Travis Kalanick on Building Uber, Fighting China & Losing Control

Key Takeaway

Treat growth as a capacity-management problem: before taking on a major new initiative, write down the problems it will create in the next six months and name the person, time, and capability required to solve each one. If problem creation is outrunning problem solving, pause expansion and clear the backlog. This turns ambition into sustainable execution rather than letting exciting opportunities overwhelm the team.

Episode Overview

Travis Kalanick discusses building Uber in China, competing with Didi through network effects and operational efficiency, and the investor conflict that led to his departure from Uber. He also explains his current company, Atoms, its focus on specialized robotics and physical AI, and the management principles he uses to pursue large-scale industrial automation.

Full Transcript

Transcript of Travis Kalanick on Building Uber, Fighting China & Losing Control from David Senra. Auto-generated from episode audio; may contain minor errors.

I want to start with Aos. Yes. You have a great phrase on the website that I actually love. It's an impressive prayer. He says: "The autonomy of the physical world requires AI for the physical world." "This type of intelligence requires computing power that we have not yet invented, with an efficiency that we cannot yet comprehend, and with deep learning models to understand and act in the physical world that do not yet exist." Tell us what you're building. Let 's begin the mission. It's easier this way.

Physical automation to transform industries. So, you start there. One might think, " It's almost Socratic, what does that mean?" And, in the terms people use today, it's physical AI and robotics to transform industry. And one says, " Okay, well, uh, what is it? A humanoid?" And no, it isn't. It's not... I would n't call myself anti-humanoid. It's just that what we do isn't that. It is specialized robotics; It's not that we make robotics so that anyone can have one. It's more about robotics and AI tackling one industry at a time.

And in the industries where we believe we will achieve massive change. Important changes. And once we're settled, we move on to the next one. And on to the next one. If you do it really well, I like to say that the only limitation to our imagination is management ability. What does that mean? We solve problems every day. If I have to solve many small problems because I don't have much management capacity under my command, we won't achieve much. I will be limited in what part of my imagination can be made possible, real.

But if you have a lot of management skills, a lot of problem-solving ability, then those limitations disappear. So, how do you expand and increase your management capacity? Okay, why don't we take a step back and talk a little bit about... I have a lot of frameworks for this kind of thing. I call one of them the meta-problem. Imagine you have this equation, which is, uh, the derivative of problem solving with respect to time must always be greater than or equal to the derivative of problem creation with respect to time.

And if that ever fails to happen, you have a real problem. I call that the meta-problem. So, what happens is that if you're creating problems faster than you can solve them, then you're pretty much toast. But when you create problems, as in the context of Uber, it would be like saying: let's go to China. "That's creating a problem, isn't it?" The way I see problems is not in a negative way. I think about problems the way a math teacher would. A math teacher with no interesting problems to solve is a sad teacher.

Yeah? So that's a good thing. You have to create interesting things to solve. You want to create problems to solve. You must accurately predict the nature of the problem and your ability and capacity to solve it. You create a problem today, and perhaps you don't understand the nature of the solution you will have to make. You have to predict it. And those problems start to hit the ground in about 6 months, very intensely, or maybe more. So you need to be good at predicting the nature of the problem and saying, "Well, what is my management capacity to solve it?" .

If that equation becomes unbalanced, then you need to stop creating problems while you focus on solving them, so you do n't drown even more, right? Can you give us an example of what happened in China then? Well, China was incredible, but very difficult and, in some ways, impossible to predict. Let's go to China. Sounds fun. It was a super amazing adventure because what happened was that I thought it sounded great. It was probably in 2013 or early 2013. Uber started in 2010. So we were still a startup team.

I got a group of people, original Uber guys, and we stayed in an apartment in China for a week or two, a week and a half, something like that. And we met with everyone we could. In fact, it was when I met Wang Xing in Meituan. And he told me I was crazy. Don't do it. It's the worst idea in history. What was your response when people told you that you were crazy, that it wouldn't work? As if that were the best thing in the world.

Well, there are many threads here. We are exploring several things. In engineering , we call this BFS, breadth-first search. I can't go into more detail; we're covering the breadth of the tree before getting to the bottom of it. We have a cultural value for that at Uber and I included it in our new value system, also at my current company. It's called "super pumped," which is about contagious enthusiasm for difficult things. The more difficult, the stranger, the more complex, any word or superlative you want to put in front of it, the more incredible it will be to solve it, Mhm.

The more excited I get. And the most incredible problems to solve are those that people think are impossible. Sometimes people think something is impossible, they perceive it that way, but it is very possible, and even easy. And there are others that people believe are impossible, that are super difficult, but possible. So that 's how you think about Atoms now, right? When I hear you talk about it and read about it, you say: this is going to be super difficult, but it's possible. Well, Atoms is the name of my company .

We just named it that. It came from a very obscure name, which was done on purpose. Basically, we kept to ourselves in ultra stealth. But the real question is, after leaving Uber, what came next and why? And they are atoms. We only just started calling it that now. I longed for, or had an inclination or affinity for, something that was super difficult. Super complicated. Have you always been like this? Or was it the Uber experience that made you realize how important that was? When did this desire arise?

I've been like that , and I find it funny how you got there, because it's like that feeling when someone tells you something impossible and you think: Really? And then I say: look at this. I've always had that. Just like when I was a kid, I always had a twinkle in my eye for doing something that someone said was crazy. That kind of thing. Did you know when you started, how...there's no way you could have known how difficult it was. Or did you think: this is a thorny problem?

I'm going to... there will be a fight every day after that. It has a complexity that was part of the attraction. I understand. And did you see that from the very beginning ? Yes, from the very first days I knew it was complicated. I didn't quite understand how complicated it was. I'm very curious, what you said was very interesting. You're creating all these problems. Some of the problems you're creating aren't reaching the shore; I think that was the word you used. time to see what the nature of the problem you created is.

So, can you give an example of a problem you create by starting in China, how long it takes to reach the coast, and what happens when it does? Well, what you learn when you go and do what we did in China is that when you take your business to China, you have to start from scratch. Many people think you can take your business anywhere, which, by the way, Uber seems to have patented, if such a thing exists. It's as if we've managed to make cities and countries not matter.

We created a system that was inevitable. But China was different because of how that country works. Everything is different, and that means you have to start from scratch. TRUE? It's like something as simple as, uh, phones, uh, or let's say maps, GPS. Mhm. There is a different GPS system in China than the one we have here. What does that mean? Well, it's different, so if I want to understand how cars move through space, I have to change my GPS system to be able to do it.

Mhm. To understand it. And that's one of the hundred things that are different in China, which means you have to start all over again . So yes, you're starting a new business when you take it to China, and you have to be very receptive, like, "I'm going to learn to do things differently in this very different place," and be excited and interested in how different it is. While most, let's say, Western entrepreneurs who go to China, almost none succeed. Has it had any success? At one time, like Apple.

OK. I would say the two that would come to mind in our area, in our environment. There are others, but in our circle you say, well, Elon definitely did it, right? And Apple definitely did. Tim Apple and Elon, right? Right? Those are the two. I want to talk to you about the main sponsor of this podcast, Ramp. I've been reading a lot about SpaceX lately. SpaceX is one of the most valuable companies in the world, and one of the main themes in SpaceX's history is constantly attacking and questioning costs.

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Were there anyone else besides...were there multiple competitors? We...eventually expanded . So, Uber Black was a thing, much smaller than what Didi was . There was another company called Kuaidi . And we were in a corner doing something niche, which is something very high-end in China, which is very niche, right? An S-Class in China at that time is like, very...it's a small sector. I mean, we were growing, it was fun, but it was a small market. But I think it was in 2014. I think it was '14.

Yes, I think it was '14. That must have been it. Where we basically said, "Okay, let's do ridesharing in China." Nobody had done that. Didi was a taxi company. And for anyone who has used a taxi app, the problem is that you're a second-class citizen, because taxi drivers prefer to be hailed on the street. They don't want to accept rides from an app where they have to give a percentage of their earnings to an intermediary. That's not how it works. So, basically, it served to fill the gaps, but that was its main function.

But we moved on to full-fledged peer-to-peer ridesharing, where anyone driving a car could offer a ride to a citizen in the city. Something that didn't exist at all in China before. Certainly not coordinated by an application. This is now a shared ride, what we used to call peer-to-peer shared rides. Think of, you know, what some would consider Lyft or UberX , that kind of thing in the American context. But we call it the Uber for the people. Then you'd open the app and see red cars.

But we became Chinese. We had a huge and incredible brand there because we cared about and were passionate about the users, the customer, in a way that other companies simply didn't. But the interesting thing about what was happening with Didi was that while we were inventing and innovating, they were copying. And these guys were so good at copying that it was almost an art form. Being able to copy as quickly and fiercely as they did was a warrior's mentality in its own right. But, I like to say that the place to be is like in Braveheart, that is, the warrior, and these guys were pure warriors.

