Takeaways From the New Uber Book
Here are some thoughts on Super Pumped, the new book chronicling the turbulent rise of Uber, by Mike Isaac.
1. Uber New How to Bro Down
Led by the ever obnoxious Travis Kalanick, Uber set the standard for Silicon Valley bro culture. From page 27:
“He went on to advise his staff not to throw large kegs off of tall buildings, and mandate no interoffice sex unless co-workers explicitly stated ‘YES! I will have sex with you’ to one another. He also noted that any puking on hotel grounds would result in a $200 fine. The email set the tone for the rest of the retreat.”
I’m shocked Uber ever had any HR problems with this type of professional behavior coming from the executive team.
2. They Blew Through Money Like Their Lives Depended On It
A theme I took away from the book was this: armed with billions in VC money, Uber never stopped spending cash. Luckily they were growing revenue extraordinarily fast (some might say dangerously), so they were always able to raise the next VC round.
One special money-burning event was their “X to the x” celebration in Las Vegas, which commemorated Uber getting to $10 billion in gross bookings. That weekend (or week, I can’t remember), Uber spent $25 million in cash, more than twice the amount of their Series A. Beyonce even played a private show for the company. The cost? $6 million in Uber stock.
3. Warren Buffett Ushered in the Dual Class Share Era?
Google and Uber have a storied history with self-driving vehicles. As an aside, Isaac talked about Google’s IPO process, and how the founders wanted to protect their company from the “evil” public markets. Apparently, it was Warren Buffett who convinced them otherwise.
“As one investor told it, Brin and Page agreed to go public only after meeting Warren Buffett, the legendary American business mogul, who introduced the two founders to the dual-class share structure.”
I love you Buffett, but dammit, you really screwed the pooch on this one.
4. Uber Has Dug Themselves an Incentives Hole
Many people consider Uber to be the fastest-growing startup ever. However, to do this they had to incentivize two large groups of people: drivers and riders. With no differentiating technology, all they could do was offer free rides and driver promos.
By 2015, the height of Uber’s growth, they were spending over $2 billion a year just on incentives. It was a classic “growth at all costs” mindset that many of the new-age tech companies have employed, and Uber is still trying to dig its way out of it.
Another astounding fact is that, before selling to Didi Chuxing, Uber was spending $40 – $50 million a week subsidizing riders in China, half of which were being scammed by local consumers.
5. Uber was Almost Banned from the App Store
To no one’s surprise, Uber used to evade rules set by Apple for apps on its iPhones, violating user privacy to gain insights into how to grow the business. The process for how the Uber engineers bypassed the App Store rules is long and arduous, so I’m not going to repeat the details here, but it is quite compelling when reading the book.
Apple caught on to Uber’s malfeasance and eventually had Tim Cook meet with Kalanick in person. He laid down the law: if Uber kept violating Apple’s rules, they would be banned from Apple’s platform for good. This likely would have killed Uber’s entire business outright. Man, Apple holds a lot of power in the business world.
6. Uber was a Bunch of Ruthless Scumbags
Here are two of the many examples of Uber’s ridiculous corporate behavior:
They had a program called “Hell” (just a terrible name choice, really) that used Lyft drivers iPhones to target and lure them over to drive for Uber. Pretty sure it was a violation of Apple’s rules as well.
Uber had an intelligence team called COIN, which is short for “Competitive Intelligence Team.” This team used special servers to analyze the information Uber gathered on its enemies.
And that is just the beginning. I didn’t even touch on the last 100 pages of the book, where Kalanick and a bunch of venture capitalists went to war over who would control the company. Overall, Super Pumped is a fantastic read and a prime example of the reckless behavior displayed by tech startups in the past decade.
Disclosure: The author is not a financial adviser, and may have an interest in the companies talked about.