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Comment by rdl | Hacker News Reader

I would be exceedingly reluctant to work with an investor who writes an "open letter" to a company in a situation like this, and particularly when that letter calls out the CEO in a pretty gratuitous way ("and we have both been contacted by senior leaders at Uber (though notably not by Travis, the CEO)"). You're supposed to be able to be open with investors and other advisors, so this is a deep breech of trust in a non-public company. I can't see taking advice from and sharing confidential or sensitive information with someone who has done that to you in the past.

(The sad part is I agree Uber has a problem and needs to change; Susan Fowler's blog post was remarkable.)

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You know what? I am disgusted and ashamed that a message board that I read and participate in daily is reacting this way.

I'm sick of how Silicon Valley always puts money and internal graft ahead of inconvenient things like morals and acting like decent human beings. Beyond that, I'm tired of how everyone then tries to pretend that these actions that are taken out of greed and ambition to "rule the world" are somehow in the public's best interest.

I see no reason why you are reprimanding a pair of human beings who realized that the company that they have aided, abetted, and implicitly condoned through their investment, and then decided to do what little they could to try to influence that company to fix the situation.

Well said. Either SV is different than business is usual... or it's not.

And if it's not (and not willing to self police to a higher ethical standard), then we should really start asking whether we're comfortable with these companies having the amount of access to our lives they do.

Would you trust Walmart with an Echo type device in your house?

>Would you trust Walmart with an Echo type device in your house?

Offtopic, but that's an odd example. I wouldn't trust WalMart to be fair to their employees, suppliers, etc. But, they aren't the company that comes to mind when I think "who would I least want to potentially listen in on me whenever they wanted?" The company I do worry about in that space does happen to sell an Echo type device...and it's not Amazon.

What company would you trust with an Echo type device in your house? I think the entire proposition is insane given the state of the law.

In terms of "business model", clearly Apple is the one I'd trust the most, Google/FB the least, and Amazon in the middle. But I agree with laws the way they are, it's very problematic. Either the tech needs to change, or the law -- I have a lot more confidence we'll finally see a (not really re)-surgence in privacy protecting consumer tech.

What's different about Amazon vs Walmart? What makes them trustworthy?

If you dig down a bit, you'll find that it's not much.

There's nothing at all special about Silicon Valley companies with respect to ethics.

I was trying to find a well-known company to illustrate the difference in how we look at tech companies vs "non-tech" companies.

For another example, if Comcast compiles user data, it's scummy. If Google does it, we might gripe about it a bit, but it's business as usual.

I think you're misplacing motives here.

The root cause for the founder sentiment in this thread is empathy.

The firestorm Uber is facing may be self-inflicted and justified, but the management team there is made up of real people that are in all likelihood good at heart.

When you have an ongoing PR crisis, a letter like this makes things impossibly difficult. And, the fact that it's written by someone who's supposed to be a trusted team member is an arrow through the heart.

I'm sorry, but "PR crisis" continues the worrying (if thankfully rare) trend of people talking about this whole ... situation like it's an unfortunate but incidental bug that just needs to be ironed over, akin to some kind of "cost of doing business". There is a very important category difference between, say, Cloudbleed, and allegations of sexual harassment.

Bounds-checking errors and the like do happen, and in rare cases reach catastrophic proportions, as we saw today. Downplaying what happened in that kind of situation isn't quite right, but it's still victimless in a certain sense -- you're minimizing the PR damage to yourself while not exactly hurting any other party. But Uber's behaviour here is essentially an attempt to apply the kind of "mitigation" that a situation report for a security vulnerability documents to a human conflict. (Non-serious aside: do they have an in-house "Fowler incident report" being edited every ten minutes?) It'd be far more admirable if they could go the completely Homo economicus route and declare "We don't honestly care, as long as we're profitable, and we're going to do everything possible to combat this eventuality." or something along those lines that actually reflects what they think of this, but obviously that would be ... suboptimal.

