Hey! Justin here, and welcome to another 🔒 premium subscriber-only edition 🔒 of Just Go Grind. Free subscribers have complete access to 1-2 editions per month. I spend 20+ hours researching and writing about one world-class founder each week, sharing their story and best insights with you. Thank you to the 1,127 of you who joined since the last edition and all 16,693 subscribers!

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On to today’s piece!

Travis Kalanick

Travis Kalanick is most well-known for being the Co-founder of Uber, one of the most innovative and disruptive startups since its founding in 2009, and a company that was worth tens of billions of dollars by the time of his departure.

I remember the early days of using Uber and it felt like magic being able to tap on your phone and have a car show up in 5 minutes.

As of this writing, I haven’t owned a car in more than 5 years, even while living in Los Angeles, largely due to the availability of Uber.

But it’s also a company with a past that many would like to forget, riddled with scandals, PR nightmares, and a history of a toxic culture that’s been written about publicly ad nauseam.

The story of the company was even made into a book and a SHOWTIME series called Super Pumped: The Battle for Uber.

Today’s deep dive focuses on Travis himself while telling the broader story of Uber until his departure, with many of the details and insights most people haven’t heard about.

Travis, in many ways, has had to pay for his sins at Uber, many people would say not enough, and yet, I don’t think Uber could’ve existed without him. Furthermore, few people could’ve accomplished what he did. This is what I find most fascinating.

So, who is Travis Kalanick, what shaped him, and how did he build a company that disrupted an entire industry, one with highly entrenched incumbents who were incentivized mightily against change?

Let’s get to it.

Early Days

Travis was born in Northridge, California in 1976.

His dad was a civil engineer and his mom was an ad sales executive.

Growing up, he mentioned that his mom told him every day, “Do your best” and that he could do anything or be anything he wanted.

He certainly seemed to take that to heart as he was highly ambitious from an early age and, as he would say later, he never lacked self-belief.

In the 6th grade, Travis started learning how to code.

By high school, he was selling Cutco knives, even making $20,000 in one summer.

Those two experiences, learning to code and selling knives, set the foundation for later companies he’d start, where his variety of skill sets, combined with his tenacity, allowed him to succeed.

Prior to starting college, Travis scored 1580 out of 1600 on his SAT, giving him the pick of essentially any college he wanted.

He chose to stay near home, attending UCLA, where he’d start his first company at 18 years old, partnering with another student’s father to create an SAT prep company called New Way Academy.

The first student Travis tutored improved his score by 400 points and they were off to the races, with his business partner finding more students to tutor through the Korean church, where there were many parents eager to have their kids improve their scores.

One summer while at UCLA, Travis actually did an internship at BCG.

It didn’t go well.

He was basically walking around like he was a Partner, but he was only a summer associate.

He was that guy.

And the entrepreneurial bug hit him hard. It was clear he wasn’t meant for the likes of a consulting firm, he was meant to build companies.

The next company?

It was a memorable experience, to say the least, and it built in him a view of venture capitalists that would stick with him for years to come.

Scour

Travis dropped out of UCLA in 1998 to work at a company called Scour with a classmate, Vince Busam, and a few others.

Travis claims he was a Co-founder, while others dispute this, but nonetheless, it was Travis and a handful of others working on the company that was doing peer-to-peer file sharing and was described as a multimedia search engine.

The role Travis adopted was that of sales and marketing and, while the company grew, they were running out of cash when they got connected through a friend to two venture capitalists - Ronald Burkle and Michael Ovitz.

For those who don’t know them, those were two heavy hitters.

Burkle is a billionaire private equity investor and Ovitz is a talent agent who started CAA and was at one point in time arguably the most powerful man in Hollywood.

Travis and his business partners were obviously not nearly as experienced, just a bunch of 20-somethings who hadn’t really built much yet.

And they badly needed the funding.

So they agreed to an investment deal that gave up 51% of the company, in common stock, evenly split between Burkle and Ovitz.

But it had a 30-day closing term, so Travis and his partners wouldn’t receive the money just yet, they only had an agreement to eventually get funding, one that came with a no-shop clause so they couldn’t talk to other investors in that time.

