Emil Michael (ex CBO at Uber)

Hi everyone, this is Jackson Steger. I'm the producer for the show, and before we get started today, I wanted to let you know about On Deck's newest fellowship, and I think that this audience would find it particularly interesting. So, Execs on Deck is an 8-week fellowship for leaders with 12+ years experience looking for their next VP or C-suite level role at a high-growth startup. The program provides one-to-one executive coaching, Personalized introductions to top startups looking for talent, and a world-class peer community to help you find or create that perfect next role. So if you're thinking about what's next, you can learn more/apply at beyonddeck.com/execs. Space is limited and applications for the first cohort close on April 9th. Thanks. Hey everyone, this is Erik Torenberg and you're listening to Execs by On Deck. Execs is a show for founders, operators, and leaders who want to understand the playbooks, frameworks, and tactics that leading tech companies today have used to scale. Our guests are tech execs in key roles at top tech companies who share their hard-won, earned secrets on how to scale faster. Emil Michael was the Chief Business Officer at Uber during their hyperscale period from 2013 to 2017. In this episode, Emil shares crucial lessons from Uber. He details how and why to develop an ambitious blitzscaling mentality from day one, imparts specific tactics learned from launching Uber in China, and advises patience when it comes to hiring execs. Emil, when you look back at the arc of your career, the various experiences that you've had, what are the threads that you've kept on pulling or the through line between them in terms of what's garnered your interest and where you've chosen to spend your time? I'm also curious how you'd define the expertise or different intersection of expertise that you've developed along the way.

I would say that the consistent thing I'm looking for when I'm joining a business that I'm going to help drive is really the relationship I have with the founder, because I've joined a bunch of founder-led companies. And is that going to be productive? Am I going to enjoy it? Am I going to learn? Are we on the same page ambition-wise? Are we complementary from a skill set standpoint? And that's been for me the most important thing. Obviously, the business, and is it a good business or interesting business, is a close second. But I joined Klout, I had some things that didn't really sort of take off. So I've been wrong on number 2, but I've never been wrong on number 1. I've always worked with great, great founders. And so that's been the consistent theme. And then I do a lot of work before I join a company, whether it's sort of referencing them, the people. I said, I, you know, some would say I take a long time to decide. Travis would say that.

Yeah.

Because he recruited me for like a year and a half. I wish I had that year and a half back because I would add an extra zero. But But that's been the consistent theme. On how would I describe where I sit in these orgs, you know, it's not as common nowadays, but it used to be sort of a Chinese business model thing. In China, sort of Alibaba, Tencent, all these companies have a CEO founder and a kind of vice chairman chief business officer. They have Jack Ma and Joe Tsai, Pony Ma and And I forget his name, Martin Lau. So you have these sort of business and product tech sort of leaders. So I'm a business guy, and what that's evolved to over time has been fundraising for private companies, M&A, strategic partnerships. And then sometimes I'm incubating businesses within the business. So I built Uber for Business, or I'd run geographies like Uber China or whatever. And it's sort of like, I call it the venture capital arm of companies. Investing in new ideas, being on the cutting edge of partnerships that are driving value creation in the business, raising money, which I've done a lot of now. It's all those business functions that face the outside world, basically, is how I describe it.

Why do you think it's not as common anymore? What are sort of the trade-offs, the pros and cons of having that model versus an alternative model?

It is more common for the CFO to be in charge of fundraising and M&A. So that is the difference between the Chinese model and the historically American model. And is it changing? I think it continues to be still mostly that's the model. But now the interesting thing that's happening in the world is you have a dearth of CFOs, huge dearth because of all these SPACs, all the IPOs that have happened in the last few years where you finally have some of the biggest IPO years in the last decade. So all the CFOs have been sucked out into these companies. And now, you know, I think people might look at chief business officers again as like, okay, well, maybe that's it. And I can have a VP finance or SVP of finance cover the controller, treasury, and accounting functions and have this sort of M&A and fundraising and strategic investment, you know, strategic partnership functions in a chief business officer. What are trade-offs? Trade-offs are you have someone like with my skill set out in the world, I'm meeting investors all the time. And my job is outside the company. It's out of the office. So you get some synergy with that, right? Or maybe I'm doing a strategic partnership and they want to add some money to a financing. So you add some efficiency on that and some skin in the game on these deep partnerships. What you lose is, you know, just the CFO candidate who wants that job is a different candidate.

Makes sense. And are you seeing companies do less of the chief business officer role in general, or are they doing it but it just has a different scope?

They're doing it. Obviously, I don't have a perfect view of the industry, but I get a lot of calls of, hey, I want the next Emil from like 5, 10 years ago. Can you help me find that person? And I'm like, well, here's the— they ask the same question you did. It's like, what is your scope? What are the things you did? And they're like, huh, I hadn't thought about that. So it's still kind of a newish thing. And I think sometimes what they're looking for is not necessarily a partner to do what I did, but someone who's in the trench with them. who has broad perspective and broad responsibility across the company. And so it is true that culturally CFOs and founders, product and tech-oriented founders, are not like culturally or personality-wise who are in the trenches together. Like they don't, you know, they're not natural partners. So they're looking for a partner that they actually want to spend time with and have a similar point of view on. So it goes very back and forth depending on the founder.