There was no poetry. They weren't creating something new, they were copying, just copying. But almost to a poetic level because of their ability to copy and the speed at which they could do it. Mhm. TRUE? But while they were preparing by copying, it was a very wild thing, half technology and half regulatory arbitrage. Very bold. It took them a while to copy, and while that was happening, growth was vertical. Did Uber do it? Yes, Uber did it. And I would also say that it was so vertical that it almost leaned to the left.

It kind of started to curve, the curve almost bent to the left, you know? And, um...that's how it happened. The opportunity was massive, where basically at some point, probably our top 10 cities were all Chinese cities. That's crazy. On trips. Yes. Not in income. Because trips, instead of costing what they cost in my day, 13 or 15 dollars, whatever , cost like two or three dollars, you know? Yes, I remember we were doing a fundraiser in China; we had to raise money there because we were, well, spending a huge amount of money.

Do you mean they were burning a lot of money? Burning a lot of money. Okay. But we also needed a partner. When we first went to China, everyone told us we needed a partner. And they tell you just like that. We were thinking: what is a partner? They told us: well, that person or entity keeps 50% of your company in China. I asked: Why? Is it the law? They would reply: no, but if you don't , you're totally finished. And I never understood it. Nobody could tell me why I had to do it.

I simply said, "I'm going to try it." "To hell with it." Which is what, again, Apple, Tesla, these people said: "To hell with it." And they simply did. Right ? And in the end we got a partner. But instead of giving up 50% , I think we gave up 7%. And he went to Baidu . But it was because we were receiving a lot of regulatory pressure. And as long as we had a partner on our side, we could be Chinese. Right ? And this is like when you start meeting with ministers in China, you know, up there, at the highest level, someone in China has to vouch for you or things start to get weird.

And that's what the 7% is for. That's what the 7% was for. Understood. Baidu needed... We needed a trustworthy partner inside China, essentially. But I remember , you know, just when we got that partner, of course we were doing this and there was a strike, a pan-European strike of all taxis in all European cities. And at some point I think it was, I think it was in 2015, I believe. July 2015, I think. Um. You know, there were vehicles being set on fire in Paris. You already know.

But it was like in every major city , they simply tried to stop all of this. And what are they protesting against? Progress. So I go and meet with the transport minister in China. And he throws out three newspapers, Western newspapers. Those were old-school newspapers, right? Do you remember them well? Images of this chaos in all these cities. And he says, "This is a problem." And this is not going to, yes, this is not something we will accept. And I said, " Why?" And you know, obviously I knew what , you know, I knew what I was going to say.

And I said, "But these are all Western democracies." And I say, "In Western democracy, as we know, it's a popularity contest. Um, and what that means is that the politician succeeds by being popular. He doesn't succeed when progress comes. And the only way to achieve progress in a democracy is for that politician seeking popularity to feel threatened. When there's a threat of disruption or instability, that's the only time you'll get progress in Western democracy." And I say, " But so what? We're here in China. And it 's totally different." He says, " What do you mean?" "And I say:" Well, the only time I can achieve progress in China is when stability is in harmony with progress.

So, or let's say that progress and that should be harmonized. You will only achieve progress when it is in harmony with stability. And I said it that way , those three words. And that was a big change. Mhm. Know? And completely different. It's like me saying that if there were any indication of instability that we brought to China, they would shut us down immediately. But as long as we create a foundation of stability, progress is very welcome. Progress must be in harmony with stability. And completely different.

So when did they adopt the view, if ever, that Uber was injecting instability into their city or area? They never did. Yes. But at some point they felt we could win. And instead of seeing major problems, for the most part we were treated fairly in the cities, not completely, but for the most part. But what happened was what I would call, what I would say at the time, is that China's war became global. So we were spending, let's say, tens of millions of dollars a month fighting Didi in all these cities.

And the struggle was like, I needed to subsidize travel to gain market share. When I gain market share, there is a network effect, because if I am bigger, my system is more efficient. And if I am more efficient than them, they have to subsidize more than I do to compete with me. So how do I subsidize where, when, and how to gain that efficiency advantage, that network efficiency advantage, to subsidize less than they do? That's why , you know, Lyft is smaller than Uber. Because we were better at this part of the issue, and people do n't really know that's what it takes.

But how do you gain an efficiency advantage? The efficiency advantage begins when someone downloads the application and registers. If it's easier to register on one than the other, you have an efficiency advantage. If it's easier to order a vehicle and have it delivered to you without problems, you have an efficiency advantage. Because you'll have less support. You'll have fewer people, which means you'll get higher completion rates . It's as if the cars move to where the demand is because the driver's app has good ways of guiding drivers to the right place.

That means you have a shorter collection time , an efficiency advantage. Efficiency advantage means you grow faster. Growing faster means you have a larger driver network , which means that wherever you are in the city, you'll get a faster pickup. And it will be cheaper because, well, if there's less downtime for the driver to pick you up, then if he generally tries to optimize his hourly dollars, everything starts to work out. That's the network effect. Then you say, "Okay, how do I get bigger?" Well, I'll make travel very cheap.

That's one way to do it. And if your trips are cheaper than theirs, suddenly your network gets bigger. Your network gives you efficiency, which means you can achieve a lower price without subsidies that the competitor still has to offer. You would make money, a profit where they would have losses, and the robber barons understood this perfectly. Yes, this is... Like you could go to Carnegie... Absolutely. 100%. When you talk about, damn, this is Rockefeller. Absolutely. So I read, I think it was a biography of Turnout.

Yes. Okay, there's a better one that I'll send you . And what it is, is this 1970 book by David Freeman Hawke. It's called " Rockefeller: The Founding Father," John D., the founding father of the Rockefellers. Titan has 800 pages and you learn a lot about his family history. This is like 250 pages of how he built Standard Oil and it's amazing. Yes. It's exactly what you're describing. I want to interrupt you for a second before you return to China. My question for you now is, I spend thousands of dollars a month on Uber and I only use Uber Black SUV.

It's crazy. In a mature market in the United States , in these big cities, I'm using Uber. How would Uber's network effects be reversed? Okay, there are a couple of things. First, a small player competing against Uber has certain advantages. Let's say a small player says, "I'm going to have cheaper trips than the big player ." Understood? The small player, let's say he's 1/10 the size, for example. Their subsidies in absolute terms are approximately 1/10 of the amount. So, if I'm the small one and I'm going to subsidize travel, I'm going to gain market share unless the big one spends 10 times more than me.

Now, the efficiency advantage can make it 7x instead of 10x . Mhm. Understood? But ultimately, when faced with a well- funded competitor, you have to let them grow to a certain point so they feel the weight of their size. So, when they subsidize, it becomes a problem. It hurts them more. I like to talk about situations where, if we have a competitor, we're not sure what's going on because what happens is that you have to guess. When you subsidize, you have to guess: do I have an efficiency advantage over them or not?

You try to be as efficient as possible. But you don't know if you're more efficient than them or not. So you need signs. Mhm. To determine if you are better. One of the ways you could do it completely is to let the competitor reach 50%. So it's 50/50. You have the same network size. Then you would start to see: Is my price lower than theirs while maintaining a 50% market share? Or is my price higher than theirs while maintaining a 50% market share? If I can maintain a 50% market share while having a higher price, then my system is more efficient than theirs.

Mhm. Then I could start adjusting. Because I know they will lose. Because? Because at some point, efficiency outweighs subsidies. What I mean by that is that when you subsidize, you go through enormous growth. And at some point, you become so big that you really can't subsidize much anymore. Even if you make 10 billion trips a year, you can't subsidize two dollars per trip. You would run out of money. That's only 20 billion dollars a year. Nobody is going to fund that. OK. TRUE? And so, as you get bigger and bigger, the amount of subsidy you can actually apply for gets smaller and smaller.

At some point, the amount of subsidy you can realistically apply is less than your efficiency gain from simply being better. Mhm. And then, efficiency trumps subsidies. Any small player in a market has a natural advantage if they are well financed. The point is that you can gain market share very quickly and force the big players to burn money. But why couldn't the big one drown out the smaller, faster competitor? Well, there are ways to reverse it. For example, the other way in which there is asymmetry towards the other side is in the hiring of drivers.

So, for example, I could give subsidies to drivers if I'm the big company. I can give subsidies to drivers that are like, uh, like, uh, $1,000 if you join Uber and do, you know, 100 trips in that first week. Mhm. I could accept that offer. The only way they will be able to keep those drivers is by having to subsidize their entire group of drivers. Although I only took a small amount of them. Mhm. So I'm going to absorb all of their drivers unless they defend their driver base.

