Trump’s NEW Under Secretary of Defense for Research and Engineering on Growing Uber | Emil Michael

Hey, Upstream listeners. Today on Upstream, we're releasing a conversation I had on Turpentine's show In the Arena in June 2023 with host Jesse Jenae and guest Emil Michael. Emil was formerly Chief Business Officer at Uber and tells stories of some of the most intense moments he saw during the company's rise. Recently, it's been reported that Silicon Valley executives have recommended to President Trump that he choose Emil as Secretary of Transportation. Without further ado, please enjoy the episode.

On our debut episode of In the Arena, we're being transported into a tumultuous period for Uber, told through the eyes of our guest, Emil Michael. I'm also joined by co-host Erik Torenberg, a startup founder, investor, and podcaster. Emil was famously the chief business officer at Uber during their meteoric and frankly incomparable growth from 2013 to 2017, as well as CEO Travis Kalanick's right hand. Few leaders in tech have accomplished so much in terms of raw user and revenue growth, as well as funding success. Also, few leaders have personally experienced So much turmoil.

So I get home or back to the office with Travis, and then Eddy Cue, who is always in the meetings, calls me. He's like, I got to tell you something. We're about to announce a billion-dollar investment in Didi. And this was the same day we had just met with Tim Cook, and he was picking our brain about our China business. And I was, I was like, oh my God, I got played by Tim Cook. Holy cow.

Wow.

Wow. Holy shit. That was my feeling.

Today he joins us to go in depth on the #DeleteUber campaign that gripped the company and frankly social media writ large in early 2017. Personally, I was taken aback by Emil's humility and candor about this painful period, and I enjoyed his reflections on how he might have handled pivotal moments differently, like Uber's unsuccessful bids to acquire rival Lyft.

We are here today joined by a very special guest, Emil Michael, former Chief Business Officer at Uber, one of the most iconic companies of Jesse's and I's entrepreneurial career. And we are very lucky to have you, Emil. Thank you so much for joining In the Arena.

It's great to be here.

So we're, we're gonna jump right in as we do. And we'd really love you to humor us. And we're gonna skip right to a very intense And you're a unique guest in the sense that there are just so many intense moments that we— no one knows where we're going right now because there's so many options. But we're going to jump to when Delete Uber starts trending and there's a big piece about it. And what I'd like you to do, if you will, is try to actually— before you just tell us about that moment, try to recollect Where you— what's actually going on in your day? Like, tell us, because I'd love to understand your true perspective. Like, where are you when you find this out, if you can, if you can remember that? I don't know if you remember that detail, but the more like bringing it to life for us you can, that'd be amazing.

Yeah, for sure. You have President Trump was elected in November of '16, inaugurated January of '17. 7 days after that, He did something like the— I think it was the migrant ban or something. So, you know, banned some form of immigration into the US. And the taxi drivers at JFK decided to do sort of a strike. And there were people protesting at the airport. So this is January 27th, like a week after the nation is, you know, especially San Francisco is is on fire about the world at this point. And I think I'm on vacation in Mexico and I get a call from Travis. I don't— hadn't taken vacation in forever. And I get a call saying, you'll never believe this, but we suspended surge. Remember Uber had surge pricing and it was very controversial. People like, oh my God, you charged me triple price during a snowstorm. Um, and we sort of had for years to try to explain how that was a good thing, that it made sure there were rides available. So we suspended surge during this strike. Um, and one guy who was on Twitter, some blogger, was like, Uber's trying to break the strike. Yeah. Um, and you're like, we weren't trying to break the strike, we were trying to, you know, get protesters home from the airport. It was like an act of goodwill, like no deed No good deed goes unpunished. And, and he said, we should just delete Uber. Um, and then it went—

That was on Twitter. That's a tweet.

It was a tweet and it went incredibly viral. And it was sort of like this, holy cow, what did we do wrong? Um, and you're talking about 500,000 people deleted their Uber app. And that's like—

On that day or like over the course of the—

Over the course of the next 3 days.

Okay.

But I mean, that's still incredibly short.

Yeah. And, you know, Uber, like the revenue per user is really high, right? If you rode Uber 10 times a month at $20, $200, that's a big deal. Hundreds of millions of dollars in lost revenue for something that we're like, how do we— like, what do we do wrong here? And in retrospect, you know, I was there sort of with my phone ringing off the hook trying to talk to people. And it was the most helpless feeling I'd ever had because this thing took off. No matter how you explained it, it didn't matter. People were angry. This thing had gotten out there. It was an easy protest act to pull up your phone, hit, you know, hold down on the Uber app, click the X and delete it. So it was sort of like the ease of protest made it a bigger thing as well. Sort of like the Silicon Valley Bank, you could wire money out right away. Made it quick, more go more quickly. It was that kind of thing. And it was, it was an amazing feeling of like, holy cow, we're in an environment now.

It's like a free fall.

Like it's— Yeah. And you can't explain, you don't have time to explain it and it doesn't matter.

It doesn't even, yeah, explaining it is not even going to help the type of people who are taking that action. So you're on vacation. Are you like, I wanna imagine it, like, are you like literally on the beach and then this is just like, oh my gosh, I like, where's my laptop? Or, or like, I don't know. I just, As someone who's not had any crises that reached this level at all, but have my own crises in entrepreneurial life, I just want to know how you felt and what did you have to do? Were you able to do anything at that point?