Totally. I want to spend a bunch of time on lessons from hypergrowth at Uber, but before that, I want to start with the cloud experience in the sense that you alluded to it not reaching its potential. Why do you think that was? Or maybe another question is, if you can go back in time and try to do anything differently, what might that have been? Or any lessons from that experience?

Yeah, I mean, cloud— the problem was we just didn't have a business model around the idea. The idea of something that measured one's clout/credibility/importance on social media actually is an interesting idea, even more so today than it was back then, because the noise of social media, especially on Twitter, is like one random person says something and who's that person to say that? This was a way of saying, well, that's fine for that person to say something, but they don't know anything about the subject. Here's the 10 other people who do. So the idea is a good idea. I just don't know how it's a profit-making idea. So that was always the problem. I still think if you launch Klout today, it would have a life as a product feature but not as a business.

Fascinating. In between Klout and Uber, I guess at a high level, what is your philosophy of joining companies? You mentioned that you like to take a long time But is it mostly founder-driven? How are you thinking about the industries? What's been your approach?

Yeah, I mean, look, I'll never at this point join a non-founder-driven company. The reason, and it's being a little bit tarnished by some of these stories these days of these Jesus founders or whatever, it's not really like that. If you've been inside these companies, there's mad respect for the people who go through the hard work of starting them. And they do have an aura around them. But ultimately, the thing that makes that model work most of the time, much of the time, is they have a long-term perspective. This is their invention that they've been thinking about how it extends and extends and extends for the next multiple decades. And that stick-to-itiveness, that long-term perspective, which is, I'm building something to last, I'm not just being hired to financially engineer an outcome, is stuff I resonate with. It's mission-driven by definition. That's really important. Now, are there bad founders? Of course. Are there founders who have bad ideas? Yes. So you spend your time finding the founders who have the vision that you share, have the values you share, have the business ideas that you share. And that's really, for me, been the theme. Totally.

When you first joined Uber, what was your expectation of how you— of what your role was and how it was going to evolve over time? Or was it sort of exactly what— What you defined as it when you mentioned the CBO?

Yeah, I love answering this type of question because Travis and I had known each other for a while. We're friends and we're sitting in a room. We're like, how do we define your role? And we both were like, you kind of want flexibility in your kind of partner. So we came up with this definition, which is you're the face to the ex— you're the external face of Uber. Not from a PR standpoint, but to other businesses. You're the external face to other businesses, which include investment firms and so on. And over time, we'll see what we put in that bucket. And so I was comfortable. I was 40 years old at the time, taking the risk of like, I don't exactly know, but it's like this stuff and I'm going to just work hard and evolve and see what that becomes. And that synced with Travis's too, because, you know, he It takes him a long time to trust people also. So that worked for both of us. But that's how it started. One sentence. The external face for Uber to businesses worldwide. Wow.

As a prompt, Reid Hoffman came out with this book the other year called Blitzscaling, about how to grow really fast. Let's pretend that that same title was written by you or by you know, Travis or Bobby become the early leaders of Uber, what do you think would be some of the positive takeaways or lessons that other companies can learn from Uber's success?

I think there's so much good stuff there. I'll start by saying the ambition to be global from day one was really rare before 2010. You know, people, especially for a business that lived probably part in the digital space and part in the physical space, right? And so that ambition from day one was like, okay, you have to have a system for that. You have to have a blitzscaling mentality for that. And so thinking you wanna be global actually helps you create this system for how you blitzscale because, you know, you're like, okay, well, we should be in the top 100 cities in the world. You're like, okay, they're so different. What are the commonalities? What are the differences? How do we playbook them? How do we create materials so that you could give it to someone and they can drop in a city and kind of know 70% of what they to know. And so that was sort of one lesson. The other was, you know, what are the adjacent businesses that are interesting, and when do you start them, and when do you not? One would argue, or I would argue, that Uber Eats was started early, and it made investors nervous, but it was the best idea we've had to start that adjacent sort of vertical alongside of ridesharing. I would argue also that investing in self-driving cars starting in 2013 or '14 was a bit early, right? Because the investment cycle, the regulatory cycle, all those cycles, that means you consume a lot of cash on the way up. So blitzscaling has its limits is the sort of second point, right? And you have to— you're gonna not get it perfect if you're truly blitzscaling. And then third, people. It's hiring, hiring, hiring, man. The people— people make a company. And when you're blitzscaling, If you let go of the quality type, it multiplies faster. So the actual culture and performance dilutes really fast in blitzscaling. So it's actually more important to keep your bar high there. And so those are kind of, I'd say, the 3 lessons I've got for blitzscalers.

Let's dig deep on the hiring front. And this is something that we are experiencing a lot now. A year ago, we were 50 people and now we're 250 people. And so we've learned some lessons the hard way and are in the process of learning lessons, but also have got some things right. What do you think are the biggest principles to obviously keep quality high? How do you make sure you do that? Or what are some of the non-obvious things that you impart to other companies that maybe is not so obvious to them?

