You can easily make the argument that Tesla is the hottest company of the post-financial-crisis period.
A surging stock price at the beginning of 2017 and a market cap bigger than Ford, GM, and BMW has helped that case, but even before the finances were turbocharged, the Tesla story was compelling.
But Tesla is 13 years old. Everyone wants to keep the plot fresh, and to satisfy that craving, for the past few years we’ve had Uber and its $US70-billion valuation — more than Tesla’s booming market cap.
Uber, however, is in full-on crisis mode, after spending 2016 making Tesla look like old news. A withering report on the company’s toxic culture came out earlier this week, and the company announced that its hard-charging CEO, Travis Kalanick, would be taking a leave of absence.
Kalanick — whose mother was tragically killed in a boating accident over the Memorial Day weekend, and whose father was injured — has plenty to think about while he’s taking a break. There’s a fair chance that he’ll seethe over Uber’s decision to demand that he become, as he put it, “Travis 2.0.”
A better use of his time would be to study Tesla CEO Elon Musk and learn from the master. Here’s why:
1. If you’re going to be a “great man,” you need to be pretty great
Startups with major-league founders or big-time CEOs will often list the “great man” problem as one of their risks in investor filings. Musk is a classic example — a CEO who is almost synonymous with the companies that he runs. Uber is also in many ways an expression of Kalanick’s personality and drive to succeed.
But whereas Musk is celebrated for his Thomas-Edison-like genius and his engagement with grown-up toys such as electric cars and rockets, Kalanick is seen as a sharp-elbowed street fighter who focuses on winning the war by triumphing in battle after battle and grinding the competition down to dust. His greatness, such as it is, is sort of grim.
It doesn’t have to be that way. When Uber rolled out a fleet of driverless cars in Pittsburgh last year, Kalanick and his team were able to rise above the rough-and-tumble of wiping out the taxi business. Kalanick also showed some spine in standing up to President Trump’s travel ban and resigning from Trump’s executive advisory committee.
But for every good thing that Uber does, it seems to do two bad things. The Pittsburgh self-driving debut was undermined by a lawbreaking introduction for the technology in San Francisco and a botching of the political relationship with the Pittsburgh city government.
Kalanick should consider that although Musk might not yet be the greatest CEO who’s ever lived, he sets a high standard and strives to be continuously impressive. Being a “great man” means being great pretty much all the time.
2. You need a vision
Uber’s origin story isn’t exactly world-saving. Kalanick wanted to create a service that would enable well-heeled urbanites to more easily arrange for chauffeured transport in “black cars” — high-end livery cabs that typically cater to the metropolitan upper crust.
Over the time that Uber has been on the ascent, some more admirable qualities have been layered on: freedom from car ownership, mobility for those no longer able to drive, the chance to craft a flexible work life (this last one is obviously tricky, given Uber’s at-times harsh business practices where drivers are concerned, but it does work for some folks).
Uber’s vision up to this point has simply been to be the cool way for young urbanites to get around, and that’s why the company has a $US70-billion valuation and is perhaps the biggest pre-IPO Silicon Valley startup of all time — the unicorn to end all unicorns.
But that doesn’t exactly add up to a vision. Musk’s companies — Tesla and SpaceX — by contrast are all vision, often at the expense of the actual businesses. The master plan (and there actually is a written-down Master Plan) is to accelerate humanity’s exit from the fossil-fuel era. Also, to colonize Mars so we have a backup plan for Earth. If Kalanick is a Mamet-esque character, then Musk is rightly the inspiration for Tony Stark in the “Iron Man” movies. He’s a scientist superhero.
Again, with self-driving cars, Kalanick has the chance to recast himself as a Muskian visionary. He just needs to concentrate on driving home the message of autonomous mobility being Uber’s big idea for the future of the human race.
3. Don’t be afraid to geek out and explore crazy side projects
In spite of the fact that Uber will likely have a massive impact on future urban design, Kalanick hasn’t made himself and evangelist for the city of tomorrow. He gave a TED talk in 2016 in which he essentially attacked mass-transit in the context of a proto-Uber ride-hailing service from the early 20th century while simultaneously dissing, somewhat righteously, the urban problem of personal car ownership and mostly un-righteously, government regulation.
Kalanick is a nuts-n-bolts businessman and seemingly constitutionally opposed to thinking of Uber as having a higher calling, although he’s happy to accept that his “punch a button and get a ride” entrepreneurial inspiration could improve lives by eliminating congestion, eliminating onerous commutes, and slow down global warming.
But it wouldn’t hurt him to up his game on this front. Uber has a certain amount of visionary penitential baked into to the business model, it’s just a question of Kalanick digging more deeply into that. And this far, Uber’s main side project, self-driving cars, has led to an increase in respect for Uber as a visionary company. More of that would be well worth it.
4. Grow up
Musk has been able to combine a child-like fascination with new technology and huge adventures with a more adult capacity to manage several growing businesses. That he’s basically a big kid is appealing and enhances his charm. But when you get right down to it, he’s trying to make a better world for his own children.
Kalanick has presided over a quintessentially low-vision, bro-y, post-dot-com Silicon Valley culture at Uber that has now generated scandals and got him all but kicked out of his job (due to his founder’s control of the company and a compliant board, he’s basically impossible to fire).
Kalanick is unmarried, childless, and seemingly all about his work. He’s worth billions, but he’s also a 40-year-old man-child who has built a company so important and valuable to the Silicon Valley funding ecosystem that he hasn’t been pressured to put aside his childish ways. Until now and his admission that he needs to become “Travis 2.0.”
His sabbatical ought to give him some time to start acting his age.
5. Don’t fear Musk
Kalanick reportedly thought that Tesla and Uber might be able to work together in 2015, but he got outfoxed by Musk, who seems to have his own idea about a Tesla ride-hailing/car-sharing service.
Despite that, Tesla is pretty far from being able to flip the switch on a Tesla Network, so an Uber-Tesla tie-up should never be off the table. Kalanick has to at some level understand that the Tesla electric-car story has been supplanted to a degree by the Uber don’t-own-a-car story. So Musk might still need Uber, if nothing else as potential major customer for the Model 3 $US35,000 vehicle launching later this year.
Kalanick can also learn from Musk how to oversee a cash-incinerating operation while still keeping the stock price up and maintaining access to capital markets. Uber burns plenty of its own cash and may continue to do so for as long as Tesla has — more than a decade.
As a bonus, Kalanick should also study Musk for lessons in how to evade a crisis. Tesla almost went out of business in 2008-2009; only Musk’s eleventh-hour fundraising kept the lights on. More recently, Tesla managed the repercussions of a fatal crash involving its Autopilot semi-self-driving technology. In both cases, Musk showed resilience and humility. Kalanick may have some of the former. The latter is something he now needs to acquire.
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