I was at dinner at the pool, at a poolside thing, 8 o'clock evening-ish. And I was like, I got to go take this call. And then obviously, like, I never went back to dinner. I had to tell people I was dinner with, hey guys, I gotta roll, get a laptop, you know, spotty coverage in some hotel in Mexico. And then, you know, hit the tweet stream just to see, and then see it getting more angry, more viral, more serious, more widespread. More of my friends who are people I know going, Emil, I can't believe Uber did this, on DMs. And, and then so me then trying to explain to at least people who would knew me, I said like, at least they'll listen to me. And they did. But then, like, that's a small set of people. How do I make 50 phone calls or, you know, 50 emails?

You saved those 50 users.

But, but, but thought that they were messengers. So like, maybe I would amplify this so at least people would understand, um, what had happened when it stops. And it was just, you know, helplessness and anxiousness. Sadness that the employees who worked so hard at Uber, who were doing the right thing, felt that their company was doing the wrong thing because their parents were calling them going like, what are you doing at this company? Because most of these startups are younger people, so they haven't been through as many of these kind of moments, right? So, calling the key leaders to help them understand, it was It was quite a kickoff to what was a bad 2017 for Uber generally.

Totally a kickoff to a totally calm year. So you mentioned something I want to go deeper on, which is internal comms. So when something like this happens, or in Uber's situation, I think all of us know probably too much about the external comms. We know too much relative to the situation, like what was going on in the media and whatnot. But you're mentioning the very real personal situations. You've got young employees who are trying to parse this, trying to explain to their family. What else is going on in internal comms? Like, do you have a Slack that's like blowing up, or does someone create like a #DeleteUber Slack channel to debate it? Like, what else do you deal with internally in a moment like that that would help us imagine what it's really like to be working there?

It's a very difficult situation to deal with something like this because it was so unique. Like, when's the last time you heard of a mass— even today, a mass delete app campaign, right? So, so, you know, you tried to put out your message, like our PR team on Twitter saying, hey, we suspended surge for this reason. We are not trying to do, you know, break the strike. We're not strikebreakers. But no one's listening to that. No one cares what @Uber is saying on Twitter right there. So it was this sort of like scrambling and the weirdest part of it was usually in crises, there's something to do. And there was kind of nothing to do except damage control with the people, like our investors, like what happened, explain to them. And they're like, okay, I get it. What do we do? I'm like, I don't know. What do we do? We tell the world the truth and you sustain it. And like we plan. You know, a future PR thing where you go on TV and talk about it, who knows? But it was one of these, the most weird crises I've ever been in because not only did we do nothing sort of wrong, but there was no way to correct it.

And it's having a real business impact. So it's not even just like a bad press situation. It's like there's a very real business impact. So you're feeling that all of a sudden you're reforecasting. I don't, I don't know. I'm hypothesizing here, but you're all of a sudden people are like, wait, my models are wrong. Like it's like a, It's a business situation, not just, you know, every press situation could be that, but it has a real impact immediately.

Yeah. And then, and I will give Lyft credit for this. That night they donated $1 million to the ACLU. Like, no joke. Within an hour. No joke. And I was like, that is some hardcore, whoa stuff.

Wow.

This is Black Lives Matter.

This is Black Lives Matter.

Media jiu-jitsu.

It's super jiu-jitsu. And they're like, you know, basically delete Uber, come on over to Lyft. It was an amazing kind of move. Yeah.

There's so many layers to this one. And one of them is political as well, which I've thought a lot about personally, just like, what is, how do you even have an appropriate commentary as a company when it's a white-hot political issue? But somehow this is all everything like rolled into one thing. It's like a business problem, it's a press problem. visual, it's affecting people and it's political with Trump and like all these personalities. How do you, do you have to navigate the political stuff internally as well? Like, are people actually fired up about that?

Yeah. I mean, think about this. So then the next, like the very next crisis that happened there was that President Trump invited all the tech leaders to the White House, Mary Barra, you know, and industrial leaders, Mary Barra, the CEO of GM, Elon Musk. Tim Cook, all these folks, and Travis, right? Because Uber was a very important company at this time. And on the heels of that, Uber and Travis became the, you better not go to this Trump thing because, uh, you know, we're going to continue deleting the app thing. So imagine this, you're like, okay, this is a new administration. We have a business that has— can be impacted by transportation regulations, labor regulations, whatever. president's invited you and other CEOs to this thing. Your employee base is going, don't go. Your customers are going, don't go. And you, for some reason, become the focus of this whole 20-person CEO meeting. And, you know, you had— he had to call the president and say, I can't, I can't go, sir, you know, Mr. President. And so you're like, how did this— how do we get here to where, you know, somehow we're the target of The ire of what had happened in that election and our participation in things that other people had done became so glaringly controversial. But yes, and you had people at the company saying like, well, do you ignore the president? Do you ignore your customer? What do you do? So, it was a really unique time, I'd say.

