Super Pumped: The Battle for Uber

Project Voldemort, that’s today’s business story.

“Snap Detailed Facebook’s Aggressive Tactics in ‘Project Voldemort'”

Or, to put it another way, you can’t handle the truth. It’s easier to see Mark Zuckerberg and Jeff Bezos as winners than to delve into how they got there. Their characters are more chiaroscuro, but that doesn’t stick in today’s world of image. You’re a winner or a loser. You’re somebody or a nobody. And chances are, if you’re a winner, you didn’t get there the old-fashioned way, but by bending the rules and sometimes cheating.

It’s probably been this way forever. But after tech started minting billionaires, they were subject to attention, if not scrutiny. Everybody wanted to be an entrepreneur, we even got a TV show about it, “Shark Tank,” but the real lessons in how you make it were never shared. Oh, the sharks can talk about projections and scale, but no one focuses on the fact that Bill Gates made computer manufacturers pay for Windows whether it was installed or not. Yup, if you installed Linux, you had to pay for Windows anyway. This not only helped Microsoft, it was to the disadvantage of competing operating systems, made them nonstarters.

So Facebook bought Onavo, which allowed them to spy on all your activity on your phone, including what you did at Snapchat. Yup, it’d be like allowing competitors to sit in on your writing sessions and then beat you to the punch with a release of the same song. Or, to put it another way, covering your indie track and distributing it by a major to prove that you either had to sell to them or get out of the way, i.e. change your business model like Foursquare, or lose out to the me-to product Instagram as all your features were copied almost instantly, as Snapchat did. Snapchat kept a dossier of Facebook’s bad behavior, it’s called “Project Voldemort.”

Now Facebook SAYS it stopped using Onavo when caught, but since that time the social media behemoth’s heinous behavior has been revealed time and time again… But the stock? Investors are thrilled.

It always comes down to the money, and Travis Kalanick was spending too much of it, not keeping track of it, and creating/tolerating a sexist bro culture all the way.

Like every other male techie is not into private planes, swanky hotel rooms, hookers and drugs. Yup, they’re imitating the rock star lifestyle. They killed themselves to get here, and now they want to relish the rewards. Most of them relate to sex. Yup, it’s as base as that. Can you question that when Jeff Bezos puts his fortune on the line to date a friend’s wife?

So Kalanick was just like Zuckerberg. Only Zuckerberg’s company went public earlier in its lifespan. And Facebook stock tumbled at first too, but then it gained, it was all about advertising. Uber is not about advertising.

Uber is about providing a service.

Now speaking of services, there’s a review of Netflix cofounder Marc Randolph’s book “That Will Never Work” in today’s WSJ too. No one could foresee streaming. At first Netflix didn’t even have a subscription service. They made it up on the fly, and eventually ended up in streaming and their own production. The goal? To make sure no one could compete.

Founders. The wisdom today is you don’t replace them. And if you do, you get a bad rep in the VC world. You see founders have a vision. It’s like the songwriter in a band, he dies and you’re screwed, like that guy in the Gin Blossoms, they never had another hit. But if you take money, you’re beholden to it.

Kalanick was screwed by Mike Ovitz. Ovitz wrote off his investment in Kalanick’s Scour so as to not be on the wrong side of copyright law.

So Kalanick protected himself from day one with Uber, by giving himself control with super-voting shares. Yup, Zuckerberg has control of Facebook, but Facebook was just an improvement on what had worked before, i.e. MySpace, et al, can you remember Friendster? Uber was conceived out of thin air.

At first it was black cars only. UberX was actually a me-too product. Uber felt it was on the right side of the law with black cars, but when you were competing with taxis…they weren’t so sure.

So to combat local governments they came up with Greyball, which prevented the law from busting their drivers. Oh, Uber got in trouble with Apple, for its spying technology akin to Onavo, but that’s how the game is played in tech. You go over the line and wait until you get caught.