As time went on, while they were desperately running out of money, Burkle and Ovitz were wavering on their terms and wanted better ones knowing they were negotiating from a place of strength, and Scour had no choice but to search for funding elsewhere.

3 days after they did so, Scour got sued for breach of contract.

That’s right, Burkle and Michael sued Scour to get them to take their money.

As the drama unfolded, Ovitz distanced himself from Scour, and then, in 2000, the hammer really dropped.

The Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA), and the National Music Publishers Association (NMPA) also brought a lawsuit against Scour.

And the size of this lawsuit?

$250 billion.

Yes, that’s right, billion with a “b.”

They alleged that Scour had infringed on copyright.

Scour had no choice but to declare Chapter 11 bankruptcy. They paid the associations $1 million cash, turned the technology off, and sold their company in a courtroom in a matter of 20 minutes.

But with his next company, Travis would get his revenge.

Red Swoosh

Red Swoosh, Travis’s next company, was started in 2001 with his co-founder Michael Todd and was another peer-to-peer file-sharing company that turned the 33 litigants that sued him into his customers.

How sweet that must have been for Travis.

Red Swoosh’s technology would eventually be on well over 100 million computers.

But that would take years of hard work to get there and was, as Travis described, 4-5 years too early.

It was also a brutal experience for Travis, constantly getting rejected by potential investors and customers while in his words getting “100 nos per day.”

The company was constantly running out of money, he didn’t take a salary for the first 4 years, and he had to move back in with his parents for a year to keep the company going. All without knowing if the company would survive.

In April 2006, Travis took his team to Thailand for a while to save money by living in a place with a lower cost of living.

All of this in an effort to stay alive.

Fortunately for them, Mark Cuban, the billionaire owner of the Dallas Mavericks, ended up investing at a critical moment.

In 6 years, Travis raised about $1.7 million for Red Swoosh, and in 2007 he sold the company to a competitor, Akamai, for around $19 million, netting Travis a few million dollars.

Years later, he’d describe why he ended up selling Red Swoosh when he did:

While others in the industry would describe this outcome later on as a “single,” as compared to the billion-dollar outcomes VCs are looking for, this was a home run for Travis after years of hard work and him being on the verge of a mental breakdown.

After this experience, fighting tooth and nail for 6 years at Red Swoosh and 4 years at Scour, he needed a break.

Flush with cash from the sale of Red Swoosh, Travis started angel investing, traveling the world, and putting himself in a position to start what he’s now known for today - Uber.

The JamPad

After selling Red Swoosh, Travis got a house in the Castro District in San Francisco.

He started angel investing and often used his house, which he called The JamPad, as a place to talk through ideas with founders and help them solve problems - day or night.

The house even had its own Twitter account.

It was all about ideas, building things together, and finding ways to solve problems.

In one talk Travis gave to a group of entrepreneurs, he gave them some advice on hiring:

Travis also started a blog and even wrote a blog post back in March 2009 about raising a seed round.

And he also helped a lot of companies when the VCs want to get rid of them - he made sure that didn’t happen - which is interesting for later in our story.

He talked about one instance, in particular:

And he views himself at this time as a curator of entrepreneurs, driven by his curiosity:

In the same talk above, he mentions how he’s a numbers guy, something that would certainly help in his next venture:

Travis ended up angel investing in about 10 companies, basically investing all the money he could.

And how did he select companies?

He was primarily looking for two things:

1. Was this an entrepreneur that he could see himself starting a company with

2. Was the idea they’re working on exciting to him, disruptive, and innovative

Fun fact, he was written out of a scene in The Social Network, where in real life he met Mark Zuckerberg for the first time:

During his time angel investing from The Jampad, whenever Travis was asked by friends the typical, “How is it going?” All he could speak to was the companies he invested in, not his own, and he missed being in the game, he was itching for something of his own again.

Soon enough, with the help of Garrett Camp, he’d be back in the game.

Starting Uber

Travis and Garrett Camp, who had sold StumbleUpon to eBay in May 2007 for $75 million, were talking about ideas at LeWeb, a technology conference in Paris, in late 2008.