We'll continue our interview in a moment after a word from our sponsors. Hey listeners, it's Erik. If you're looking for more expert-level conversations, but specifically about top negotiation strategies, then I have the perfect podcast recommendation for you. DealCraft: Insights from Great Negotiators, hosted by Jim Sebanias, Harvard Business School professor and renowned negotiation expert. DealCraft features interviews with the world's greatest dealmakers and diplomats, from former Secretary of State Henry Kissinger to Blackstone's Steve Schwarzman, on their most challenging negotiations, from which Jim draws lessons for listeners. Not to mention that The Guardian recently called DealCraft a best podcast pick. New episodes release weekly, and I'd recommend starting with their first episode, which reveals how legendary entertainment attorney John Branca was able to successfully negotiate for Michael Jackson's ownership of his master recordings and the Beatles catalog. Almost unprecedented feats at the time, so don't miss out. Follow DealCraft: Insights from Great Negotiators on Apple Podcasts, Spotify, or wherever you get your podcasts. Hey everyone, Erik here. You know, at Turpentine, we're always looking for ways to streamline our work. That's why we use Notion for all our internal documents. It's been a game-changer for us, and I want to tell you why. Notion is this amazing all-in-one workspace that combines your notes, docs, and projects. But what's really cool is their new Notion AI. It's like having multiple AI tools built right in. You can search, generate, analyze, and chat, all without leaving Notion. What sets Notion AI apart is how it personalizes responses based on your content. It's not just another generic chatbot; it understands the context of your work. Plus, it can search across thousands of docs in seconds, even connecting to tools like Slack and Google Docs. And get this— Notion is used by over half of the Fortune 500 companies. Teams using it send less emails, cancel more meetings, and save time searching for their work. It's designed to keep everyone on the same page while protecting your privacy. Wanna give it a try? Head over to notion.com/upstreampod. That's all lowercase notion.com/upstreampod. You can try Notion for free, and when you use our link, you're supporting our show. Give the powerful, easy-to-use Notion AI a shot today at notion.com/upstreampod.

It's also just incredibly distracting internally. Like, do you feel as an executive like we have so much other stuff to work on? I mean, obviously it's just so important in the first 3 days you talk about it, but does it actually become just like the internal topic for a month and you're like, I wish we could focus on the business or something. I just wonder how that feels when you're there and there's just, you know, growing a business is just hard in general.

Yeah. I mean, these, these sorts of things are totally defocusing because you, whatever you have travel you had planned, you have to cancel whatever sort of planning meetings. You're early in 2016, so you're thinking about the year ahead and everyone else is watching Twitter and TV and reading about this. So like the whole Employee base is distracted. So, it does have a real cost to efficiency and productivity at the company. But the people at the top, well, who else is going to deal with this stuff, right? Who else is going to talk to— go do an impromptu all-hands with a group of people who are scared about what this means for the company? So, that's where your real leadership skills have to kick in and try to find how to allocate your time, how to get— what does getting past this problem look like? How do we not fall so far behind on the productivity that we're trying to do? How do we fix this so next time we're sort of a little more understanding of the environment so you don't trip into something like this again? So, yeah, it's incredibly distracting.

Was there a person who felt incredibly bad because they made the decision that kicked it all off? Was there someone just like cowering in a corner? I just have to know who was just like totally innocent and just like, oh, don't look at me. Like, like I almost broke the company. Um, you know, cause also helping that person, I've had to help again, different contexts, that person through things. Was there one person who was like whole teams that decided?

No, there's one person who innocently Sent out a tweet saying, hey, we are suspending surge pricing due to the problems at JFK. And it was not a senior person because we empowered younger people to do this stuff in terms of whether it was a weather crisis or things like that so that people didn't think we were taking advantage of hurricanes or those kinds of things. And so, We had a whole protocol about doing this and someone did it. And yeah, that person was like, holy cow. And obviously they were not doing the wrong thing, they just got unlucky.

Just a commentary on the times, we're talking about 2017. This was a time where Uber, and there were some other companies who were basically almost punching bags for people who just didn't like tech. They were calling a bunch of nerds like tech bros as if they were doing like cocaine or something all the time, like doing these egregious things. They're just nerds building these companies. And there was— what's different now is tech learned, I feel like the industry built immunity to attacks from inside the company. It would be like less than 1% of employees or just a handful of employees who would go out to journalists and they would concoct this story that was out of line with what was actually happening that was very negative to the company. And I feel like we learned enough from this that we started to build our own internal media, even just on Twitter, like people who would just push back. And that kind of culminated in, Elon is the most strongest example of someone who just says, fuck you, you're wrong. And if you're against the company, you're fired. And I'm going to just contradict you in public. And I feel like if Uber was having those crises in 2023, you could have maybe done something similar, but maybe at the time we just as an industry had to be apologetic because we just didn't have the resources to directly fight back. And that was the advice we were getting, right? Is like, just take it.

Yeah. I mean, there was a turning point in 2014, '15, '16 where the tech press became much more critical and less adulation about startups and more about the challenges in them. And it was a long-term change, but it definitely changed. And at that time, companies didn't have their own channels, their own Twitter followings. They didn't sort of have their internal sort of comms things structured in a way to be responsive to these types of things. So yes, we were caught a little flat-footed, but today I do think— Companies can withstand some of these things, especially when they're not true. They contain them. And then also there's— and this is a bad thing, but people don't trust the media more today than they did 7 years ago. So, everything they hear is taken with a grain of salt. Yeah. And there's a lot of bad sides to that as a country. But right now, at least, there's always time for another version of the story or someone else's point of view on that story. And that often leads people to like, okay, it's a food fight. I don't know who to believe. I'm not going to condemn anyone or praise anyone.

