The downfall of Uber co-founder Travis Kalanick is reverberating through Silicon Valley like a swing of the mallet ending a bad Gong Show act. And now the tech industry seems to be seizing this moment to save itself from its worst excesses.
Kalanick is by no means the only problem with the Silicon Valley of the 2010s. Plenty of bad players have helped create a tech universe stained by too much misogyny, financial lunacy, social irresponsibility and general asshole behavior. But Kalanick managed to combine all those characteristics into just one person. It is a rare feat usually reserved for the darkest corners of our society, and the White House.
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So when, in late June, a group of Uber's biggest investors demanded Kalanick's resignation as CEO, it seemed symbolic—and hopeful. Here are four ways the end of the Kalanick era can make Silicon Valley better:
Fight discrimination: By now, Silicon Valley and rotten treatment of women go together like the NFL and brain trauma. It's far too prevalent to ignore. One survey, titled "Elephant in the Valley," found that 60 percent of women in the industry experienced unwanted sexual advances in the workplace, and one-third of those women were afraid for their physical safety. Complaints abound about women not getting top jobs, not getting funding from venture capitalists and not getting equal pay. Uber's culture became one of the worst for women, as a blog by former employee Susan Fowler and a report by former Attorney General Eric Holder made clear this year.
The revelations about Uber's sexist culture encouraged other women to come forward. That led to a late-June report in The Information about alleged unwanted sexual advances by Justin Caldbeck, a venture capitalist with Binary Capital. Caldbeck is taking a leave of absence and announced that he "will find ways to learn from this difficult experience—and to help drive necessary changes in the broader venture community." Spurred by all of this, high-profile investor and LinkedIn co-founder Reid Hoffman published a call for an industry-wide mechanism "so that venture capitalists who engage in such behavior face the same sort of consequences that they would if their overtures were directed at an employee."
Screw unicorns: Over the past couple of years, Silicon Valley has been enamored with unicorns: private companies worth $1 billion or more. So much money poured into unicorns that many became worth absurd amounts, and the companies found they could easily find some nincompoop to give them yet more money and raise their valuations even more—so why bother to go public? In 2016, just 20 tech companies went public, the lowest count since 2009.
Of all the CEOs in tech, the most vociferous supporter of such a unicorn strategy was Kalanick. By the time he resigned, privately held Uber was valued at $70 billion, and Kalanick had pledged Uber might have an initial public offering around the time it starts transporting riders in flying saucers.
But this trend causes all sorts of trouble. It concentrates more wealth in the hands of fewer people (i.e., early private investors and company founders), makes it hard for employees to cash in on their company's success and shuts out the wider public from participating in the tech boom. This also artificially makes companies' private valuations much higher than the valuation they'd get if they went public, putting the unicorns in a no-win situation. They won't be able to go public to raise more money to grow, and they won't be able to get more nincompoops to give them more private money. At that point, many unicorns could burn through their cash and collapse.
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Uber's investors had a lot of reasons to push out Kalanick, but reports say the IPO issue was their biggest motivation. Every anti-IPO CEO today is rethinking that stance, and that will be good for the whole industry.
Stop the asshole worship: Most tech CEOs are not assholes. Many are truly decent leaders, including some of the most successful, like Marc Benioff of Salesforce.com and Mark Zuckerberg of Facebook. But Steve Jobs was a legendary asshole. Back in Microsoft's heyday, Bill Gates earned his asshole merit badge. And now there's a segment of tech that believes in the Jobs-Gates management philosophy. A couple of years ago, an investor in Uber talked about Kalanick to a Vanity Fair writer, saying, "It's hard to be a disruptor and not be an asshole." Analyst company CB Insights promptly ran a poll asking if that was true, and 23 percent of respondents said yes.
In recent years, Kalanick has reveled in being Silicon Valley's asshole-in-chief. Now it's apparent that positioning didn't work out so well for him. The CB Insights poll today would get a whole lot fewer "yes" votes.
A little less of the "disruption" thing: Uber made a lot of enemies by enthusiastically embracing its "disruptor" mentality. It didn't care whether it broke laws or elbowed out taxi drivers or even squeezed its own drivers. It embodied a Silicon Valley ethos of "move fast and break things."
Uber's troubles are making the industry realize that a sizable portion of society doesn't appreciate getting violently disrupted, and maybe the industry ought to do more to highlight what it's creating instead of what it's destroying. Kalanick's comeuppance, along with other recent concerns, such as Facebook's role in fake news, seems to be stirring a desire among tech companies to be more socially aware and responsible.
One small sign: Just a few days after Kalanick resigned, Facebook, Microsoft, Twitter and YouTube said they are banding together to form a Global Internet Forum to Counter Terrorism. "By working together, sharing the best technological and operational elements of our individual efforts, we can have a greater impact on the threat of terrorist content online," the group said. The industry needs more of that.
There is, of course, much good in Silicon Valley, as well as in the tech sphere everywhere. But it veered a little too far toward the Kalanick brand of leadership, to the industry's detriment. It seems ready to change. "In the entrepreneurial ecosystem, we celebrate our ability to pivot," wrote Trae Vassallo, a prominent female VC, after Kalanick resigned. "And that's clearly what we need to do with part of our current culture."
Gong!
