Winning the Deal

In 2010, Bill Gurley was already a one of the top venture capitalists in the world. In this little taxi startup, Gurley saw the opportunity to hit the biggest score of his entire career.

Gurley saw two key things in UberCab: strong traction and a platform shift. Above all, Gurley was excited by the size of the market.

Winning the deal wasn’t easy. After multiple meetings, Gurley’s cell phone rang late one Sunday night.

It was Travis.

Gurley raced up to San Francisco from his Silicon Valley home, joining the young entrepreneur for a drink. That night, they made the deal.

Spinning Out of Control

Uber grew fast, hitting city after city and expanding all over the world. Wherever it went, riders flocked to the platform.

Kalanick raised billions, pouring fuel on the fire. But Uber’s breakneck expansion began to cause serious problems.

Foreign offices like Bangkok were a mess. Employees were doing cocaine and ordering prostitutes — in the office!

Back home in San Francisco, Uber HQ was only a bit more restrained. Sexual Harassment and discrimination against women were commonplace — and unpunished.

The dysfunction got so bad, it was impossible to hide from the public. Kalanick was even filmed cursing out an Uber driver who complained about the company cutting fares.

The Investigation

The board was getting nervous.

Investors like Gurley were sitting on billions of profits on their Uber investments — on paper. What if the company melted down before they could get their money out?

It was time to face the music. The board appointed former Attorney General Eric Holder to investigate claims of sexual harassment, gender discrimination, and more.

Holder’s report was damning. He found widespread harassment and discrimination throughout the company.

The Showdown

Bill Gurley had heard enough. Quietly, he started to lobby the board to take out Kalanick.

Kalanick fought back, hard. But after several unsuccessful attempts to rally his allies, he agreed to step aside.

On the day Travis left, Uber was valued at $69 billion. Today in the public markets, it’s worth $98 billion, a growth rate far below the NASDAQ.

Kalanick’s successor, Dara Khosrowshahi, is a competent CEO. On his watch, Uber’s performance has been good — but not great.

I find it hard to believe that Uber wouldn’t be bigger and better today with Travis at the helm. No one can match his intensity or love for the company.

Wrap-Up

Uber’s problems were very real. But pushing out Kalanick was the wrong solution.

Uber could’ve simply fired anyone guilty of sexual harassment, discrimination, or drug use. Kalanick could’ve made clear that any such misconduct in the future meant instant dismissal — if the board had let him.

Instead, they went for the quick fix: dump the CEO.

Still, Uber is a remarkable success. Kalanick’s company took the miserable process of calling a cab and turned it into magic — a feat I would’ve thought impossible.

Even if he was pushed out of his own company, Travis can take pleasure in that.

Should the board have dumped Travis? Why or why not?

Leave a comment and let us know!

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