And it seems like the 2 approaches are either the Elon approach or the Travis approach. Either you're totally outside of the media building, heads down, and it seems like they're crushing it, or you're in the media every day and willing to contradict, push back on things that are wrong and make sure that your narrative is getting across.

Yeah. There are a few companies like Brian at Airbnb who just are somehow, because of their talent, able to float above it all. They're just, it's the nicest company. You would never think that anything bad happened in Airbnb. And he just has a persona and a way of talking about his company that really transcends sort of some of this food fight thing that I find really impressive.

I think it's really impressive. I have a— I'm a generally extremely optimistic person, but I have a streak of still concern that people, that just the desire to rip someone off a pedestal is so strong that the higher the pedestal floats, the—

It's just a matter of time for Brian.

Just the fall, the more bones are there to crush at the end. I just really, I really hope that that's completely wrong. I'm an optimist at heart, but it It scares me a little bit that it's just maybe not yet, you know, in a sad kind of way. Hopefully, hopefully that's incorrect.

Hopefully. I mean, look, I joke with people that Elon's Captain America. If you take down Elon, you're taking, you know, the American dream, an immigrant built all these great companies. And yes, he's got things, but yes, we have that nature in our press and so on to take down the top guy or gal, which Which we hope doesn't take down everybody. Then there's no heroes. Then what?

Why don't we transition to a different story? Maybe let's transition to the China one because that one was so high stakes in so many ways. I mean, I'd be scared doing business in China, period, at a high level based on what has happened to other people in China recently. Why don't you take us through being on the ground doing some of the most intense or craziest things that happened there?

Yeah. So in 2014, right, you have to imagine yourself back to almost, you know, uh, 9, 10 years ago now. The optimism of US-China relationships was at its peak. Mark Zuckerberg would go there and try to convince President Xi to get Facebook, uh, there. Uh, Tim Cook was there all the time. I mean, it was literally, it was like, maybe we can open up and there might be a chance where we can do business there. Chinese were, uh, government was thinking about giving banking licenses to Goldman Sachs. And it was this, there was, it was still the same president, but just a different time. And, you know, we had this business that didn't seem sensitive. It wasn't social media. It didn't have sort of prop— you know, any, you know, uh, uh, way of sort of changing what people think about Chinese or the government. So we were sort of allowed to slide through, um, as not really a, you know, tech business or a social media business. And it was amazing because, uh, a lot of Chinese folks wanted to work for an American company because it was just exciting and different. Uh, the mayors in China who care about transportation in their cities, they loved us because they were like, they don't want a monopoly like Didi, but they wanted us. So every time I go to a different city in China, the mayor'd want to meet with me or Travis and like sit down and have tea and talk about Welcome in the city, and do you want this in this building? And what can we do for you? And you're like, this is amazing. Could the competitive environment, however, was like nothing else I've ever seen. I mean, talk about Didi, Didi, which was to make it better, texting our drivers saying Uber's not going to pay you this week to try to cause a rush at our office. You know, with employees and doing stuff like that. Being you know, I didn't love being followed every minute in China when I was there. I didn't love getting the the same hotel room every day, knowing that, you know, feeling like I was being observed in the room and all those things. But yeah, it was wild times out there and good times. And thank God we sold the company to Didi in 2016 because in today's environment, none of this is possible. So those were good times. I mean, during the acquisition, In 60 days. And, and the way I did it was raise $3.5 billion from the public investment fund in Saudi in May of 2016. The next day I called my counterpart at Didi and I said, I'm gonna, you know, we've got $3.5 billion more dollars to, to blow in China if you wanna fight this war, or we could figure out a deal. And like, she immediately came to San Francisco. You know, we kept our phones outside so no one was tapping the phone, shades drawn. I was only allowed in there with her and her whole team until she trusted me enough, and then I was allowed to bring my people to try to come to a deal. And then we met in a secret location in Macau to close the deal with lawyers. We didn't leave for 3 days, high-intensity environment. They didn't want the Chinese regulatory authority knowing about deals, so we had to sign it and close it the same day. And tell our own employees. And it was, it was wild times.

So that has to be kept, that has to be kept super under wraps in every, in every way. Like how, how you just described some of the mechanics, but how do you go about, how do you go about secret keeping on that level? Because we're just talking about, talking about the fates of so many people, you know, governments who do want to know all these details. Like, is there any other besides just whisking lawyers away to Macau? Is there, I just feel like there's more to it. I want to know. I want to know how you keep a deal so big, you know, under wraps? Uh, like, how else— what else goes into that?

