Speaker A
We know what Uber's 2017 was like. Travis Kalanick has stepped down from his role as chief executive.
Travis Kalanick discusses Uber's 2017 challenges, fundraising strategies, and building companies stealthily with a16z.
Ask about this video. Answers come from its transcript only — with the timestamp, so you can check them.
Generated from the transcript and can be wrong — check the timestamp.
Key Takeaways
- Successful fundraising can involve creating competitive tension through auction-like processes.
- Board composition and leadership significantly influence a startup's trajectory and crisis management.
- Entrepreneurial drive often stems from passion and resilience, not just initial conditions.
- Stealth mode and branding decisions are critical in early-stage company building.
- Building disruptive companies requires aggressive tactics and navigating complex partnerships.
What the video covers
- Travis Kalanick reflects on Uber's turbulent 2017 and his stepping down as CEO.
- He shares insights on aggressive fundraising tactics, including the 'uncapped anchor' strategy.
- Kalanick recounts a high-stakes Series B fundraising auction and negotiations with investors.
- The discussion covers the importance of board composition, highlighting Mark's absence impact on Uber.
- Travis emphasizes the motivation behind starting companies rather than just the starting point.
- He discusses building companies stealthily and the challenges of naming and branding.
- The conversation touches on parallels between Uber's disruption and innovations in food delivery.
- The podcast explores the dynamics of partnerships and relationships in Silicon Valley.
- Kalanick shares personal entrepreneurial mindset shaped by past hardships.
- The dialogue includes reflections on negotiation, credibility, and investor relations.
Chapters
- 00:00Uber's 2017 and Leadership Changes
- 03:37Fundraising Strategy and the Uncapped Anchor
- 07:12Series B Auction and Investor Negotiations
- 11:12Board Dynamics and Partnership Reflections
- 15:12Entrepreneurial Mindset and Stealth Building
- 18:46Disruption in Food Delivery and Company Building
- 23:12Silicon Valley Relationships and Deal Making
- 25:43Negotiation Challenges and Credibility
- 29:46Reflections on Leadership and Company Growth
- 33:00Closing Thoughts on Entrepreneurship
Full Transcript — Download SRT & Markdown
Speaker A
That wouldn't have gone that way if Ben or Mark was on the board. You're in this hell. You're dealing with the lawsuits.
Speaker A
You worry about the lawsuit and you say, "Hey, let's build again." It's not as much about where you start.
Speaker A
It's about why you start. He's one of the very rare guys who made as much money as he did and wanted to keep playing. Also remember I did it stealth.
Speaker A
I know some of the techniques I use are very aggressive, but that name, you can't use that name.
Speaker A
And I remember David Drummond from Google was on our board and he's like, "No Travis, that's not a thing, dude. You got to change it." The meaningful thing about Adam's food is can you make the preparation and delivery of a quality
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meal so efficient that it approaches the cost of going to the grocery store? If it does, you do to the kitchen what Uber did to the car.
Speaker A
A lot of that idea to build a company, a great company. It's always a great entrepreneur.
Speaker A
Travis, this is the I'm Back podcast. This is the return of the kingd episode.
Speaker A
Um, return of the mech. That's I'm all about we can return. I don't know what the right thing is, but we got to come up with a walk-on song for sure.
Speaker A
Return of the Mac. Return. And it's not just—it's not just a return of Travis, but it's also a return of this partnership or what could have been, uh, and this relationship with Travis and Ben. So, I want to read a
Speaker A
quote from Travis from your launch post. I've known Mark and Ben for a long time and we got oh so close to partnering up at Uber in 2011. I, Travis, blame Mark.
Speaker A
Ben blamed himself, but let's just say it was all on us and it was—it was on all of us. And in 2017, Uber suffered the consequences of not having Mark on the board. If you know, you know.
Speaker A
Travis, tell the story. Okay. So, um, this will be interesting because I think Ben and I have maybe discussed this once or twice.
Speaker A
Yeah. Painful and I think that there could—I'm not sure if there's a difference of opinion on what happened, but I'll tell you what I thought happened.
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So, I'm in fundraising mode. This is our Series B. This is 2011. Uber started 2010, June 2010.
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I'm raising our Series B. Earlier that year, I did Series A with, uh, VC. I'll remain nameless.
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And, uh, I'm hardcore. Like, it's interesting. I went through such tough times as an entrepreneur pre-Uber that once I'm in Uber and things are working, I'm still acting like I'm not going to eat tomorrow.
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So I would do everything right up to the line, like be perfect. And so I have this whole fundraising process that I would do just to perfection. And that means I'd run an auction.
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So met with A16Z guys, met with lots of folks. And it was a what I would call winner takes all auction, meaning there's one major lead.
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They're going to set the price and then everybody else will fall in. So I'd go to the one guy, you know, I'd tell him what the story was and, uh, they're like, "Oh, you know, we're interested." He's leaning forward. And I would, they're
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like, "So, how much you raising? What's the price?" And I would do this thing where I would say, "Um, we don't know what—like this is going to be one of the hottest deals in Silicon Valley this year. We don't know
Speaker A
where the price is going to be, where it's going to go to, but it's at least blank." And I call this the uncapped anchor. Meaning, I'm never in a place where I'm negotiating with somebody where I'm here and they're here and we
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meet in the middle. I'm always saying it's at least this and it can go up, but I start low.
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So, it all goes so that everybody's pumped, leaning forward. He's like, "Okay," you can see body language. You can read. It's good. You go to the next. The next guy literally comes to your office. An hour later, same thing happens. He's fired up. I'm
Speaker A
showing all the analytics. It's great. Uh, okay. So, we're interested. What's—what are you thinking about price?
Speaker A
Whatever. I'm like, if the last one was at least 2x our previous round, it just became 3x. I'll say, "We don't know. One of the best deals in Silicon Valley. It's going to be one of the top deals in Silicon Valley this
Speaker A
year, but it will be at least 3x our last round." And he's like, "Okay." You then go call the guy before and you're like, "Hey, just—hey, look dude, just went from 2x to 3x." You know, we'll see where it goes. I don't know.
Speaker A
They start getting nervous. Anyways, you get all the way to the top and then you go going once, going twice.
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And, uh, it's kind of funny in this particular case, Yuri was almost coming over the top. So, we got to 3.75 with 3.775 million pre with A16Z.
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Yuri almost came in at 400, but he was like, "No, I can't do it." And so I'm like, "Okay, going once, going twice, sold." Yeah.
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And it's funny because that's a high momentum deal, and that's how you do it.
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And at the time, you almost should feel a little shy about doing something like that. And it's a little bit crass, let's just say, but that's how I was wired back in the day. Like just go all the
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freaking way, all the way. Like run the touchdown, like score the touchdown even when you're gonna, you know, it's a little much.
