Stick around long enough, and you’ll see just about everything. A U.S. president who disses members of his own cabinet and party leadership while trying to win a bellicosity contest with a murderous North Korean dictator. A faddish social media startup worth billions of dollars that can’t produce one favorable earnings report. And now, a lawsuit by one of Silicon Valley’s most respected venture-capital firms against the former CEO of its most important portfolio company.
Benchmark Capital’s suit against Travis Kalanick is no run-of-the-million litigation. It alleges that Kalanick duped Benchmark last summer into approving control by Kalanick of three seats on Uber’s board of directors. More, it claims he did this because he knew one day he’d get fired as CEO and seek a way to continue controlling the company—something Benchmark believes he recently has been trying to do.
Because this is a little confusing, consider this: Benchmark willingly granted Kalanick the control over the three seats he sought. Where it says it was fooled was in damning information Kalanick withheld from the board and from Benchmark, specifically Bill Gurley, the (former) Uber board member once considered to have the closest relationship with Kalanick.
Benchmark essentially is saying it was shocked—shocked—to find out Kalanick was a shady character. He didn’t tell them his acquisition of a self-driving truck company might get Uber in trouble with Waymo, Google’s former robotic vehicle unit. He didn’t tell them some of his top deputies had messed with the privacy of a rape victim in India. And he didn’t tell them the company was rife with gender discrimination.
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People asked me often earlier this year if I’d managed to get all the latest scandals into my book about Uber, which came out May 23rd. I frequently joked that in fact I was able to include the first 17 scandals of the year, but not nos. 18, 19, 20, 21, 22 and so on. It’s hard for me to imagine that just a year ago Uber was still riding high, having recently retreated from China but still bent on world domination.
In Silicon Valley these days it is a common refrain that Travis Kalanick is his own worst enemy. (Indeed, I’ve thought for weeks now if he had pulled a Gavin Belson some of his troubles might eventually have blown over.) Now Kalanick has a new worst enemy—and an improbable one at that.
| Adam Lashinsky | |
| @adamlashinsky | |
| adam_lashinsky@fortune.com |
NEWSWORTHY
You thought Travis Kalanick had a bad day? Things were tough all over tech land.
Bad day. It's a do or die moment for pioneering music and podcast hosting service Soundcloud. Existing shareholders must accept a tough proposal that guts their stakes in return for a new cash infusion. If they refuse, the company likely folds.
Very bad day. It was also a tough day for some publicly-owned tech companies on Thursday. Stock market darling Nvidia had risen over 50% this year on excitement that its graphics cards were increasingly being used for AI and machine learning. But datacenter sales growth slowed in the second quarter, and Wall Street fears the company may be too dependent on digital currency miners. Its shares are down 7% in premarket trading on Friday.
And teen favorite messaging service Snap showed slowing user growth and mounting losses, sending its stock down 15% in premarket trading. It's now lost almost one-third of its April IPO price. Quips MoffettNathanson analyst Michael Nathanson: "Snap should never have gone public when they did."
Another bad day. Google CEO Sundar Pichai had to cancel an all hands meeting to discuss a fired engineer's widely-circulated, sexist memo. Apparently, some employees who wanted to ask questions at the forum were publicly identified and being harassed and threatened by alt-right figures online. "Googlers are writing in, concerned about their safety," Pichai said in an email. But Pichai did speak at a coding event for girls at the end of the day. "There’s a place for you in this industry," he said. "Don't let anyone tell you otherwise."
Very bad. Bad day in China for some top Internet companies, too. The country's "Ministry of Information," aka the Cyberspace Administration, said it was investigating Tencent's WeChat, Weibo, and Baidu's forum site Tieba for possibly carrying content that was violent, obscene or deemed offensive to the Communist Party.
Not good either. Shares of Live Nation Entertainment, which owns Ticketmaster, plummeted almost 10% in 15 minutes after Reuters reported that Amazon was looking to get into the ticket selling business.
Finally, someone had a good day. Coinbase, one of the leading brokers of digital currencies including Bitcoin, raised $100 million of venture backing at a private valuation of $1.6 billion, the company told Fortune. That makes Coinbase the first "unicorn" of the cryptocurrency startups.
IN CASE YOU MISSED IT
Apple iPhones Are About to Get a Lot More Useful by Barb Darrow
$5,000 Bitcoin? 3 Reasons to Buy—and to Stay Away by Jeff John Roberts
Dear Google Memo Writer: The Problem’s Not Biology—It’s Guys Like You by Debbie Sterling
AMD’s Super Chip, the Threadripper, Arrives to Rave Reviews by Aaron Pressman
Google’s Latest Doodle Is an Interactive Hip-Hop Celebration by David Meyer
Priceline CEO: Travel Is Growing Greater Than the Global GDP by Susie Gharib
FOOD FOR THOUGHT
The tech industry is suffering from a lack of diversity, pay gaps, and other labor issues. At a panel discussion for the second annual Tech Inclusion New York conference, a possible if rather old-fashioned solution came up for discussion: unionization. As one participant, CEO of Fog Creek Software Anil Dash, observed:
It's labor organizing. We need unions in the tech industry. Workers don’t have any power.
FOR YOUR WEEKEND READING PLEASURE
A few interesting longer reads I came across this week, suitable for perusing over the weekend.
Dropbox Has Whipped Itself Into Shape, but Going Public Won’t Be Easy
One of Houston's favorite books is Only the Paranoid Survive by Intel Corp. co-founder Andy Grove. He's taking seriously Grove's advice, borrowed from Mark Twain, to put all your eggs in one basket and watch that basket. Starting in 2015, Dropbox shut down the standalone photo and email apps to focus on its core product. It also slowed hiring and trimmed perks.
What Happened to Google's Effort to Scan Millions of University Library Books?
"Somewhere at Google there is a database containing 25 million books and nobody is allowed to read them." That assessment may be technically true, but many librarians and scholars see the legacy of the project differently. In fact, academics now regularly tap into the reservoir of digitized material that Google helped create, using it as a dataset they can query, even if they can't consume full texts. It's a pillar of the humanities' growing engagement with Big Data.
Forget Ratings. 'Orphan Black' Had the #CloneClub.
Orphan Black never had huge ratings. A July episode on BBC America, for example, garnered just 645,000 viewers, ranking it 33rd among scripted cable TV series that week. But what the show does have is the #CloneClub, the name its fiercely loyal fans collectively go by when they gather online. And BBC America has done everything it can to cultivate their dedication.
The Birth of 'Hamilton,' Told by the Man Who Was in the Room Where It Happened
Years before "Hamilton" opened at the Public on Feb. 17, 2015, I had been comparing Lin to Shakespeare. Each of them took the language of the common people and elevated it into verse, thereby ennobling both the language and the characters who spoke it. They both told the founding stories of their nation in a way that recognized everyone, of all classes, as citizens.
BEFORE YOU GO
London's Tate Modern museum opens a massive retrospective of works by Amedeo Modigliani in November. I don't want to miss it. The exhibit also will be enhanced with a virtual reality experience, as well, bringing a bit of high-tech flare to one of the early 20th century's great artists.
