by Isaac, Mike
Uber employees were anxious. The negative articles and upheaval over the past six months had impacted their jobs and affected their personal lives. Throughout the spring, Arianna Huffington had appeared on television—CNN, CNBC, and other outlets—to discuss the report. On those shows, Huffington would claim the report was coming in a week or two weeks, in hopes of holding off the press. Bonnie Kalanick’s unexpected death in a boating accident had further delayed the presentation. But now Arianna stood just offstage, waiting for everyone to take their seats.
On the morning in question, Kalanick was nowhere to be seen. As it would turn out, he wasn’t in the building at all. Over the weekend, a news story appeared saying that Kalanick may take a leave of absence from the company. But even the topmost executives had no idea what Kalanick was going to do that day. As employees dialed in to the all-hands, Kalanick was offsite typing furiously at his keyboard, deciding what to say to them. At 9:59 a.m., all Uber inboxes received a note from Kalanick, just as Arianna Huffington was taking the stage, flanked by fellow board members Bill Gurley and David Bonderman.
“Good morning everyone,” Huffington said into the microphone. A few people in the audience chirped a half-hearted “good morning” back at Huffington, the morning’s apparent emcee. “Before we begin, I want to address the elephant in the room. Where is Travis?” Huffington asked, rhetorically.
The answer was in Kalanick’s cryptic email, which some employees had opened just as Huffington began her spiel. It read:
Team,
For the last eight years my life has always been about Uber. Recent events have brought home for me that people are more important than work, and that I need to take some time off of the day-to-day to grieve my mother, whom I buried on Friday, to reflect, to work on myself, and to focus on building out a world-class leadership team.
The ultimate responsibility, for where we’ve gotten and how we’ve gotten here rests on my shoulders. There is of course much to be proud of but there is much to improve. For Uber 2.0 to succeed there is nothing more important than dedicating my time to building out the leadership team. But if we are going to work on Uber 2.0, I also need to work on Travis 2.0 to become the leader that this company needs and that you deserve.
During this interim period, the leadership team, my directs, will be running the company. I will be available as needed for the most strategic decisions, but I will be empowering them to be bold and decisive in order to move the company forward swiftly.
It’s hard to put a timeline on this—it may be shorter or longer than we might expect. Tragically losing a loved one has been difficult for me and I need to properly say my goodbyes. The incredible outpouring of heartfelt notes and condolences from all of you have kept me strong but almost universally they have ended with “How can I help?.” My answer is simple. Do your life’s work in service to our mission. That gives me time with family. Put people first, that is my mom’s legacy. And make Uber 2.0 real so that the world can see the inspired work all of you do, and the inspiring people that make Uber great.
See you soon,
Travis
So there it was. Kalanick was going to step away from the company.†††††††† On one hand, it was difficult to imagine an Uber without Travis Kalanick at the helm. The man lived and breathed the business. But on the other, employees now recognized how toxic a symbol he had become.
Kalanick’s last-minute additions to his letter terrified some of the executive leadership team. The phrases “see you soon” and the suggestion he would be away “shorter or longer” than people anticipated did not inspire comfort. Still, they were relieved that he was willing to step aside for some period of time, whatever that ended up being.
Huffington continued. The recommendations stemming from the report were the result of an exhaustive, months-long process, she said. Holder and Albarrán interviewed more than two hundred people personally, while also fielding tips and holding anonymous conversations with hundreds of other current and former employees through an anonymous hotline. The firm reviewed more than three million documents, turning the company inside out. Huffington did not note that the undertaking had cost Uber tens of millions of dollars; management considered the money well spent if it allowed them to purge Uber of its problems.
“The recommendations are going to be posted on the Uber news site momentarily,” Huffington said, as employees began scanning Kalanick’s email. Uber had formed a special committee to oversee the report, composed of Huffington, Gurley, and Bonderman. All three of them adopted the recommendations before passing them on to the rest of the seven board members. “On Sunday, at the board meeting—which certainly was the longest board meeting I’ve ever been at—the full board adopted them unanimously,” Huffington said.