Speaker A
So we're starting to work. You're going to get a term sheet going, the whole thing. And, uh, I get an email from Mark.
Speaker A
Um, and it was like, uh, hey, let's, uh, hey Travis, like let's go to dinner. I think it was like tomorrow night or something like that. Let's go to dinner. And I said send me the term sheet and then
Speaker A
yeah, we can go to dinner. And he responded he said let's go to dinner.
Speaker A
And I'm like, oh that didn't—I didn't like that. So came down south this neck of the woods.
Speaker A
Yeah. Because I was in San Francisco and, uh, this little sushi place, I don't remember the name of it. And he said, "Look, I know we talked about 3.75, but went to the partnership. They don't agree or they just didn't think it was
Speaker A
the right number. We're the best we're going to be able to do is 2.10.
Speaker A
See that?" So that I'm just telling you how it went down for me. Yeah. Wow. Well, and and so then I'm like story was definitely different on the other side, but so but I want it be interesting to hear
Speaker A
it. I've got—I've got more than the hour we have scheduled here if we want if we want to take time. But anyways, I had a high momentum deal. It went all the way to the top. I auctioned it,
Speaker A
cleared the market, and the bottom came out from it. And so I had to go back to everybody else and say 2.10 is the new number. Yeah.
Speaker A
Like, "Hey guys, the guy who won backed out. I'm now back at 2.10. We're starting the auction over." It was super awkward and weird because people you lose credibility in that moment. And I built it back up. And
Speaker A
uh, basically it ended up being Menlo Park. This is how Shervin got involved in Uber.
Speaker A
And at some point I told Shervin to stop negotiating against himself because he just kept driving it up without anybody else. I'm like, "Dude, you won, dude.
Speaker A
It's fine. I didn't want the same thing to happen again. You know what I'm saying?
Speaker A
Uh, so I'm I am very clear about the 3.75 and the 2.10 and the experience I had, but there may be another side of that story.
Speaker A
Yeah. Well, you know, okay, let me just tell you what I actually remember. Um, and then what I kind of remember. So, I remember you came in for the pitch and I think it was just you. Yeah, that's that's
Speaker A
which is, uh, by the way unusual. So normally people don't, particularly in those days, very rare that entrepreneur would come in with no team members on a deal that size. That was a big deal by the way that wasn't—that was a high
Speaker A
price deal at now it's like a [ __ ] 3.75. Yeah. You'd be like dude preede preede pre pre and right yeah the pitch was super impressive. And then, um, the other thing I I I recall pretty closely was, uh, like Travis had
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definitely like read some of my blogs like I felt like oh we can win this.
Speaker A
This is a deal. Um and we had the discussion and like it was clear like no we want to do the deal. Uh and at the time I was like I should really do th
Speaker A
the consumer guy. And then I, you know, I had a lot of board seats and a lot of I think it was like 16 board seats. It was something crazy.
Speaker A
It was, it was just so I was like, uhh. And so I I gave it to Mark and John O. Ferrell um to do and then all I remember so I remember something different at this point, but I I got it all from them. So
Speaker A
I wasn't there. Uh there was something about the employee option pool or some [ __ ] like I I I couldn't but it was one of these things where it's like okay okay but like I just assumed we were
Speaker A
doing the deal and then the next thing I knew uh Shervin had the deal and I was like geez and and I regret I can't tell you how long because like so that was the beginning of my torture on on this
Speaker A
thing. So I was like, "Fuck, I know we should do that deal. We lost a deal." And then um meanwhile uh Scott Weissen did a deal uh for the other company in the space, Lyft. Um and by the way,
Speaker A
that kind of got off to a very very difficult start, you know, largely because of Uber. Um, so and you know in order to Dave and catch I ended up having to go on the board like I took
Speaker A
over that board seat to kind of help them through that. And just so you understand my experience on the lift thing, it happened I believe a year later.
Speaker A
Yeah. Almost to the day something like this and the deal on 210. Was that was it really? I I don't I know. I'm just saying this is what the entrepreneur is going to remember, dude.
Speaker A
You know what I'm saying? Holy cow. But anyway, so so I you know because if a company is in a lot of trouble that that's generally when I get called um you know given given my history with that.
Speaker A
Oh man, I was working so hard on that. And so I was working hard on that trouble.
Speaker A
Oh my god, it was a lot of trouble. It was a lot of trouble. But anyway, so so I'm living with that. And then by the way, and then I would see Travis, you know, now and again like we had I
Speaker A
had him over to my house, CEO barbecue, like all kinds of [ __ ] right? like just cuz like I knew who he was.
Speaker A
Yeah. And we were kind of friends. We were like and it was always like a lot of like there was a there was a respect there because we knew who each other were.
Speaker A
Um but like he was winning and it was just like he wasn't going to let me [ __ ] not hear it. And it was just horrible. You know, I had to listen. I was like god damn it.
Speaker A
There's also all the time like for for a decade. There was also this other thing would happen. So this is like 2000 I think this really started 2014 15 etc. is Emil and I would meet up with Mark and Ben at
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this super undercover restaurant. Ah yes yes right next to our office which was in the same building at the time as TW or sorry same building as square right by the way me also like a remarkably amazing [ __ ] and
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currently the CTO of the department of war but um super talented. Yeah the best. Yeah, we would do these sess. We just we'd have dinner, break some bread, talk shop, and we're like, yeah, Emil and I would always walk out going,
Speaker A
damn, it would have it would be so great to have these guys involved. Of course, I didn't because they were at lift. Yeah.
Speaker A
And sometimes even we might even talk about, hey, is there a thing that comes together? But like I was just so the way I was. There's Yeah. There was no way to cross a deal with him other than if he gave him the
Speaker A
company. Yeah. and he could just fire everybody instantly. So it was, you know, but it was like that is it was it was there was m there was mutual respect with this really kind of cool tension at the same time.
Speaker A
Yeah. Yeah. Uh that made it that kind of just was the extra texture on the Uber experience. At least for me.
Speaker A
Yeah. It was kind of like uh it felt like well you're a basketball guy. It was felt like the old Larry Bird like [ __ ] Magic Johnson. We're like okay we'll meet each other.
Speaker A
We hate you but like wish you were on our team. This sucks. So it's the one that got away.
Speaker A
Um but fast forward and now there's a there's a new chance at Well, what I would say is there's one middle piece to this.
Speaker A
Sure. which is those who are obviously in the tech industry, like we know what Uber's 2017 was like.
Speaker A
Uh that wouldn't have gone that way if Ben or Mark was on the board.
Speaker A
Nope. So, so when Ben and I talk about this, we're like, it was our fault.
Speaker A
Yeah. We we screwed it up. Yeah. I mean, it would have been By the way, Uber would be I'll just say considerably larger and more important and more central company today. There's no question. I mean first of all it would have won food. No qu
Speaker A
Uber was dominating food. Yeah. Dominating food at the time and it would have also been Door Dash for sure a lead a leader in autonomous.
