Ben Carlson, another star commentator from the fabulous Ritholtz stable, discusses one of the best business books he has read for a long time – Mike Isaac’s book ‘Super Pumped: The Battle For Uber’.
Carlson says that there are no neat black & white takeaways from Uber’s rise; instead there a good, bad and ugly takeaways.
Lesson 1 – Tech can clearly & obviously supercharge businesses: “Garrett Camp came up with the idea for Uber in 2008 because the transportation system in the Bay Area was so subpar. Travis Kalanick took that idea and ran with it, creating a business out of thin air that’s now worth more than $50 billion.
A little over 10 years after that idea was hatched, Uber is a company that operates worldwide, using a process that has disrupted the transportation business in an obscenely short amount of time.”
Lesson 2 – There is tons of cheap VC money sloshing around in America – The book details “…an Uber company-wide party in Las Vegas to celebrate hitting the $1 billion mark in gross bookings. Thousands of employees were flown to Vegas for an entire week of celebration, drinking, and debauchery. There were open bars everywhere, parties at clubs, and a grand finale performance by Beyonce…” Queen B was paid $6m in restricted stock units for her performance that night even as her husband – a megastar in his own right – sat and watched the wild party.
Lesson 3 – Most boards in Silicon Valley (and perhaps most boards everywhere) are useless: The book has a killer anecdote to drive home this point: “Kalanick had a standing meeting with Apple’s Tim Cook and Eddie Cue because the App Store was so important to the Uber’s business model. Cue asked Kalanick why Uber took an investment from Google and placed their chief legal officer on the board, considering both Uber and Google are in the self-driving car space.
Kalanick told them bluntly: “The board is irrelevant,” Kalanick said, waving them off of the idea. “I hand pick all of these guys. They do what I tell them, and the way I’ve structured things, I do what I want.”
Cue was taken aback. Many founders at least performed a sense of humility in public—a strategic modesty that Kalanick clearly lacked.”
Lesson 4 – Most companies cut corners to rise to the top: “Uber…pushed these grey areas to the extreme, going so far as spying on government officials, tracking their digital lives and even following them to their houses to keep tabs on them.
The most egregious example Isaac used was a line of code called Greyball, which allowed the company to identify people who posed a threat to the company from a regulation perspective when they downloaded the Uber app.
Kalanick and the leadership team also took secret meetings with regulators in certain cities to encourage them to go after the competition such as Lyft.”
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