They were jamming on ideas every night, all lifestyle businesses as Travis would describe, with one problem that stood out:

The thought was to buy 10 S Classes, hire 20 drivers, and rent a parking garage so they could create a service that allowed you to press a button on your phone and get a car.

Travis was against owning the assets but liked the idea of on-demand car service.

As Travis would say, Garrett brought the classy and elegant components to the company and Travis brought the efficiency.

That word, efficiency, comes up again and again when you research Travis. He obsesses over it, something that allowed Uber to succeed.

But the company wasn’t called Uber initially, it was called UberCab.

And, neither Travis nor Garrett wanted to run the company:

Pretty low-tech?

Oh, how wrong Travis would end up being.

They did their first test of the product in January 2010 with 3 cars in New York and a few people using it.

It was essentially a black car service with the push of a button.

In the early days, Garrett was handling the consumer side of things and Travis was figuring out the supply side - getting drivers on board.

Travis filled out an Excel sheet and started dialing for dollars. He went to Google and typed in SF limousine or chauffeur. With the first 10 guys he called, 3 hung up, a few listened for 45 seconds and hung out, and 3 agreed to meet which, for cold calling, was actually a high number.

It was encouraging and they knew they had something.

Travis continued to work with Garrett and his friend Oscar, but they needed a General Manager, because, like I mentioned, they weren’t looking to run the company full-time themselves.

So Travis tweeted this out:

And he got an answer:

Replying to that tweet, plus you know, years of hard work and all that, would eventually make Ryan Graves a billionaire.

But let’s not get ahead of ourselves, my friend.

Ryan started on March 1st, 2010 and they launched in San Francisco on May 31st, 2010, with Ryan as CEO.

In the beginning, you needed a special code to get access and Travis was constantly getting texts from friends asking for a code. Of course, they’d quickly evolve from that, and along with Garrett, they’d invite friends to the platform, with Ryan attending tech events to signup more people.

In October 2010, UberCab closed an angel round, but even with the previous successes of Travis and Garrett, it was a challenge:

The $1.25 million round would be led by First Round Capital and also include Lowercase Capital, Founder Collective, and a number of angel investors.

10 months after Ryan started as CEO, Travis stepped in and took over the position in December of 2010, not long after UberCab had gotten a cease and desist letter on October 20th from the San Francisco Metro Transit Authority & the Public Utilities Commission of California.

Travis relished the cease and desist letter because he knew it confirmed they were innovating, and he was up for a challenge:

Within 5 days of receiving that letter, UberCab had changed its name to Uber, to avoid any appearance of being a taxi company.

And they paid a pretty penny for it, buying the Uber.com domain from Universal Music Group for 2% of the company, shares which Uber later bought back for $1 million.

I’ll bet UMG regrets that!

A few months later, Travis would secure a critical investment providing a stamp of approval for Uber.

“Because they’re the best.”

In February 2011, Travis raised $11.5 million from Benchmark Capital, adding to an investor base that included the likes of First Round Capital, Lowercase Capital, and a number of notable angel investors.

The round valued Uber at $60 million.

Asked why he chose Benchmark, he gave a simple response: “Because they’re the best.”

In an interview in August of 2011, Travis describes his early ambitions:

In the same interview, he was asked about Uber’s future expansion, offering up these thoughts:

And it’s clear from the start, he was in it to win:

The opportunity for them is massive and Travis knows it.

He explained just that when talking about the potential for Uber in New York City:

In August 2011, Uber was in SF, Seattle, and NYC, with expansion plans in the next few months to Chicago, Boston, and DC.

By New Years Eve in 2011, they’d be in 8 cities, and at this point, they already had some drivers who were making $3,000 per week driving with Uber.

To grow the number of drivers, Uber gave them iPhones, essentially leasing them for around $40.

And Travis built the team to make sure they could handle the logistics:

Late that year they also raise a $37 million Series B led by Menlo Ventures, with Jeff Bezos and Goldman Sachs investing along with Benchmark Capital, and more angel investors like Jay-Z, Ari Emanuel, and Ashton Kutcher. This round valued Uber at more than $330 million.

It’s a round of funding that Andreessen Horowitz, one of the best venture capital firms, missed out on:

The next year would mark another big step for Travis and Uber.

