A newly revealed letter to Uber employees by founder Travis Kalanick, written right before he was forced out as CEO but never sent, can teach you a lot about leadership and the challenges of dealing with success.
Now-public Uber may be facing profitability problems and a possible new law in California that could make its current business model untenable. But, believe it or not, in 2017, things were a whole lot worse for the company. In rapid succession, a blog post by former engineer Susan Fowler exposed a culture of sexual harassment; video of founder Travis Kalanick berating a driver went viral; Waymo sued for alleged intellectual property theft; and an Uber application designed to deceive law enforcement, called Greyball, was discovered. The company truly looked like a train wreck, and founder Travis Kalanick was entirely to blame.
Just when Uber was its lowest point, Kalanick’s parents were in a boating accident that killed his mother and severely injured his father, and Kalanick took a leave of absence as a result. Sitting in a hotel room near the hospital where his father was being treated, he drafted a lengthy letter to Uber’s employees blaming himself for the company’s ills, apologizing, and promising profound changes for the better. It’s a letter he never got to send, because Uber’s board had already started the process of removing him, and very soon he would be forced to step down as CEO.
Now Uber employees and every one else can finally read that letter. It’s part of a forthcoming book about Uber by New York Times reporter Mike Isaac, and Gizmodo has published the letter in its entirety. It’s a fascinating and very telling document that can teach you a lot about failed leadership, the difficulty of scaling, and the enormous challenges that can come with success. There are some big lessons here for anyone in leadership, especially at a startup or fast-growing company.
1. Scrappiness will get you only so far.
Kalanick opens his letter by saying that, although Uber had grown a lot in seven years, it had failed to grow up. He continues:
I’ve been an entrepreneur my whole life. Most of the time, I’ve been on the brink of imminent failure and bankruptcy. I was never focused on building thriving organizations. I was mostly just struggling to survive.
When Uber took off, for the first time in my life I was leading an organization that wasn’t on the brink of failure each day. In just the last three and a half years, our service and our company has grown at an unprecedented rate …
… As we grew, I held on to too many things that helped me survive and build a great company, but at scale became ever-increasing liabilities.
Knowing how to hang on when a company, especially a startup, is barely able to survive is a huge plus for every leader. But there’s another skill that’s just as important as knowing how to survive tough times: knowing how to deal with success. When your company or your product takes off and suddenly all eyes are on you and you have plenty of money to burn–that’s a challenge just as big as knowing how to stay afloat when you’re not sure you can make payroll. The difference is that it’s much harder to get practiced at running a successful company than a failing one. As Kalanick says in his letter, had plenty of experience with the latter, and none with the former.
2. Stepping on toes can be a bad idea.
Uber famously included “toe-stepping” among its company values. Some people say it’s better to ask for forgiveness than for permission–but Uber rarely asked for either. And indeed, without that super-aggressive approach, Uber and ride-sharing in general might not exist today. Instead, the company could have languished forever waiting for the cities where it planned to operate to give their approval.
But what seems like eagerness and confidence in a small company looks a lot like bullying in a larger one. Even as it grew, Uber kept up its super-aggressive tactics–for example, fighting a long battle with the State of California over its right to put self-driving cars on the street, rather than buying a $150 permit.
3. If you want happy customers, you need happy employees.
This may be especially true of Uber’s drivers who, if you think about it, make up the service Uber sells. The company may try to cast itself as a marketplace between riders and solo entrepreneur drivers, but the fact is most customers see Uber as a ride-hailing service and judge the company by the quality and affordability of the rides it provides.
That Uber gained a reputation as a toxic place to work, at least for female engineers, was a black mark not mitigated by the news that most large Silicon Valley companies were no better. But the fact that drivers were angry at the company didn’t bode well for Uber’s future. Their dissatisfaction has led directly to the current push to pass legislation in California that would define ride share drivers as employees rather than contractors. Both Uber and Lyft say that law, if passed, would pose a significant risk to their business.
In his letter, Kalanick acknowledges the need to build a better relationship with Uber drivers and promises that he’ll share more about this “next week.” Unless Kalanick himself decides to comment on his letter, which so far he has not done, we’ll never know what plans he had for improving Uber’s relations with drivers. It’s a shame, though. Maybe it could have helped.