Yeah, I mean, a couple of ideas for you. Number one, the leaders, whether it was Travis and Ryan Graves or me, interview everyone on your team for as long as you can. At some point, you won't be— you as a leader won't be able to interview everybody, or you won't be able to interview everybody in this job category. For us, it was general managers of cities. Like, I think Travis and Ryan interviewed every one of them until there was like, you know, 100 of them. And then it became, you know, you couldn't— you know, it was too time-consuming. But as long as you can do that means that you will have some consistency in the filter. And that consistency amongst those people that you personally interviewed, and yeah, you're going to make mistakes, will sort of drive consistency in a multiplicative way downstream. The second thing is spend a third of your time recruiting. And that means 3 interviews a day, 30 minutes every day for your whole company, for as long as the company's worth scaling. And it's super painful, but you just gotta do it. And not only will you get better asking questions, you'll get better at what kind of talent is out there, you'll get ideas on new things to look for, and you'll create a machine. So that's the second thing. And I guess what I'd say third is, you know, we did a lot, you know, Uber did a lot of summits. So you have this far-flung employee thing. You don't quite have this problem just yet, but you have this far-flung group of people.

Yeah.

We'd actually bring them back very frequently to trade notes and to create camaraderie and social connections and so on. And that's when your blitzscaling sort of connected the social fabric of the company together. Ideas traded faster, best practices got distributed faster. So, those are the key things for leaders, I would say, in a blitzscaling company. The 50 to 250 is a big number. That's a big change. Yeah.

And when you did 3 interviews a day, would you and Travis kind of like divide and conquer? Like, hey, you'll do them for these roles, you'll do them for these roles. Did you own hiring for any of those roles or you were just supporting?

Yeah, well, so I did 3 interviews a day for people in my org, right? And then eventually he stopped interviewing general managers and ops and he was only interviewing execs. And we would tackle the execs and I was more of the recruiter of execs. I'd go find them and have lunch with them wherever they were in the country or the world. Do the soft interview and then sort of bring them in if I thought that. And then on the technical side, he would take more of a lead, obviously, with the CTO types, and I would take more of a lead on the business and operations types. So eventually you have to divide up, especially with exec hires, because exec hires take the longest and they're the most risky and have potentially the most upside. Yeah.

The only exec we've hired is a CTO. I have a co-CEO, so we're top-heavy on that front. But yeah, we need to hire a lot of execs. What was your sort of like process or philosophy on finding them or building that top of funnel or what advice do you have on exec hiring in general?

Yeah. So I have some hard, hard lessons here and no one wants to believe this, but 50% of exec hires at a high growth company fail. 50%. It's like a one out of— no matter how hard you work at it, no matter how much you interview, it's just how it is. And it's, Partly just culturally, they think they want that, but they don't actually want what a startup is. Or the company just sort of not ready for a level of formality and bureaucracy and process that they bring, but the company thought it was. So it's really just a high failure rate. Therefore, my best answer to that is try to speed up the process because you know you're not going to get it perfectly right. on both sides. And obviously, if something doesn't work out, be willing to cut it faster. Because if those are the odds, no matter how hard you worked at it, and I've done it fast, I've done it slow, whatever, then fast is the better answer, right? And also with execs, it's sort of like the ones who are doing this, there are a lot of them who are doing it for the wrong reasons. They see a lot of money being made by younger people faster. That's a tough— that type of answer, even if they're not saying it, but you know that's what they're trying to do, almost never works. The person who's gone through tech companies, actually seen it before, but they just happen to be senior, they kind of get it. They're much more likely to not have that be sort of their motivation, and they're more likely to understand, like, yeah, I'm gonna get into this. It's gonna be a bigger shit show than I remember, but I remember being in shit shows before. So their muscle memory's still there. So, those are the things I'd say is just test for motivation, test for flexibility, test for, are they willing to learn a new playbook? Not just bring all their buddies or gals and friends just from their company to drop them in here, and that's how they establish power or land grab or create orgs. Are they willing to say, I'll come in with nobody and I'll hire all new people, I'll manage the people you hired, How flexible are they really? So ask them how they'd build their org. And if their first go-to is, I'd go to the people I had who worked for me at so-and-so company, that's also a red flag.

It's interesting because if we take that idea that 50% of them might not work out or a high percentage of them won't work out, there might be a pressure to do a trial or something. But then there's the question of, hey, if they're on trial, is that a real trial? They can't be a fake CTO or COO or something. They need to have the title. So do you just say, hey, let's go for it?

Here's the part. I'll answer you and I'll give you a little more substance, which is trials don't work at the most senior levels because they actually can't unplug from whatever they're doing that easily for something temporary. They're probably older. They probably have families or some deeper connections into whatever they're doing. Half pulling that out means the trial's definitely going to fail. So you're actually not— the trial's never going to work because they're half in, half out. The other thing I've learned over the years is when an exec is not willing to move to headquarters, and this is a little bit pre-COVID thinking, they're like, well, I'm going to keep— I'm going to get an apartment and I'll, you know, I'll— after a year I'll do that. Almost never works because they haven't emotionally committed to the place or to the mission.

Right.