Yes, Uber management may be (in fact, from the emails they're sending out to people "deleting Uber", they definitely are) suffering as a result, but the lack of a contrite "Yes, this happened, it shouldn't have" instead of the "This is contrary to our values, our ethos, and a few other words that conjure associations of fine, upstanding citizenship in our communities and such" (read "Lies!"), together with the obviously impartial steps they're taking to "investigate" the matter, make it difficult to find empathy for their pain here.

(Any strawmen or logically suspect arguments in the above are unintentional and I'd love being told about them. Damn, I'd use that for an HN signature if those were supported.)

I have absolutely no empathy for the management team at Uber. They are the ones that set their company up to be like this. They have known for a long, long time that their company culture was terrible. The only reason they're appearing to do anything now is because it became public.

I absolutely wish this "stress" on them, because they deserve it for letting their company get to this state. And people who are good at heart don't let their company's culture get like that.

> people who are good at heart don't let their company's culture get like that

This kind of comment is too harsh and over-simplifies the kind of decisions that growth-phase startups have to face. You have many battles to fight, and sometimes you have to make a trade-off. In Uber's case, they prioritized hiring and firing people to manage performance over dealing with culture issues. Not saying the trade-off they make is right - I think they all realize now they cannot treat themselves as a startup any more - but claiming the management at the company are not good at heart is just totally unjustified. Do you also think startups that lay off people when they don't need them or move operations to cheap regions to also have bad heart?

> lay off people when they don't need them or move operations to cheap regions to also have bad heart?

Those are always rather cold-hearted actions. Employees are not a disposable quantity that you can dump at Goodwill like surplus furniture; companies should make sincere efforts to avoid layoffs.

No. You can try to rationalize it all you want, but at the end of the day, as you said, they prioritized managing performance over dealing with harassment and sexism. And that is NOT what good hearted people do.

EVERY manager over at Uber has to own this. They are the ones at fault. And right now, they need to prove they are good hearted. That is not an assumption to make by default.

> real people that are in all likelihood good at heart

So are the harassment victims and underappreciated employees. Spread your empathy around.

"Good at heart" is kind of meaningless anyway. Judge people by their actions, and their sincerity by how they respond to criticism and mistakes. It's a character test and they're failing it.

Mitch has invested in a company I founded before, and I would have him as an investor again in a heartbeat.

Your relationship with your investors and your board is both public and private (or at least, it's supposed to be). Yes, you are owed a private space to discuss difficult internal matters. But your investors are also responsible for getting you ready to be a public company, and that means holding you accountable when you've fallen below the threshold of what would be acceptable to public shareholders. As the letter notes, "accountable" by definition means in the open and out of your total control.

Mitch and Freada are doing Uber's shareholders a service (and therefore also doing Travis a service) by helping the company clean house before they're exposed to the harsher sunlight of being a public company. If you wouldn't have them as investors as a result, then you're not ready to be held accountable by others and aren't public CEO material.

fron the perspective of some founders, its easier to take the dumb money from overseas investment and sovereign wealth funds as you get the benefit of the funds but without the baggage of a minority investor with a blog who wants to change the world.

Mitch and Freada have already well accomplished "changing the world." Travis has many years to go yet before he can even be considered to be in the same league.

As they say, GIGO. Feel free to take on garbage investors, but don't be surprised if your probability of success goes down as a result.

Skimming their portfolio, it seems like their biggest accomplishment is actually funding Uber.

http://www.kaporcapital.com/portfolio/

Can you name something they've done that has had a more positive effect on the world than Uber has?

Mitch Kapor founded Lotus, the EFF, Kapor Capital, and the Kapor Center for Social Impact. I don't know exactly where his wife contributed among those things, but they generally refer to themselves as a unit these days so I do, too.

He's invested in UUNET (!), Real Networks, Asana, AngelList, Dropcam, Omada Health, Optimizely, Twilio, and many more startups.

