Uber shareholder group wants Benchmark off board
axios.com
axios.com
https://www.recode.net/platform/amp/2017/8/11/16130148/bench...
If the next Slack (i.e. companies where VCs form a line to have them take their money) always pass on Benchmark after remembering this, instead choosing to take money from Sequoia/A16Z/NEA etc., who are also competent investors who aren't complete marks, then returns may take a hit.
Benchmark clearly believes that Kalanick is toxic to Uber's success. Given the amount of money they have in the game, and given the belief that Kalanick will sink Uber, it's pretty hard for me to come up with odds that future founders will be Benchmark-averse that overcome the amount of money they have in play with Uber plus whatever heat they'll take from their LPs.
https://news.ycombinator.com/item?id=14986446
They have really dropped the ball with this one. I know I wouldn't work with benchmark if I had a choice in the matter. A company is too hard to build - let alone a unicorn - to let investors treat you the way Benchmark have treated Travis. There are better ways to deal with such issues. They embarrassed him and left him out to dry at a time when they should have been most supportive.
I am severely disappointed in Benchmark and I hope they go away for good!
https://mobile.nytimes.com/2017/03/18/technology/bill-gurley...
http://www.latimes.com/business/technology/la-fi-tn-uber-bil...
In this case, I think the easier dismissal would be to simply say, "I think that Kalanick's relationship with Benchmark soured over time."
I think it is hard to argue that Benchmark made Suzan Fowler write her blog post etc.
The counter argument is that Benchmark seems like the grown up and Uber is lucky to have them on their BoD.
Read the Ravikant v Tolia complaint where Bill Gurley defrauded the employees of Epinions:
http://blog.ericgoldman.org/personal/archives/2005/02/ravika...
I worry that HN is being astroturfed by TK and his buddies. When there is a negative Uber story a throwaway account emerges to present an implausible pro-TK angle.
Benchmark obviously did not cause Susan Fowler, Waymo, Greyball or the rape-file. Travis deserved what he got or worse.
What Benchmark has done is continue to leak negative stories and internal data to gain leverage in boardroom spats. Without pointing fingers this is more or less acknowledged internally. And now they've instigated a very public lawsuit to drag everyone back through the muck. It completely undercuts the majority of thousands of employees who were not complict in any of the above and having been fighting desperately to right the ship.
If Benchmarks position is so righteous and self-evident why can't they just convince the other board members to remove him? No one's that strongly allied with Travis anymore. Ryan Graves and Garrett Camp both publicly declared theyre not voting him back in. There hasn't been a peep from Arianna in months. All the other directors are independent or external investors.
And btw the real fire from Benchmark didnt start until Travis rallied to have Bonderman, Benchmark ally, immediately step down after making mysognist comments at the Holder report all-hands. A role reversal which epitomizes the deeper truth here -- none of this is particularly about ethics; its about money, control and liquidity.
But even if, implausibly, Benchmark is the messenger, shooting the messenger is still wrong.
so it was either one of them or someone they told that leaked... pretty simple regression analysis to eventually figure out that story after story with a certain group is getting out. then you have to figure out why and then it's... the present.
The suit claims the board did not know about the bad acts. If the board was the source of the press about the bad acts, surely the primary claim would instantly be disproven in discovery. Perhaps a better way for Uber to have avoided the many, many PR crises would have be to not have done the bad acts in the first place.
Uber is a potentially wonderful business. The business model is so wonderful Travis was able to raise funds almost instantly. He deserves credit for recognizing that, pursuing the idea and building it quickly.
But while Uber has raised enormous amounts of investment, and used it to grow incredibly rapidly, it's never come close to making money. And worse, as it's grown management decisions have repeatedly damaged it. Given billions of dollars, anyone can hire tens of thousands of people and expand world-wide. Running a large organization so it protects the value that's already been created is a skill Travis clearly lacks.
The examples are so numerous it's hard to pick the worst. But clearly his leadership, especially his mantra of "always be hustling" led subordinates to constantly cross lines that gained Uber very little at the cost of great risk. That's terrible leadership.
His lack of focus has saddled Uber with many dozens of side businesses that suck resources and attention from their #1 and only important task, building Uber out world-wide. UberEats?
Even the autonomous car effort was dumb. Autonomous cars are coming at some point, and they will be fully available for purchase when Uber needs them. What's far more important is building the Uber brand so it's on everyones devices and is their first choice for summoning a ride. Autonomous competitors will have to surmount that huge obstacle to even have a chance to chip away at Uber's lead.