I mean, speed is a weapon, right? Speed— the faster you go. Um, and that actually forces negotiators on both sides to actually come to agreements sooner. So it forces— actually, yeah, it's a forcing function. And it was, you know, you had to have lawyers under like triple Double secret NDA, right? And then you had to increasingly over time bring more and more people into the deal and swear them to secrecy. And you know, we kind of got lucky that we got the sixty days without knowing it. But I will I never forget the day that this was announced, and I had to go to our employees in China who were so dedicated. They bled Uber black, and I had to tell them that. We got sold and there were like a room full of crying employees who had just made a ton of money, but were devastatingly sad. And I had Gene, my counterpart there, and I was like, look, they're— I remember saying this, they're not monsters because the competition was so fierce that everyone thought the other side was a monster. It was one of the most wild experiences I ever had. And there were some weird things that happened in China. When you have a Chinese subsidiary, you have to have 2 Chinese citizens sign the docs. So they technically own the company. So I had to locate the 2 people who owned the Uber China company, who, if they absconded, you know, it was a problem. So you had this other effort to do this, to get them in the same place, to get these like Docs with red wax on them. I mean, it was a very, very complicated thing to do in 60 days.

And then this is like, I don't remember when different, when each different chat app comes out, like Signal and all this different stuff, but something I, another like just detail I'm curious about is even just communicating internally. Like, how do you make sure that this stuff is not getting out? And I'm, I don't feel like I'm a super paranoid person, but It just feels hard. It just feels like technically hard to make sure that you're messaging. You don't accidentally put someone on CC, like just stupid stuff, you know? Like, uh, so is there, is there any other mechanics to that? Like, was there a chat app that was, you know, better at the time? Or are you just like on Slack and stuff, just on a channel where you're like, I hope this is really super lock symbol?

Well, so, so Slack hadn't infiltrated Uber yet in 2016.

Right. Okay.

So. People were using Telegram or text. Telegram was a good app for that. But also, I've learned that my emails were like people would send me an email and my answers would be yes, no, or call me. That was it so that no email that I wrote with the details of the deal could be floating around. So, I had to keep a lot of it. And, I had a core team around me that were deal machines. But yes, it's hard to keep that stuff down. But Uber was a pretty secretive company generally and compartmentalized. So we sort of had a head start on that. And Didi didn't want it either because they didn't want their employees to think they lost and they had to buy Uber. So we all had the same incentive.

Yeah, there's no asymmetric. You weren't worried. There was no asymmetric warfare from that component. Everyone had the same motivation. It's just more of a technical thing. Like, uh, as someone who has occasionally put the wrong person on CC, I just, I just feel paranoid.

Yes, no, call me. That's the— Yeah, yeah, exactly.

I'm learning things. I'm learning things because that, yeah, that's honestly, that's a good strategy.

And the, and the acquisition, is it as simple as someone throws out a number, the other party throws out a counter number and you come somewhere in the middle? Or like, what was it actually like?

Oh no. I mean, this is, this is like, you know, The, the, the, you know, Chinese companies are headquartered if they want foreign investment in the Caymans. So you're merging a Caymans corp with a, you know, 2 Caymans corp and in private to private deals, it almost becomes the ratio. What ratio of the resulting company do I get? Right.

It's like a blend, like you're pouring water into a cup and it's like, how much?

Yeah. Yeah.

Got it.

And, you know, you're— there's a lot of chicken there because you're doing subsidies to get riders, you're moving market share. China has, I think, 100 cities with 10 million people or over. The US has like one. So the vastness of China and the amount of expenditure. So there was a lot of incentive for us to get that deal done so we stopped spending money and for them so they could stop subsidizing. Um, to do that. So it all just comes down to the ratio, but, but the complexity of the cross-border deal with the regulatory where, where the entities are was, was serious.

And I, I think we talked in a previous interview that you and Lyft almost got there, um, and that, that was a big missed opportunity for, for both sides.

Twice. Um, I was super in favor of the deal, um, just because Again, the subsidy war was just unhealthy for the system, right? And I got there once and then John Zimmermann blew it from Lyft side because he didn't want to agree to sort of the— usually you acquire a company, the leaders of the company acquire staying on for a couple years. They vest into some amount of what they do. He didn't want to agree to that. Uh, uh, because he didn't trust that we would give him that. It was, for him, it was, you were talking about like hundreds of millions of dollars, uh, upfront and then a few hundred to come. And he, he just didn't, he blew it on that point. And then some other time Travis just didn't want to do it because he thought, you know, we had the upper hand there. And I think, you know, had we done that, the US market share, the US marketplace would've been a lot healthier for rideshare. But it didn't happen. And look at what Lyft's now. Lyft now is trading at $3.5 billion. They raised $8 billion.

I just, I'm going to go super general if you'll humor me. What, like, what takeaways do you have from a human perspective on those 2 deals that don't come to fruition that you just mentioned? Like, it does sound, it, the numbers can work, everything can be good. And a human being who has just bled to start something has to sign on the dotted line. And so have you learned anything as a leader that would make you feel like those deals maybe could happen or you'd know what to say? Or I don't know, I'm just curious.

Yeah, no, totally. I mean, I spend a lot of time thinking about this and I often tell people, don't read these negotiation books because what the negotiation books or what McKinsey tells you about BATNA, Shocking.

McKinsey doesn't have the answer to this? You're blowing my mind.