As Huffington spoke, the recommendations from the report were posted online. At the meeting, employees breathed a collective sigh of relief. At the very top of the report was the news they’d just heard: Kalanick’s role would be diminished, and he would be subject to far more oversight. No one outside the board would see the report’s raw text. It read like a repository for every grievance and complaint employees had filed against Uber. After months of waiting, some in the audience felt Uber owed it to employees to publish the report itself, if only to come clean entirely. Huffington noted it would be improper, citing privacy and legal issues.
Speaking to the point about diversity, Huffington continued: “I just want to say that for me, a personal and stated goal since I joined was to increase the diversity of the board, much as I do love my white male colleagues,” she said. “Today, I’m delighted to announce the addition of Wan-Ling Martello to Uber’s board,” Huffington said, accompanied by faint applause. Martello, a career executive in the food industry who spent time at Kraft, Borden, and most recently as executive vice president of Nestlé in Asia and Africa, was supposed to be an independent director, a voice of reason who could vote to serve the best interests of the company and its shareholders.
“She’s someone I know you’ll love to get to know,” Huffington continued. Many in the audience didn’t know who Martello was or what to think, but the addition of another female board member was probably good. Martello would tell others that she intended to be “Switzerland” on the board between constantly warring factions, but she entered the company at a time when acrimony was at its peak. Huffington went on to highlight the diversity she would bring to a board that was still very white and very male. “There’s a lot of data that shows when there’s one woman on the board, it is much more likely there will be another on the board,” Huffington said.
From her side, David Bonderman piped up. Until that moment, he and Gurley had been quiet, letting Huffington present her section of the report. But a thought popped into his head.
“I’ll tell you what it shows,” Bonderman said. “It’s that it’s much likelier to be more talking on the board.”
The room froze. Had one of Uber’s board members just made a sexist comment about women talking too much?
The audience was stunned; Bonderman, a seventy-five-year-old white billionaire hedge funder from Fort Worth, Texas, was dunking on women in the middle of the board’s company-wide presentation about changing Uber’s misogynist culture. Bill Gurley, who was standing behind Bonderman, shook his head.
Huffington tried to recover, playing off the moment and moving on. “Oh, come on David,” she said, chuckling. “Don’t worry everybody, David will have a lot of talking to do as well.” The room was dead silent.
“So, the final category,” Huffington announced, trying to move away from the awkwardness of the moment. “The final category is culture.”
Someone in the audience laughed aloud.
For months, Bonderman had been driving Kalanick crazy.
Bonderman, a career financier and no-nonsense businessman, had sat on the boards of plenty of companies during his time as co-owner of Texas Pacific Group, the private e
quity firm he had helmed for a quarter century. Born an Angeleno but now a Texan, Bonderman had moved to Fort Worth and made his fortune working for the enormously wealthy Bass family, who controlled substantial oil and gas concerns in the Dallas–Fort Worth metroplex. It was there Bonderman met his partner, Jim Coulter, working for Robert Bass. Coulter and Bonderman struck out on their own to found TPG in 1992. Coulter was the conservative, sensible partner; Bonderman loved to take risks. When TPG invested in Uber, its growth trajectory made it a sure bet. But with Kalanick at the helm, Bonderman would have less control over the company than he enjoyed on other boards.
To most, Bonderman was a shuffling giant, tall, white and unkempt in ill-fitting suits. He did not look like the 239th richest man in the world (which he was), and certainly didn’t appear in the ostentatious cowboy garb of other Texan energy tycoons. Balding, with a gruff, high voice and utter contempt for small talk, Bonderman had no qualms about speaking up against Kalanick during boardroom meetings. He agitated for change around Kalanick’s Ahab-esque pursuit of the Chinese market, chafed at firing of Brent Callinicos, Uber’s first and only chief financial officer. And Bonderman was furious that it had taken so long for Kalanick to fire Anthony Levandowski, someone who was a clear liability to the entire company.
