Naked plug: My first book, The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google, drops 10/3. If you pre-order the book and tweet your receipt with the hashtag #thefourbook by midnight Monday, I will give $50 to Charity: Water, who provides safe and clean water to developing nations. In addition, I will surround you with white light so as to register total self-actualization. So, there’s that.
Uber: What To Do
I love Uber. With the exception of CrossFit and YouTube, Uber has had more impact on my day-to-day than any consumer firm <10 years old. I take 30–50 Ubers a month and probably spend $15K+/year on the service. And while classifying millions of employees as “driver-partners” to avoid the nuisance of sharing equity or providing benefits is the toxic waste of a digital age, it’s hard to dispute that Uber offers flexibility to drivers.
If you ask drivers if they like driving for Uber — and I ask every one — the answers are universally positive. Last week in Ohio, I had three drivers. The first was a middle-aged woman who said that driving took her mind off the death of her daughter (breast cancer at 38) and paid for a trainer and better food — she had shed 100+ pounds in six months. Btw, her daughter’s first husband had killed himself while serving in the Marines. She believes it was because of a psychotic break he experienced due to a malaria medication given to Marines. Life is so hard for some people.
The next driver said he was taking care of his parents and couldn’t work for more than 2–3 hours at a time, which he could do with Uber. The last was a stay-at-home home mom who drove in the mornings to make extra money while her kids were in school.
This week Uber announced a new CEO, Dara Khosrowshahi. This is a great choice — a solid manager with chops in digital and travel. Anyway, I love Uber and want to show my affection by telling them (or whoever will listen) what I believe they should do. In a past life as CEO of a strategy firm, I would find someone who worked at Uber, get them to intro me to an influencer, have lunch with him or her, play golf with someone else, and (about 1 in 3 times, within a year) convince them to pay my firm $500K–$1M to spend 3 months doing a ton of work to validate what I already knew and thought they should do. Anyway, some thoughts:
— Dara should cancel the next board meeting and ask that nobody on the board show up at HQ, speak to the press or (other than the lead director) contact him for 6 months. He’s got his work cut out, and Uber’s board was pulling away from Twitter’s board as the worst board in tech — a mix of apologists for bad CEO behavior, tone-deaf statements, and litigious VCs posing as fiduciaries. A good board can’t save a bad company, but a bad board can screw up a good one, and Uber’s board was well on its way.
— Immediately promote a female to COO or President. Yes, it’s sexist to promote on gender. But in this case it’s the right thing to do for shareholder value. Uber needs to cauterize the perception (doesn’t matter if it’s true or not) that the firm is a hostile workplace for women. Distinct of the morality, it’s the smart thing to do, as the majority of college grads, and 70% of high-school valedictorians, are female. The future of the white-collar workforce will likely match that ratio, and firms need to be Alan Alda, if he was a better businessman.
— Go vertical. Uber can’t build real differentiation without owning some of the cars, or figuring out a way to lock them (or drivers) up. The signal of a continuing price war amongst nondifferentiated products is evident when a car pulls up with both Uber and Lyft logos in the window. Delta doesn’t let their planes swap logos for an American flight. It’s unrealistic, even for Uber, to think they could pull this off across their entire business, so they could start with UberLUX.
— Begin thinking of Uber as an OS. The most impressive firm of the nineties was the original gangster leveraging the operating system — Microsoft. The most influential firms of the last decade, the Four (Amazon, Apple, Facebook, and Google), have become operating systems for retail, media, connections, and information, respectively … and extract serious rents from the apps that sit on top of the OS. What firm has busted a move and blown through $100B market cap that isn’t effectively an OS? The latest, Netflix, has taken advantage of the extraordinarily lame cable industry and now occupies the second-most-important screen, the television. Netflix has increased its market cap 2400% in the last five years. In sum, the only way Uber gets from $70B to $700B is to become the OS for travel, becoming the user interface / API / rules for all transportation. Leveraging AI, cheap capital, and relationships with 40M of the planet’s wealthiest consumers each month, Uber should expand its offering (dramatically). Same interface, but instead of entering “ACK airport,” where I’m headed Sunday morning, I type in “London,” and using AI — connecting the dots of my preferences, economic weight class, deals at the time, APIs — Uber presents the best options for not just the ride to the airport, but the flights to JFK, then London, the car that picks me up, and the hotel I stay at. Uber has the license to do this. The ride-hailing firm can’t get there on its own and will acquire other firms.