Speaker A
Door Dash was 5% market share when I left. Yeah. And um and if we lost a tenth of a percent in a week, yeah, we're not going home this weekend.
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And by the way, Tony, God bless him, had a hell of a time getting his round done at the time. Like like right at that period, he was doing a round at Door Dash.
Speaker A
Um and he had to really struggle to get it done. And you know, congratulations to him for building, you know, what he built.
Speaker A
And he's done it. He got it. You got You know what? It's really easy to do the whatifs and the this and the that. The thing that matters most is tail of the tape.
Speaker A
Yeah. And he he got some stuff done. He did. He did. He did. You know, respect.
Speaker A
No. Amazing. He survived it. Which is, by the way, you know, in entrepreneurship, surviving is a big part of it.
Speaker A
Yeah. Yeah. Good stuff. Not that easy. Our Tommy program was like second to Whimo, but catching up at the time.
Speaker A
And you had the network. We had the network, too. Uh and we just we had the ferocity sort of the fierceness that it takes to catch up.
Speaker A
Yeah. In a certain technology space uh while building all these other things that we were doing. I mean it was a lot it was it was good times. It was a lot of fun.
Speaker A
Yeah. Yeah. I mean even though 17 was super tough for me uh and maybe you could say even for the company at large. Um certainly for the company at large uh you know I loved every minute and honestly even when you
Speaker A
come out of it and you're like yeah got a little weird at the end. It was tough.
Speaker A
I still I still I still re it was still great. Some of that you love in retrospect.
Speaker A
Yeah. No, I get you. I trust me. Trust me. You don't have to remind me of that.
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I'm just saying like there's that feeling that's so [ __ ] horrible at the time, you know?
Speaker A
Yeah. It was there was a love affair there and that's almost the way I would put it.
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And a lot of people talk about well you know are you mad about this or that?
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You upset that that happened and I'm like when you when you fall in love again you don't think about the ex very much.
Speaker A
Yeah. That's it. So then you can just be like it was a good time.
Speaker A
Yeah. She got a little crazy at the end. That's true. That's true. Like the Yeah.
Speaker A
The crazy crazy ex. Yeah. So there we go. Yeah. And um how did you fall in love again or or did it take you how did you handle this the interim period between sort of the Well, yeah. I mean you had a really
Speaker A
interesting situation. And I think headlines and the neg the negativity in the headlines from that period of time and and you could really say the extreme wokeness that was sort of coming in on on Uber and trying to constrain it if that makes
Speaker A
sense. There's this interim period. It was like seven, eight months between when I left and when I started what's now called Adams. And I had to sort of fight for my life because there are just a number of lawsuits,
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a number of investigations, all these things where it was just like I I continue to stand by every decision I made at Uber.
Speaker A
Uh but you know there are a lot of times where you could just make the argument I just got way too close to the line and then yeah I could show that there's no chalk on on the shoe. I could show but
Speaker A
you would need a electromagnetic scanning microscope to see that there was no chalk on the shoe. You reverse angle slow-mo and it's just like that's the problem is is the edge of being a what's the word? a hard scrabble
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small startup kid brought to something that's working and going super big. Yeah. You don't realize that when you get big there actually are different rules.
Speaker A
Yeah. You and they're not just the rules, there's the there's the vibes when the when the pirate becomes the navy. We talk about this at the farm a lot.
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When you're the upstart and you're battling the man, you can go hard in ways that if you do it when you're the big the big dog, it's not okay.
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Yeah. It's very that you're viewed entirely differently. Yeah. And I didn't I hadn't consumed that information. It actually helped me because, you know, when we started the firm, we were the upstart and I I talked just [ __ ] crazy [ __ ]
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about the other VCs and this and that and you know, call them [ __ ] and but like at some point like I could feel it turning. Yeah.
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And I remembered what happened to him and I was like and we we actually had a whole thing like we're not the pirates anymore.
Speaker A
Don't say that type of stuff. Like be be chill. We had Yeah. We had this thing where um we would against Lyft we would uh we would recruit the drivers on Lyft um to bring them over to Uber so that uh it
Speaker A
was hard for Lift to build supply um and we would aggressively do it and we had a program for it internally which we called shoplifting.
Speaker A
Okay. ju just that that name by the way like forget about all the I I know some of the techniques they used very aggressively but that name you can't use that name it's just not a thing and I remember um
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you know David Drummond from Google was on our board and he's like you know Travis that's not a thing dude you got to change it and then I had of course like antitrust training which are like at the
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time again I'm like this small startup kid. I'm like, "Any trust? What the hell is that?" Legal people telling me whatever. They're like, "Look," I'm like, "I can't wait to have that problem," you know? And uh they're like
Speaker A
they're like, "Look, here's the thing. The way you call projects, it has to be appropriate for like a a a 10-year-old basketball team." So, it went from Shoplift to the National, sorry, the North American Championship Series. We call it the NACS.
Speaker A
And we had a whole very heavy duty initiative called the NACS to like make sure that the North American Championship Series was won by us.
Speaker A
That is hilarious. I didn't know about the North American Championship series. That's Yeah. Okay. So, you go through this eight-month period. You're in this hell.
Speaker A
You're dealing with the lawsuits. You're sort of reflecting back. You're thinking about what's next. and you say, "Hey, let's let's build again." So, what happened was it's super interesting.
Speaker A
Um, so I had a buddy who started a thing right near the end of my Uber tenure.
Speaker A
Um, and it was called Cloud Kitchens. And what happened was is he he's a real estate savant.
Speaker A
Yeah. That's just thing. And he was looking like real estate like there's got to be an angle in tech and real estate. How do we do this? and he got a property up.
Speaker A
Actually, maybe you know what? Let me start even before this. We got Uber, we got Uber Eats up in 2015. We saw the first dark kitchens. I don't know, it was like late 15, early 16. We saw pictures of
Speaker A
commercial kitchens in Melbourne that were not restaurants that were on Uber Eats. Oh, wow. Wow. Wow.
Speaker A
So, the first dark kitchens were emerging. We're like, this is crazy. That's so interesting.
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And uh a buddy of mine who is this real estate savant sort of like caught wind of like what's going on and he had this idea which was why don't we have a multi-tenant approach to this. So 30 kitchens on a
Speaker A
single property and uh basically lease these kitchens which are 200 square feet as delivery only locations.
Speaker A
Anyways he I didn't really I mean I sort of knew what was going on but not really. And then in the fall, like like 3 months after I had left Uber, we meet up and he's telling me about he's like,
Speaker A
"Yeah, you know, we got a few tenants. It's kind of working." He's like, "I'm going to do like a few more of these. I think I think I'm going to try to figure out how to do a few more." I'm like,
Speaker A
"You mean like a few thousand, right?" And so then we partnered up. Um I acquired it. Uh I think they they'd sort they've done like their uh they just done their series A and uh so I acquired it and then we just went to town, right?