Uber is going to win, it's almost predestined at this point given it's enormous funding and market penetration advantage. The only way it can fail is if governments are convinced it should be reined in, and Kalanick's entire leadership has generated awful PR and made that possibility far more real than it ever should be. They continuously damage the one thing they are tasked with building, the Uber brand.
How can that be regarded as anything but incredibly incompetent?
I've only built one $100M company (founded three VC backed startups that were valued at over $10M), does that make me unqualified or qualified? Travis has built a billion dollar company, but not yet made it successful, not only is Uber is hemorrhaging money but he was forced to resign out of fear his presence would queer their next round they'll desperately need.
My companies made it to profitability. So does that make me even more qualified than him?
When you are CEO, your job is to keep everyone focused on their jobs while you are focused on the big picture. You are allocating resources to increase the companies value, while also minimizing the biggest risks to that value.
When you are already the market leader, and already have billions in funding, you have created lots of value, and have minimized the risk of running out of cash before you're done building out your market. So what other risks do you have? Governmental regulation, brand damage, etc, hurting your growth and costing you installed base.
Travis led by telling people to take risks, to cut corners. The results were lots of damage to the brand and emboldening opponents who could push for government regulation.
Go through some examples 1) Threatening to surveil some inconsequential twit at Pando Daily so it could blow up into a big story about creepy Uber. Like Trump Administration level idiocy.
2) An HR staff that hid complaints of harassment to protect key engineers. When you have $7B in funding and a massive lead in app installs worldwide, no engineer is key, your brand is key.
3) Numerous instances of showing they can surveil people they don't like by tracking their uber rides.
4) He also distracted his teams, they have close to 100 different side businesses they've launched over the last few years, many of which have nothing to do with making the main Uber service you've been funded to build any better.
5) The Waymo suit. Autonomous cars right now a distraction, when they are finally ready they'll be freely available. The company with the largest market share and best brand should be able to easily adopt them. Travis poured a ton of resources into this acquisition and hired a guy who took the 5th amendment when deposed. Either Travis is duplicitous or he's incompetent for spending that much time and money on someone he didn't know was dirty and would possibly cost them an IP theft lawsuit.
6) Yelling at an Uber driver.
7) etc, etc, so many more examples in the same vein.
All of these hurt the brand, hurt the growth, hurt the installed base. It's his #1 priority to build all of those, and make Uber a service people are happy to have on their phones. Yet Uber is constantly in the news because of brand damaging behavior. Is your contention that because someone arbitrarily gave him a valuation over $1B that all this was good for Uber and he has some secret plan to generate horrible PR to improve the business?
Now Uber claims to have other investors ready, willing to buy back over $6B of that stock. If that were the case, then wouldn't Benchmark have already divested?
Who is willing to invest $6B into Uber when it has no CEO and such an astronomical valuation?
It depends, would that equity be offered through an ICO? If so, shut up and take my money.
How awesome would it be to go from the taxi medallion system to an Uber token system.
1. Tech community initially embraced Uber, drank the cool aid and echoed: better service, disruption of existing industry highlighting the NY medallion system as the worst example of a taxi monopoly stifling innovation.
2. Uber lost its appeal with stories of their disgusting corporate culture and cut throat/intimidation practices at best and outright illegal practices at worst, just as block chain and smart contracts are hailed as a decentralized solution to the "sharing economy" for things just like Uber. The tech community fell in love all over again, despite the obvious problems and unrealistic expectations of smart contracts.
3. When a blockchain Uber competitor/replacement does come around, it is going to be token based and idiotically the tech community will fall in love all over again, no recognizing the irony of replacing a taxi medallion with a expensive token.
https://www.recode.net/2017/8/7/16110020/benchmark-softbank-...
https://www.cnbc.com/2017/07/31/softbank-talks-to-invest-in-...
eerily similar battle going on now
What is uber ownership breakdown? What do you think who will win?
Lyft.
https://www.cnbc.com/2017/01/13/lyft-to-go-global-take-on-ub...
So basically they aren't going global.
Who signed the request? Shervin Pishevar (Sherpa Capital, although signed as an individual), Ron Burkle (Yucaipa Cos) and Adam Leber (Maverick).
[Edit] According to Crunchbase [1], Sherpa Capital was involved in Series D and Series E funding for Uber, while Adam Leber was an Angel investor. I couldn't find info on Ron Burkle or Yucaipa Cos.
That world is sort of the dark matter flip side of Venture Capital. A firm like Yucaipa doesn't need to blog or tweet -- doesn't need to market itself -- because it never needs to raise money from limited partners, and it's super flexible and agnostic about the kinds of investments it's looking for, time horizons, and how exactly it structures deals.
"We have investors ready to acquire these shares"
So they have 8.4 billion in new funding lined up? Somehow I doubt it.