— The moment Mr. Khosrowshahi became CEO, Trip Advisor became an acquisition target (by Uber), as did Lyft (Expedia should acquire Lyft in a blocking move). Uber needs to become Expedia before Expedia becomes Uber. In a man-bites-dog scenario, the second-coolest acquisition (nothing will top AMZN/WFM), Uber acquires Expedia, which is currently valued at $23B. Either Expedia is dramatically undervalued, or Uber is overvalued.
Either way, Dara should be spending a lot of time with bankers before the markets sober and realize a firm losing $3B on $7B in revenues may not be worth 10x revenues. In sum, Dara needs to engage in retail therapy (acquisitions) on a celestial level, as tomorrow will become today, fast, if Uber does not become an OS for something more than ride hailing.
P.S.: dirty secret of consulting — a few creative / strategic minds surrounded by thousands of people to run up the bill and justify the notions the few had pre-engagement.
(Not So) Evil Stepmother
Fifty percent of marriages end in divorce. Where I grew up, California, it’s 60%. So, I was surrounded by stepmothers and stepfathers growing up. The mother of best friend, Adam, after her divorce, lived with a handsome, quiet law student named Paul, who mostly only spoke when it was time for me to leave. He was one of the first men I remember thinking was cool. He had groovy sunglasses and drove the coolest cars of the eighties, nineties, and aughts as his career progressed — Datsun 260z, Porsche 911, and Ferrari (don’t remember the model). He was a steady, present male role model for Adam and his sister, who, like me, only saw their biological father every other weekend.
We have friends in Florida where the stepdad, Jimmy, traded in a life as a pilot carting and partying with the wealthy around the Caribbean for a just-add-water family — wife and two school-age daughters. He boasts of his successful effort to bond with the oldest daughter by getting her into the Wicked Tuna series and speaks of the girls as if they’re his own … and they are.
After my mom and dad split, I got my very own stepmom, Linda (“#3”). Dad’s been married 4x. #2 (my mom) referred to Linda as “that bitch,” as there was some overlap between #2 and #3 (see above: seventies California). I don’t think my mom and Linda were ever in the same room at the same time, ever. My mom refused to be in the same room with my dad until my business school graduation 20 years later, but that’s another post. Anyway, the narrative was set up for me to dislike, even hate, my stepmom Linda. One problem though: Linda is a good person who was wonderful to me. Linda, in her twenties, had been told she couldn’t have children, so when a well-mannered eight-year-old boy, missing his two front teeth, showed up wearing cords and an Ocean Pacific shirt, she was in love.
Linda was the first person to spoil me, I mean really spoil. She would bake for me, a foreign concept in my house, as my mom worked and was British (not one with the kitchen). She would bake these amazing buckeye cookies, peanut butter paste enveloped in dark chocolate. When schedules would keep me from Linda and my dad for a month, Linda would bake buckeyes, wrap them individually in foil, and mail them to me.
One Friday she announced she was taking me to ToysRUs, where I could buy anything I wanted. Strolling through the aisles of ToysRUs, she would track my gaze and noticed me eyeing the remote control planes. She stopped me and asked which one I wanted. I was too embarrassed to say, as spending money was a crime in my household, and these were $30. No matter, if I wanted a model P-51 plane — which my father and I would venture to a parking lot and spend several hours not getting off the ground — then I was going to get my plane.
Soon after, she found out that her doctors were wrong. She was expecting. When I went to the hospital to see my half sister, Linda gave me a gift — pajamas with the picture of a basset hound with lettering underneath that read “I’m special.” A dump truck on her bladder, about to push my sister through her birth canal, and Linda found the time to get me pajamas to ensure I knew she still loved me. Some people are…
Just. Born. Wonderful.
Most mammals will give their lives defending their offspring. What makes us human is not just opposable thumbs, but also our ability to cooperate. Cooperation draws on things that are uniquely human, like speech, culture, and long childhoods. One of the most noble forms of cooperation that advances the species is caring for those that aren’t biologically yours. I don’t enjoy my kids a lot of the time, and don’t enjoy others’ offspring most of the time. It’s a miracle people agree to love kids that don’t smell, look, or feel like them. Death, disease, and divorce leave a lot of kids in single-parent households, where the odds are markedly worse for the kids.
The fastest blue-line path to a better world isn’t economic growth or a better fucking phone, but more of us becoming irrationally passionate about the well-being of a child that isn’t our own. The Pauls, Jimmys, and Lindas … being there, baking, watching bad TV, buying planes that won’t fly, makes us more human. My mom is gone, but this Thanksgiving my family will host Linda — my not so evil stepmom.
Life is so rich,