – at least in two high profile cases - has often been to hire them back. Steve Jobs at Apple and Jack Dorsey at Twitter were both brought back to right the ailing ships. In this instance, George Bernard Shaw’s quote comes to mind, “The reasonable man adapts himself to the world: the unreasonable man persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man”. Kalanick and Jobs were certainly unreasonable men, but must they be deprived of their will to drive their organizations forward?