Now the institutions are not prepared. They’re based on ancient technology, they’re reaping the profits while the upstart begins to eat their lunch. As for the public? Uber is a blessing. You can’t hail a cab almost anywhere in Los Angeles, but you can call up an Uber, with a nicer driver and a cleaner car. This is the way it always happens, the public votes and the old companies scream, but they die anyway.

So #deleteUber was a misunderstanding of what was going on. Uber turned off surge pricing so as to avoid huge bills that had gotten the company in trouble previously. But the creator of #deleteUber thought it was to kill the taxi business.

But one guy in Chicago with a hashtag put a permanent dent in Uber’s rep. And allowed Lyft to flourish. And now, when I take an Uber ride, people wonder, why am I not using Lyft?

But it very easily could have gone the other way. Lyft could have cratered.

Kalanick wanted to win in China. The establishment told him it couldn’t be done. Isn’t that what they always tell you?

Uber went into driverless cars.

That mission has been pulled back since Kalanick was kicked out. How dumb is that? The future always arrives. Blockbuster is history. He or she who does not prepare for what’s coming down the pike is gonna be snubbed out.

Same deal with UberEats. Supposedly losing money, but someone is going to own this sphere.

Today Uber is a nice company which folded its business in Asia and isn’t prepared for the future and the stock has sunk. And you want me to laud the board and Dara Khosrowshahi? We’ve seen this movie before, we’re seeing it right now. Apple was built on breakthrough products, Tim Cook is incapable of coming up with them, never mind delivering them. The iPod and the iTunes Store were built on the back of copyright protection…the labels wanted it, Jobs delivered it and wouldn’t share FairPlay with competitors. The game remains the same, he or she who is not striving for a monopoly ends up with almost nothing. If you’re not playing for all the marbles in tech, you might as well close down the company right now. Especially with social media sites and Uber…there’s no there there, it’s all virtual, there are no hard assets, except maybe some servers, but you can rent those too. It’s all about what’s in the brain. And we love the victorious techies as long as their warts are not revealed.

To tell you the truth, if you followed the Uber story in the newspaper, ironically covered mostly by Mike Isaac, the author of “Super Pumped,” you will find little new in terms of Uber facts. But you’ll learn a whole hell of a lot how business works, especially in Silicon Valley. The way the board gangs up on people. The way info is leaked to achieve the desired result. How personality is used to cover up a killer instinct. He or she who doesn’t know how the game is played loses.

That’s one thing that outsiders never understand. If you want to make it big in movies or music, move to L.A. Because that’s where it happens. Until you hang with both the wannabes and the players, you’ll have no idea how the system really works. And if you’re outside the system, it’s hard to win, especially in movies and TV. It’s easier in music, but even if we write off the major labels, which are signing their own death warrant with such narrow pickings, the truth is there are zillions of people in L.A. who know about how much it costs to tour, where to get the best road people, how you penetrate media…you go where most people are. Amazon may be based in Seattle, but it’s got a big team in the Valley, that’s Silicon Valley to you.

If you ask me, Uber should blow out Dara Khosrowshahi immediately. Bring Travis Kalanick back. America loves a comeback, especially after a mea culpa. Didn’t Steve Jobs come back from oblivion to triumph? And hiring an HR department, and a CFO with stricter cost accounting, that’s easy, but not the vision thing.

Now if you’re one of the boys, if you get along with everybody, self-deprecating and backslapping, I’m not worried about you, you’ll always find a gig somewhere. You can make it to the top, but you’ll have to kill a few people along the way, and the chances of you actually making it to ruling status are de minimis.

No, those who change the world are outsiders. Never a member of the group, never accepted. They’ve got a vision and they want to see it come true. And nothing will stop them, because they want to prove to the establishment that they have value, that you don’t have to do it the usual way, that you don’t have to blend into the group to succeed. And if you’re one of these people, it’s astounding how much information you can gain just by reading.

“Super Pumped” is one of the books you should devour.