It's all sort of just half the story. The other half is what is happening with this person on the other side of the table? What is their mental calculus? And their mental calculus includes emotions, feelings of winning or losing, where they are in their life, and so on. Over time, I've really incorporated that into my thinking in negotiations. So what would I have done different with Zimmer in this case? I probably should have gone to his house and sat with him and be like, let's talk about this because this is not the case, man. You built something great and just done. Just went there and met him where he was at emotionally. And it was a money thing too, but just really kind of worked it out. And on the other thing with Travis, I, you know, I probably should have, you know, just said, you know, said, let me illustrate what this world looks like and this world looks like and been pushier about it. But, uh, because he just didn't like those guys.

So it's normal when you spend your time in battle, it's normal to not like, and then basically that, that's, that can be some of the core issues with M&A is like, ultimately then people are like, Well, now we're one. And then, and then you hear about all these flameouts where acquisitions are terrible. And it's usually because at root, the people sitting across the table were like, fuck you, you know? And then you ask those people to all play nice later when they've been, you know, so it makes perfect sense, but it's like a, what can we all learn? Because often, you know, the other side could be positive if those people could all come to that place.

Yeah. And you could, you could ring fence this or that. You're like, here's how we do it. Right. And listen, let's be cold. Let's be business people about this. This makes sense. So now it's just a, you know, who do you want to spend time with or not and how much? So let's just break that problem down into its chunks. And then you might realize like, okay, well, this is probably doable for like a really smart business deal. If this is the combo of what this looks like and that illustration of what this looks like. Um, is really powerful negotiating tools. You know, it would have been in both scenarios.

Helping someone live in that new world, like how, like basically illustrating that new world, like literally, like I'm going to over-exaggerate maybe, but to the extent where you're like, you want a nicer office than the other previous CEO just because you love that office and that's, you're going to feel great if you walk into the building and that's your office. It's like getting to a place where you're like, let's, let's live this world. Um, that makes a lot of sense to me.

Yeah, so it's not a pure and ethereal It's like, it's like what happens every day? Because when you break it down to every day, then you're like, okay, I'm gonna see this guy once every 3 weeks, like, you know, whatever.

Yeah, you're gonna do a meeting together once or whatever. Yeah.

We'll continue our interview in a moment after a word from our sponsors. Hey everyone, Erik here. In this environment, founders need to become profitable faster and do more with smaller teams, especially when it comes to engineering. That's why Sean Lanahan started Squad, a specialized global talent firm for top engineers that will seamlessly integrate with your org. Squad offers rigorously vetted top 1% talent that will actually work hard for you every day. Their engineers work in your time zone, follow your processes, and use your tools. Squad has frontend engineers excelling in TypeScript, React, and Next.js ready to onboard to your team today. For backend, Squad engineers are experts at Node.js, Python, Java, and a range of other languages and frameworks. While it may cost more than the freelancer on Upwork billing you for 40 hours but working only 2, Squad offers premium quality at a fraction of the typical cost, without the headache of assessing for skills and culture fit. Squad takes care of sourcing, legal compliance, and local HR for global talent. Increase your velocity without amping up burn.

Visit choosquad.com and mention Turpentine to skip the I want to segue to the Tim Cook and Apple stories because I know Super Pumped got that wrong. They got a lot of things wrong, most of it wrong.

I thought it was just a documentary. Was it not?

Live footage.

Yeah.

No, no. And we can talk about what, you know, the things they got wrong. You've also talked about it, but maybe let's talk about the Tim Cook and Apple. What made that so interesting, so intense? What'd you learn from that?

Yeah. Well, we, so we had, I would say, 3 meetings with, with Tim Cook and Apple that were, uh, where Travis and I were together. And I don't know if everyone does these meetings with Apple, but they're multi-hour meetings. And I don't know how the CEO of the largest company in the world has that much time to spend, but he did because he liked that we were in China. He liked it that we were doing one of the first apps that was making something change in the real world in real time and generating revenue. So, there was a lot of good— we were doing maps and he was competing with Google Maps. So, we had a lot of relevance to him. And so, there were 2-hour brainstorming meetings and Travis would pace around the deck and all of them were really productive and great. And then, 2 different meetings, weird stuff happened. So, We had, we taught, he was picking our brain in this latest meeting about China, China, China. How are you doing in China, China, China? And we are very open. It's not like you do an NDA with Apple or Tim Cook. You just kind of go talk to Tim Cook. It's not, you know, it's not, you can't, it's harder to ask for an NDA or something like that from a guy like that. So I get home or back to the office with Travis, and then Eddie Q, who is always in the meetings, calls me. He's like, I gotta tell you something. We're about to announce a billion-dollar investment in Didi. And this was the same day we had just met with Tim Cook and he was picking our brain about our China business. And I was, I was like, oh my God, I got played by Tim Cook. Holy cow. Wow. Wow. Holy shit. That was my, my feeling.

How does that feel like? Do you feel like, wow, he's playing 4D chess, or do you just—

Do you reach out to Tim Cook?

Are you like, what the fuck, man?

Do you text him and you're like, WTF?

I mean, yeah, Travis texted him exactly that. He's like, maybe you could have told me. It would have been a courtesy. I still want to share something with you, but, you know, he was like, basically, sorry, guys. Play big boy ball. Welcome to big boy ball.

