These are reviews of business books. They are also about technology in business.
Feb. 11, 2017 "Start me up": Today I found this article by Shane Dingman in the Globe and Mail. This was in the arts section and not the business section. This is a review of Brad Stone's book The Upstarts about Airbnb and Uber:
A look at the disruptors who are transforming the way we live
It is tempting to think the #deleteuber movement launched last month in New York – a hashtag and cry for punishment that flowed from the ride hailing company’s perceived closeness to U.S. President Donald Trump – became a global movement so quickly because everything is amplified in Trump’s America.
But it’s not merely because Uber appeared to break a taxi strike during the peak of protests against executive orders curtailing immigration from seven predominantly Muslim countries, and not because, until last week, Uber’s chief executive, Travis Kalanick, was on a White House business advisory council.
Thanks to the great timing of Brad Stone’s new book, The Upstarts, curious readers will discover the company has a long history of creating reasons to delete your account.
Stone’s book is ostensibly about two companies, Airbnb and Uber, that have blown up just about every existing relationship in the hospitality and taxi industries by unlocking the economic value of underused assets (amateur drivers became cabbies and people with spare rooms became amateur hoteliers).
While Stone – a technology reporter for Bloomberg – hasn’t cracked the culture of either startup as he did with Amazon in his previous book, The Everything Store, which revealed that crying at your desk was a part of everyday life inside the online retailer,
The Upstarts features lots of new details about the tactics Airbnb and Uber employ.
The book reads like several long magazine features stapled together, with chapters generally alternating between the two companies, although Airbnb gets less space in the narrative.
The book reads like several long magazine features stapled together, with chapters generally alternating between the two companies, although Airbnb gets less space in the narrative.
While Stone somewhat disproves the myth that Airbnb is the “nicer” of the two upstarts – showing how the companies often mirrored each other’s tactics as they raised billions, while hosts and drivers were often underpaid or left to fend for themselves in legal fights – Airbnb CEO Joe Chesky is nowhere near as compelling an antagonist as Kalanick.
True, Stone admits there are things to admire about Kalanick, and early on, he does some work to humanize the hard-charging California native, who was already a startup millionaire when he co-founded Uber, albeit one who claims to have been burned out by brutal experiences with his first two businesses.
His first company, Scour.net, an early search engine that enabled peer-to-peer sharing (and therefore copyright violations) was sued into bankruptcy by the music, television and movie industries.
His second company, Red Swoosh, based on a data transfer technology, had no real revenue and few customers.
Rather than be humbled, these experiences seemed to radicalize Kalanick; Stone recounts incident after incident where he turned a potentially constructive meeting with a more powerful player into a confrontation that minted a new lifelong enemy.
He’s portrayed as a man who will end friendships, break business arrangements and out manoeuvre regulators and politicians who oppose him.
He’s portrayed as a man who will end friendships, break business arrangements and out manoeuvre regulators and politicians who oppose him.
Uber and Airbnb’s willingness to charge past long-standing restrictions on their businesses often seemed to end in tragedy or scandal. The way they shrug off legal, ethical, public relations and financial challenges is almost awe-inspiring. But not uplifting.
(Kalanick once explained his actions thusly: “This is the way of the world, and the world isn’t always great.”)
(Kalanick once explained his actions thusly: “This is the way of the world, and the world isn’t always great.”)
Take the ugly mishandling of the 2014 death of six-year-old Sophia Liu, run down by an Uber driver who was checking his phone for new fares; Uber’s first instinct was to deny involvement, not to comfort the family or promise to do better. Eventually there was an apology, but it was too late to contain the damage.
In one prophetic line, Greg McAdoo, a partner at venture capital giant Sequoia, describes how way back in 2009, his colleagues were concerned with the legality of Airbnb. What he told them would come to equally apply to Uber: “These businesses either work or don’t work based on whether or not they are good for consumers.”
And there’s the rub. Uber’s current troubles seem to stem from its slipping hold on the affections of its users; Mobilizing that people power has been the company’s ace in the hole in many of its epic struggles with city politicians and regulators. With #deleteuber, the tables have turned.
In the middle of the Trump fiasco, Kalanick wrote a blog post that said, while he would tell the President what he thought of the ban, he did not say he would distance himself from the administration. As the week stretched on and approximately 200,000 accounts were deleted, representing millions in potential lost revenue, Kalanick changed his tune and left the council.
Uber’s progress is still fragile: It was beaten by a rival in China and is handcuffed by strong regulations in large parts of the European Union. That leaves Stone’s book without much of an ending.
Kalanick still offers up a grand vision, in which, thanks to Uber, car traffic in cities is slashed in the next five years. “Our cities are going to given back to us, our time is going to be given back to us,” he declares.
Kalanick still offers up a grand vision, in which, thanks to Uber, car traffic in cities is slashed in the next five years. “Our cities are going to given back to us, our time is going to be given back to us,” he declares.