Bonderman didn’t care about Kalanick’s feelings. He didn’t care about the feelings of the legion of bros at the company. What he cared about was his money, and that Uber became as successful as everyone hoped it would be. TPG had billions riding on it.
So when Travis Kalanick saw his opening, he took it. Kalanick was tired of the older man’s prodding and complaining. After Bonderman’s slip-up onstage, Kalanick started working the phones. Even before the presentation had ended that Tuesday morning, Kalanick had text messages out to board members and others on the executive leadership team.
Kalanick’s message was clear: Bonderman needed to go.
As Arianna Huffington’s audience shifted in their seats, unsure how to handle Bonderman’s comment, the presentation continued. Huffington announced a few symbolic changes. For example, workers wouldn’t have to wait to eat dinner at the office until eight o’clock at night anymore, a practice long espoused by Kalanick in order to keep employees in the office for longer workdays. And the famed “War Room” in the middle of the office was given a new name, courtesy of Huffington herself: “The Peace Room.” Though this last change seemed cheesy, the room seemed to accept it.
It was Gurley’s turn to take the stage.
“I wanted to make a few comments just to put all of this in perspective,” Gurley began, his towering frame always at odds onstage with the awkwardness of his personality. “This company is undoubtedly the most successful startup in the history of Silicon Valley. It grew faster, bigger, it touched more people customers, countries cities faster than ever before.
“But I want to bring up a phrase you hear pretty often but I think is applicable,” Gurley continued, his tone turning grave. “With great success comes great responsibility. We are no longer considered a startup by the outside world. We are considered one of the largest, most important companies in the world. And our behavior, our corporate behavior, has to begin to equal and parallel that expectation or we’re gonna continue to have problems.”
Audience members nodded along.
“We’re in a reputational deficit,” Gurley continued. “You can read something and say that’s not fair, but that’s not going to matter. Because, it’s gonna take us a while to get out of this, and people are not going to give us the benefit of the doubt.”
“No one thinks since we announced the Holder recommendations here that everything will be fine,” he said. “Don’t pay attention to that right now. Let’s just do our best work and help get to Uber 2.0,” Gurley said, handing over the microphone.
The audience cheered. Perhaps it was possible, they believed, to finally turn the company around.
Despite Bonderman’s gaffe, it appeared that the Tuesday all-hands had been a success. Shortly after Arianna Huffington took the stage, a New York Times reporter had somehow infiltrated the meeting and began live-tweeting the event.‡‡‡‡‡‡‡‡ Kalanick was apoplectic; members of the security team scrambled to try and find the reporter. But fortunately for Uber, the Times seemed to have missed Bonderman’s comment.§§§§§§§§ Perhaps the company could deal with the situation privately.
They had no such luck. Hours after the presentation ended, another website published the entire contents of the presentation, highlighting Bonderman’s sexist comment. This latest blow was absolutely crippling. After months of waiting for the report which launch serious change, a member of the company’s board of directors had suggested to more than six thousand workers that women talk too much. Employees were outraged, while journalists felt validated; Uber’s culture was poisoned from the very top.
For Kalanick, it was different. He finally had the ammunition he needed to take out Bonderman. After a day of texting and emergency board deliberations, Bonderman knew he had to fall on his sword. His note to employees was sent out by the end of the day.
Today at Uber’s all-hands meeting, I directed a comment to my colleague and friend Arianna Huffington that was careless, inappropriate, and inexcusable. The comment came across in a way that was the opposite of what I intended, but I understand the destructive effect it had, and I take full responsibility for that. . . .
I do not want my comments to create distraction as Uber works to build a culture of which we can be proud. I need to hold myself to the same standards that we’re asking Uber to adopt.