Speaker A
And so it's really interesting because sometimes you start a thing and sometimes you're involved in a thing and then you come in like I think this is interesting story about like Elon was involved like obviously involved in Tesla from the beginning
Speaker A
was an investor at first but then went all the way in. Um and it's interesting how these ideas come. So I like to say that sometimes I you you have ideas sometimes ideas come to you.
Speaker A
Yeah. But if it's an idea that's meant to be if it's your it's meant to be your soulmate, you know it when you see it, right?
Speaker A
And it's and you just and sometimes you just it's like a love affair. You just go for it.
Speaker A
Some people have these long list. Important distinction because there's a real difference between that and like what's known as the professional CEO, right? where nobody would ever consider nobody smart other than like a few like weird political people would ever consider Elon a
Speaker A
professional CEO. It yeah it's like oh that's an idea that's I I didn't start the company but it's mine that's mine like it is me and I know how to do it and these guys did a great job in starting it but there's no
Speaker A
way they can do it and that's that that's a different a very different animal. Yeah. So, you know, you fall in love with something and it's meant to be for you at that time and you just you just go for it.
Speaker A
And for me, it was like ah man um complexity is interesting to me. uh things that are naturally not they're not sexy on the surface is also weirdly interesting. Um and then how like especially if you can see that it's sexy but people don't
Speaker A
understand yet. That's where the the sparkle in your eye you kind of go ah you don't see what I see and I'm pretty sure I'm right and that's the fun part.
Speaker A
Yeah. But this was a a very complex thing because we're buying property. We're doing construction.
Speaker A
We are uh then have a sales team that's selling to restaurants a deliveryonly location. So they're expanding the restaurant chain. This isn't like I'm just getting into a a vendor flow. I'm actually we are we're making a strategic
Speaker A
cell which is you should expand. You should expand your business and you should expand it in a new way, which is two strategic moves at the same time.
Speaker A
Yeah. And uh by the way, you like complexity. Yeah. Yeah. Yeah. Which makes it Exactly. Yeah. So then they're like, you're also, okay, so we've woven technology through this whole real estate thing. We have a software stack that of course we'll sell will work in
Speaker A
this facility, but we'll also sell it to all your brick and mortars everywhere. And [ __ ] let's just get some robotics going at the same time because like labor is your biggest problem if you're a restaurant tour.
Speaker A
If you solve that, it's really big. I can get into the strategy of why that is the whole thing, but but just the brass tax of the complexity of the project was interesting to me.
Speaker A
So it was more kind of emergent or iterative than hey, I've got this master vision for what it's all going to turn into.
Speaker A
No, I I think at that time I like I if it if I don't see how it it's big and meaningful then the complexity for like complexity complexity sake's not a thing there there has to be you know maybe
Speaker A
somebody would say a pot of gold at the end of the rainbow it has to be something meaningful the the meaningful thing about Adam's food or what folks know as cloud kitchens is can you make the preparation and delivery of a meal,
Speaker A
a quality meal, so efficient that it approaches the cost of going to the grocery store?
Speaker A
If it does, you do to the kitchen what Uber did to the car and you go, "Okay, that's kind of a big deal." But then you say, "What do you need to do to get there?" Okay. Well, you need to do e-commerce
Speaker A
for online food delivery, which means I need warehouses like Amazon style. Yeah. Except they're not just for logistics.
Speaker A
It's not just picking, packing, sorting, and then putting in a car. You also have to have manufacturing there, too.
Speaker A
Manufacturing also known as a restaurant. People don't think of that, but you go to the labor statistics, Bureau of Labor Statistics, restaurants are manufacturers. Okay? So you have to have manufacturing and logistics infrastructure in the same place. That's
Speaker A
real estate. Then you actually have to have automated production. That's the manufacturing. So robotic food robots essentially food robotics. And then you need to have robotic couriers.
Speaker A
And you do those three things and then all of a sudden you are getting super high quality meals. Everything you could ever imagine. We call it the internet food court.
Speaker A
and it gets to you at the price of going to the grocery store. So you go, okay, nice. That's a nice story. You go, well, in 20 years, will robotics I start with a really easy question. In 20 years, will people be
Speaker A
cooking food regularly? And there will be a suite of robotics that basically will make higher quality meals.
Speaker A
Uh like there just they will be doing a better job than any of us could do. And I think most people especially those in the robotics space be like of course that's obvious that that's going to happen. And you're like in 20 years are
Speaker A
we going to have I call them autonomous burritos like boxes on wheels that hold food at temperature that come to your house? Yes. Everybody will say yes absolutely. We see Whimos cruising around all the already. We just need a
Speaker A
very cheap a much cheaper version of that. So 20 years is like the easy one.
Speaker A
Then you go well what about what about 10? What about seven? What about five?
Speaker A
And so that's when you're bending you're bending reality. You're you're bending it towards now.
Speaker A
So everybody would agree that this is going to happen and now it's about when and who and then you say LFG.
Speaker A
Now sometimes you're a little bit early and I would say on the we were a bit early on cloud kitchens but but you build those bricks all those things I talked about we have hundreds of facilities in 30
Speaker A
countries many hundreds of facilities in 30 countries restaurants because the online delivery market keeps growing the restaurants are doing better and better so success is happening. Yeah, right. Well, restaurant world has high churn. Your churn starts coming down
Speaker A
because volume's going up. We have applications that guarantee volume into these restaurants so that we can have successful tenants, which means I'm a successful real estate guy from a from a business model perspective. The robotics start to work.
Speaker A
You know, you we're getting a manufacturing line for our robots up this uh in Q4. So, like the pieces start to come together. You're like, production is now 50% cheaper. Once we get the couriers, the robotic couriers, you go from $12 a drop for each meal to
Speaker A
50 cents, a dollar of distribution cost per meal. And now you're taking now you're taking, okay, $6 out in labor. you're taking, let's call it, $10 or $11 out on the courier um on the real estate because you're going to get higher value volume
Speaker A
because you're driving the prices down. Uh you probably save a few bucks, maybe let's call it two or three bucks on occupancy per meal and all of a sudden you've got like a eight or$10 meal that's delivered to you all in.
Speaker A
Plus, you don't have to recruit drivers, you know, and get shoplifted. That's true. So that's right. You can't shoplift a a rob a robotic courier.
Speaker A
Yeah. Yes. So we need to stop using this term. So wrong. Okay. 100 facilities in 30 countries, thousands of employees in over 8ear period and you're in stealth.
Speaker A
Yeah, dude. Yeah. That's just super hard mode. Yeah. And the thing is is like look coming out of 17 things were it was 150 articles a day of negative you know negativity and so I wanted to be able to build
Speaker A
without bringing that negativity into the system and I wanted the team to be able to build without worrying about what the New York Times was writing tomorrow.