There are many little things like this and I'm almost remembering, since it's been 10 years since I did any of this, but I'm trying to remember all the ways it 's asymmetrical in one way or another and yes. You hit the nail on the head, it's this attention to every little detail. So, like when you were even talking about the registration process and how quickly the trip arrives and how easy it is to enter your credit card information and everything else. What I'm thinking about here isn't necessarily about you and Uber in China.

I'm thinking of Rockefeller walking around and saying, " Hey, you guys are putting 50 drops of solder on these barrels, and you're doing it because you think it's 50 so it won't drip. Try 48." They're testing with 48. This is on the damn Titan. They try with 48 and it drips. How about 49? 49 does not drip. And he says, " The first year it only saved us $2,500 a year because of that small reduction. But we were very small. Now it's hundreds of thousands of dollars, and he did that with a thousand different things .

So by the time it reached his scale, you're not competing at all. It's impossible. And that's super important. Now I read Titan after Uber. Okay. And I 'm reading it and I'm thinking, damn, this guy was way more extreme. But the reason is because I had an antitrust lawyer at Uber, and they were being very clear. Like, there are certain things you can do and certain things you can't. They were training and educating me about antitrust law. Yeah. Now, at first, when you hear that and you're just a startup kid, literally just starting out, and you're like , antitrust law, what's that?

I can't wait to have that problem, you know? Uh, but it ends up being obviously very important. Um, but Rockefeller didn't have that. No. But the laws were passed because of him. Of course. But it's like he's the super, people use OG. They use it the wrong way. It means original gangster. He's the OG. OG. I came across one of my all-time favorite quotes when I was reading the book Zero to One. The quote says, "The most powerful pattern I've ever noticed is that successful people find value in unexpected places and do it by thinking about business from fundamental principles rather than formulas." That's exactly what AppLovin has done with its advertising platform.

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So you'll want to get started quickly before all your competitors are on AppLovin. And you can do that by going to applovin.com. That's applovin.com. I think the other thing about monopolies is that there are different ways and different things, because sometimes a monopoly arises because the company is very competitive. Sometimes a monopoly arises because the company is anticompetitive. And they're different. This is interesting. Tell me more about this. Yes, well, where I ended up at Uber, basically the motto was more like whoever serves the customer best gets all the customers.

Very Bezos-esque. That's where we ended up. So you can be highly competitive. And look, we never at Uber got a regulation passed that would hurt a competitor. We would never do that. That's just not how we operated. We never donated to a campaign. Ever. To try to get something passed. You wanted to win because you built the best service. That's right. I'm reading this biography right now . It was published in 1975. It's about the founder of Honda, who was competing in Japan. He founded Honda in 1948.

Japan was in ruins. Yes. And the technology in Japan was really low at that time, so everyone who made motorcycles and cars said, "Let's get together and ask the government not to allow imports." And he said—and he was the only one who voted against it—he said, "No, no," he said, "the way to win is to create superior technology." Yes. Because he said that if we have the best product, that product won't just be profitable in Japan, it will spread all over the world. Much like what you're saying here, it's like, "I don't want protectionism, I want to win because I built the best product and customers are choosing it." Also, remember that what we were overcoming to do what we do was a perfectly anti-competitive system.

Can you explain what a government-sanctioned monopoly, a government-sanctioned cartel called a taxi, is? People don't understand this. Can you explain the environment in which... You started Uber? Let's start with, what is a taxi? Okay, what is a taxi? Um, we'll use New York because it's the best way to explain it. In the early 1900s, there were people who would pick up other citizens who needed a ride around the city and charge them for it. And, um , eventually, the city decided, " Hey, we want this to be licensed and regulated in some way, or at least have traffic rules ." Just traffic rules.

So, you would get a license, but anyone could get one. You'd get that license for free and they'd make sure you weren't a criminal and stuff like that, to which you'd say, "That sounds good." Good idea. "But anyone could get a license and get it for free." A taxi license in New York. And eventually, that number reached, I don't know, something like 13,000. And then those 13,000 people who had licenses, this is , let's say, in the 1920s or 1930s, decided to pressure the city not to issue any more licenses.

And the city, they made some deals, who knows, you know, that time in New York, you know how that worked, but no more licenses. And of course, that was great for those who had them, because as the city grew, there was more and more demand to cross the city, but with a fixed number of licenses, only those who could afford it were allowed to do so. Then the taxi drivers went to the town hall and pressured them again. And the next version of the lobbying was: we want to be able to sell the license to someone else .

So now I have this, now known as a medallion, and it's kind of an artificial scarcity and I can sell it to someone else who wants to get a cash flow. That's an artificially high cash flow because essentially no one is allowed to compete . And then they went to the town hall once again and said they wanted to be able to lease that license to an individual on a daily or weekly basis. And that's the modern taxi system today. When Uber arrived in New York, the driver had a 12-hour shift, 7 days a week.

But there are two 12-hour shifts. Each of those drivers paid $40,000 a year to rent a car part- time. It's crazy. Which means the guy who had the license, whose grandfather got it for free, okay? Is that alright? The guy who has a license, whose grandfather got it for free, is making $80,000 a year renting a car to a taxi driver. And that taxi driver, who pays $40,000 a year for 12 hours a day, he rents a car for $40,000 a year for that privilege, he ends up impoverished.

That's the taxi system . And it's been over 100 years, so it's like Stockholm syndrome or regulatory capture is so damn narrow that the regulators, the difference between the regulator and the taxi company is almost indistinguishable. And it must have been shocking for you to enter a system where you are simply describing corruption. That's right, it's not legalized corruption. So, remember, what is a taxi system? It is a cartel tolerated by the government that prohibits competition. But it would be shocking for you because then you come along with a better product at a better price that customers love.

I've never used anything else since I got Uber. You caught me in 2010 when they started in New York. You've had me ever since. I've never opened another application. Like 16, 17 years old, or however long it was. It's like if I chose to do that, and then the governments say, "No, no. This legalized corruption is good. You, Travis and Uber, get out of here." So what happens is that being anticompetitive is illegal in the United States unless you can get an official or regulator to do it for you, then it's legal.

Quite interesting . We were talking about capitalism before we started recording . And you have some interesting ideas and ways of describing it. I would also say that, you know, this program is a love letter to capitalism. It is very pro-entrepreneurship. I am the son of a Cuban immigrant. I grew up knowing people who arrived here on rafts. Since I was 9 years old, I knew... Exactly. I was obviously born in a very special place if these people risked their lives to get here. And the wealth that this country has created.

What I think should also be pointed out is this crony capitalism, where I don't like the Hondas of the world. Where it's like: "No, no, I want to win because I'm the best, not because I gave you a bunch of money and you shut down my competitors." Exact. That should be reported. So it's super interesting because you say, "Well, in this case, Uber was ...it was the symbol of hypercapitalism in many ways. It kind of embraced all the values ​​and principles of capitalism. But it started with the most important thing, which is that an individual has the right to choose between different providers of a good or service.

It's pro-competition. A consumer has the right to choose between different offers. The other side of that is that an individual can start a business to offer that service or offer. So you say, 'Okay.'" Capitalism at its core is that someone can start a legal business, manufacture a product or service, and offer it to people. And people have the right to choose which one to use. That's capitalism. So the question is: what is anti-capitalism? Anti-capitalism is the restriction that prevents people from starting a business or having the vocation they choose.

Or to individuals not having the right to choose what service or product to buy. In essence, that's what it is. However, people get confused. Sometimes people think something is capitalism when it isn't. It's pretty obvious, you know, anyone who sees this part of the conversation about taxis knows that they're definitely not capitalism. Mhm. But that's why they're not very good and why they're more expensive than necessary. And if people take Ubers today in New York and wonder why it's so expensive. And why it is becoming less and less reliable.

It's because after I left Uber, they started passing a bunch of laws that are turning Uber into the taxi system. I did n't know this. Yes. They have a limit on the number of drivers that can be on Uber. They have turned it into a system of non-transferable licenses . And as people stop driving, the number of Ubers, I think—I could be wrong—but it's something that's either stagnating or decreasing right now . And that's why prices are going up and service is getting worse. But Uber is seen as something capitalist, when in reality the government is restricting it.

This is a...Why? Because of the taxi owners, who want the prices of their licenses to go up again . This is crazy. Have you ever read Atlas Shrugged? Of course, yes. In other words, many people say that what is happening now seems like the scenario , you know, the scenes from that book. It's been recommended to me a million times. There is a group of people, I suppose they have been on the program, who have spoken to me about it privately. And finally I said, "Okay, the twelfth damn person to recommend it to me, I'm finally going to read it." And I looked for information.