Wow. But coming back to the people dynamics, like, do you actually feel like that is fair play and that it's just like he made a calculated choice and obviously you're going to trust him less? Or do you feel like it's actually kind of a weird move because who knows what, you know, he needs to do in future rounds with every person he's going to meet? And it feels, it feels a little strange to me, even though sure, super powerful, but I don't know, it seems like not a long-term game kind of move.

Yeah, I, I wouldn't have done that in reverse. Um, And I think that Eddie Q and I had known each other for years. He called me and he knew by the tone of his voice that this was not something he would probably do either. So it was definitely one of those things that I put in my brain to remember and those kinds of things that go, that some people do that and some people don't. And I don't want, I'm not one of them.

And you don't know who they are, like in any given circumstance, you don't know who that person is, you know, because you, so it's just a, uh, and I think that's a, this is another general question, but coming off of, you know, everything that happened in 2017 and everything that happened in general, do you come away from these experiences in business as you go forward? You do many things now, like a little more paranoid. Like, I'm just curious about the, how, how it all hits.

More able to deal with it and more paranoid, right? So I'm more paranoid about Internally, what I really didn't understand that when a company's being sort of attacked from the outside, there's a lot of people inside who sort of rebel against the company. They agree with what the outside people are saying, and that's leaks happen.

You're not one team against the world.

Yes.

Yeah.

Especially when it's repeated and sort of Every day there's something there. And that disunity is very hard to operate against. And so would I do it again? You'd have to sort of deal with the disunity, like get the people out, make really hard decisions really fast, or fix them. And some of these things are harsh, like what Elon did at Twitter. He's been criticized for it. So he took a Slack channel where everyone's complaining about back to work. He's like, okay, Everyone on that, gone, fired. And I know why he did it because of this. He didn't want the internal dissension at any cost because he said, that's going to break the company. On the other hand, I've learned that to just be paranoid about cascading crisis, once something feels vulnerable, so many other people see that vulnerability and want to write or talk about it. So, it's really bad things don't come in ones, they come in like threes or fives. So, you kind of have to be prepared for a sustained sort of situation and you do have to have stronger internal messaging about what you're doing and why and repeat it, repeat it, repeat it, repeat it. But, the worst thing in the world is having your PR team turn against Sort of you, which we had that because their access, their megaphone access, and we just didn't know it till it was too late.

I think a lot about selection filters in the same context of like, how do you— sure, you can go like Elon to that channel of all the people complaining about your company and be like, hey, thanks for outing yourself. Like, you're all fired. That also creates a certain culture after that. You have to worry, obviously people aren't going to do that again. You know, so it was like a one-timer. Usually. But how do you prevent people from coming in the first place? Do you have thoughts?

Who are going to be disloyal during hard times?

Yeah. Comment about selection filters. How do you kind of create that filter coming in? And I'm not just talking about hiring, but can you broadcast a certain message to make sure that the people come are aligned? Did you have an opportunity to do that at Uber, you feel?

I mean, I think, yes, you can do that to a large degree. You'll never be perfect, right? the Brian Armstrong Coinbase memo that he sent out was sort of a version.

Yeah.

Which is a version of, this is who we are. You should know it on the way in. And I think companies need to be smarter about that. We were pretty good about that, but we got so big so fast. We went from 200 employees to 20,000 in 3 years. And in so many countries, in so many different ways that There was no way that filter was going to be strong enough because no one had ever grown that fast, not Google, nobody in terms of number of employees. But I do think you can and should have filters like that. I think it's almost irresponsible to build a company and not have a filter like that these days because you are going to have mismatch. And I do think we're a little bit of a bear market now. So you're a little bit more in the driver's seat to be choosy on who you let in and who you want in. But some of the tone gets set too is, you know, we used to joke, if you're complaining about the cafeteria food, your boss should be fired because you're not being managed well, right? Or, you know, no quinoa, or we're going to have cheap food, or, you know, you have, there are messages you could send by how you spend money and how you do things, which again, sort of attract or repel Right.

There's no amount of corporate values that can get around some of those actions that actually tell people how you feel about things and make them stick around or not.

Zooming out a bit, when you think about the legend of Uber and how it continues to be told and will be told, what do you think is most misunderstood, even from people within tech who, not just people who've only seen the show or something, but people who were around during this time, not at Uber necessarily, but know, within tech? Like, what do you think is, is most misunderstood?

You know, there's this notion that the rule-breaking or bending the rules on ridesharing was, was a bad thing and one shouldn't have done that. And if you think about that, you're like, okay, well, um, if we take the world as it is and you succumb to sort of the sort of small mafias that these taxi, uh, people created, or cartels they did with the politicians and that sort of payola scheme that they had. If you don't break that, well, then you're going to have the old system. And so we broke it, and people are like, why'd you break it? And you're like, well, because this is a better system for everyone. It's better for drivers, better for riders. And guess what? We won. You know why? Because China, India, US, Brazil, Russia, all of them Now legalize ridesharing. Most of the world has listened to their citizens and said, you were right, we were wrong. And so had we not done that and we played by the rules, we would've still been in that world. And, you know, I, I think it's misunderstood that, well, the world moved because we moved it and every country in the world now adopted something that's better for their citizens. And therefore we were vindicated. It was a form of corporate civil disobedience. Like, these were wrong. These were wrong. And, and we were going to disobey them because they were wrong. And we were, we were doing something that was right. And we were vindicated by, you know, ridesharing being legal all over the world, essentially now.