Speaker A
Yeah. Simple as that. And it was the right thing to do. Now we had to do hard mode is we had to recruit cold And it was always from a recruiter who has a stealth thing in LinkedIn and on
Speaker A
their signature. Yeah. Okay. Um and you had to go get customers with like stealth in LinkedIn like and you're thousands of people big. This is hard mode.
Speaker A
Yeah. And it was interesting. We didn't know how long it was going to go and you have to trust that no one's going to leak. Um, you know what happens is here's the cool part about stealth.
Speaker A
If you go that long and I I don't recommend this for anybody like it's not a very special case.
Speaker A
Yeah. You don't really I don't you know but eventually there's this break in your narrative like there was this story arc and it was going going and then it's discontinuous.
Speaker A
It stops and there's this Whoops. Sorry about that guys. There's this long period of time now where nothing is filling in. And what happens then is the media doesn't want to cover a story because they it's so hard to discuss a
Speaker A
thing that has a gap a few years before it. So it's too hard to do the story and it's too hard to cover it. So you get to this place where it becomes self-fulfilling.
Speaker A
Yeah. Where it's easier to be stealth over time because even if somebody tries to leak, nobody even knows what to do with it.
Speaker A
They're just like, I don't even understand. And by the way, we did crazy stuff. So people know it as cloud kitchens in the US.
Speaker A
But it's casinos in Latin America. And we have different names. That means like magical kitchens essentially. Uh we have like kitchen valley in Korea. We have Flash Kitchen and three other names in China. We have I mean food stars in
Speaker A
London like go it goes you know you know I think it's uh Kitchen Park in Middle East. We were going to go with Yala kitchens like you know it's like a bunch of things like this. So it was
Speaker A
very hard to connect the dots. Yeah, you're extra still. Yeah. Anyways, it worked. And so at at some point an even bigger vision for for this company emerges to to digitize the physical world. We're we're category creating the
Speaker A
you're creating a new category the term industrial AI. Yeah. Talk about when this bigger vision starts to culminate.
Speaker A
So look the the vision for digitizing the physical world for me started at Uber. Okay. And treating atoms like bits started at Uber. You were it was sci-fi at one point. I promise you would touch glass and a car would come to you.
Speaker A
Yeah. And you had satellite view. You're watching this car come to you. That was crazy.
Speaker A
Now it's just like whatever. Okay. But it was crazy at the time. Everybody's first Uber experience was a magical moment.
Speaker A
So we I you know digitizing the physical world was the thing. And this idea of what I would call an atomsbased computer was something I sort of was working on in terms of her framework at the end of
Speaker A
Uber, which is CPU manipulates bits, storage stores bits, network moves bits from point A to point B. Okay. Well, CPU manipulates bits. What manipulates atoms? That's manufacturing. Storage stores bits. What stores atoms? That's real estate. Network moves bits from
Speaker A
point A to point B. What moves atoms? Well, that's transport, logistics, and those now are your three core computing resources in an atomsbased computer. And you know what? Everything you learn in your computer science curriculum, everything you learn in engineering, it
Speaker A
plays in the atoms world. Same frameworks, all the data structures, all the algorithms, it works exactly the same. And I routing algorithms.
Speaker A
Oh, totally, totally. In fact, we use we use TCP. We use TCP saw to basically manage how much demand to send to certain kitchens based on capacity and reliability as an example.
Speaker A
But like we look at when I go and I I'm messing around like when I'm pitching this to a tech person who wants to understand that 10,000 foot facility I call a 10,000 foot semiconductor and it's a 30 core processor 30
Speaker A
kitchens. They're computing atoms, not bits. The corridors where the food moves, that's a network bus. The processing center is like an L1 cache or something similar. The He's taking this analogy very far.
Speaker A
The cold cold storage where you have ice cream and juice. Okay, that's precomputed items that sit on the edge.
Speaker A
Those are your Okami servers. The courier who comes and picks up the food and goes on the road and brings the the meal to you, he that's a TCP packet.
Speaker A
This [ __ ] goes forever. It's excellent. Okay. So, the vision started at Uber.
Speaker A
So, the point is is that Adamsbased computation is a thing and honestly it's always been a thing. And the idea that oh, okay, Uber was network for the physical world, digitized transportation.
Speaker A
And by the way, almost done. Why almost done? Because it's almost fully software. Yeah. Right? Whimos are cruising. It's almost fully software. But what about what about uh CPU for the physical world and storage for the physical world?
Speaker A
Basically digitized manufacturing and digitized real estate. There's just so much to do there. It's crazy. And so there's a huge amount of innovation there. Not just with what Adams is doing, but like there's going to be lots of stuff even beyond what we we're
Speaker A
doing. It's a portfolio strategy really if you're investing. It's very interesting because you kind of got to the conclusion that we've now all learned from AI which is you can model just about anything with computation and you basically were ahead of that in
Speaker A
modeling this physical world even metaphorically computation and now kind of manifesting that it's you know probably entirely with AI on top of your computational. Funny because the framework started near the end of my Uber time really when we were
Speaker A
getting deep we were going into deep learning and heavy duty ML and I was you know we would go after some of the best AI we had an AI lab that was probably one of the best in the world as well and
Speaker A
I was always pitching that the physical world is more interesting for this stuff than the digital one and you look I'm selling my book like that's what we do right But it's you have a way way many more uh variables
Speaker A
axes of stochastic distribution. Yeah. Which then problem which then means you're not going to solve it with an algorithm.
Speaker A
You're going to solve it by empirically understanding how it works. Yeah. Right. So let's fast forward to how the the bigger vision for atoms comes together in terms of the Yeah. combination of the companies.
Speaker A
I keep stopping you. I know. Yeah. Um and then I also want to get to the partnership because it also ties together.
Speaker A
Yeah, it's all good. So, okay. You've got to have your manufacturing logistics hub. That's the real estate.
Speaker A
You've got to have your automated production. And you've got to have your autonomous burritos. The minute about a year ago, I started looking into autonomous burritos and I went to China and checked out all of the autonomy guys. Was here in the US talking to a
Speaker A
lot of the autonomy guys. Word got out. They're like, Travis is looking at autonomy again. People started going, "What's going on?" Yeah.
Speaker A
Yeah. And you know, folks like, you know, folks like Uber, other partners across different categories were like we're interested like for one reason or another because it's like you could even be do you could be like supply chain guy
Speaker A
on food. You're also saying I need to have I I for business continuity and just like peace of mind. I need to have another alternative for how these freight uh how these trucks heavy transport are going to move and um I
Speaker A
need an alternative and I'd love to have a partner as an example this kind of stuff.