I thought, "Wait, this was written between 1946 and 1956, I think, the 10-year period in which she was writing." I thought, "This sounds... the people in this book are exactly the same kind of people as today." Yes, definitely. I agree with that . I mean, the book is about how we have these main drivers and then people who are just trying to restrict their competitiveness and their... I love what you said: what are they protesting? Progress. Yes. But what happens when the people who build progress go on strike?

That's a very fascinating theme throughout the book. Yes, I mean, we get to some pretty interesting places with this kind of thing. In your career, was this the only instance of government corruption you encountered at Uber? Have you come across any? I know you started it, uh, City Storage Systems. Mhm. Cloud Kitchens was at City Storage Systems. Yes. You've now renamed it Atoms. Have you come across...? Because everything about you, everything I love about you, is like, yes, the whole physical world. I think you said that it's...you consider it a calling.

Yes. To digitizing the physical world. I love that you use the word called, though. I think that's really important. Have you come across other ways of...? It's everywhere, but the taxi thing is by far the most intense. Literally, competition... We're talking about anti-competitive things, antitrust laws, Rockefeller and stuff like that . No, no, no. Competition in taxis is illegal. But why do they sell power? They have captured the regulators. Through lobbying, donations, and legalized corruption. And it's not the only industry where this exists. You know, obviously there are many other industries, but from what I've seen, competition is prohibited.

How does the story of China, Didi, and Uber end? Did the government tip the scales in favor of Didi over Uber? Yes, they finally did it. What happened is that China's war became global. And what happened was that their sovereign wealth funds in China began investing billions of dollars in my competitors, Uber's competitors in different regions, to subsidize those regions and drain my resources. Wait, before we continue, tell me your mindset when you realized the game they were playing. Yes, I mean, you say, "Damn, this is real." Are you...are you sleepless?

Are you...? Well, I mean, the whole Uber thing was like a lack of sleep, you know, so this is a new lack of sleep thing. I simply mean, it was something new, but the lack of sleep in general was a constant because I had a global business that was very intense. And very game theory-oriented in the ways I describe, which means he was always active. And strange and crazy things happen in cars at night. Like the first time I was woken up in the middle of the night because there was a shooting from an Uber car.

Do you know what I mean? That's not good. The thing is, what happens in a city, happens in an Uber. And therefore, you are exposed to all the whims of human behavior . Yes, roads are the cardiovascular system of the city. Nothing happens in a city that the roads don't touch. You know, people are people. They do things they shouldn't do. Our goal was to make Uber the safest place in the city, and I think we achieved that. We came pretty close to that. I know they take it very seriously these days, but going back to stress, you wanted that stress, didn't you?

It was fun. Okay, Herb Kelleher, do you know who he is? The founder of Southwest Airlines? Yes, the most successful airline in history, it was profitable for 43 years and you know, he was a gangster, right? He drank a bottle of bourbon a day, smoked cigarettes on airplanes, and was a guy with no filter. I would love for him to still be alive. He would be one of my top guests I'd like to talk to, and I love that he was once being interviewed and they told him, "You go through a lot of stress." "How do you handle it?", and he says, "I don't handle it." "I like it".

I get that same vibe from you. The lifestyle of an entrepreneur, I believe, in its essence. There are a couple of things, but this is one prism, one part, one pillar of it, is that I can endure more pain than the other type. And I will prove it. Once you adopt that lifestyle, yes, I mean, it's a real thing. It's not just that I choose to adopt him. It's the nature of what I 'm doing. So you are embracing a life of adversity and constant overcoming.

And once you see adversity all the time and overcome it, it just becomes normal. The bad thing is that you can get used to adversity. It just becomes very normal. Why is that a bad thing ? Because you almost start to accept it. If something bad happens, you don't even get angry . You say, "Oh, that's interesting." But wouldn't it be beneficial to be so calm like that where...? There are benefits, but you must make sure you do n't get so used to it that it doesn't even bother you anymore.

You can become so zen that nothing affects you. You act, but there's something special about the extra ferocity of feeling annoyed. To be upset about something that is wrong. Yes. Wrong things, what is adversity? What is adversity? Adversity is usually when something bad happens that shouldn't have happened. And they did it to you. It is adversity. Do you know what I mean ? For a farmer, it's like a drought. You know, it's terrible. Or it could be many things. It's possible that someone stole their crops.

It could be...it could be pests. It could be...it could be anything. So you're becoming desensitized to it? Is that what you 're saying? There were parts to saying that once you fully embody the lifestyle of adversity and overcoming it, you should be careful about how easily you get through it. Because there is extra power in being bothered by something that is wrong. You can get too used to bad things happening. Have you ever reached that point in your career? Well, no. I would say that nowadays, there are very few things that really stress me out.

Does that worry you? Of course. So I remember the things that are important. And that's where I channel my ferocity. What is right and what is wrong. You're practically telling me you've been inoculated. My point is against pain. Yes, it's something like there's a Zen that can occur when a warrior has fought for a long time. You can get used to it. Yes, but still, at least from the outside, you still have this madness; I told you that you are the most intense person I have ever met, and I have met almost all of the best founders in the world.

But imagine ferocity with inner calm. Is that what you want or what you 're working on? That's what I have. That's where I am. Yes. You want calm. Inner calm when you're building Uber. That's what you're saying. I 'm just saying that as one undertakes something for longer and longer and does it correctly, I've never heard you use that word. You arrive at that place. You simply arrive at that place. entrepreneurs for longer and longer, I'm going to use that phrase, man. You simply arrive at that place.

Well, I love what you said about pain, because you know, there are a lot of maxims from the history of entrepreneurship that I love. As, I believe that something we both support is trying to win by providing the best service. So, one of my favorite maxims comes from Henry Ford, when he says: "Money comes naturally as a result of service." If you go and read his autobiography, you'll see how he organized the Ford Motor Company. He says, "We're going to provide the highest level of service and I won't...

The money will take care of itself." If I'm just pleasing the customer, the bank account will be fine. "But my favorite maxim from his entire endeavor is: Excellence is the ability to endure pain." " That's exactly what you said." It's 100% Oh, I love that one. That's 100% true. So, once you say that entrepreneurship is the lifestyle of being an entrepreneur, the lifestyle of being an entrepreneur is, uh, this kind of pride that I can endure more pain than the other guy. You say, " Why?" Well, the best example is a world-class marathoner.

At mile 21. Have you ever seen that? Have you ever watched a marathon? Have you ever seen a marathoner at mile 21? Probably on TV. Is that guy smiling ? Hmm. No way. Of course not. Why? Because if he were smiling, if he simply wasn't in pain, there's someone else who is. What 's the difference between feeling pain and not feeling pain? It's that extra push. That extra push means you lose if you don't push into that pain. And that's what excellence is. Excellence is about pushing to the limit, what a human is capable of, their maximum potential.

Because if you don't do it, someone else will. Yes. And then that becomes the standard of excellence. And all human progress is through that push toward excellence, which is a push through pain. If it's not painful, you're clearly not pushing hard enough. And I love that you linked this. Because if you do something that's easy, you're doing something that isn't valuable. If you do something easy, it might be valuable , but you're about to get your ass kicked. Or it might not be valuable. It just depends.

So, you know , easy might be sitting on the beach for six months. Now, it might be valuable to you. I respect that. And that's all fine. Everyone has that choice. That's all fine. But you 're not, you're not, you're not contributing to human progress. And then you say, " Well, that's interesting." So, if somebody sits on the beach for six months, they're not contributing...they're not participating...they're not taking part in human progress. I say, "Well, how could they?" "You say, 'Well, what if they start thinking deeply about life, philosophy, and society and have some truly amazing thoughts?'" " I say, 'Well, did they write them?'" " I say, 'Okay, he wrote them .'" So now he's on the beach writing it.

Mhm. And I say, "Okay, but there are a lot of people doing that." "He has to be better than those other guys if he wants to talk about progress." So now he's actually writing them, damn it. And he is polishing those words to such an extent that they are beautiful and perfect before someone else has that idea and does it himself. And now he feels pain. How long did it take you from leaving Uber, which obviously must have been devastating and heartbreaking, to moving on to the next thing?

Did you sit on the beach for a while? So, what did you actually do? No, it was like 7 months, 6 or 7 months, something like that. And most of it was defending myself against the legal battle. Wait, was the legal warfare criminal? Were they trying to...? It was both civil and criminal, without a doubt. Yes. Yes. Yes. So, you're fighting against that... Yes, it's like corporate cancel culture, the court wars, all that stuff. On the corporate side of all those things. Remember what I said, remember we talked before about how business became politics.