And it's not— they may not be intentionally Thinking that they would have a foot out the door waiting in case this is not what they expected. But that's what it says. And it's often, oh, the kids are in school. Like, you know, when they're done in June, I'll move out. It's like, you know, no, you know, that's like an 80%, you know, flag, not 100%. So I don't want to taint everyone with that. But that's the— that's my odds on it.

And what's your advice on sort of like the change management of execs? If 50% don't work out, probably most employees don't understand that or don't figure out that that's normal? Is it something you're just prefacing with them? Or how do you think about change management in general as it relates to critical people?

I mean, that's a good question because it's a hard answer in that you can't disempower that person by making it seem like they may not be here in a year. You have to be all in. And because if you're not all in, then the people who they inherit won't be all in. They'll be looking for reasons. It's just human nature, right? So you kind of have to be all in. And if it doesn't work out, it doesn't work out. It's sort of these sort of like expecting the unexpected. I know that, yes, this person may not work out and it's gonna be, you know, a bomb dropped and I still have to do it, you know?

Yeah.

So that's unfortunately the answer.

One of the things we started doing, just because we have a lot of younger people on the team who are building their careers at On Deck, but then we have some people who've— one of our key leaders was at WeWork through the journey. Just sharing war stories of what it looks like when you're— obviously way further than we have so far, but just the pros and cons of hypergrowth and just normalizing some of the Some of the chaos.

Yeah. I mean, I do think the problems with hypergrowth, which are actually— we're coming to a point where because of the lessons learned on all these other companies that were imperfect, I actually think now there are lessons learned that could make a company more durable through its hypergrowth stage. And we always say that The business was going like this, a slope of 80 degrees, and the company building was going at like 60 degrees. And that means HR, legal, finance, manager training, the things that glue a company together and keep it from going off the rails. Now you know that that's the risk because other companies have had that issue. You can sort of solve for that, which means the CEO's time has to adjust to spend more time on HR, legal, finance, training, than you thought, than in previous generations of hypergrowth startups. Because you have a long-term mindset, you're like, okay, well, that's a risk, so I have to adjust away from that risk. And I think WeWork was obviously different than Uber in that it wasn't clear that the business model worked at that valuation. There were other— there was Regus and these other office-sharing companies. And yeah, WeWork, sure, it was a better business maybe, but at no point was it clear that The marks were valid, whereas Uber had revenues and it had unit economics and had churn. We had all the metrics. So having a business that people love and became a verb and whatever obviously is something that was more durable. But yes, so some of those lessons I learned there, I tell other founders who are doing hypergrowth.

On the exec side, do you have any advice for how to— you mentioned that you took a year and a half For all the people who are trying to get their Emil or their key exec, how to convince them to do it sooner just because it takes so long or what is sort of the key to closing?

The keys to closing execs are you've got to show the effort and commitment. Sometimes that means flying to where they are and meeting them in their space to get extra time that you wouldn't get if you're waiting for them to come to you, even if you're a hot company. It's showing that you're interested. It matters a lot to these people because they're probably in a stage of their career where they have options because they've been around a bit if you want them to be an exec there, right? Second is, it is true that you're more likely to get someone who's in a relationship or has a family at that stage, and they're making a decision that's more collective than a single person who just graduated from college. So, understanding those dynamics, asking about those dynamics, are you getting— You have supportive family members, or are they worried or whatever? You know, a little uncomfortable to get to go there sometimes, but it's— but people are pretty open. And, you know, like, uh, with that, if you're— if you actually genuinely are like, look, I want you to be happy because this is a consuming job and you need support around you. The other thing on closing is like when they're ready to sign, like relentless on being signed, not like, let me think about it on the weekend. Get agreed upon times. Like, you're going to decide by Friday at 4, right? Are we on the same page? You don't have to— you don't have to put— You know, the deadline to be unreasonable. You're like, do you need a week? Fine, let's do a week. But how about let's pick the date and time? So set the terms of the timetables in an agreed way and don't deviate. And you'll be like, hey, look, obviously it's not going to work if they can't get back to you, you know. But you've got to put some, some ground rules in place to force the heart— that sleepless night when the exec is like, am I going to do this or not? You got to force that conversation, that internal—

One thing I'm seeing, although maybe it's just isolated examples, is top executives, people who've done this for quite a long time, at this stage in their career, I'm starting to see some people who want to be fractional executives. I'm curious if you came to a startup and was like, hey, I'll do 10 hours a week or 20 hours a week, but I'll do this among 2 different startups. And a startup, they could get someone else who's full-time but way less experienced than you accomplished. Is it something where you take it? If you're the startup, what's your perspective on fractional executives?

I think that's fine. That sort of to me describes an advisor relationship. It's lightweight enough where someone could actually probably do it and they're not going to be involved in the details because you can't with a quarter of your time run a function or lots of people or do daily standups and all that stuff. To me, that's explicitly an advisor. I know what you're trying to get at, which is how do you try before you buy, right? It's sort of underlying these questions. I think it comes down to reference checking. It comes down to spending time with them, breaking bread, understanding what drives them.