He was the founding chair of the Mozilla Foundation.

And much more. He is a lion of industry, having made his mark across multiple generations. Uber is important, but it's one company whose wins are not yet even solidified. Travis isn't even close to being in the same league yet.

If Optimizely and Asana stopped existing, most people would never notice. They would definitely notice if Uber vanished.

Doubly so if the fixes Uber made to city governments were also to vanish.

Do you know who Mitch Kapor is? https://en.wikipedia.org/wiki/Mitch_Kapor

You may be confusing, "thinks they're changing the world," with something more like, "Trying not to do any more harm than necessary."

I don't believe their public letter helps Uber -- it just puts Kapor Capital in an antagonistic relationship with Uber in general and likely Travis in particular, and weakens the plan Uber has committed to (bringing in a former AG, already familiar with the company, with very little delay, to do an investigation -- he's not an outsider, but I respect his integrity more than a completely random attorney), before we've even seen if it produces good results.

I can't tell how much of this was because Uber decided to find someone themselves, vs. relying on Kapor's Project Include.

There is a difference between "held accountable" (which would be shareholder/board actions) and "throwing bricks through the window" (which is this).

Shareholders are well within their rights to take an "antagonistic" stance with respect to companies whose values disappoint. We need more shareholders like this, not fewer.

When one party in a 'relationship' behaves in an increasingly dysfunctional manner, healthy corrective behavior by the dysfunctional party's acquaintances becomes sharper and sharper until it resembles "throwing bricks through the window" to outsiders without historical context.

For example, parents can justifiably kick one of their kids out of their house if that kid is dealing drugs from the parent's house or something similarly extreme.

Thats the kind of situation investors are looking at with Uber. From the "benign" lawbreaking we consider disruption they've moved on to attempts to silence and intimidate journalists, and now a self destructive culture where the strong are preying on the vulnerable inside the company.

That can completely destroy an investment!

Minority shareholders writing angry public letters happens more than you think. It's just that normally it doesn't make it outside the financial news.

In public companies, absolutely (and in public companies, it is often the right course of action.). By investors in private closely held companies, no.

I think every situation is different, and Uber's legendarily toxic culture has remained unaddressed for long enough now that I am starting to think less of investors that silently allow this sort of thing to continue on in the name of returns.

If you're known to be a silent investor in Uber, how long until your deal flow starts getting interrupted because companies refuse to work with you? Maybe never, but I personally applaud these investors for finally speaking up.

Isn't that the point, though? By writing this open letter they're effectively holding the company accountable in an extreme, public way. I would hope a company would treasure such investors since they're willing to offer such "tough love".

Exactly.

I have a very different take - I'm a co-founder of a Kapor portfolio company & sent Mitch & Freada a note today thanking them for speaking up. I want investors who are patient and supportive (and my experience with the Kapors has been excellent in this regard), but also investors that hold portfolio companies accountable when necessary.

And I would be reluctant to work with someone who wouldn't write that letter.

I'm not asking this disrespectfully, but how do you intend to identify such people? Track down a list of all Uber investors who have not written such a letter?

Depends, are you asking about the parent poster's statement literally, or are you asking about the more general point of finding investors who have principles and integrity and are willing to hold you to them?

Could you explain why? Honest question.

I'm not the grandparent poster, but I can say why I would want that.

I'm not perfect. I make mistakes. If I were a founder and I made a mistake running my company, I would want my investors to tell me. I would want them to tell me privately, so I could do something about it without creating a huge public scandal. And I would listen to what they said -- I might, after careful consideration, disagree, but I would absolutely listen and take it to heart.

Now, suppose I were not the founder, but some other member of management in a company, and the company was making a mistake. I would want the investors and board members to talk to the CEO (and other people, perhaps even me, depending on my role). I would want the CEO to listen (just as I would). But if the CEO were NOT listening, if the CEO were part of the problem... well, then I would want the investors and board members to use other channels (even public letters if that's what it took) to rescue the company before it was destroyed.

