Man and uber man: Do startup CEOs have to be jerks?
What's lost when aggression becomes the corporate culture
Want to be a successful Silicon Valley entrepreneur? You may want to practice being a jerk.
I know; I know. There's that old mantra that correlation isn't causation. But over time, an awful lot of correlation adds up to a pretty convincing pattern. And right now, the overlap between "jerk" and "Silicon Valley success story" is looking fairly large.
This week, it's Uber grabbing the headlines, for rather dramatic reasons. The high-flying ride-sharing company — estimated value $18 billion and, until this week, climbing by the day — has stirred plenty of controversy in the past. Now it's riled members of the media and tech worlds with comments made by Senior Vice President Emil Michael suggesting that Uber could wage an opposition-research campaign against journalists responsible for some critical coverage. Most notable among those journalists is Sarah Lacy of Pando.com, who wrote a scathing story explaining just why she had deleted the Uber app from her smartphone.
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Instead of adopting a smart, savvy marketing strategy, Michael spouted off at a dinner he thought was off the record, Buzzfeed's Ben Smith, who attended the dinner, reported. The Uber executive said the company could take $1 million (of shareholders' money) and invest it in a Watergate-style dirty tricks operation against journalists, hiring researchers and journalists to dig into their own lives. Note: not into the journalists' work methods or articles, but into their personal life.
USA Today columnist Michael Wolff on Wednesday criticized the Buzzfeed story for being presented in "clickbait fashion" and casually tossed off a mention that key Buzzfeed investors are also investors in Uber's rival, Lyft.
Those critiques may be true, but they don't really matter. There's a much bigger, broader issue here that venture capitalists and other investors in startup companies are going to have to wrestle with: Just how much boorishness are you willing to tolerate? And at what price?
High-profile jerks are nothing new in the tech world. As Walter Isaacson's biography of Steve Jobs pointed out, he parked his Mercedes in handicapped parking spots and even denied paternity of his daughter for a period. Larry Ellison of Oracle is renowned for being brash, egotistical and cutthroat; former Microsoft CEO Steve Ballmer has a hot temper, while that of Amazon.com's Jeff Bezos apparently can strip paint off metal.
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The success of those leaders, particularly Jobs, may have inspired other young tech entrepreneurs to emulate them. One venture capitalist who had worked with Uber CEO Travis Kalanick described his pugnacious approach to Kara Swisher for a recent Vanity Fair piece: "It's douche as a tactic, not a strategy."
Either way, it' nothing to be proud of, but investors might turn a blind eye — for as long as it works. But when being an asshole becomes part of the corporate culture, it can also undermine any advantages that aggressiveness has brought to a business. What happens when throwing temper tantrums and humiliating employees drives away some of your most creative employees, leaving the company in which you've invested with "yes men"?
When companies look to win at all costs, nastiness can turn to ethical lapses. Google's IPO prospectus famously claimed that the company's mantra was "don't be evil," and in some pockets of the business and tech worlds that fairly low bar qualifies as a high standard. What happens when customers are turned off by stories of bad behavior, or when the corporate brand becomes inextricably linked to executive impropriety? At that point, investors must be concerned.
If you want to succeed in technology — which relies on being disruptive, on challenging conventional wisdom, breaking down barriers and forcing reluctant organizations to rewrite the rules of engagement — you need to be aggressive. You need to push people beyond their comfort zone. For instance, Uber CEO Travis Kalanick has had to be creative in offering riders more and more reasons to use his service rather than hail a cab or use a rival like Lyft — and so was born the idea of enabling the customer to stream his or her own music as part of the ride experience. It has also meant challenging local licensing regulations and other restrictions and combatting protests by taxi owners.
But where is it written that a CEO and his senior executives — even if they are misfits best suited to the rough and tumble that is life in a startup — are exempt from all standards of normal behavior? The incident involving Sarah Lacy wasn't the only time that Uber has crossed the line with a female journalist recently; in another case, they tracked a journalist traveling in an Uber car that she had summoned and paid for, using an app known as "God View."
There are other stories, too, some involving alleged assaults and abductions by Uber drivers or dirty tricks to sabotage rivals. In some cases — such as the driver who responded to a canceled pickup request by texting the customer that she was an animal and deserved her cancer — Uber has acted promptly: they fired the driver.
Kalanick apologized for Emil's comments in a series of Twitter posts and the company said on Thursday that it has hired a law firm to audit the way it handles customer data. Even so, the calls are growing for Michael and/or Kalanick to go. The image of an arrogant company led by jerks — people who insist that they, and only they, have the secret for the way the world should unfold — has only grown. The company's leaders came off appearing eager to pocket the profits, but less so to shoulder the responsibilities associated with serving customers, including fielding criticism.
This is a particular issue in Silicon Valley, perhaps, which isn't just a hotbed of innovation but also the focal point of "bro-grammer" culture. It has become a vicious circle: With so many young men flocking to the area, it can be about as welcoming an environment to women as a fraternity house full of drunken undergraduates. Women fill only a fraction of the technical roles in Silicon Valley firms.
And the jerks may be to blame.
Will the Uber backlash lead to changes, or is the jerk gene inextricably linked with the gene for entrepreneurial success? Does the struggle have to be a Darwinian one, with the fiercest competitor — the one willing to draw the most blood, throw the biggest temper tantrums, cross the most ethical boundaries — walking away with the prize?
If it is, where does that leave us? We've seen, time and time again, the consequences of pushing the envelope in the corporate sphere. The leaders of Enron, WorldCom, and Tyco did it. The investment banks did it in the years leading up to 2008. Rogue traders like Joseph Jett and Nick Leeson did it, and brought their financial institutions down with them. Jerks tend to be arrogant, and arrogance, too often, brings with it complacency. If you're an investor, those are characteristics you really don't want to see in a CEO.
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