In the last question, it's more the opposite in the sense of we'd be over the moon to have them full-time, but at this stage of their life, they kind of want to do part-time. And what we're thinking is, oh, maybe we can convince them over time that they'll just fall in love with it.

So I wouldn't do it for that reason, but I would say if on a tactical basis, they would actually be helpful with a quarter of their time, they actually drive the business forward, as a lure to try to get them interested, it doesn't quite work. But as a— yeah, it might work, that we recruit them full-time. But more than anything, I need their— I need their time and help. They would actually help us drive the business.

Yeah. And when you were working with Travis before you joined, was it in an advisory capacity or what was— what did that look like?

No, it was, you know, I was at Clout. Um, and yeah, but, you know, for me, the spotlight went off because when we first met, I was like, this is a black car service for rich people. How big could this be? And I didn't really see the vision. When UberX launched, I saw it. I finally was like, I get it now. This is why. And I called him. I was like, okay, I've been wrong. We need to sit down and see if we can figure something out. I moved to San Francisco. I was there for the clout. And that's how it went. Totally.

Since Uber started a decade ago, or whenever it started, a lot has changed in terms of how companies operate. The remote versus Non-remote expectations of a Gen Z or millennial workforce. I'm curious, if Uber started in 2022 with the DNA of Travis and you and some of those early leaders, where would Uber have taken a position? Of course, you guys are still in the game in your respective ways, but what do you expect that would have looked like for Uber in terms of where it would have— Stead on some of these issues?

It's a great question. I mean, it's, uh, what one of the things we did believe in back when the company was started was, you know, quality of person first, location second. So we kind of had this mentality in the beginning of, you know, not for everyone, especially at the— like, if you're CFO of this company that was like really big, you had to be at headquarters. But for, for most functions you can have remote. So we thought that early because we were early users of Zoom. We had a global business to begin with. So the notion of communicating over video was sort of built into the business model. So that was one principle that would've survived, like sort of been, you know, ahead of the game in today's world. I think, you know, it's interesting with the sort of work habits of the next generation, It would definitely be hard to sort of institute a hustle culture in today's environment to the extent we did. We interviewed for that. Like, you know, we would still try to do that. I think, you know, maybe we would have taken sort of a little bit more of a Coinbase approach insofar as, you know, let us— you know, this is what we're selecting for. We're going to be explicit about it. It's not for everybody. and use that to recruit. Because I think right now companies should be what they want, but they need to be explicit about it because people have so much choice.

Of course.

And so, if they're not happy, you're actually going to lose them. The cycles of people leaving jobs are increasing, not decreasing. So, your responsibility as a leader is to sort of say, okay, I want people who are going to be here for as long as I can keep them. So, let me be as explicit as possible about what this job and what this culture is. And people who select in, I'm going to have a better chance of retaining for a long time. But back then you were less explicit about it. These things weren't as high profile as they were. These kinds of issues, work-life balance, all that stuff, no one talked about that.

It's really interesting. You have Coinbase, you have Palantir, Anduril, but these are, I imagine, just much smaller than Uber was in terms of workforce. It's one thing to certainly get to 100 people like-minded, certainly get to 1,000 people like-minded, but once you're— I don't know how big Uber was in the peak, but once you get into tens of thousands of people, it feels hard to just really keep that rigor, hustle, contrarian culture.

Yeah, it's very hard. I think this is part of, again, what I learned, lessons learned, which is For a startup like you are, your company is now— you're a tribe for a long time, right? You're a tribe. And as you get bigger and you get to the scale that we're at, 15,000, 20,000 people, you're a civilization, right? You have everything. You have constituents, you have all kinds of things. And you have to sort of accept that that is going to have some effect on the sort of the tribal sort of messaging of we have to win and some of the rah-rah stuff that you could do. You have to be a little bit more diplomatic. So what companies have done as well, I mean, I would say that people we hired from Facebook still have a lot more of that DNA than Google people did, just culturally. And that's because Mark seems to be very hands-on, involved in the company. But it's hard to do that. You do have to moderate. There's no way you can be a tribe inside a big business That's truly civilization. It just can't be done. But as much as you can hold on to that, the better. And some companies do it better than others. Typically, the leaders who come in, who are hired guns, they can't. They have to go full civilization, full company diplomat. The founders have a shot at keeping it a little more aggressive.

I'm curious, how you think about company storytelling or company comms. Because I feel like that's evolved too, where you have people like Balaji and Mike Solana and others who've really advocated for companies to go direct and build their own messaging. But that means they have to put in the work and become storytellers and go on all the podcasts or create the podcasts or create the distribution. And kind of created this parallel distribution mechanism so they don't go to the previous gatekeepers. Do you think that's something that Uber would have done today? What's your stance on that? Because my understanding was that Uber was fairly quiet and focused on the work itself rather than on the hype.