We were talking about this off- camera. Can you talk about it now? Yes, well, something happened in the media in the 2010s. And that's how business became politics. If you think about your favorite politician and go online today. Do you think you'll see many happy things about your favorite politician? I mean, of course not. We know that. Because politicians, basically due to the nature of what they do, engage in a lot of personal attacks and a lot of garbage, and the vast majority of it is simply false.

Although I would say that with some of our current politicians, perhaps much of it is true. But you know, it's a dogfight and the headlines are often not true, which I think we know in politics. What we didn't know in the 2010s, or what was just beginning to happen, was that business was becoming politics. That the headlines you started reading about business were just narratives and often fabrications with a substantial distortion of the truth. And you were the prime example of this. Definitely. I would say yes.

Yes, I would say that too. Yes. Well, you know, if you talk to anyone who knows me, they'd basically say that the difference, especially if we're talking about 10 years ago, between the public persona and the real person couldn't be greater. Well, I can speak to this, I can vouch for it . Yes, and I know that before we started recording, and I've been chasing you for a while. It was at dinner, and then I saw you at Michael Dell's house, and everything else, which is funny, by the way, when you approached us.

I was like, "Do you remember me?" He said, he said, he said: "Yes." I said, "It's time to do the damn show." And you said, "It's time to do the damn show." I love that. But , what I would say is that, as far as founders who really know what they're doing go , yes, your reputation is perfect. Mhm. Impeccable. It's like: "If you're a top entrepreneur, you say great things about Travis." Yes. The only thing I've heard is from the investors. That's why I do n't necessarily think it's coming from the investors, but I'm just saying what I hear.

No, it's interesting because where I am, you know, yes, many times it's from the stands. Now, sometimes investors fall into that category. But when I go to do presentations and fundraisers, I don't feel like you're Travis Kalanick. Come on, brother. I'm just saying. You are Travis himself. Do n't know. Of course. So, you basically have unlimited...So, this is what I was writing to Daniel Ek about me coming to see you, and he wanted ...He said, "You have to get me to talk about fundraising," which we'll touch on in a minute.

But I think we need to touch on something really important because what I loved about our dinner is that you simply interrupted me, which I loved because you had to. But, I was trying to tell you: "Man, listen, there's something weird about the fact that all the content in podcasts that entrepreneurs and founders consume is created by venture capitalists." And you were like...And then I went to say something else, and you cut me off. You put your hand on my face, which is hilarious. You said, "Real founders don't listen to venture capitalists." We need to talk about this.

Yes, yes, that's fine. Because, of course. If your friends are founders, you hear horrific horror stories and investor misconduct all the time that they won't talk about publicly. Mhm. TRUE? You went through one of the worst situations. So, looking back, is it just that when you were doing Uber, you raised money from the wrong people? What? How do you see it now ? And what could you do? What would you say to a young founder who now has to raise a ton of money? I always have to do it, I have to shoot the arrow first, which is that you definitely shouldn't raise Benchmark Capital.

That needs to be made clear. Um, and then, okay, let's get to the important stuff. Um. Look, I think it's very interesting to start with, where, where did it get weird? In other words, basically at the peak. So, 2017 was my problem year, right? I mean, it was always difficult, but this was when everything intensified. And Benchmark was running a war room. They were a tacit activist investor who created a crisis every week. But without. Against you? Yes, against me. Uh, without even mentioning it. Again, there are things I don't know, but the best I can see is that they wanted liquidity and felt that I wouldn't give it to them .

We were already preparing for an IPO, but I didn't tell you. Why didn't you tell them? Mhm. Because we wanted to make sure we had done the right analysis, to be prepared, so we could just say that we were going to do it. And here's how we're going to do it. And Bill Gurley is a bit of a doomsayer. It's always the end of the world. Um, and that forces you to do very strange things if you think the world is always going to end, including trying to get me out.

So instead of dealing with that catastrophizing, let's just do the damn thing. Because, I'll give you many examples, I think in the... We had a fundraising round in 2014, in the middle of 2014. Um, where the last round we did was in August 2013, it was $3.5 billion. That's when we brought in Google and, um, um. Google and TPG are involved in this. And then in mid-2014, that is, 9 months later, that was 3.5 billion. Nine months later, we did a round. Gurley was convinced it was the end of the world.

And we got a raise, and just take your first sheet of terms. Just take it, damn it. And yes, I have a whole philosophy about this, and that is that if you want a round to go well and be quick, you have to have a process. If you simply accept the first sheet of terms, closing the round will actually take longer because there are no alternatives. You have no alternatives, and then everything gets strange. And then the VC will keep pressing, pressing, pressing, pressing, wanting more, more, more, more, more.

And it gets weird to the point where it actually becomes very likely that the deal will simply fall apart . That's why I like to say that I never get attached to a price. I stick to a process. That process is about excellence in fundraising . Anyway, would you explain that process? We'll get to that. Alright . Okay. Don't let me forget. I won't do it. DFS. Good. We're going to have to sit here for 10 hours to cover everything. But he was convinced that, hey, he only accepts the first offer.

Like, just do a $ 6 billion round, I was saying something like: I think you could get a $ 6 billion valuation right now . Nine months have passed since the three and a half. Only accept the first page of terms. Make it happen. Now, if you're a founder who hears that and thinks, "Dude, I hear you." But even if the world were about to end, the best thing you can do is have alternatives. And the deal will, in fact, close faster. So we reached a point where I just didn't want to talk to him anymore.

It's not that if he contacted me I wouldn't talk to him, but I simply didn't try to get involved because it was always the same thing. So, Emil Michael was in charge of this part . He handled much of the investor relations, especially regarding that. Greetings to Emil Michael. That guy is incredibly loyal to you. Well, he's just an amazing guy, not because of loyalty, but because he's an amazing guy, but of course, that's part of it too. And he did it in a genuine and authentic way, trying to handle objections or whatever.

Anyway, two months later, we closed a round at a pre-valuation of 17.5 billion. Wow. So, that's my point. So, when you want to do things right, you have to do things right. And the VCs—not all of them, but many, most of them—are just preoccupied with other things. So, we were already planning things for the IPO . They didn't know. But they never expressed a desire to do so either. Like, hey buddy, you need to go public. It is never mentioned. So, it was like a strange catastrophism mixed with the idea that if you believe the world is going to end and you have something worth a lot of money, you could end up in a strange place, especially when you're a VC, you have no control.

You don't like to be in charge of anything. So now you're saying, damn, my results in life depend on this guy. And you think the world is going to end, but he does n't. You say, you could reach a point where you organize a war room to destroy it. And that's more or less what happened. What is the alternative scenario if you had raised funds only from someone who hadn't done that? Like, I'm just going to make this up, but Founders Fund says that no matter what happens, they will never remove a founder.

They won't do something like a combat war room against them. Well, I think there are two parts. So first I would say that the highest, actually a very high goal for a VC is to do no harm. There are many reasons why that's difficult for a VC. Please elaborate. This is important, man. Nobody talks about this [ __ ]. Everyone wants to leave a mark on the world. And you can believe one thing or another. You want to leave a mark on the world. And the way I think about it is that an operator who runs a company is, if he's good, a grandmaster of chess.

Mhm. Yes, the VC, and also, by the way, that great chess master, this entrepreneurial operator, is playing this chess game between 60 and 80 hours a week. And it's like, he really knows this. And it's like, he knows a lot of plays in advance and just sees things that others don't see and are involved in it too. And the VC is a chess enthusiast. And they review the chess game once every 3 months. And it's like , they try to leave a mark on the way they have an opinion.

They try to leave a mark. Hey, why don't you do this or that? And you say, you know, hey, don't go to Jordan and tell him how to dunk. And definitely don't go with him to tell him how to dribble. But it's difficult because everyone has an opinion. And whatever you believe , you truly believe it. But, if you're not totally immersed in this, fully committed, every day, 12 to 16 hours a day, in this game, you're nothing. But that's hard for most people who aren't in charge to accept.

Why do you think they find it difficult to accept? Because venture capitalists are glamorous, they have a seat at the table and a certain amount of power. You can leave your mark. And, well, one way to look at it is as if you were in the Serengeti and if an antelope limps in the Serengeti, the lion will catch it even if it's not hungry. He can't help it, damn it. It simply is what it is, what it does. And that's the nature of most venture capitalists.

The nature of this is that if you're in the Serengeti and you limp, you'll be eaten . It's simply their nature. And sometimes the lion doesn't even know why . It's like, it's what I do. Yes. So, when you talk to other founders, the younger ones, you tell them that the number one priority is finding an investor who won't cause harm. That would be a very high goal. So what percentage of the time would you say it's possible? 10%. And then the 1% is for help.