In the book’s epilogue, one of the few places where Stone offers his own perspective, he writes that it’s “up to us to hold them to their promises.”
Shane Dingman covers technology for The Globe and Mail’s Report on Business.
Mar. 20, 2017 "To ensure your startup success, remember you aren't Steve Jobs": Today I found this article by Harvey Schachter in the Globe and Mail:
Steve Jobs was the worst thing to happen to startups and their chief executive officers.
That’s the considered opinion of Tom Hogan and Carol Broadbent, whose Silicon Valley consulting firm focuses on boosting startups. Too often, the problem with startups is a CEO who thinks he or she is the reincarnation of Steve Jobs.
The result is boorish behaviour, zero work-life balance not only for the head honcho but also other employees, arrogant authoritarianism, and disdain for the notion of giving back when staff want meaning that transcends their product or service.
The result is boorish behaviour, zero work-life balance not only for the head honcho but also other employees, arrogant authoritarianism, and disdain for the notion of giving back when staff want meaning that transcends their product or service.
“We see it in first-time CEOs. They are brilliant. They are brave. They have convinced venture capitalists to support them. But they take on some of the worst aspects of his behaviour,” Ms. Broadbent says in an interview.
Sure, there is much about the late founder of Apple to admire. But there is also much to steer clear of or be wary of. If you want to be successful, they suggest finding co-leaders with strengths where you are weak. Also, repeat this mantra regularly: “I am not Steve Jobs.”
Of course, there are still other ways you can go wrong. “Failure assumes a variety of faces,” they write in their book, The Ultimate Start-Up Guide:
- No market need: A recent study of 101 failed-ups found 42 per cent citing lack of market need as the cause. A group of engineers, fascinated by technology, come up with something marvellous. Only nobody particularly cares. When the two consultants come into flagging operations, often nobody knows what the market is for their fancy innovation.
- Running out of money: Funding is hard to come by; startups can be parsimonious, taking as little as possible to reduce obligations; and the leaders assume everything will go swimmingly, when it rarely does. “You need to be lean and careful with money,” she says.
- Camel design: The company, marketing, and website is developed by committee, with consensus leading to the proverbial camel. That doesn’t happen, interestingly, with the product, where the decision-making is usually sharper.
- But Mr. Hogan says “most of our audience are technologists who have never run sales or marketing. They are uncertain and hide behind consensus to save them. Quiet often the collegiality ends up in a half-assed company.”
- Field of dreams marketing: The companies assume everyone they target will see the value of their innovation. “We build it and they will come” won’t happen without good marketing and customer connections, she says.
- Chemistry and teamwork aren’t there: The CB Insights study found 36 per cent of the startups listing “not the right team” or “disharmony” as the source of failure. You need to get rid of the jerks on staff and inspire a sense of common effort and teamwork, looking for diversity that can build for the long term.
- Underestimating the competition: They point to “natural hitters,” who often make a big splash in Major League Baseball initially but wind-up in the minors because the competition figures out their weaknesses.
- The truly successful hitters are patient and fix the problems with their swing, becoming a complete hitter. “Most of the startups we work with are ‘natural hitters.’ They are so enamoured of their technology and so sure that they are “The Next Big Thing” that they either ignore or deride the competition,” the duo write in the book. But that’s a mistake because the competition will adapt.
As those reasons for failure remind us, startups are risky. In their book, they share a helpful matrix used by venture capitalist Mike Speiser that shows adoption risk on one axis and technical risk on the other.
Although we consider risk bad, the reality is that if there is low technical risk and little risk of the startup idea being adopted you are in an unhealthy “no man’s land” – fragmented industries with low margins and low barriers to entry, such as most service businesses and consulting.
Although we consider risk bad, the reality is that if there is low technical risk and little risk of the startup idea being adopted you are in an unhealthy “no man’s land” – fragmented industries with low margins and low barriers to entry, such as most service businesses and consulting.
Low technical risk but high adoption risk – we can build it, but will they come? – can be highly successful, as Uber, Facebook, Airbnb and salesforce.com show.
Similarly, the reverse – if we build it, they will come – where the technical challenge is high, but chance of adoption is strong can be very successful.
The toughest spot, but also very lucrative, is where both risks are high – if we build it, will they come? – which is where Amazon, Google, Apple and Tesla have staked their ground.
Similarly, the reverse – if we build it, they will come – where the technical challenge is high, but chance of adoption is strong can be very successful.
The toughest spot, but also very lucrative, is where both risks are high – if we build it, will they come? – which is where Amazon, Google, Apple and Tesla have staked their ground.
“Building a company is a high-risk act,” notes Ms. Broadbent. But finding yourself on that matrix and remembering the mistakes others have made can help you be successful. So can remembering you are not Steve Jobs.
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