Riding the bumps: Travis Kalanick is one of the toughest fighters in Silicon Valley

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Travis Kalanick, head of ride-hailing company Uber, “grew up”, as he puts it, “being the scrappy, small entrepreneur”. But it has not always gone his way.

His first start-up, file-sharing company Scour, filed for bankruptcy after trade groups from the recording and film industries sued it for copyright infringement. His second, Red Swoosh, helped people transfer files quickly but never found huge demand for its software. It was sold after six years for just $18.7m.

Today, while he certainly remains scrappy, Kalanick is no longer small. Uber, which lets passengers hail rides via a smartphone app, is worth more than $40bn and has raised nearly $6bn.

But Kalanick is still one of Silicon Valley’s toughest fighters, with an unusual ability to convince others to join him in taking on the world and a fierceness developed over more than a decade spent fighting to make it as an entrepreneur.

“The reason he is who he is, is because he failed twice,” says one person who has worked at Uber.

The company operates in nearly 300 cities in more than 50 countries, and Kalanick is dreaming even bigger as he seeks to revolutionise the transport industry globally.

He speaks of how Uber aims to push rates so low that Uber rides could be a viable alternative to owning a car and possibly to using public transport. People familiar with the company say it wants to use its network to start ferrying around not just passengers but also cargo at a cost that would scare courier services such as FedEx. Uber is sponsoring a research centre at Carnegie Mellon University in Pittsburgh in the US to explore self-driving car technology.

Kalanick’s ultimate goal is to build “a network of transportation as reliable as running water, everywhere for everyone”, as he has put it. Thus far he has developed a list of enemies and Uber has sparked controversy as it has expanded from a limousine service in San Francisco to an international network that relies on more than 200,000 drivers using their own cars.

Uber began by operating in a grey area in many places. Regulators and officials around the world have fumed about how Uber launched in their cities despite warnings not to or requests to wait until new laws were in place. They have sometimes levied heavy fines against drivers who continue, often at Uber’s behest, to operate.

In Paris, taxi drivers have launched protests against the growth of the service there. These have included slashing the tyres of Uber cars.

The company has typically treated those obstacles much like a monster truck driver would a speed bump. Only rarely has the company stopped its operations, most notably in response to a judge’s orders in Nevada.

Uber’s origins did not indicate it would become such a polarising blockbuster, or that Kalanick would emerge as one of Silicon Valley’s most prominent leaders at the helm of a company with a valuation larger than the market caps of most constituents of the FTSE 100 index.

Uber launched in San Francisco in 2010 but had its genesis in Paris in 2008. Kalanick and his friend Garrett Camp had been bandying about ideas for start-ups. Uber was inspired by the difficulty they experienced getting cabs in the Parisian snow. Kalanick credits Camp, now Uber’s chairman, with the idea of “push a button and get a ride”.

Kalanick has admitted he was not keen to get back into the ring after struggling with his first two companies — he had gone without salary for the first four of his six years at Red Swoosh. Camp convinced him to give entrepreneurship another try, and Uber launched in 2010, with Kalanick later becoming chief executive.

As the company has grown, say people who have worked with Kalanick, he has remained relentlessly involved in every aspect of the business, often taking its challenges and the frequent criticisms of it personally.

“He’s trying to drive down the cost of moving around the world,” says one person who knows him.

“He’s bold and fearless in trying to overcome [obstacles] but does so not through a lens of cockiness — it’s done through a lens of economics. This is how he thinks he can make the world a better place.”

Kalanick and his company do not conceal their aggressiveness, a culture shaped in part by his own attitude. Uber’s San Francisco headquarters features what he calls the “war room” — a conference room for huddles around crises and serious planning. The office also has a quarter-mile walking track around its perimeter, and Kalanick takes many of his calls and meetings while pacing along it.

Had he not struggled with his early start-ups, the chief executive has said he “wouldn’t have been as fierce — it wouldn’t have grown as fast”.

Some of that fierceness has drawn significant criticism to the company. Kalanick has admitted to interfering with a fundraising by rival Lyft. Employees in Uber’s New York office hailed and then cancelled rides from a competing service while trying to poach its drivers, while senior executive Emil Michael drew considerable flak for suggesting the company could start digging up dirt about journalists who criticised it.

But Kalanick has aired the view that the bullish persona that has stuck to him is not entirely accurate. Some controversy surrounding Uber’s rise, he has argued, is because he is not good at communicating with the public or regulators: “You’ve got to remember, I’m a technologist, I’m a computer engineer and I’m not familiar with policy circles and what’s good policy or how to get policy enacted. That’s not my go-to.

“My go-to is go and code some stuff and make a great app that people can use.”

Although a sometimes stiff public speaker, Kalanick is known to be far more at ease in small settings or company all-hands meetings. That charisma, and his relentlessness in business, go back a long way. “The ability to instil confidence and this notion that we’re going to take on the world and win — I’d never seen anything like it,” says a former employee.

Vince Busam co-founded Scour, the start-up Kalanick worked on while they were studying computer science at UCLA at the height of the tech boom. Even then, says Busam, Kalanick had a knack for motivating engineers, networking and pitching to investors. “People say [Apple founder] Steve Jobs had that reality distortion field — the ability to pop into someone’s office and pitch, and they’d be in love with the idea. Travis had a small version of that,” Busam says.

Kalanick’s tirelessness manifested itself in Red Swoosh, which Kalanick has said was “too early/kind of wrong”. By 2006, five years in, the business had little traction and needed to relaunch. He did that by “offshoring” the team to Thailand for six weeks and got to work rebuilding the business, selling it the next year to Akamai.

“The company would have gone out of business many times in the hands of someone less focused and obsessed,” says David Hornik, an investor in Red Swoosh. “People get tired, and Travis is not a guy who gets tired very often.”

Even during Red Swoosh’s troubles, “he never revealed a loss of faith”, says Ken Keller, another investor in the company and a long-time tech executive.

For now, Uber is working with regulators to convince them to approve Uber’s business model. Last year Kalanick hired David Plouffe, a former top aide to US President Barack Obama, to help build connections with regulators and others who will have a say in Uber’s future. The company’s lobbyists last year helped convince more than 20 jurisdictions to pass laws legalising the service, according to Kalanick.

Uber is also focusing on an initiative called UberEverything, run by Jason Droege, a co-founder of Scour. Its activities include delivering hot food and goods from drugstores. That will bring it into competition with instant courier companies, including tech giants Amazon and Google, which are both trialling express delivery services. UberEverything’s ultimate mission, says Droege’s LinkedIn profile, is “delivering the world in about five minutes”.

“That name — it tells you their ambition,” says one rival.

Additional reporting by Tim Bradshaw and Sally Davies

Copyright The Financial Times Limited 2017. All rights reserved.
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