Friday, July 28, 2017

“I have accepted a group of investors’ request to step aside,” wrote Uber’s Travis Kalanick

Posted on 06/22/17 by Frank Tobe

Kalanick is still on Uber's board. He owns a majority of the voting shares. Some are already comparing this situation to Steve Jobs' ouster from Apple. It's possible Kalanick could someday return in a blaze of glory. But for now, he is out and Uber is searching for a new CEO.

There is a reason this story is getting so much attention: it is news that has real ramifications throughout Silicon Valley and the rest of the startup world. The import was captured in a series of posts by Erin Griffith at Fortune which I've liberally excerpted.

Erin Griffith wrote:

Uber is the largest, most valuable, most global, most disruptive, most quintessential Silicon Valley success story of this era. What happens to this company affects the entire tech industry - the companies, the investors, the culture, the regulations, the employees.

  • Regulations - Uber's swashbuckling approach to the law and the ouster of its CEO bolsters the case of any regulator looking to crack down on disruptive Silicon Valley startups. And not just in the specific areas Uber ran afoul of the law - labor, transportation - but in any startup that operates in a legal gray area
  • Employees - Startups need experienced executives to provide adult supervision to help them transition from fledgling disrupters into legit businesses. Now these executives are probably looking at former Target CMO Jeff Jones' six month stint as Uber President and viewing the jump to startup-land as career suicide.
  • Investors - This era of founder-friendly venture investing - driven by Mark Zuckerberg, Sean Parker, and The Social Network -- means founders get board control and can't be forced to step aside when the job outgrows them. (Instead they "hire a Sheryl Sandberg" to deal with all the management stuff.) Now investors are likely rethinking that trend. In Uber's case, Benchmark, First Round Capital, Lowercase Capital, Menlo Ventures, and Fidelity Investments consolidated their power -- voting rights worth a combined 40% -- and demanded Kalanick resign.
  • Businesses - Everyone said Uber was too big, too well-funded, too valuable, too dominant to face a comeuppance. How wrong that was. It's led plenty of the media to rethink their assumptions that tech's dominant power players are invulnerable.
  • Culture - For Uber, "flying in the face of convention was an asset, but ultimately a horrible liability." Growth at any cost, Kalanick's mantra, is causing others to reevaluate the serious risks associated with it.

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About the author: Frank Tobe

Frank Tobe is the owner and publisher of The Robot Report and co-founder of ROBO Global which has developed a tracking index for the robotics industry, the ROBO Global™ Robotics & Automation Index. The index of 82 companies in 13 subsectors tracks and captures the entire economic value of this global opportunity in robotics, automation and enabling technologies.

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