Uber X

In July 2012, Uber launched Uber X, a service 35% cheaper than their black car service.

By October 2012, more than half of their employees are outside of SF. The same month, they launch Uber Tax in SF.

Also, Uber is in 17 cities by this point, most recently adding Sydney, Australia, and Minneapolis.

50% of all people who have ever ridden on Uber have ridden in the last 30 days at this point and the average customer is paying $105 per month.

Uber at this point has 26% month-over-month growth in the last 16-17 months, and they were pretty big already which makes this even more impressive.

Before Uber launched, there were about 600 town cars in San Francisco. By this point in 2012, there were more than that dedicated only to Uber.

In late 2011 and into 2012 they also started rolling out Uber internationally, starting in Paris and expanding into Toronto and London by this point.

And they were finding creative ways to draw attention to Uber.

On Valentine’s Day one year, they distributed tens of thousands of roses to thousands of drives, and every woman who got in a car after 4 pm got a rose.

In DC on President’s Day, they did an Ubercade (Like a motorcade), which consisted of an Escalade, a Town Car, and another Escalade, with town flags all the way down, and 1 in 20 people who pushed the button to get a ride that day got the Ubercade to show up, with drivers that had earpieces in as well, making them look like the Secret Service.

In Austin, for SXSW, they had 100 pedicabs with 10 of them having containers with Texas BBQ.

Another year at SXSW they did a collab with Tesla:

But they were fighting the taxi companies and battling city officials in many cities:

On one occasion, DC was going to put a floor on Uber prices, essentially making them 5x more expensive than taxis, so Uber rallied their riders and drivers:

And, for context, taxis were a problem in many cities.

In NYC, for example, there were around 13,250 taxis in the 1940s, and by this time in 2012, that number hadn’t really changed.

That’s absolutely crazy.

Uber had a better solution and in 2013 Travis landed a huge investment to help his solution scale even more.

Google Ventures

By January 2013, Uber has 170 employees, and they’re expecting to grow that to 800-900 by the end of the year.

Then Travis lands a massive investment in August 2013, with Google Ventures making its biggest investment to date, nearly $258 million, and Uber raising more than $360 million in total in a round that also included TPG and Benchmark.

By late 2013, their revenue cut would be more than $200 million, with these leaked metrics becoming public and Uber taking a roughly 20% cut of revenue:

Things were going well for Travis and Uber, but 2014 would be a rough year in the press for them.

Reputation Hit

By March 2014, Uber was growing 20% month over month and they’re in 80 cities around the world.

One of the things slowing down growth?

The number of cars on the road.

They needed more, so they offered vehicle financing to get more drivers on the road. They would ultimately discontinue the program in 2017 because too many drivers were struggling to keep up with the monthly payments, but it shows just how they were willing to try anything to grow.

Also, because of pricing, they’re starting to compete with public transportation:

Travis is a big fan of Jeff Bezos of Amazon and you can see that with what his approach was to building Uber - looking for efficiencies, bringing the price down, dominating a market.

From a business perspective, it was all working.

Uber also made a couple of key hires around this time.

One was David Plouffe, a former Obama campaign manager, who was brought in to help them lobby for change, further aiding expansion efforts.

Another was Ben Metcalfe, an engineer who, along with his team, created a system to aid Uber riders and drivers in lobbying for Uber to exist in their cities. The system helped them efficiently contact city and state officials, something that worked wonders in a number of cities.

Travis was asked about this success at the time and how it compared to his time spent building Red Swoosh and Scour:

But it wasn’t all rosy either with Uber.

In 2014 a series of shitstorms hit the company.

From “Boob-er” with Travis commenting on his “skyrocketing desirability” with women in a GQ interview, to journalist Saray Lacy writing about deleting Uber because of its asshole culture, to Emil Michael threatening a smear campaign against journalists, and finally an incident at an escort bar in Korea with Uber employees.

It was a lot.

And it was a nightmare.

Travis was asked at the 2014 TechCrunch Disrupt why the press was so hard on him and he thought it was important for people to understand why he is how he is:

Of course, running a big company and a small startup are two very different things.

As Travis would say, you’re not allowed to be scrappy and fierce as the big guy vs. the little guy.

