Uber chief is gone, but what will change?
CEO’s departure may amount to nothing more than warning
So a group of Uber shareholders have been successful in inviting Travis Kalanick to jump off a cliff. Inevitably, this will lead to a zesty round of discussion. Does Kalanick’s ouster usher in a warning to all campus culture companies out there to, well, grow up? The answer is sure, it’s a warning. But effecting change? What are the chances? “It’s part of the internal Uber mantra: if they hadn’t behaved the way they behaved they never would have gotten to where they are.” That’s author Adam Lashinsky giving his take on the core culture at Uber, which could handily serve as a thesis statement for any tech startup. You can’t be a disrupter by playing by the rules. And it’s not just tech. Many months ago, I had a couple of long conversations with Dov Charney, ousted founder of American Apparel. There are similarities to the Kalanick tale. Charney’s founding vision was to disrupt the sweatshop world of garment manufacture by selling made-in-America T-shirts. Workers were to be paid a fair wage. And for a time, as with Uber, it was a love fest.
But American Apparel became synonymous with hyper-sexualized branding and for the libertine exploits of its leader. “So I wasn’t conventional,” Charney said in one of our conversations. “Boo boo kitten.”
A profile of Charney written for Jane magazine defined the beyond-bounds behaviour of the CEO and would stick to Charney and his company in much the same way as Susan Fowler’s blog post alleging sexually harassing inner workings at Uber will forever stick to that company. It’s a stain that can’t be erased. Consider a message Kalanick sent Uber employees in advance of a company off-site in the fall of 2013: “Do not have sex with another employee UNLESS a) you have asked that person for that privilege and they have responded with an emphatic ‘YES! I will have sex with you’ AND b) the two (or more) of you do not work in the same chain of command. Yes, that means that Travis will be celibate on this trip. #CEOLife #FML.” FML is shorthand for f--- my life. The external investigators hired to examine the corporate culture at Uber had a wealth of such material to draw upon. More than 200 employees past and present were interviewed. More than three million documents were reviewed. Seven days after their report was delivered, Kalanick was out the door, resigning from the company late Tuesday.
One of the early-in investors who had voiced his displeasure at the goings-on at Uber was Shark Tank’s Chris Sacca. “Nothing about that story shocked me at all. I was upset,” Sacca said when asked about the Fowler blog post. Sacca was speaking at the SXSW conference in Austin, Tex., in March.
It was well known throughout the industry that his relationship with Kalanick was strained.
“The basis for us not speaking is not wholly unrelated,” Sacca said of the reports of the unbridled culture at the company. He expressed particular fury at the way in which Uber’s human resources department handled the complaints. Or more correctly, didn’t handle the complaints.
The number of times a serially sexually harassing manager was said to have committed a first offence is laughable. Except none of this is funny. “It’s f---ing bad for business to not have a healthy culture at these companies,” Sacca said in March. “Customers are not f---ing stupid and they will see through it and they won’t patronize business if they don’t have a healthy culture.”
I would like to believe that’s true. But I’m not so sure.
The external review provided the angel investors with the ammunition needed to persuade Kalanick that it would be in the company’s best interest if he stepped aside. Uber, valued at something like $70 billion (U.S.), is losing buckets and dreams of a public listing one day. Only by redrawing the architecture at the top can the company be primed for listing. So the story is less about customers and a lot about the market.
Dov Charney said a curious thing all those months ago. “My life’s work is really to impress my mother,” he said.
Kalanick, whose mother died in a recent boating accident, has said that he has entered a period of selfreflection in part triggered by her passing. It’s not much of a stretch to connect that vulnerability to his decision to exit without putting up much of a fight.
Does this presage changing behaviours in future startups? Will angel investors insist on best behaviour from the get-go?
Sure. Provided that gender parity is set from the get-go. Like I said, what are the chances? Jennifer Wells can be reached at jenwells@thestar.ca.