Yeah, we did not do a great job at comms, obviously. I think we did it in a much more traditional way. of the old school way. So my only answer is like, that didn't work. So yes, when we start the company today, I'd be like, yes, let's— we gotta try something different. Yeah, those things that you mentioned, podcasts and all that stuff, is time-consuming. So maybe it's not the CEO who does it, maybe it's someone else. Like, someone has to have that as a big part of their job to communicate to the world what the company is and isn't. You know, I think that one of the things I saw recently was that Mark Zuckerberg appointed this Nick Clegg guy to be president. of some division of Facebook, which includes communications. Maybe that's a version of that, that he's going to be more visible and be someone who's in charge of doing all the things you're talking about, because someone has to do that work. But the sort of normal channels don't work because, as we know, media has changed dramatically, and therefore you have to be telling your own message. or you're going to be subject to everyone else's filter on what you're doing. So I'm not an extremist on this stuff. I'm just more of a— companies have to adapt to a changing environment. Yeah, totally.

At a high level, from what I'm hearing from you, if I were to project, let's say in that book, the Blitzscaling book, here are the things that Uber absolutely crushed, legendary company, that other companies can take on and then just like any other success story, here are things that we wish we could have done differently. My understanding is what you might say is something along the lines of, hey, be more explicit both internally and externally. Internally, what you stand for, even if it's not going to make everyone happy, that's even better because it self-selects the right people, which is important as you scale. Then be more explicit externally of, hey, we're not going to let other people tell our story or tell us what we stand for or tell us incorrect stuff about how we're operating or what we're doing. We're not going to let that be the final record without us having our voice. And then of course other things like pick the right investors or pick the right partners or whatever it is on that front. Would you edit anything there or anything you'd add onto that?

I'd say one thing. I think we'd tell the story differently just because that didn't work, not because I know what would work. So it's more of a reaction. But the one thing I would add, which I mentioned earlier in the conversation, is you have to make this shift toward big company, or let's call it diplomacy, change in language. Like, you just have to do it. You should be ahead of it. We were behind it. So let me give you an example. One of our cultural values was stepping on toes. And that was what that meant. What that meant, what we meant by that was we wanted younger people to be empowered to bring their ideas to senior people and be heard out. Like, demand that your idea be considered. Just because someone has more tenure doesn't mean they're right. So challenge conventional wisdom. Afterwards, like in 2017, that turned into something else. It turned into this sort of like toe-stepping as this physical act. You're like, no, that's not what it was. So you see the things you did in your early days as a tribe, even just subtle language changes, there could be ways in which you describe the same thing, kind of matter more than you think they do. And you're appealing to a wider audience of people, you have a broader customer base. And so you have to kind of Revert a little bit to the mean that you're serving in a way.

We say a lot internally as well, this idea of what got you here won't get you there. But it's kind of hard to know when one ends and the other starts in terms of like, okay, we've been doing this this whole time. It's been working. Now I guess we can change it, but also it's been working. So that kind of—

Look, I think you could go up until it stops working, but don't try to make it work when you know it's not working anymore. You're like, I want this to keep working. Sort of accept reality. I don't think you have to be super ahead of it, but you have to be responsive to it, maybe I should say at least. Yeah.

We've grown really fast recently, but we do have some people who've been here for quite a bit. We started On Deck in 2017 and company journeys are long, so we're nowhere near the end of even the first chapter. But I'm curious how you think about the multiple different eras of Uber or of a company and you have some people who will go the distance, a lot won't. How do you think about that process of a team changing or evolving or whether it's on a bottoms-up or tops-down level?

How do you think about that? I think employees, over the 3 eras I've been in tech, The likelihood that an employee goes the distance has decreased with every era, partially because there's a lot more money from venture capital going into new companies. There's a lot more founders. There's a lot more of everything, a lot more choice. So, obviously, one of the things that cures that is an increasing stock price because people are like, okay, well, the first grant I got is worth more every year. Then the second grant I got continues to go. So, you layer these vesting schedules on so they have a long-term financial incentive that's plain and easy to understand. But then that means that you're succeeding, right, at doing the stock price. Every company goes through hard times though. So like, okay, what do you do during hard times? I mean, I think you got to identify the people who, you know, are going the distance, make sure you're doing the best to keep them. They're your best ambassadors. They're usually the magnets who attract other people with their, their missionary sort of, um, sort of outlook. And, you know, one could say, well, that's, you know, you're rewarding people who, you know, you know really well because they've been with you longer. You're like, yeah, because, you know, they're the heart and soul of this. They understand the culture. They're going to be the best recruiters. They're going to be whatever. So, but that's what you have to do. You have to really have a tight group around you and try to keep them as long as— and it can't just be money. It has to be sort of motivation. It has to be growth. It has to be— opportunities you're helping them find. Like, I would find them advisory gigs at other companies. Like, do you want to angel invest? Like, as they started to do that, help them sort of expand their scope inside and outside the company. So, they had a lot more attachment to the ecosystem of the company and caring about that. I cared a lot about it, right? I would spend a lot of time with people, especially as they got toward you know, the midterm, you know, 2, 3, 4 years into Uber, making sure I understood what they needed to go the distance and that I was doing it. So it was, you know, and that's why your job as an entrepreneur turns into a management job, whether you like it or not, to a large degree, because you become dependent on these people and you need to spend— put in the time as a manager and as a leader to actually understand and deliver these kinds of things, because that pays off in, you know, in big ways if you're able to keep that core group motivated.