" But if the CEO were NOT listening, if the CEO were part of the problem... well, then I would want the investors and board members to use other channels (even public letters if that's what it took) to rescue the company before it was destroyed."

Errr, they literally describe this as the case?

(IE they tried all of the channels you suggest first)

> Errr, they literally describe this as the case?

Yes, that's why mcherm is saying that he agrees with the open letter having been written and published.

They wrote that they already tried those channels. Justified at that point to grab the megaphone.

Interesting, thank you for sharing.

Because they prefer morally scrupulous co-workers. Just a guess.

I think they should do a lot more than the letter, but not publicly. (And to be fair, it sounds like they did, until recently.) The ultimate goal here should be "make Uber a better company -- for employees, customers, and society", not "burnish the Kapor's SJW credentials". The public letter accomplishes the latter, not the former.

The Kapors are invested in Uber. If anything, they would care more about the success of Uber than all the other commentators here--aside from any employees.

Right now, they're probably walking a fine line between doing the right thing and maintaining some sort of ROI. I didn't know about the Kapors until today, but considering Mitch's background as an EFF cofounder, the companies Kapor Capital has invested in, and their two other articles on Medium posted a year ago, their actions show they care about more than just profits.

If all the Kapors' effort happens to be for "burnishing SJW credentials" then so be it, at least they're making a difference in the real world.

From reading the letter it sounds like they've been trying to do more for years in private, without success.

What is your reasoning to state so unequivocally that the goal of this is not to make Uber a better company?

Do you agree at least in theory that there is some amount of time of attempting to influence a company in private without success after which it is appropriate to go public? If not why not, and if so why are you so certain that that time requirement has not been met yet in this case?

What are their "SJW credentials"?

I take the opposite view. Ethics are important. If I was to found and run a company I'd hope that I'd never let things get to the point that investors felt that this was a reasonable step. It sounds like up until this point they've been active and trying to help the company with these sorts of issues in a more discreet manner.

Mitch Kapor must know that a number of founders will react this way. That makes it a stronger statement, because it's costing him something.

As a thought experiment, what if Travis Kalanick personally committed a serious violent crime, and Uber the company was covering it up? I think you would agree that it would be ethical and commendable in that hypothetical case for Mitch Kapor to go public like this with his criticism.

So if you accept that, then really it's just a measure of what offense is bad enough that it's ethical for an investor to criticize an investment like this. Maybe to you this sort of offense is not so bad, it's on the "okay" side of the line, and to Mitch Kapor this offense is pretty bad, it's on the "not okay" side of the line.

I don't think either you or Mitch Kapor is a bad person here. But, maybe all this public outcry indicates it is worth you thinking for a bit if perhaps you are underestimating how bad it is to allow this sort of environment at your company. Maybe you have been thinking "hmm this sort of problem is X amount badness" and the reality is it's 3X units of badness.

Personally, this makes me more likely to want a Mitch Kapor investment. If I am founding a company then I really do not want the culture to be Uber-like in its treatment of women. In fact I'd like everyone working at the company to know that up front. After he called out Uber publicly, anyone taking money from Mitch Kapor in the future is making a statement that they care about their culture not ending up like Uber culture.

Anyway I can't see inside your head so I don't know if your real nuanced stance on this is right or wrong but I wrote this comment in the hope that you would reflect a bit and consider retuning your instincts on "how bad is this sort of behavior" to be more critical of it.

I don't think I'd want investors to publicly criticize a founder or CEO in their portfolio even if the founder was arrested for shooting someone (particularly outside the workplace). Plenty of other people can do this; there's no reason for investors to weigh in. If it were a situation which were work related, then the issue is "pending" vs. "resolved" status. (If it were a serious crime credibly alleged, then I'd expect the CEO to resign pending resolution, but there isn't a whole lot of cause for anyone to comment on it during that process.)