And I, but I feel like in Silicon Valley, the culture at one point prized these things. Like, I do feel like it has been the concept that that's not prized or not good to kind of question the status quo. And just effectively, if there's some statute somewhere that says you didn't do it right, you're wrong. Like, I don't know, it's more shocking. Isn't it more shocking that people in tech think that? Like, I don't know, didn't something like— didn't the snake start eating its own tail or something? It's just strange to even hear you say that that's the misunderstood part. Yeah, because that sounds like the cool part.

I think it's a little bit of this. This sort of narrative, this anti-tech narrative has made that not a prized value. Move fast and break things is now bad. It was good, right? There are these things where, you know, AI is going to do this. Let's stop it. It's bad, you know, not about what good it could do. So there is a little bit more focus on the negative, which I don't understand because our government works slower than it ever has. So you're like, okay, well, should we wait? Like, what do we do? Do we just wait for something to happen? Or do we try to do it?

Do you wish that you could have been a bit more slick? And I say slick in both positive and maybe negative ways, like maybe transcended above it all in the way that you described Brian Chesky, or been a bit more like Elon and just been more aggressive, given that you guys were already thrown in the food fight and it was hard to get outside of it against your will?

I've thought about this a lot. I think it's a really hard question. In some ways, I believe that had we turned the corner a little bit toward being a little more Chesky-like a little earlier, because we went from insurgent to the man really quickly. We were the underdog, And then in like 18 months, we became the overdog, like very fast. And we launched Uber Eats. We're in 92 countries. We're on magazine covers as most, you know, most valuable startup in the world, most fast growing. And, and that made the spotlight shinier. And had we sort of like smooth some of the edges a bit and realized that like, hey, we're now, we're going to, people aren't going to rooting for us anymore. They're rooting against us, so we have to take a different approach, um, was probably the better answer at that moment.

We were talking about how, you know, you had government pushback at times. We were talking off air how at one point you had a SWAT team descend in one of your regions. Like, tell us about one of the crazy, uh, crazy experiences there.

And this relates to sort of the things that people understand about Uber. Like, the resistance was unbelievable, right? This Las Vegas When we launched in Las Vegas, a couple of police officers sort of ordered a car. This poor guy kind of rolls up to pick them up in a Toyota Camry, and they have a fully dressed SWAT team with machine guns take him out of the car to arrest him. And you're like, what? The fear that caused. In Italy, the taxi mafias were so serious, they put pictures of our female general manager on the Light posting, saying you know you should hurt this person essentially all over the city. You know all kinds of crazy rules in in South Korea. It was elite. It was legal for foreigners to take a rideshare, but not legal for Koreans to take a rideshare. So if a Korean got in an Uber, they would like arrest the Korean person. Just you know you know LA had. rules on the color of socks you could wear. Germany had a rule that if you took someone to the airport, you couldn't take another passenger back to the city. You had to go all the way back to the city and then go back to the airport. And it was called the return to base rule to protect the limo industry. I mean, you had all kinds of rules that you were facing that were kind of insane. And we were— Yeah, we were not following these rules because they were dumb and they were bad for everybody.

Wow.

In closing here, Jesse and I as entrepreneurs have both had our own versions of crises where some people stepped up and were super loyal and some people stabbed us in the back in our own way. You certainly had that at a much bigger scale. I'm curious, when you advise people who've gone through versions of what I just discussed. Do you say, hey, do you advise them, hey, never think about it again? Just like move on with life? Like, it's just business, it happens? Do you say like, hey, use that as motivation to like beat them in whatever you do next? Like, how do you get over when someone like really fucks you over?

It's really hard, especially if it's your life's work, or it's sort of a mission that you were, that you were on that was taken from you, or so much money was taken. Yeah. So significantly diverted because Because of that. So number one, I tell people, just again, make this filter on the front end a lot better. It forces you that, that at least you should do. That's forward-looking. Backward-looking, you have a responsibility to make sure that this doesn't happen to anyone else if possible. And so if this person or this firm is out there behaving this way, you should be a resource for other entrepreneurs about how they behave. That's just how it is and it's all factual. Then maybe these firms will change if they know that there's consequences, or these people will change if there's consequences to their actions. I mean, I don't think it's about vindictiveness, but it is about making sure we're paying it forward to the next people so it doesn't happen to them. And that's sort of the mindset I would put them in, and that's more constructive.

You've been very constructive in this interview. Emil, thank you so much for coming on In the Arena.

Upstream with Erik Torenberg is a show from Turpentine, the podcast network behind Moment of Zen and Cognitive Revolution. If you liked the episode, please leave a review in the Apple Store. Hey everyone, Erik here. At Turpentine, we're building the first media outlet for tech people by tech people. We're the network behind the show you're listening to right now. We have a slate of hit shows across a range of topics and industries, from our AI and investing cluster of podcasts to shows that drive the conversation in tech with the most interesting thinkers, founders, investors, and influencers, like Econ 102 with Noah Smith. We're launching new shows every week, and we're looking for industry-leading sponsors. If you think that might be you and your company, email me at erikaterpin@podcast.com. That's erik@turpentine.co, and let's partner together.