But it's difficult. How the hell are they supposed to be of help? However, there are different times to be helpful. Being helpful is in difficult times. That's when you really need real help. TRUE? Being useful is, you know, maybe it's personal. It's like you need epic people, but even then it 's difficult for them to participate because they're not that involved. So, can you explain the excellence in the fundraising process and how you think about the system you developed for this? Yes, and it may change over time, but I certainly have my own approach.

It's interesting because I just finished a fundraiser and it 's curious to see how the world changes. But I think part of what we're seeing now is that we're in a supercycle or a boom time. We are in a cycle of... I don't want to call it a hype cycle, but we are in a very bullish cycle at the moment. Which means that different things happen than if it were an average cycle . When it's average, it's super important to tell a beautiful, woven story, a story where the numbers are intertwined.

It's a beautiful, entertaining, and interesting story. with intertwined analytical numbers . And basically you arrive at what I would call QED. It's like having dissected the chess game to such an extent that it becomes clear what is needed to win and that you have the winning formula. You get to the end of the matter and it's as if it's simply been proven. It's not even a question anymore. It's QED. That's in normal times. And I think that in supercycles, or whatever we want to call what's happening right now.

That rigor is not so important. And if you go overboard with that rigor, it could be too much. Explain that. You hear stories of entrepreneurs who simply sit around a table, have an idea, and make money. That's the opposite of QED. But if you have a two- hour presentation that goes from QED to a supercycle, you should probably cut it down to 45 minutes. Because? I do n't know how to explain it. It just seems like too much. Why are you going so far, friend? What's the...

You'll disqualify yourself from the deal. Something wrong? Yes, you will disqualify yourself from the deal . Why are you so detail-oriented? It's this strange dynamic. It's very funny. That's fine, bro. Know? Perhaps it's also because you're projecting yourself many years into the future. So the more supercycle you are in, the further forward you go, the further into the future you are. And that future cannot be presented so rigidly with numbers. Yes, so when you talk about two hours for it, you don't know. So it's about the theory of the case.

That's probably the way to think about it; it's a mix of supercycle plus the speed at which technology moves and the kind of true exponential inflection point that can occur. You're talking about 3 to 5 years ahead. There is almost no set of numbers today that can prove the matter 5 years into this crazy 100x situation that is likely to occur. So you have to talk about the theory of it in many ways , and maybe that's why it's a little different today. What do your approach to a normal cycle and the supercycle you've just entered have in common?

The normal cycle is QED of 2 hours. What 's something you'll use in both, regular or super? Well, I'm still doing some versions of...my style is QED. And the multiple offers are mandatory, right? Well, I would call it this: QED is the storytelling and then it's like an auction process that you refine. If what you're doing right now needs to be measured based on how many resources you have to do QED and how many negotiation resources you have to manage a full auction. Explain that part to me.

In other words, if I have five rooms running at the same time, I have to have...that's something you do in five simultaneous rooms for a whole week. Where did you get that idea? It was simply the expression of what was right. It's like, if you keep improving something and making it better and better, you'll eventually get there. What was the quality of the business like when you were managing this five-room process? That's the heyday of Uber. The heyday. In other words, you can invest money in this or nothing, nothing even comes close.

No, there are other things, no, there are other things, but it was the heyday of Uber, but the point is that I did it with QED. So I showed at an atomic level how the whole system works. With a very analytical vision, but also a kind of performing art. Because you're telling a story. Okay, explain what's happening in those five rooms then. Five rooms, 12 hours, one week. Who's in the rooms? You don't have to say who they are, but no, it's okay. So, I'm in the $259 checkout room.

Then there's a $100 million room , a $59 million room, and a $25 million room. And there'll be a guy in the room with $25 million who is, uh, who works for somebody who works for me. Right? And what are you all saying in these rooms? We are telling the story. Mhm. That story is the key. Mhm. And now you're having it performed in four rooms at the same time. And there's a deadline, the price is going up. Well, no, it's not that the price is going up.

So, that's the mistake, that's the misunderstanding. Okay. The correct way to do it is to start with a low price. Explain that. So, many entrepreneurs go and say, they really have a...remember I said, attached to a process, not a price. So many entrepreneurs focus on price and not on the process. And we must be careful. It's very easy to get caught up in that. Where you receive some signal that it should be a certain price and you stick to it and then that becomes your price, but you haven't cleared the market.

So you have to be very careful with that. So, you stick to the price, and when I throw out a number, you're on the other side of the table and you offer less, and that's when we start negotiating. TRUE? From my point of view, it's a very bad situation. What you really want is to start with a low price and say, "Look, I don't know how high the price will go, but I know it's at least this much." "And if it's low, the investor says," Okay.

" Now, once they give you that signal, once they lean forward, you say, 'Okay, everything's going well. You've got a bidder.'" And then you move on to the next one. It depends on the nature of the round. If you're doing a winner-takes-all round, you just go to the next person and say what the previous person said, X plus five, whatever. X plus Y. Let's say, X plus five. And that guy does the same thing. Then you go to the next one and now it's X plus five plus five.

And with the next one, X plus five, plus five, plus five. And while all that is happening, it's a winner-takes- all agreement. Mhm. You go back to the first one and say, " Dude, this is going up. It's going up." "And you tell everyone it's going up. That's the winner-takes-all approach. And then you do something like, 'One, two...' When you start to reach the limit, where people get a little... they start to feel the pressure, to sweat . Then you say, 'Okay, one, two, sold.'" And you close the deal , the winner takes all and they keep the agreement.

Yes. But most of today's big deals don't work that way. When you're in several rooms at once on something like this, it's more like: How much would you invest at this price? And how much would you invest, let's say, I'm just making this up, eight billion? And how much would you invest at nine? And how much would you invest at ten? How much would you invest at twelve? How much would you invest at fourteen? Fill out the sheet. You decide how much you would invest at whatever price we end up at.

And you do that with everyone. Is that what you 're doing now? Wait. Slower. Slower. Then you add how much demand I have at each price. So as the price goes up, demand goes down. Now you have your demand curve. And you think, "Okay, I want to raise a billion." " But at a very low price, I have a demand of three billion." At a higher price, I finally have a billion dollars in demand. And I say, "Okay, that's the price at which I could close right now." "Then you go and tell all the people who were left out because their price wasn't high enough." There is less demand at this price, which means that some people did not bid here.

You go and tell them they're outside. And you tell them : "But you could fill out another sheet if you want to make some moves." " So, they fill out the sheet, you do the demand curve again, everything shifts a little to the right, there are other types that are now left out, you do it one more time, then you clean it up and you're done." So, what are you doing now? I'm about to close a deal. Do you want to say how you did it, though?

You don't have to say numbers, but like... I can't, I can't do that. No. Good. I can't do that. OK. I think it's fair. That's only fair. Come back and tell us in a few months and you... Yes, I'll say: "Yes, a couple of years ago, this is how this one came about." You have to let time pass, because it's like you just closed a deal. Do you know what I mean? But I would say I did it a little differently, a little different this time.

I'm very curious about how you protect yourself so that what happened with Benchmark and Uber doesn't happen to you again . So how are you selecting? Is it obviously just the price? Look, you're not accepting the highest bidder. So, how are you choosing your partners? Yes, you also have to be careful, like, um...there may be...you have to be very careful not to fall into a victim mentality. And what I mean by that is what my part was in that dynamic. I was thinking while you were talking, what if we could ask them what they would have liked you to do that you weren't doing?

Maybe say, "Hey, we're about to go public." That probably would have saved me. But also, I didn't kiss anyone's ring. I think Girly wanted to feel like someone close to me, but it never happened . However, feeling close is different from kissing the ring. But...it's similar. Alright . Okay, let's put it in that category. We don't need to get involved in that. So...that's it, there you have it. That's something I definitely could have done differently. Everything would have changed. There were people within the company who became their partners in carrying out the heist.

Those people shouldn't have been there. I understand. Did you suspect them at any point? Yes. Wow. Something was definitely wrong, that's what I would say. Okay, let's put it that way . Every decision I made at Uber stands to this day. Perhaps I wasn't 100% right, but I always had good intentions and acted correctly. Overall, I did the right thing, you know? One of my lawyers put it this way, he made a sports analogy: Do you have chalk on the sole of your shoe? As if you were trying to step out of line or do something wrong.

I told him I never had chalk in my shoe. But to know for sure, you'd need an electron microscope and a slow-motion replay to verify that there's no chalk. The problem was that I ran too close to the line in too many situations, which... When you're big and important, the scrutiny and expectation is that you don't run so close to the line, even if it's correct. And that's something I definitely didn't understand. It comes from what I did before Uber: I was in a very difficult startup.