Speaker A
And so, okay, so partnered with a couple folks, actually created a new company to do it because funding autonomy through a sort of core food company just wasn't going to work at first. And the reason why is because it's like
Speaker A
these are just different profiles. A real estate company. This is like heavy duty software. Big big money going after it.
Speaker A
It's like a computer company trying to build a network company off of the side.
Speaker A
you got to you got to buy a networking company. So So we just got and these partners wanted a pure play and so we created that sort of near the end of last year.
Speaker A
But what happened is it's like you got to get okay well now I need to get my team together. I need to get my guys from way back when 2016 when we were 2017 we were we were running hardcore at
Speaker A
autonomy. We need to get that going because if you're going to be in the specialized robotics game, you have to have autonomy for yourself. You have to your robots are act are moving and acting in the physical world and you
Speaker A
cannot depend of on only one company that has an existence proof. Now, of course, Tesla's going to get there, you know, sometime soon or maybe some amount of time. We don't know exactly. Um, you got to you you can't be dependent in
Speaker A
that way. And so, okay, get your team together. Uh, Eric Myhoffer, who ran ATG, is already running my food robotics division. Um, that's Uber's advanced technology group, uh, is is working for us. Uh and then uh Anthony Lewendowski
Speaker A
who was one of my top leads uh on autonomy in back at Uber was running uh pronto which was an autonomous mining company. Let's call it off-road autonomy but in a workflow or category where it's like much more than just like this thing
Speaker A
needs to move. It's like how does it move? What is the context for which it's moving? It's like a very specialized thing. Yeah. I was the biggest investor in Pronto. I'm like, let's go. So, uh, acquired Pronto and now I'm in the
Speaker A
mining business. But it's not like I didn't know about it. I was the biggest investor in it to begin with for a good reason.
Speaker A
It's one of the most beautiful and interesting autonomy categories or use cases. And on our mining business, we, you know, we have our mission statement is more productive mines to power Earth's industries. We can go to a gold a gold
Speaker A
mine CEO right now and say, "Would you like to get 20% more gold per year?" We don't get no right now. He says, "Prove it." He says, "Prove it." And we're like, "Let's go." But that's what's happened is so
Speaker A
separately, Pronto is working on mining for eight years on their own. seven, eight years on their own. Go ahead.
Speaker A
Also a great a great target for autonomy because you know maybe the worst job for humans there is is the mining jobs, right?
Speaker A
And we have so our mining customers because we're operating in a bunch of mines around the world. Our mining customers have existential safety problems or let's call it safety issues, safety concerns.
Speaker A
Yeah. like where bad things can happen on any given day and you've got real people that are putting their lives on the line when they're on when they're at these mines. And so when you automate certain parts of mining, you
Speaker A
dramatically improve safety and you I mean in a real way. Uh that's like when you look at the work that's being done and how it's being done, it's uh a little bit heart-wrenching when you are exposed to it and you see how minds work. It's it's
Speaker A
not the mind's fault. It's just the nature of the work and um there's a massive safety upside that goes along with the productivity upside which is really special. Um yeah. So, so what happened is is that Pronto just now is coming past human
Speaker A
productivity. So, it's like you do it's like any enterprise software company. Yeah. You do some cool pilots with big companies, you got stuff and you're like, "Dude, I've got like I've got like eight seats at this 10,000 person
Speaker A
company and you're like, "Okay, maybe." And then all of a sudden it's better. And in the autonomy world, it's about it's better than human productivity.
Speaker A
That means your minds and the quaries and it's like it's like exactly go time. That's when you hit the gas. So we're gonna see super exponential. We're seeing it.
Speaker A
We're in the middle of it right now. Super exponential growth on the mining side, which is super special. These guys ran a very lean startup for a long time.
Speaker A
And now I'm going to their customers who are begging us to move faster and get more out there. We have to manufacture kits. Sorry. We have to do supply chain and manufacturer kits. We have to install these kits on these machines
Speaker A
that are in the middle of the Amazon or on the border of Saudi and Iraq or like in these crazy wild places. Um, and do it fast and then do the change management at every one of these mines. So, they're
Speaker A
like, "It's time to go. Let's go." And they're pushing us. And so, our, you know, how we talk to them is like, "Look, we were a lean startup and we're going to muscular." Yeah. And that's how I talk to the team,
Speaker A
too, because you don't want them to get fat. Yeah. It's like lean muscle, you know.
Speaker A
Yes. Um, but we need some protein shakes, you know, and creatine and things like that.
Speaker A
And it's about process, professionalizing a lot of this stuff. But it's in some ways the growth there is almost deterministic as long as you do the professional things to like get all that stuff in mind. But what it means is that existing
Speaker A
minds are going to be producing more and they're going to be able to go much further and getting more and new minds are going to emerge that couldn't that were not viable before and what that means for AI what that means for
Speaker A
progress here and everywhere super big deal. Yeah. Yeah. And so to to continue, we'll get to the partnership conversation. At what at what point does this become sort of a are you thinking from the beginning this is a conglomerate or at what point does
Speaker A
this become all wrapped up in the in the atoms? Well, so this I mean the the fund raise was part of it. So what happened is is we started the fund raise and you know Ben remembers this because I gave him a
Speaker A
preview at first at at in Vegas actually and I'm like uh I was like the guy with a trench coat that's got like 20 watches. I'm like, "Which watch do you want?" I got a I got all kinds of
Speaker A
watches. And he's like, "Dude, I just want the whole freaking trench coat, dude. Like I you know, the the idea being I don't want to invest in mining or transport or food. I want the things that you're doing and let's be partners
Speaker A
for all the things you do." And so that's that was the impetus for um bringing the companies together creation of and the funding itself. Yeah. The creation of atoms and the funding itself uh being at what we would call topco
Speaker A
level. Yeah. Right. And so now it's just one entity. I mean there's sub entities there all over the place but but it's one equity structure uh which is great for the employees and great for me because managing I
Speaker A
honestly I don't know how Elon does it or did it slash does it. It's pretty wild and I'm really glad I don't have that headache to be honest. Yeah.
Speaker A
Yeah. Yeah. It's very complicated alignment. Um but you know it it's a kind of an interesting point because it's very obvious to you know when we talked about it here the way it should work and I and I think
Speaker A
the the narrative of how these things get built is um mistold constantly by the industry by the press which is you know if you hear about how did Facebook come about how did Google come about how did you know Tesla
Speaker A
come oh they had this idea Yeah. And the idea was to do this. Um, but that's not really what happened. A lot of [ __ ] had that idea. You know, there's a lot of those ideas out there.
Speaker A
And like if you look at Tesla, there was a very famous documentary called Who Killed the Electric Car that came out before Tesla. And if you were an entrepreneur watching that, what you would see is big oil, big auto, big government.
Speaker A
We're never going to let that happen. They would kill you. Um, but then the reality is, oh, Elon Musk, that [ __ ] is hard to kill, right?