Totally. I want to segue a bit into M&A. I'm curious what your broad-level advice for how you thought about M&A at Uber and when you advise startups who are building M&A functions, what's really important to get right?

M&A, buying companies, is hard to do in a private-to-private setting because Everyone's valuation is dependent on their last round and sort of the argument of who's worth what, assuming you're not paying with cash, is like an ever-present argument. And therefore you end up seeing a lot of talent acquisitions and small deals when a company's clearly failing and they're sort of bailing them out for tech. But in terms of a strong company buying another strong private company, it's really hard. So you just have to accept that the success rate on actually closing a deal is really hard. And then if you do close one, and that doesn't mean you shouldn't try, like we tried to merge with Lyft many times and it was still the right thing to do. I wish we did it. We should have done it. It was this relative value argument that was sort of predominant. But once you do it, you kind of have to decide what you want out of that company. Do you want the leadership to transition after 2 years or do you want them to be part of the effort for the next foreseeable future? And be realistic about that because usually an entrepreneur who you've acquired doesn't want to be not an entrepreneur at your company, right? So being realistic about what you expect from them and what you get with them sort of sets the tone for their whole company, the company you're acquiring, all the employees. And then having a way of checking in and seeing if, like, the best lessons learned are when you look back in acquisition and say, what did we do right and wrong? So that no one ever does this. They buy a company and they forget about it. You know, they miss their metrics, the things like, The people leave, they split up into the company, and no one ever goes back and says, why did that happen? And what would we do different? The best corp dev guys and gals think about that a lot and try in the acquisition process to plan for what this company is gonna look like in 2 or 3 years inside this company. And is it what we want? And is it worth it? And what's the likelihood of success and all that? It's a little bit like FP&A inside of M&A, if that makes sense.

That's really interesting. Don't share anything you shouldn't share, but to the idea of the Lyft-Uber acquisition, I'm curious because a lot of companies have direct competitors that they are worth more than, maybe twice as much or 1.5 or whatever. It's close. They might be listening to this thinking, hey, should I be trying to merge or acquire even if they think they're worth more than they are, etc.? When do you think it makes sense? In order for that to have made sense for you guys, you would have to believe that even if you're giving up a big stake, that smaller stake with Lyft would have been worth much more because together you're just way more powerful. Do you think more companies should be partnering with their competitors or merging with their competitors? What do you think about that?

I generally think there's underconsolidation in private tech. For too long, and you know I'm biased a little bit by this Uber Lyft sort of thing, which like the money, the subsidy wars continued for so much longer that everyone took dilution. Like everyone sort of lost in a way, and the market for riders wasn't quite market driven because of all the subsidies are given. So you didn't really know what was real and what wasn't, what was driven by sort of subsidies, which allowed you to correct. It took a longer time to correct, and like right now Uber's correcting into like what is what are users willing to pay? What do drivers need to make? to, you know, to have this balance. So, but it's so hard to emotionally get over acquiring or merging with a direct competitor. It's so hard on the valuation thing. It's so hard. But I think, I think companies need to try, um, and I think they should do more of it and they should do it earlier.

Yeah.

And it just typically makes more sense because today the biggest businesses have multiple lines of business. They have like lots of execs who are really great. I mean, look at how many The execs at Facebook were great. Several have left. We have David Marcus, Hugo Barr. You had these great execs who were either from acquisitions or who've risen up to be big parts of the business. I really think if you're going to be a generational company, you need to be thinking about that earlier. Yeah, it's really interesting.

One thing you guys thought about as you entered all these markets is, do you Do you build from scratch? Do you partner with the local player? Do you compete with them? Obviously you have the Didi China experience. I'm not sure how much you can share there, but just in general, what did you learn about that process of the build versus buy versus partner?

I mean, we were definitely more of a build company. Uber Eats, self-driving cars, that sort of thing. We did some smart acquisitions, but mostly we built it. And what do I think about that? I mean, it's a mixed bag, right? If I think it would've been right to acquire Lyft, as opposed to building a brand that appealed to the customers that they had. And they're literally, I mean, their customers didn't overlap with ours for a long time because they had a unique brand. It was playful. It was sort of different. It was lighter weight. It was sort of coming UberX up, but we were coming Black Car down. But the build-buy thing, most acquisitions fail, but then look at Instagram and WhatsApp inside of Facebook, look at YouTube inside of Google. So it's just hard to have a one-size-fits-all approach on this. But when you're doing the build-buy analysis, be realistic. That is my advice to leaders and corporate people and finance people. It's like, be realistic.

Right.

Yeah, we could build that in 6 months with 10 engineers. But doesn't your main business need all the engineers it can get? So are you actually going to build this thing in 6 months? And if you don't, have you lost market position because it's going to take you a year longer? And how much is that worth? And being really smart about what would you actually have to do to build this? And if you haven't built that into your plan and you don't do this acquisition, then build it into the plan because that's what you want to do. It's sort of forcing the issue. If you really want to build something, into the plan and really being realistic about it.