During the first 4 years without a salary, I ran out of money several times. It was an exhausting routine, I lost all my friends, it was the unluckiest business path of all time. You can't call it bad luck. I ended up selling, but you definitely wouldn't call it lucky. I am very sure of that . Basically, it was so difficult that I had to be epically precise and tough just to pay the bills and buy food the following week. That precision and intensity made Uber what it was, but I was running a $ 70 billion company like someone who thinks he's going to starve to death next week.

That's fascinating. Like a super intense precision, perfection, obsession, because he doesn't know if he'll be able to pay the supermarket bill next week. Did you understand that this was your approach at the time you had this approach? Or did you have to step back, look back, and realize it ? It's probably a bit of both. Yes. But I'm proud of that. At that moment, it was like a source of pride to go all the way . But perhaps without understanding everything in the way I understand it today .

I wonder how much of that is a benefit. I mean, you're one of the most aggressive founders in history. You are wiser, you have more experience now, more access to resources, a better network of contacts. I wonder if this version of yours could compete with that version, or if that aggressiveness is simply what made you create the whole category. Yes, no, I understand. It would be super fun if there was a universe where I could compete against my younger self. That would be incredible. I would absolutely love to.

I'd kick his ass. Are you OK. Now, there will be certain things he does because he's younger, and there's something to that. Remember I talked about, um, the passion for right and wrong. TRUE? For example. There's something to that, but what I also notice today is that most of the things that took me x amount of time 10 years ago, I can now do in x divided by three. And not because I've gained an advantage there. OK? That's a completely different matter. I'm just saying you read my Adam's vision now.

Yes. Okay, that would have taken me. I don't even know if I could have written that back then . Not so well. I can just go with the flow and do it. The core of it was written in an hour and a half. Mhm. You know, that kind of thing. What has made you accelerate now, though? There are different things. So, um, many first-time founders are afraid of failure. But what that does is create a roadblock to progress, preventing you from moving forward because you're stuck.

The psyche surrounding the fear of failure ruins your ability to get there. Well, the fear of failure could get in your way or push you from behind, right? It's like pushing yourself from behind, but in the end you'll never truly be world-class if you're afraid of failure. But how many entrepreneurs have you met who say that their fear of failure is greater than their love of success? I understand that. I'm just saying it will take you far, but it won't take you all the way to the end.

Okay, in that version of Travis, where you run a $70 billion company. I would say that I was leaving behind the fear of failure. Towards the end in 2017? Let's just say we don't have to set a specific date. It's just a specter. It's a...I'm simply leaving that behind because it reminds me of where I come from. It's right before. So, I'm leaving behind the fear of failure. How old were you when you started Uber? 33. 33 and you had a couple of million dollars? Right?

Yes, I put all of that into my friends' startups. OK. I had nothing. Yes, so it's... It's kind of funny. Yes, it was kind of funny. Did that work? Well, I was the first investor in Expensify. Um...there's a health technology company that hasn't gone public yet. It's really funny. Okay, so not many resources , still young. 33, still young. So it makes sense why you felt the way you did. Yes, but it's simply about the background. It's just about what the previous experience was, not my age itself.

It was just the experience she had just come out of. I love where the conversation has gone , because what I hear from you is that there's a central theme that runs through your personality and your approach to building companies. So we 've barely touched on what you're doing now. Let's get into Atom, and you said you wanted to start with the mission that says: physical automation to transform industry and move the world. AI and robotics to totally transform industries, but one industry at a time.

And specialized robotics to do it. For example, if you want to make a thousand pancakes per hour, you wouldn't put a humanoid to do it. If you wanted a car to move down the street, you wouldn't put a humanoid in charge of driving it. I believe humanoids have their place , which we will call low-scale tasks in environments designed for humans. So, for example, you're in a house. The clothes need to be folded. But it's not like you're folding clothes all day. It's one thing, but you'd never buy a robot costing tens of thousands of dollars just to fold clothes, because it's not a big enough problem.

So now you need a machine that can do many different kinds of things around the house. She has to fold laundry, take out the trash, probably wash the dishes; There are a lot of things. But that's a very widespread issue. It needs to be able to do many different things and be in a very human environment. The best format for this is a humanoid. But I will mention the thing about the thousand pancakes per hour. Imagine a humanoid making pancakes; Well, I would do them like a human.

It would be like... Okay? And by the way, if you only make pancakes at home once a week, on a Sunday, because you need a machine that does many things, including making pancakes, that's fine. But if you needed to do a thousand miles an hour, you'd probably need, I don't know. One hundred humanoids in a row doing this. TRUE? In comparison to a very simple iron apparatus where the mass is pushed. It's already hot and is producing maybe up to a hundred pancakes every few minutes.

Mhm. Do you know what I mean? So specialized robotics, machines specialized for the task in question, is more or less how I see what we do. And that's why, on an industrial scale, there is a real change in an industry when the entire process is automated. And then you say, "Okay, I'm already seeing a lot of activity in the food sector." "The idea is, can you get a prepared meal delivered to your home so efficiently that it comes close to the cost of going to the supermarket?" It would be amazing if you could.

It has to be a high-quality meal, of course. But the question there, whether you can pull it off, requires that you have what I would call industrial real estate for food e-commerce. What do I mean by e-commerce of food? We know what e-commerce is. It has Amazon warehouses everywhere. Or main centers, large distribution centers. But online food commerce is a little different. It's a type of warehouse. You need to handle logistics from there. But you also need to do manufacturing. No manufacturing takes place in an Amazon warehouse because everything is manufactured elsewhere.

It is delivered to this large warehouse and then distributed from there. But with food, it has a shelf life of 30 minutes. So manufacturing and logistics have to happen in the same place. And it always has to be 15 minutes away from where you are. So now you have a very different situation where you have real estate in urban and suburban environments that are always 15 minutes away from anyone. So, you have an urban logistics network, a production network, and a logistics network throughout the city.

Which is: I own the real estate. Then I have robots, robotic food production. Because then I eliminate the cost of labor. And then I have robotic logistics. Because right now your $15 bowl that they then deliver to you, somehow became $30. Mjm. Of course, it's expensive to produce, but every time a delivery person makes a delivery, that's another $12. Mjm. Industrial real estate, robotic production, robotic delivery drivers . So, was there a specific reason why you started with food? It simply attracted me. Yeah, I mean , it's like I don't have a list.

Well, first of all, of course I did Uber Eats. So I'm very familiar with this part of things, but nowhere near the atoms needed to do what I just described. Mjm. You know, I like to say that I have a lot of ideas all the time. I mean, I'm an idea factory, but other people have great ideas too. But it's like an idea comes to you, or finds you, if that makes sense. And I like to say, you know, that you have a date with the idea.

Right? Was it a good date? Mjm. Did it go well? How well did you and the idea get along? And it's very much related to who you are, which will be a big part of what idea works for you. You call this finding your sport. Yes, finding your sport or your business soulmate. Mjm. Be in touch with who you are, and then when the right idea comes along, you just know. You just know. I thought I understood how you thought. Yes. And now, you know, we've been talking for several hours.

I think I'm getting a little closer to that. But then I read what you wrote where you simply say, well, look around you , buddy. Everything you see in a city, in a civilization, has been cultivated, extracted, or manufactured. Yes. And then I think, oh, he's like you, you're interested in the details, like when you were describing the Uber sign-up flow recently. But you completely distanced yourself. Yes. Well, I'm going to start with the material components of everything that exists in the world. So, when you look around, everything around you is grown, mined, manufactured, or transported.

And that's how we see the world. And then you say, well, when you think about physical AI, the automation of movement and action in the physical world, you look at what I call the physical AI technology stack. The real estate sector is part of it. For the reasons I have described in relation to food. If you didn't have the industrial scale, what I call high infrastructure, high-performance energy, heavy mechanical systems because you extract air, treat it and reintroduce it. Real estate is a big part of it.

What is a mining company? It's actually the real estate sector. Therefore, the ability to take land and turn it into something productive and that generates progress is something undervalued and poorly understood. And it's definitely a big part of what I would call the physical AI tech stack. If you look around, you know, you can see Tesla and all the things Elon does, it's obvious that real estate is his thing . Or, certainly, his team's. He doesn't talk about it that much, but it's a big part of what goes on.

It has a damn city. A damn city is starting up , isn't it? You know, the head of human resources is basically the mayor of a city he's building, you know what I mean? So, it's something really important, but also, you can go further, which is all we 're seeing in technology. You know, we often talk about how superintelligence is a function of needing energy and needing minerals at the base. Lots of energy. We're talking about data centers now in gigawatts or megawatts, you know. So, I need to have energy and I need to have the minerals .