Therefore, I have decided to resign from Uber’s board of directors, effective tomorrow morning. It has been an honor and a privilege to serve on Uber’s board, and I look forward to seeing the company’s progress and future success.
And with that, Bonderman was gone, and Kalanick had one less enemy on the board. With the day behind them and Kalanick claiming he was heading out on his leave of absence, it was time for Uber to heal—to become “Uber 2.0.”
At least, that was what was supposed to happen.
Chapter 27 notes
******** Bradley Tusk, founder of Tusk Ventures, was an early advisor and aide to Kalanick as he attempted to conquer Manhattan. Tusk, whose fee for political consulting at the time was in the tens of thousands, opted instead to take shares in Uber as a form of payment. Those shares are said to be worth more than $100 million today.
†††††††† Nine months later, Alex Trebek asked Jeopardy! contestants the name of the Uber CEO who “took a leave of absence to work on Travis 2.0.” Kalanick tweeted a photo of the question on TV, adding the hashtag: “#bucketlist.”
‡‡‡‡‡‡‡‡ Uber was not happy with me.
§§§§§§§§ I was not happy with myself.
Chapter 28
THE SYNDICATE
When David Bonderman opened his mouth at the all-hands meeting Bill Gurley had one thought pop into his head: “You’ve got to be kidding me.”
Gurley was optimistic heading into the all-hands that Tuesday morning. He was disgusted with the report’s contents; it read like a lewd magazine, a racist, sexist Silicon Valley bachelor party. But with the board unanimously accepting the report’s recommendations, Gurley had hope.
Everyone looked to Gurley as the one to somehow fix the mess. Gurley had known Kalanick for years. He was on the board. Along with his physical height, Gurley had an air of authority. Now, the adult in the room was expected to do something, and fast.
But the pressure was getting to him. By the middle of June, the lanky and trim Gurley had started to gain weight. Earlier in the year, Gurley flew to San Diego for an extensive restorative surgery on one of his knees. In the weeks leading up to the June 13 meeting, Gurley had been fielding calls with his injured leg propped in an anti-swelling machine. Benchmark’s offices were in Woodside, California. There, leaning back in his desk chair, he wou
ld complain to partners in his South Texas baritone about Kalanick’s inflexibility. His knee hurt—a lot—but it was nowhere near as bad as the pain this Uber situation was causing him and his firm.
Gurley did have support. Benchmark had historically operated as a true partnership. Every Monday morning at Benchmark’s partner meeting, the close-knit group of VCs would spend hours reviewing each of the companies in their portfolio. That meant input from partners like Matt Cohler, an early Facebook employee and customer growth savant. Peter Fenton, the “high EQ partner,” helped Twitter juggle the ousting of two founders and the installation of a third CEO at the social network. Eric Vishria and Sarah Tavel, the most recent Benchmark additions, could give the perspective of what it was like to be a founder or an executive inside a closely scrutinized startup.
Yet Gurley shouldered the brunt. His cell phone was constantly buzzing with calls from Benchmark’s limited partners—the group of enormously wealthy investors, from college endowments to pension funds, who put up the hundreds of millions of dollars that Benchmark used to invest in other companies. They were terrified Uber would tear itself apart, evaporating the billions of dollars in returns they expected. Through every frustrated email, every anxious phone call, Bill Gurley was there to soothe them, assuring his LPs that he had everything under control.
To friends, it didn’t look like it. One evening in 2017, David Krane, a partner at Google Ventures who helped lead the quarter-billion-dollar investment in Uber four years earlier, threw a party at his house to benefit a scientific research foundation. Peter Fenton showed up full of his usual bubbly friendliness. In tow was Bill Gurley, who spent most of the evening nursing a drink and moping in the corner of Krane’s living room or propped against the outdoor bar on Krane’s back porch. Gurley was so tired and stressed that he could barely stand upright. He had tried to take care of himself, he told friends. The six-foot-nine Texan started doing yoga and meditating. Yet he still couldn’t sleep. Gurley was exhausted.