Speaker A
Like, so he by himself kind of decarbonized American auto industry, which is, you know, really unbelievable in retrospect, but then it gets told, right? Like if you listen to the politicians now, they're like, "Oh, he didn't build Tesla. He just like struck a gold mine
Speaker A
and is just pulling the gold out." Like all those people built it. Yeah. But why didn't all those people build another Tesla? Like there's only one because there's only one nonfgeible very rare person in that equation who could do that. And same and that's
Speaker A
why there's only one SpaceX. Uh and that's why you know that's why Meta is Meta and Fster Fster and all that kind of thing.
Speaker A
That's a good one. I haven't heard that one for a long time. Yeah, it's good. And so to build, you know, to build a company, you know, a great company, it's always a great entrepreneur. And so when we
Speaker A
looked at it, we're like there's a very few entrepreneurs, you know, in the history of the valley that built something like Uber. Uh, and that Uber basically it survived and is still a very valuable company without him, which almost, you know, like that
Speaker A
never happens without the founder. I mean, it it's usually turns to crap very fast. And so that was what we like, yes, the idea is great, the ambition is amazing, it's going to be amazing for the world if he pulls it off, but like
Speaker A
we want to invest in the guy who could pull it off. And and that's kind of what drove drove the whole thing.
Speaker A
And there's a fun thing. I I realized this at Uber too is that I think I in many ways maybe maybe Bezos was the guy to sort of really go there which is uh the only constraint to your
Speaker A
imagination is management capacity because like look at all the things that Amazon started doing. They were earlier than everybody else starting to do lots of things, right?
Speaker A
And so I'm like oh by the way another good one. How many [ __ ] had the idea for an online bookstore, online retailer, online any of that?
Speaker A
There we go. And how many Amazons? Yeah, totally. You know, and and by the way, Jeff, like everybody who knows Jeff, everybody's heard him talk, you're like, "Oh, he's very special. That's a special CEO right there." And and that look and that's our
Speaker A
business is to invest in that kind of very very special individual. And they're super rare. And so I think in many ways Bezos may have been I always want to say the OG on something but then you find out a hundred years
Speaker A
earlier somebody else did that. But of our time where it's like how did AWS happen? It literally had nothing to do with a bookstore really.
Speaker A
Nothing. I mean there's there's some fun stories they tell but it's like this is just a whole new thing.
Speaker A
Yeah. But yeah, by the way it wasn't like the [ __ ] that was running Amazon.
Speaker A
Yeah. No, totally. That's my point. Yeah. Yeah. So, so once you get the foothold, the beach head, whatever, and it's working you can start going, you Uber rides, then it's Uber Eats, then it's Uber autonomy, then it was
Speaker A
Uber Freight, then it's like Uber AI labs. Like, you can start letting your imagination with constraints start to do really interesting things.
Speaker A
And so where you start matters. Yeah. Yeah. You're right. And it has to be like you need knowledge.
Speaker A
Yeah. Right. Like the the thing that Amazon did have on AWS is they had knowledge of what it meant to run these things at scale because they were the first to get to or one of the first like five to get to
Speaker A
that kind of scale. And so they had that knowledge. Totally different business totally but they had the knowledge about what the product should be.
Speaker A
Yeah. And because he's a customer of these things, right, at Uber, he all of a sudden he knows what the network is.
Speaker A
He knows how to do that. And although it's a totally different business, that knowledge is transferable if you if you can scale and execute and expand management and sometimes you go to sometimes those C look adjacent categories are way
Speaker A
easier than whole new Oh, yeah. off the rails categories. Yeah. Yes. And and there's also I I mean the amazing thing about AWS is it's one of the few expansions where like nobody would think well what I want to buy from
Speaker A
Amazon is like a compute cloud. Like nobody was thinking that at the time. Yeah. No.
Speaker A
You know like there there's always oh I should sell them more stuff they want to buy from me.
Speaker A
But that's a that's a whole another that's a whole another thing. But, you know, if you're if you have that level of Jeff skill, which like in terms of organizational design, cultural continuity, that guy is Peak Bezos hard to beat.
Speaker A
Very good. Yeah. So, where you start matters. Yeah. Don't let him living his best life.
Speaker A
He gets a lot of bad PR for that. Well, I was wondering you, Travis, you could have had a version of living your best life where you just like, hey, this is what I do, you know, or or was
Speaker A
it like, I'm going to keep doing it forever, or was it like, hey, I I chased the promised land. I got really far, but I could have got so much further. I'm going to get there next. What was the
Speaker A
sort of motivation to just get right back in the It's just I love being in the arena fighting it. And it's not, you know, by the way, he's one of the very rare rare guys who made as much money as he
Speaker A
did and wanted to keep playing. I mean, and start over basically. Not totally, but almost completely, right?
Speaker A
So the Yeah, you got to really want because also remember I did it stealth. Yeah.
Speaker A
So what it means here's the thing about stealth is that stealth and starting at the bottom, right? Like doing it by hand, right?
Speaker A
like not not like I walked in I acquired this company executive chairman I I acquired I acquired Cloud Kitchens uh partnered with a buddy of mine Diego right and there were like six people in the company that I acquired okay so it was
Speaker A
so funny because you got to think the last all hands I did had 20,000 people the next all hands I did and it's the only company I was in had six and I stood in front just like the same and
Speaker A
I'm like Let's [ __ ] go, guys. Let's do this. Charts, you know, like here what's happening. We're, you know, let's roll. Let's do it. And um these guys who like I just walked in. They're like, "What the [ __ ] just happened?"
Speaker A
They went to work that morning at a sixperson startup and an hour later, the founder of Uber is now the CEO.
Speaker A
Yeah. Yeah. Yeah. That is wild. And then by by the way, like we I we've seen it so many times where somebody gets to the penthouse and they're like, "Oh, I want to do a new thing." But they don't want
Speaker A
to go all the way down to the ground floor and start at the bottom [ __ ] putting the building together. Okay, now you're in a [ __ ] shotgun house. They want to jump Yeah.
Speaker A
all the way to the which never works. You You can't start at the top.
Speaker A
Yeah. Well, and the bottom thing also is about there's a humility thing to it.
Speaker A
Yeah. And there's like there there's an an anti-fame thing to it. And what I mean by that is imagine do you start from the bottom, you also do it stealth.
Speaker A
It means you plus everybody in your company gets fulfillment from the work they do every day. Not because they're going to get famous.
Speaker A
Yeah. But because they enjoy the people they're working with and what they're doing day in day out. By the way, if you can pull it off, that's a very significant cultural advantage because as soon as the company feels like it's
Speaker A
doing something for the outside status, it's a dangerous Yeah. It's a volatile [ __ ] situation.
Speaker A
That's right. You start making decisions based on external validation versus internal correctness. Yeah. You lose true north.