And then I have those two things and eventually I can get superintelligence. Work hard on those things. But where does the energy come from? You say, "Oh, it comes from the sun." " Okay, but how do you capture it?" Go back to minerals. In other words, the land is the whole damn thing. So, there's a really interesting perspective on how the land plays a role in the future of physical automation , physical AI, and simply autonomy in the physical world is very dependent on it. And that's why mining is so interesting.

You don't own the mines, right? You just make them more productive with cost-effectively employed robots ? Correct. Yes. What we call profitable employment. Which is hilarious, by the way. Yes. But it's like, right now, you know, look, I think, of course, that humanoids will be employed profitably. They're not there yet, but they will be. But right now, the demonstrations are dancing and martial arts. You know, I'm talking about Beijing. There are humanoid Olympics in Beijing and they are running a marathon. You say, okay, they're not there yet.

They're coming . But I kept thinking, man, imagine if you put wheels on them. TRUE? And this goes back to the fact that humanoids are good at some things and not at others. And having a machine specifically designed for the task is important. So, wait, you've said two very interesting things. Your life's work is to digitize the physical world. And then you say that, for atoms, you're going to attack one industry at a time. Mhm. The physical world far surpasses the digital world. Therefore, you almost tripped over our moat.

You didn't trip over him. You chose an endless game. So there's no limit to how much this company can expand. Look, I have a slight problem with infinity, but it goes very, very far. Like the dream...okay, look, the mission for mining is to have more productive mines to boost Earth's industries. Because we can go to a gold mine right now and ask its CEO if he wants 20% more gold per year. Because? Because when you automate it, that 's the result. And you make it cheaper to go to other places and even extract more gold from that mine than you would have obtained before.

So it's about getting more per year, getting more than you would get from the entire mine , plus being able to go and do more mines than you would, because the capital expenditure is much lower. But if you increase raw materials, then you also increase overall industry worldwide, period. And then you could go and automate and improve those industries too, right? If you become really good with minerals, materials, and land, you become good at automating to make the land productive and boosting progress with it; It's like the lever that moves the world.

Exactly. So, if you automate what is the lever that moves the world, it's like the ultra-lever. And it's simply fun. It's really great. If you see a picture of, you know, a machine that when loaded weighs more than 2 million pounds, is the size of a building, and moves autonomously. Pretty cool. The dream, and this is really, well, Elon's wish, actually. But one day he will send missions to asteroids to extract minerals. Yes, perhaps we can help in some way. That would be a lot of fun.

You have mining. You have the food. Transportation. And we call it the mobile base for robots. So, if you have specialized machines that act and move in the physical world, that's what we do. You need a real foundation. You need to automate how they move. You know, some people think of ridesharing when they think of this, but there are a lot of things you 're not thinking about. Like when I was talking to one of the big food suppliers in the US. They supply all the food to, uh, the restaurants.

They spend $3 billion a year on labor that moves pallets with forklifts. This is just a tiny drop in the ocean of all the things that are moving. Right? But what about freight transport? What about package delivery? What about, um, food delivery? So, we talked about that on the food side. Once I knew I had to enter into autonomy to complete the food story, that's when the Atoms idea took shape, beyond just food. One of the things I was telling Daniel Ek that he finds most fascinating about you is your propensity to build a lot of separate companies within one.

Obviously you did it in Uber. Yes. You 're doing it again in Atoms. Yes. Is that natural? Is that what you meant by your " business soulmate"? It's as if you don't want to work on just one product or business. As if you wanted a conglomerate. What are your thoughts on this? This goes back to No, that's not how it works. It is. But it is. Remember, the only limitation to our imagination is management ability. So, the question is twofold. Do you have imagination, and is it good ?

But if you have imagination, and it's good, you'll have interesting ideas that should be made a reality. There are many ideas that perhaps shouldn't be done or that someone else should do, but there will be many ideas that you should do. So, what is Adam's internal organization really like with all these different businesses? For example, does each business have a CEO? Do they report directly to you? How did you actually structure this ? Business unit leader, and you can even have business subunit leaders as well.

You really try to empower them to do their own thing; I see it as alignment at the beginning and responsibility at the end. So, what are we trying to achieve? How are we going to try to achieve it? What do we consider risky and what is the most logical thing to do? And how do we handle responsibility as we go along? And then approach it with a management style that I call the chief problem solver. Which is to dedicate my time to the most impactful problems that are still not being solved.

Is this how you spend your time? Yes. Is that the directive you give to everyone? Yes that's fine. Yes. I have a set number of hours a day, but it's a small fraction of the problems that need to be solved. That's what I'm trying to decipher. How is it that...? flows downwards. Now, everyone has their, let's say, their own sphere. So, they solve problems in that area. So, it flows down, but they are the chief problem solver delegated for their area. Down to the lowest level.

Are you still emphasizing—I've heard you talk about this in the past—hiring and empowering young people? Is this business different from when you were launching new cities for Uber, for example? Where you gave a lot of responsibility to aggressive young people? Okay, again, there are some really interesting ways to do it. I have this concept that I call the line, within the framework of finding the line. So, there is a line. On one side there is order. Lots of structure. Sorry, structure. As you move away from order, you have many rules, a lot of structure, a lot of process, and ultimately, a lot of bureaucracy.

And if you stray too far from that line, you go slowly and people get discouraged. And if you go to the other side of the line, which is chaos, lack of rules, lack of processes, lack of structure, and as you go deeper and deeper into chaos, you also reach a point where you move slowly and people are discouraged. So, that line between order and chaos is innovation at speed and scale. And the job of every leader is to find that line. And it 's not in two dimensions.

It's like in 80 dimensions. Alright? And the best leaders are able to find it. And you know, probably the simplest way to describe this is having the fewest rules without falling into chaos. That's the simplest way to describe it. But if we go back to the launches at Uber. You might think, well, there's a group of 23-year-olds launching cities. What happened at the beginning, in the first 20 or 30 cities, is that I was deeply involved in whether that city was going to launch or not.

But what was happening was someone would come out and say, "Hey, go build a city, create something out of nothing." And there would be some kind of manual there. But much of it was undefined. But nothing was really launched until they got to a price call, because prices in the transport sector are the sum of the entire strategy. And then, in the pricing call, the question arises: well, what are the regulations? What type of car are you going to use because of those regulations? What is the average salary in the city?

Because that's on the driver's side and it's part of the cost, of course. Basically, you review every aspect of the city that relates to transportation. How long does it take to get around there? Where do people go? Eventually you arrive at a price, but that means you have to understand everything. And how you arrive at that price is what matters. So in the first 20 cities I was on price calls; In some of them, man, there were like eight price calls. It could be like eight or ten hours of pricing calls before launching London, for example.

But I never solved the same problem twice. Once we solved it, it became part of the manual. And eventually we get to city 20 and that price call takes 5 minutes. I stopped attending them. It didn't matter anymore. But the point I was trying to make is that you have a 23-year-old who can then go and launch a city. Even at the beginning, when I was still participating in that pricing call, they didn't see me until the pricing call, but they knew I was going to be on that call.

The only rule was that they couldn't launch until I said yes on that pricing call. So they came ready to act on that pricing call and they knew that if they didn't, I would say, "No." And then things go badly for them. And then they put all their effort into making it a success, which means that everything beforehand would be organized to do it right because they want to win. So now I have only one rule: that price call. The fewest possible rules to avoid chaos, because if you didn't have that rule, you'd have 23-year-olds doing crazy things out there.

That's great. It reminded me of another quote I love that you put on Adams' website, which said that chaos is the law of nature and order is man's dream. Mjm. My interpretation of that phrase now, after having spoken with you about this, is that I feel you are imposing order on the chaos of the physical world. That's what your company is trying to do . I almost think it's negentropic, which means, and it's kind of, you could get into a very interesting and energetic debate with certain people about negative entropy.

But civilization is an attempt to locally slow down entropy and perhaps even make it negative. It is about building a structure against the natural tendency towards chaos. That's what civilization is. And so, Adams is essentially the structure for defending civilization and moving it forward towards progress. There's another phrase: when you speak, there are many things you say that remind me of Rockefeller. And in the early days of the oil refining industry , he used that word because he thought it was a chaotic industry. It was just starting out.

This is when the entire oil industry was concentrated solely in Pennsylvania, for God's sake. And he says, "I'm going to bring order to this chaos ." That's the phrase he used. Progress is a kind of organization and structuring of the world towards happiness, freedom, and human transcendence in some way. That's how I see what we're doing, perhaps at the highest level. I think that's an amazing place to end, Travis. It means a lot to me that you took the time. Yes, of course, my friend. Thank you.

Brilliant. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And be sure to listen to my other podcast , Founders. For almost a decade, I obsessively read over 400 biographies of the greatest entrepreneurs in history, looking for ideas you can use in your work. Most of the guests you hear on this show first found me through Founders.