How much money would your company be willing to spend to win?
I don’t mean just barely, à la sprinter Shaunae Miller’s finish line dive during the women’s 400m at the Rio Olympics. I mean sheer and utter domination, à la swimmer Katie Ledecky’s 11-second lead to win the 800m freestyle.
Would you spend $12 million? $120 million?
How about $1.2 billion? And how about in six months? That’s how much Uber CEO Travis Kalanick wants to win. According to various reports, his company is losing staggering amounts of money—the GDP of Grenada, every 180 days—to secure its place at the top of the global ride-hailing market.
Uber generates plenty of revenue. But its desire to subsidize drivers in highly competitive markets around the world is draining the company’s coffers faster than it can fill them. (Even having raised almost $9 billion in funding.)
Can Kalanick pull it off? If he’s smart, he’ll steal a page from another CEO who has plowed extraordinary amounts of money back into his company: Jeff Bezos. Quarter after quarter, the Amazon chief has managed to keep investors at bay by eking out just enough profit, just enough times, to give him to the cover to plow funds into growth initiatives, often at a loss. Bezos’s ability to take the long view—and crucially, convince others to do so—has given the retailer unmatched competitive advantage.
But Bezos never lost money like this. Amazon’s biggest annual loss was $1.4 billion in 2000. Last year, Uber lost almost twice that.
All Uber wants to do is win, win, win—no matter what. And that may be the problem.
Have a great weekend.
BITS AND BYTES
Facebook’s plan to use WhatsApp data poses legal risks. The social network intends to analyze the messaging service’s user data, including stats like the sort of mobile devices they use, as another trigger for personalizing ads. The plan isn’t going over well with privacy experts, and could prompt some unwanted attention from the Federal Trade Commission. (Fortune)
China to tech firms: Help us write the rules. The country invited several influential U.S. companies, including Microsoft, Intel, Cisco, and IBM, to play a more active role in shaping its evolving policies for encryption, the use of consumer data for analytics, and other matters related to privacy and cybersecurity. Previously, they’ve played the role of observers who had to comply with the end result. (Wall Street Journal)
Salesforce intends to make its software smarter. The business software giant has snapped up at least a half-dozen other startups specializing in machine learning, predictive analytics, and other AI technologies. You can expect this software to be layered into most of its applications. (Fortune, Forbes)
Major job layoffs on the way at Google Fiber. The Internet giant’s ambitious effort to offer gigabit speed Internet and cable TV service via optics connection is attracting far fewer customers than hoped. The Information reports that at least half of the 1,000-person team could lose their jobs. (Fortune)
Tech companies chase ultimate milestone. Getting to a billion users is an achievement lots of tech companies dream of, like billion-dollar valuations or hiring in-house DJs. Most are far from it, but not Google and Facebook. (Fortune)
Head west for the best startup culture. California still rules, but you might want to make a pit stop in Texas. Austin tops the latest list of the 25 best places for entrepreneurs to bring their ideas to life. (Fortune)
WATCH FOR IT
September is nigh, and so is tech conference season. Expect a barrage of news next week from three high-profile business software companies that are holding their annual customer and partner conferences: virtualization pioneer VMware; SuccessFactors, SAP’s human resources software arm; and Okta, the identity management tech firm.
PEOPLE AND CULTURE
Men benefit from closing the pay gap too. SAP conducted a pay equality analysis on its U.S.-based employee base (the tech company has close to 80,000 workers across 130 countries).
After working with a third-party firm to complete the report, SAP says its results showed that more than 99% of its male and female employees in the U.S. are paid equally. Within the less than 1% that did not have pay parity, SAP says it “proactively” increased those employees’ compensation. Surprisingly, not all of them were female—it turns out that a third of this group were male. (Fortune)
IN CASE YOU MISSED IT
Why MasterCard Bought VocaLink for $920 Million, by Andrew Nusca
Why Fintech Startups Are Flocking to a 124-Year-Old Bank in Kansas,
by Jeremy Quittner
Want to Work for a Cloud Company? Here’s the Cream of the Crop,
by Barb Darrow
Why WhatsApp Could Be a Game-Changer for American Health Care,
by Jen Wieczner
ONE MORE THING
Watch President Obama frolic in virtual reality. To celebrate the 100th anniversary of the National Park Service, Yosemite has premiered a 360-degree immersive film in which POTUS shows off its spectacular waterfalls, granite cliffs, and giant sequoias. It’s a real demonstration of how VR could be used for marketing purposes. (Fortune)
MARK YOUR CALENDAR
BoxWorks: Box’s annual customer conference. (Sept. 6-8; San Francisco)
The Exchange Community: Workiva’s training and development event. (Sept. 7-9; San Diego)
nginx.conf: Strategies for application development and delivery. (Sept. 7-9; Austin, Texas)
Women in Product: A gathering of experienced female product managers. (Sept. 13; Menlo Park, Calif.)
GitHub Universe: For people building the future of software. (Sept. 13-15; San Francisco)
Oracle OpenWorld: The future of the cloud is now. (Sept. 18-22; San Francisco)
IBM Edge: Outthink status quo. (Sept. 19-22; Las Vegas)
Hosting and Cloud Transformation: 451 Research’s annual summit. (Sept. 19-22; Las Vegas)
Gigaom Change: 7 transformational technologies. (Sept. 21-23; Austin)
Workday Rising: Talent management in the cloud. (Sept. 26-29; Chicago)
Microsoft Ignite: Product road maps and innovation. (Sept. 26-30; Atlanta)
Adapt or Die: Apigee’s #DigitalKnowHow world tour. (Sept. 27; San Francisco)
Dreamforce: The Salesforce ecosystem meets. (Oct. 4-7; San Francisco)
Atlassian Summit: Tips and training for developers and project managers. (Oct. 10-13; San Jose, Calif.)
Virtuous Circle: The future of the Internet ecosystem. (Oct. 10-11; Menlo Park, Calif.)
Gartner Symposium/ITexpo: A gathering of CIOs and senior IT leaders. (Oct. 16-20; Orlando, Fla.)
DellWorld: Dell’s annual global customer conference. (Oct. 18-20; Austin, Texas)
Grace Hopper Celebration of Women in Computing: The world’s largest gathering of women technologists. (Oct. 19-21; Houston)
AI World: Business applications for artificial intelligence. (Nov. 7-9; San Francisco)
TBM Conference: Manage the business of IT. (Nov. 7-10; San Diego)
DevOps Enterprise Summit: Develop and deploy software faster. (Nov. 7-9; San Francisco)
Drone World Expo: Commercial apps for unmanned aircraft. (Nov. 15-16; San Jose, Calif.)
AWS re:Invent: Amazon’s annual cloud conference. (Nov. 28-Dec. 2; Las Vegas)