Uber CEO and founder, Travis Kalanick, has been ousted from Uber. This is of course the result of a corporate culture that is incompatible with the times we live in. This dramatic turns of events is ironically, the result of the technology era Kalanick has contributed to establish. Bad CEO manners have existed before. Steve Jobs notoriously called those employees he didn’t like “Bonzos”. He was also known for losing his temper, specially in his first Apple tenure. But that was in a time before social media. These days, CEO and upper management failures can be broadcasted to anyone in a question of seconds. It will be interesting to see whether this event could prompt dissatisfied employees in other companies to do the same. Those with real low moral standards may even lie if they, for example, don’t get the promotion they think they deserve.
The farewell to Kalanick implies a strong signal for investors with a taste for Unicorn meat. It is a strong signal for an IPO. Indeed, Kalanick had to be sacrificed in order to secure a future polemic-free IPO.
Today I was interviewed in E24.com about the departure of Kalanick. This is the English version of that interview.
The resignation of Travis Kalanick was absolutely necessary now because the company is heading for IPO, analyst Salvador Baille believes.
“He has been a very charismatic leader. That he is being ousted is very dramatic,” says Salvador Baille, consultant and analyst within innovation and technology management.
The person he is talking about is Uber’s recently departed boss Travis Kalanick.
Baille describes Kalanick as a typical “aggressive Silicon Valley wonderboy” and points out that he is far from being the only one in history who has had to leave the company he once started.
“The same happened to Steve Jobs, who was kicked off Apple, and Jack Dorsey, who was kicked off Twitter,” says Baille.
– But both came back later. I do not rule out that it can happen to Kalanick too, he adds.
The departure of Kalanick was the result the Uber investors’ pressure. Kalanick has been accused, among other tings, of tolerating a working environment where sexual harassment occurs.
Baille thinks that Kalanick has been under pressure for a long time now.
– Business models like Uber are easy to copy. Growth is the only thing that can secure a future. I’m guessing Kalanick has been very stressed all the time and unable to get into HR-related issues, he says.
The fact that Kalanick is now disappearing can have major consequences for the company’s innovative power, but it was still necessary, says Baille.
“They could not hold him because the company is heading for IPO. Under such circumstances you can not have a boss at the top who has such a reputation. Institutional investors, who will be the first ones to buy shares, don’t want to be associated with these issues. The company had therefore to find someone to blame, remove him, and start over again”, says the analyst.
– Critical who takes over
It has been speculative for a while if Uber will be on the stock exchange. Baille is aware that a stock listing is the next step for the company which, according to Bloomberg, is valued at $ 69 billion.
“They have gone through several investment rounds and the likelihood of a new big round is getting smaller and smaller. I think investors are concerned with first and foremost one thing now: when can they list the company?”
It is likely that the listing will take place as soon as possible once they have replaced a new boss, he believes.
“I think they must get into one that has run companies through IPO processes before. Ideally, he or she should come from outside, and from a similar industry” , Baille says.
“But if they hire a more conservative manager-type boss, the consequence can be that creativity and innovation power may disappear very quickly. At least if he is not visionary enough, he continues.
“It is absolutely critical for the company’s future who it is taking over.
Should Kalanick come back, it’s because the company has come in a bad situation, Baille believes.
“If the strategy does not work and Uber continues to lose money, Kalanick will be able to come in again and be accepted as a hero,” he says.
According to Baille, Uber now loses around $ 1 billion a year, mainly due to structural costs linked to the business model itself and that they are also expanding very quickly.
– Many believe that when the company stops growing, it will become a money printing machine. I have my doubts, says Baille.
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