Totally agree with you about not wanting Uber-like culture. People should take affirmative steps to not develop that kind of culture. Investors should contribute to that. But, I don't see investors going public with their concerns about portfolio companies as contributing to solving that.

I would possibly feel differently if it were a situation where the investor had special knowledge of the incident, but otherwise, why should this one of ~1-100 people comment, when there are ~7b other people who could?

Though I agree there is a line in the sand, I think there's more to this than just "how bad is this sort of behavior"

In addition to severity, we need to consider: - the "impact" made by joining the conversation publicly - other available means to exert the same level of influence

Given the size of the organization and the fact that it was already in crisis mode, I'd argue this won't really change much. And, if that's the case, then the breach of trust isn't really warranted.

As outsiders, it's impossible for us to truly determine how impactful this letter will be, or whether there were alternative means to achieve the same change.

Given imperfect information, where does that leave us?

Well, making business decisions always involves incomplete information. If there's uncertainty around whether said investor's actions were justified, and I have a choice to take money from another investor on equal terms, I'll take the alternative (all else equal).

This is a practical decision driven by caution - not a judgement of character on said investor (I have a lot more respect for Mitch as a person because he certainly considered the consequences of this letter).

I appreciate this not because I think it will change Uber. I appreciate this because it will make Mitch Kapor's other investments realize that, if their internal culture is as bad as Uber's, they now have one more reason to improve it.

I think they know this. And they still wrote it. What does this tell us?

Hah. Yes, they are not looking to be all things to all founders. This is good signaling on their part.

I started a company while sharing office space with them--great people. I'm sure they've been working behind the scenes on this for a long time.

Being in the Kapor office I got a much more visceral experience of "diversity and inclusion" as a raise the bar strategy. Tons of smart people who were also happy and kind and productive.

Ding ding ding ding ding.

Two things can be true: This can be a breach of trust, and the situation within Uber is so dire, with so many people being just terrible human beings, that this breach was necessary.

How else should the investor respond? In many situations (I don't know enough about this one) I don't think it's acceptable to say nothing; it's effectively tacit support.

Unclear. It's a tough situation.

I wouldn't consider one of the (100?) investors Uber has to be responsible for Uber's actions, particularly since they're famous for ignoring their investors. Investors are most responsible for the investment decision itself; if they knowingly invested in Uber today, that's a different statement IMO than investing in Uber 4 years ago.

I would still prioritize fiduciary duty and privileged information/position as an advisor over anything else, unless there were criminal activity, in which case I'd bring it to the attention of the board and correct authorities.

I think you can criticize Travis and management a lot in private, and ultimately push for changes in management (although I don't think anyone would benefit from removing Travis!). Doing things in public is not helpful, though.

The other really helpful thing is probably a good reporting pipeline for employees if they think something criminal or illegal or unethical is happening. Less of an issue in a company the size of Uber (there SHOULD have been a way to report to someone...HR was weak, but legal/CFO?). In a smaller company, I'd consider an investor a good proxy for that.

I think you can criticize Travis and management a lot in private,

It sounds like that's what they've been doing ("We are speaking up now because we are disappointed and frustrated; we feel we have hit a dead end in trying to influence the company quietly from the inside."). If the private approach doesn't work, what should one do?

Accept that they possibly can't fix Uber, and focus on making/helping other investments.

If your neighbor is beating his wife, and he won't stop when you talk to him privately, you have two options: You go public, or you accept that you can't fix him, and move on.

It seems like they feel some responsibility for having put money into a business where toxicity was tolerated, and also that their trust in Uber's management has been breached. Why do you think it's so important that they keep their views private rather than state them publicly?

I have a pretty bright-line rule: investors should not be publicly critical of portfolio companies or founders. This situation does test it, but in general I think investors, founders, and society are better off with that rule than without it.