Another challenge on the PR front for Uber was its surge pricing. Here was Travis’s response when asked about it:

They also provided an option to send a notification to be told when surge pricing comes back down to 1x (It often happens after 15-20 minutes).

Not only was Travis dealing with his own mistakes and press blunders, he was battling a competitor, Lyft.

Lyft, Apple, and China

Uber, in keeping up with the unrelenting ambition of Travis, kept expanding its offering, announcing Uber Pool in August 2014, days before its competitor, Lyft, announced a similar offering.

By late 2015, half of the ride requests they get in SF are for Uber Pool.

The two companies would be fiercely competitive, with Uber clearly winning, but Lyft proving more than a little annoying:

Uber had the opportunity to buy Lyft, ending the battle, but didn’t make it happen.

A story in the NYT mentioned it:

The next year, Travis had even bigger concerns - a potential ban from Apple.

Early in 2015, Travis was called in to meet with Tim Cook from Apple. Uber was identifying and tagging iPhones, even after the app was deleted, and this violated Apple’s privacy guidelines. They had been doing it for months, but it finally caught up with them.

Why do that in the first place?

China.

More specifically, rampant account fraud in China, where drivers were being offered incentives and taking advantage of them by creating dozens of fake email addresses and using multiple iPhones to make more money on each trip.

By “fingerprinting” the iPhones, Uber could fix the problem, but in doing so it broke Apple’s rules.

Travis made it through this meeting with Tim and Uber was allowed to stay in the app store, but in 2016 they pulled out of China after battling another competitor, Didi, and burning billions of dollars to do so.

It was a massive hit for Travis, especially given the potential that China represented for Uber as far as growth.

Of course, Travis pushed on, but the next year would be his toughest yet.

Leaving Uber

By March 2016 Uber had gone from 400 to 6,500 employees in the previous 2.5 years, fueled by Travis’s thirst for growth.

An April 2017 article in the New York Times described Travis’ drive:

Mark Cuban, the billionaire owner of the Dallas Mavericks, who invested in Travis’s previous company, but passed on Uber in 2010, also described the duality of his drive:

The drive to win also culminated in the creation of Greyball, a tool Uber used to trick city officials, but that it defended with a statement that said the program, “Denies ride requests to fraudulent users who are violating our terms of service – whether that’s people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret ‘stings’ meant to entrap drivers.”

And those crises that the NYT mentioned?

They included the #DeleteUber movement, Susan Fowler’s blog post detailing the sexism and terrible work culture she experience during her time working for Uber, and a video that showed Travis berating an Uber driver.

Travis did make changes in 2017, working to improve the workplace culture at Uber as well as his own actions, but it was too little too late.

The public opinion on Uber had soured, the mistakes had piled up, and Uber’s investors wanted Travis out.

To make things even worse, in May 2017, Travis’s parents were in a boating accident and, tragically, his mom was killed.

On June 13, 2017, Travis took a leave of absence from Uber and by June 21, 2017, he was forced to resign, ending his reign as CEO of the company he co-founded 8 years before.

Post-Uber

After leaving Uber, Travis launched a venture fund called 10100:

With his drive and ambition, it’s not surprising he’s keeping busy, though there hasn’t been a lot of news about him specifically in the last few years.

Given the absolute thrashing he took in the press for years, I can imagine he’d mostly like to stay out of the limelight.

By investing $150 million in City Storage Systems, the parent company, CloudKitchens has mostly been able to operate in stealth.

It is known, however, that they’ve raised more than a billion dollars of venture capital to fund their growth, with Travis investing around $300 million in the company.

At the end of 2019, after the Uber IPO, Travis stepped down from the Uber Board of Directors and sold the last of his shares, with his last ties to the company officially gone.

I have to admit, I admire his ambition and commitment to Uber for so long (Though I obviously disapprove of many other things) and think this quote from Vanity Fair illustrates that commitment he had:

Travis Kalanick’s Wisdom

In each edition of the Just Go Grind newsletter, I like to include a few more quotes at the end from my research into the founder who is featured, sharing their wisdom.

On becoming an entrepreneur:

On innovation:

On making decisions:

On potentially taking Uber public back in 2014:

On how he approaches his day: