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  • Mark 4:48 pm on November 10, 2019 Permalink | Reply
    Tags: , , , great disruptive project, , , , , venture capital   

    The Great Disruptive Project of Uber 

    I’ve blogged in the past about The Great Disruptive Project. We should understand a company like Uber, at least in its earlier stages, as in part a moral project. By this I mean there is a vision underlying the company, a critique of the existing order associated with this vision and a commitment to changing the world in line with both. There are many other things going on here. For example it is easy to be enamoured by a vision which is also making you fabulously wealthy. But if we reduce the vision to a front for avarice then we miss an important element in why such a company comes to be the way that it is.

    Reading Super Pumped: The Battle for Uber has left me more convinced of this then ever. It charts the evolving corporate culture of Uber and how Travis Kalanick sought to build a company which reflected the hyper-competitiveness with which he approached the established transportation order from the outset. The author Mike Isaac deftly explores how the rapid growth of the company was dependent on giving regional managers a wide latitude in their mission to entrench Uber within a new municipality, as well as ensuring they backed staff and drivers to the hilt when it came to the inevitable pushback.

    Uber has been notorious for its willingness to flout the law, bulldozing its way through each new municipality. What Isaac conveys is how this had some of the characteristics of a movement, uniting intensely ambitious young (mostly male) staff in a project to change the world and get rich in the process. His book left me with such a vivid sense of how the pathologies of the company were incipient in its model of growth, as Kalanick’s libertarian impulses coupled with the glut of capital they had access to produce a lawless juggernaut enthusiastically seeking to destroy anything which got in its way.

    While Uber might be an extreme case, it nonetheless highlights characteristics of (successful) startups which render them different to other firms: they grow at a remarkable pace with huge implications for on-boarding processes and corporate culture, access to capital can give senior management an astonishing degree of latitude, the startup’s fundraising depends on a plausible account of how it will change the world and the key people involved stand to become fabulously wealthy if they succeed in this endeavour.

    It embodies the tensions of contemporary capitalism and, as Emily Chang observes in another book I’m enjoying at the moment, creates an environment in which an endeavour which involves a large amount of luck (particularly when it comes to the economic juncture in which Uber were able to raise such an astonishing amount of capital while being so far from profitability) comes to be coded as the alpha bros rising to the top. Given the persistence of the underlying conditions, it’s hard to avoid the conclusion that things will get worse before they get better.

     
  • Mark 3:50 pm on April 13, 2019 Permalink | Reply
    Tags: Chris Sacca, Edward Snowden, venture capital,   

    When the venture capitalists tried to get to Edward Snowden 

    I thought this was a wonderful anecdote, recounted by Anand Giridharadas on pg 77-78 of his Winners Take All. Edward Snowden was interviewed at Summit at Sea by the venture capitalist Chris Sacca who immediately looked straight past the politics of what his interviewee was saying once there was a fleeting mention of a startup emerging from it:

    Perhaps in an effort to be courteous to his entrepreneurial audience, Snowden had tucked a mention of a start-up into his much grander vision of heresy, thereby destroying whatever chance he had for his ideas to be heard as they were intended. He had ensured that Sacca, and presumably many others, would now hear his revolutionary words and think only of investment.

    “So I invest in founders for a living,” Sacca said, staring up at the giant screen. “And I gotta tell you, as I listen to you, I smell a founder here. You’re talking about these things that need to be built. Are you going to build any of them? Because there’s probably investors waiting for you here.”

    Snowden seemed taken aback. Here he was talking about heresy and truth and freedom, and now he was being asked about a start-up. Flummoxed, he tried to let Sacca down politely: “I do have a number of projects that are actively in motion. But I take a little bit of a different view from a lot of people who need venture capital, who are trying to get investors. I don’t like to promote things. I don’t like to say I’m working on this particular system to solve this particular problem. I would rather simply do it, at the minimum expenditure of resources, and then be judged on the basis of results. If it works, if it expands, that’s wonderful. But ultimately, for me, I don’t tend to think that I’m going to be working in a commercial space. So I would rather say, ‘Let’s wait and see.’ ”

    It was a kindly delivered rebuke to MarketWorld’s way of life. Here was a man who didn’t like to promote himself, who didn’t crave money, who was actually fighting the system, and willing to lose for the greater good to win.

     
  • Mark 8:05 am on April 2, 2016 Permalink
    Tags: business models, , , profitability, , , venture capital   

    Aaron Swartz on digital business models 

    From The Boy Who Could Change The World: The Writings of Aaron Swartz, loc 309. He’s talking about the semantic web but what he’s saying could easily be applied to much of social media:

    So, uh, here’s the plan:

     1. Collect data

     2. ???????

     3. PROFIT!!!

     
  • Mark 7:16 pm on March 27, 2016 Permalink
    Tags: , , , , , , venture capital   

    A contagion of pivots reveals the hollowness of the sharing economy 

    Interesting analysis of the difficulties that many platform firms are facing now that venture capital is starting to dry up. I also love the phrase “a contagion of pivots” more than I can express:

    A contagion of pivots began happening among other sharing economy startups. Companies like Cherry (car washes), Prim (laundry), SnapGoods (gear rental), Rewinery (wine), HomeJoy (home cleaning) all went bust, some of them quietly and others with more headlines. Historical experience shows that three out of four startups fail, and more than nine out of 10 never earn a return. My favorite example is SnapGoods, which is still cited today by many journalists who are pumping up the sharing economy (and haven’t done their homework) as a fitting example of a cool, hip company that allows people to rent out their spare equipment, like that drill you never use, or your backpack or spare bicycle—even though SnapGoods went out of business in August 2012. It just disappeared, poof, without a trace, yet goes on living in the imagination of sharing economy boosters.

    http://www.salon.com/2016/03/27/good_riddance_gig_economy_uber_ayn_rand_and_the_awesome_collapse_of_silicon_valleys_dream_of_destroying_your_job/

    The rather provocative conclusion drawn is that the so-called sharing economy ultimately amounts to nothing more than a series of digitally mediated niche temp agencies:

    A pattern has emerged about the “white dwarf” fate of many of these once-luminous sharing startups: after launching with much fanfare and tens of millions of VC capital behind them, vowing to enact a revolution in how people work and how society organizes peer-to-peer economic transactions, in the end many of these companies morphed into the equivalent of old-fashioned temp agencies (and others have simply imploded into black hole nothingness). Market forces have resulted in a convergence of companies on a few services which had been the most used on their platforms. In a real sense, even the startup king itself, Uber, is merely a temp agency, where workers do only one task: drive cars. Rebecca Smith, deputy director of the National Employment Law Project, compares the businesses of the gig economy to old-fashioned labor brokers. Companies like Instacart, Postmates and Uber, she says, talk as if they are different from old-style employers simply because they operate online. “But in fact,” she says, “they are operating just like farm labor contractors, garment jobbers and day labor centers of old.

    http://www.salon.com/2016/03/27/good_riddance_gig_economy_uber_ayn_rand_and_the_awesome_collapse_of_silicon_valleys_dream_of_destroying_your_job/

     
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