(Doesn't apply to public companies, since you're appealing to potential co-investors. Doesn't apply in cases of criminal/etc. behavior when a founder or manager is replaced.)

And I don't. I believe that investors who would be quiet in this situation have shown that they have absolutely no scruples or morals.

I understand what your position is, but I'm asking why you hold it.

I have two reasons for asking this. First, criminality seems a really low bar to set before you can speak up about an ethical issue, and second, not speaking up about questionable ethical behavior often enables criminality to continue - Bernie Madoff springs to mind as a simplistic example.

I hold it because there's a huge value to being able to 100% trust your team/investors, and compromising it even for "cause" harms that, and on balance, is a bigger problem.

There are ~7b other people who can call out Uber's behavior who are NOT Uber investors. I don't think any particular value was added in this coming from Kapor vs., say, EKP. There are a lot of people who are not Uber employees or investors who have even more moral credibility here, too.

How are you quantifying this value to weigh one issue against the other? It seems like you're saying the potential profit is the defining factor for you, so I'm wondering where you consider the stakes to be valuable enough to override other considerations.

I don't see how people outside the team are supposed to call out bad behavior if they have no information about what's going on within the team because confidentiality is contractually enforced.

Trust has to be mutual. Once the investors have complained and not been listened to, how can they continue to trust?

> I wouldn't consider one of the (100?) investors Uber has to be responsible for Uber's actions

Not fully responsible, but still responsible. IMHO we are accountable for the consequences of our actions. As an extreme example, I shouldn't fund someone who uses slave labor. If I knowingly funded someone's violent, criminal act, I would go to jail.

I think the bar for criticizing an existing portfolio company should be far higher than the bar for declining to make an investment (and potentially telling the company why you're declining...not often done, but if it's due to a moral reason, probably worth it.)

Criminal activity is clearly a line which can't be crossed even for existing portfolio, but I don't think an investor is the one in a position to deal with that -- it's more for regulators.

Exiting the investment is probably the course I'd take before publicly calling out a portfolio company, for "non-criminal but terminally bad-for-brand" reasons.

Internal corporate governance (board/shareholder actions) would be before that, and extreme internal pressure before that. I'm absolutely not calling for investors to just let stupid stuff pass; I just don't blame investors for not taking action when not required, and I think there's a defined escalation path which doesn't include an open letter to a portfolio company which isn't public.

Kapor Capital focuses on funding companies that strive to make positive social change. Uber's behavior pretty much forced Kapor into make a statement; staying silent while touting their message of diversity would look extremely bad.

There's a bit of a theme in these comments that make it appear that the founder-investor relationship should become a suicide pact in the face of problems.

That seems inconsistent, curious how you reconcile. Some companies now might hesitate to work Kapors. Some companies now might hesitate to hire Susan. If you are okay with employee speaking up publicly when private action failed, why not an investor? Seems entirely within their rights and the moral thing to do.

> this is a deep breech of trust in a non-public company

How so? Senior leaders at Uber seeking "advice on a variety of issues, mostly pertaining to diversity and inclusion" isn't a bad thing.

Clarifying that Travis Kalanick, the CEO, wasn't one of those senior leaders, doesn't breach anyone's trust.

Really? This has the opposite effect on me. Uber and Travis were given plenty of opportunity to change and they didn't take it so the Kapors are taking action. We need more investors like Kapors and less amoral profit first and only investors.

On one hand you are right, but on the other I've seen this argument used soooo many times in my life by people who didn't leave you another chance. And if one can believe the content of the open letter, it also says that they already tried multiple times to discuss this in private.

Communication always has two sides. And if one side is not willing you can't just blame the other side.

I think you're misplacing where the deep breech of trust has occurred ... if an investor stays silent in this situation, I would regard that investor as suspect ethically.

And in this case, if the investor is pissed at Travis for not getting in touch (a different breech of the relationship), this is pretty good way of getting their attention (well, possibly).

Edit: disclaimer, I should declare my bias: #deleteuber

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