When it comes to disruption, Brad Stone wrote the book. Twice.
The best-selling author of The Everything Store, a detailed account of Amazon’s history, is out with another book, this time focused on two darlings of Silicon Valley. The Upstarts is a deep dive on Airbnb, Uber, and the gig economy. Stone shared insights he learned from profiling the startups, which are each worth billions of dollars, on stage during an event at Seattle’s Town Hall with GeekWire editor Todd Bishop on Tuesday night.
Stone covered the recent blows to Uber’s reputation, the surprising kinship between the two companies’ CEOs, and how each startup takes inspiration from Amazon. Continue reading for highlights from his talk, watch the full video below, and listen to a podcast of the talk above or download as an MP3 here.
On the sexual harassment allegations against Uber: “It shouldn’t have been a surprise to anyone. Not just anyone who follows Uber but anyone who pays attention to the technology industry or Silicon Valley … I think Uber does not have a monopoly on boorish behavior in the workplace. I think it’s endemic in Silicon Valley for a couple of reasons. One, women and minorities are just grotesquely underrepresented in the ranks of all the big technology companies and two, it’s a little bit of a boys club. I think it’s too simplistic to say this was a ‘frat boy culture’ because there are many impressive women executives in positions of power at Uber. It’s not that simple, but clearly, they made mistakes in the implementation of sane HR practices.”
“Uber is held to a different standard for a couple of reasons. One, it’s a San Francisco-based company and there is a special responsibility, I think. We call it the People’s Republic of San Francisco for a reason. If your offices are there on Market Street where now there are fresh protests every day, you’ve got a little bit of a vulnerability and there were, in fact, protesters chaining themselves to the front doors of Uber’s headquarters. That’s not something that even Elon (Musk) in the East Bay and down in L.A. has to deal with.”
On whether scandal will hurt Uber’s bottom line: “It probably won’t impact their business. I have to say the reason that Uber has succeeded like it has, the reason they’ve built a global brand and, perhaps, part of the reason why they’re valued at an absolutely insane $69 billion, is because people like the service. They use the service. It has created a transportation option where one did not exist in places like the south side of Chicago where there were very few transportation options, where taxis wouldn’t even go.”
“This, to me, was the lesson of Amazon, which went through its own trial by fire many times on all sorts of issues. When people love what you do, where you’ve solved an inconvenience for them, created a lower price point, made their lives better in some way, you can get away with a lot of missteps. Uber may be testing that right now, because it does feel like they’re one or two blog posts away from real disaster if other employees come and pile on. But it helps, and it wins a lot of political battles when, by and large, people want to use the service.”
On the friendship between Uber CEO Travis Kalanick and Airbnb CEO Brian Chesky: “They are in this very strange and somewhat exalted position of having ridden an eight-year rocketship to unimaginable wealth and power and so, to some extent, I think that they can just kind of relate to each other.”
On potential IPOs for Uber and Airbnb: “They each have a significant obstacle in their path. Airbnb has to resolve some of the regulatory ambiguity. It cannot go into the process of going public with battles waging on both coasts, which is currently the situation. And they’ve also announced this major expansion into other travel services. So that’s their issue. Uber’s issue, I think the biggest one is driverless cars. That could be a complete reset to the business. Can they demonstrate enough leadership that an investor can be comfortable that they will be a leader in five or 10 years? I think that’s still a question. And then right now would be a terrible time, obviously. They’ve got some reputational issues to work out. The other thing is that they don’t have to. We’re still in this bizarro climate where capital is plentiful … There’s not a lot of reasons for these companies to go public.”
On President Trump’s deregulation agenda: “It really has been a local and state battle for both of these companies. The two caveats are one, he is the most prominent hotelier in the world and he has said that he doesn’t particularly like Airbnb and wouldn’t allow it on his own properties. So I guess he could, if properly instigated, take to Twitter or do something else to cause some problems for Airbnb. Uber, as I said, the agenda is really more about the next wave, so it’s about driverless cars. Could he do something maybe in an effort to protect the jobs of truck drivers or taxi drivers? Do something to slow down progress, maybe make certification of driverless cars more difficult? I could see him doing that for sure.”
On the influence of Amazon on these companies: “The funny thing is that they are very much disciples of Jeff Bezos. Bezos, I don’t know how he does this, but he has personally invested in both companies and the companies styled themselves after Amazon. Amazon has 14 leadership principles. Not coincidentally, Uber has 14 leadership principles and some of them are the same as Amazon’s … Airbnb has the potential to feel more Amazon-like but the final word is that Amazon’s an incredible company, 20 years in, and I think both Uber and Airbnb would have a lot to prove before we even consider them in the same breath as Amazon.”
On regulating gig economy companies: “It’s incumbent on regulators to change how they look at these businesses. I think this idea that you could legislate and these rules could be applicable for a century, these companies went and they hacked the law so regulators have to be more accountable and responsive for the new kinds of businesses that technology is spawning.”