Let's say you're advising or you invested in a company and the company has lost its founder. 5 years go by or 10 years went by and the founder's moved on to other things or was pushed out or whatever it is. One answer could be, hey, it's over for you guys. What works there? What advice do you have for turnaround CEOs, I guess, Or CEOs who are trying to lead companies to a new place?

Yeah, I mean, the counterargument to the founder thing is Satya at Microsoft and Tim Cook at Apple. Apple wasn't a forced situation. It was sort of a succession situation. And they've been wildly successful. So what did they do? Well, on the Microsoft side, Satya decided it was going to be more open than closed. You're going to be able to get your Office apps on your iPhone. And that sort of shift in sort of thinking was the opposite of the Ballmer-Gates approach, which, again, the Ballmer-Gates approach may have been right at that point, but the world had changed with mobile. And Satya saw that, and he was right. So you kind of— in a way, you have to be right when you come in if you have a big idea. And then you have to relentlessly pursue it. Like, his thesis was, we got to be more open, more open, more open, more open. And he was right, and he had the sort of technical depth to do it, and he was inspirational. So he changed the culture of Microsoft. So the second thing he did is change culture. Microsoft was very hierarchical and had 18 levels, and they were rigid about who got promoted. He changed it all and made it all much more discretion-based. So he let cream rise to the top, whether it was young or not. So I guess my answer to that, long way of saying it, the short way of saying it is, You've got to come in with a thesis, and the thesis has to be big and transformational. And it may not work, but if it does work, you end up with what Satya did or what Tim Cook did. Now, Tim Cook, people said, remember when he took over, Apple hasn't created anything new in a while. It's not going to succeed. You got your same old iPhone. People are not using iPads anymore. What did he do? He built a massive accessory business, a massive App Store business, like completely massive, right? Bigger than most Fortune 500 companies. And squeezed operational efficiency out of the system, and they're the biggest company in the world. Like, have they invented the new HoloLens thing yet? Maybe not. But he took the business in a direction that worked. And so it's really having a strong point of view, I guess, is my question— is my answer. Yeah.

Fascinating. Zooming out a bit and nearing towards close, Uber is an iconic company, kind of representative of a certain generation in some ways. It's interesting when there's a lot of hoopla around a company or books written or TV shows or movies written. Companies like Facebook or Twitter who are also iconic and emblematic of a certain time period, the leaders of those companies typically have a different story perhaps than the story that gets told. Do you feel any interest in telling your own version of the Uber story in some medium or do you think that There will be a counterstory told there?

You know, the counterstory is being told by a lot of the people who were early on at Uber who are now starting their own companies and building them and talking to hundreds and hundreds of young people about the great things they learned, the best time of their life, here's what they learned. So there is sort of an infiltration of that happening. And then Uber Network's super strong, and I think it'll continue to get stronger. You know, do people care anymore is the question. I don't— you know, I think if you looked at the stats on who bought the recent book or who bought— who's watching the show, it's like you could count it in the low hundreds of thousands of people in a country of 350 million people with a brand that maybe a couple billion people knew about. So I don't— And obviously since 2017, lots of other companies have realized that like workplaces have to be reformed and, like, no company's immune from needing to change and adapt. So, I think it's like, okay, well, yeah, well, there's a lot of— this is not that unique a story anymore.

Yeah.

But, you know, I always reserve the right to tell it, you know, but I haven't yet because we had to bake and see what it became, what was in retrospect. And I'd say the epilogue is being written now. The company is a shell of what it was. And so, you know, one of the investors used to say like we were on the right side of history when Travis and I left the company. You're like, I don't know about that. It looks like it's been the wrong side of history and it's played out. So, you know, without trying to be defensive about it, that's my point of view on it.

Yeah, no, totally. In closing, how are you spending your time now? How do you want to be spending it? Do you have a next big act in you or what's your North Star going forward?

I mean, I have spent the last 4 years working as a kind of a— I would say, like, trying to mold my— what I do around what Bill Campbell did for a lot of young entrepreneurs. He was my coach, he was Steve Jobs' coach, he was Larry Page's coach. I do it a little more commercially and a little more in depth. So I picked a few companies and, and we— that I liked and where the founders and I got along. Gopuff, Brex, Revolut, Q Health, where we had a lot of camaraderie. And I kind of work with them on the things I'm best at: M&A, fundraising, executive hiring, and so on, hypergrowth. And it's like a job that I spend a quarter of my time on per company. And I get a lot out of it because they want these companies have all in hypergrowth. They're all super interesting, all great entrepreneurs. And I invest in them alongside of doing an advisory thing. And it's been really rewarding. It's different than than being a general on the field. You'd be more of a coach, but it's been very rewarding to get the next generation forward.

Yeah, I love that. That's inspiring work. It's a great place to wrap as well. Emil, thanks so much for coming on the podcast. It's been a really fascinating episode. Learned a lot.

It was great to talk to you. Good luck with your hypergrowth. Very impressive.

I'm really happy Thanks for listening to today's episode. Execs is produced by On Deck, where top talent goes to start companies, find their next roles, or invest in their careers. If you're looking to start a company, uplevel your career, or navigate a career transition, I encourage you to visit beyonddeck.com. See you next time. Thanks for listening to Execs.