Speaker A
Yeah. And that's part of the upside of stealth and part of what I was doing because remember I wanted to build without worrying what about what the New York Times was saying.
Speaker A
Yeah. So it starts with internal correctness versus external validation. Yeah. Which once once the company starts doing that it's hard to like you you you already see this with the big labs. People keep going oh why why do the big labs you know smack
Speaker A
themselves in the face? Well, it's because they need that external validation for their employees because their employees are addicted to it. I want to be a good guy. I want to be a good AI researcher. So, go ahead
Speaker A
and tell them that we're going to take all the jobs. It's like, really? You want to say that? You don't even know if it's true, but you want to say that.
Speaker A
Well, why are you doing that? Well, it's that external validation is is so important to them, and it's so important not to just to the not just to the people running it, but to all the people in the company. And so, they almost have
Speaker A
to do it. Um even though they if you wanted if that's what you think then work on like those problems work on like oh you don't want it to reward hack well why don't you try and solve that as
Speaker A
opposed to go running your mouth because you care about the external validation more than the actual thing and that's the yeah it's it's very easy to slip into that like many companies slip into that and it's uh and here's the thing
Speaker A
it's hard to once it gets out of the bag it's very There's a human nature aspect to being proud of what you do, wanting your mom to be proud of what you do and your community at large.
Speaker A
Yeah. So there is a human nature piece which I was malnourishing by being stealth.
Speaker A
Yeah. But it forced a emotional intelligence that's very powerful now that we're moving out of stealth.
Speaker A
Yeah. And it's it will be interesting to see how the coming years go. Yeah. I'm that that's a going to be a very interesting cultural case study.
Speaker A
See what the company is like over time. Yeah. Yeah. Yeah. Yeah. So, we've talked about, you know, what books were to Amazon, you know, food is to Adams in the sense of it's where you start and where you start matters. So,
Speaker A
why was it important that you started at food in terms of what's generalizable? What's like Yeah. Same way.
Speaker A
So, here's the thing, right? So what cloud kitchens was uh was all about the way I saw it and this was what I brought to the party but it was like this is digitized manufacturing and digitized real estate.
Speaker A
It was called we I called it when I came people know as cloud kitchens because that's what we'd sell restaurant customers on but it the name of the company was city storage systems. Ah okay storage for the physical world.
Speaker A
This is digitized real estate. Yeah, this is a food computer with a basis in real estate storage.
Speaker A
Okay, that means a network. Yeah. So, this was the name of the company from the beginning.
Speaker A
Yeah. Or once I came in. Okay. It was purposely boring because I was going stealth. You imagine selling something called City Storage Systems. Like people are like, "What is that?" They'll forget literally 20 minutes after you talk to
Speaker A
them. They're like, "City CSS." they're like thinking HTML. They're like they're confused. They don't know what's going on. So, um, so for me it the framework was already there. I already thought about this as digitized manufacturing and real estate
Speaker A
about an atomsbased computer about a food computer and that's why I was excited. The idea captured me because of that. And so it wasn't like why' you start with food? It was like I saw something different than even maybe the
Speaker A
the the original team that was working on it saw it, but I saw where it was going. And in in the way that I just described, and that's what the romance was about. And yes, there are lots of digitized
Speaker A
manufacturing problems out there. Yeah. Like mining, like mining, like a whole bunch of other things. Um, but this is just captured me at the right time. You know, I was sitting at the bar and somebody came up and we had a great conversation. You
Speaker A
know, went to Cabo the next weekend and then just put a ring on it like let's go.
Speaker A
Serendipity, man. Yeah, that's a real thing. So, and that's okay because the thing is if you believe that you can like find something, make it work, just grind it out, make it work, will it into working. Your imagination can keep
Speaker A
going. So, for me, it wasn't it's not as much about where you start. It's about making sure you're passionate about where you start. And then where you go, you have no idea. And this is very much, I go back to the Bezos style, which is
Speaker A
like your imagination will just keep coming up with new cool ideas. And so it's not about where you start.
Speaker A
It's about why you start and how you build a culture that allows you to keep going into new places over time and lets your imagination when it's right flourish.
Speaker A
Yeah, that's what I was. It's it's not an idea, it's an idea maze. And the more you learn about the idea and all the things and you you don't know any like the thing that is so hard to understand coming from the
Speaker A
outside is you know so little when you start like when he I mean he didn't even tell me he started he he didn't know [ __ ] 1% of the [ __ ] problems he was going to run into with cloud kitchens.
Speaker A
Yeah for sure because you've got to really get into what tech guy knows anything about real estate.
Speaker A
Yeah. 0.0. Yeah. So you you it's all the whole thing is a learning process and then it's the best entrepreneurs can take those learnings and then apply multiply the applications and that's you know it's just a very very rare
Speaker A
thing uh like like look the fact that Elon has taken SpaceX to Starlink to data centers in space it's just like nobody would Start there or think about this. Uh the the first Roadster.
Speaker A
Yeah. Is now Optimus. Yeah. Okay. Talk about Yes. Yes. Letting the imagination flourish is a beautiful thing.
Speaker A
Yeah. Understanding what the core core principles are. Yeah. And applying them. So with that said, paint us more paint us a picture about the future of of atoms or more about the or maybe say some of the guiding principles that will
Speaker A
dictate you know which industries you enter next or how you think about where you go from.
Speaker A
Yeah, look um I tell people I'm very focused uh right now because it's it's only food, mining and transport.
Speaker A
There's so many things I haven't done yet. Like we're like I'm so constrained right now. Um, but it goes back to that thing I was saying before is you've got to find that beach head, make it flourish, build management capacity to solve 98%
Speaker A
of the problems that are going on, and then you have the room to go do a new thing. And really what it is, it's, you know, I I'm I've been accused of using the marathon analogy too much.
Speaker A
Yeah. and I'm gonna I'm gonna I'm gonna live up to that, which is, you know, uh at some point you might be doing a business and it just starts working. I I started seeing that on rides at Uber
Speaker A
where it was like I had my leads in different geos and I'd call them up because we would jam on hard ideas and crank and all this. We didn't have much to talk about.
Speaker A
Yeah. Cuz [ __ ] was working. It was just worked, you know, and they're like, "Travis, we got this. I don't know why you're calling me right now." you know.
Speaker A
So, actually this brings up one of the things that he did best at Uber um having had to deal with these guys was like if you look at most companies mo most of the um really the big tech
Speaker A
companies that that emerged in the 2000 2000s and 10s the management team were kind of professional middle managers etc. He had so many guys who you would have gone no that's a founder you know that's a founder over there
Speaker A
that's a founder over there that's a that's an actual entrepreneur and it's amazing that he's not building his own company because he's like working for Travis but that enabled them like to get to a multitude of ideas you need like a
Speaker A
team like that uh and there's just not that many people who can build that kind of it's just a it's a very hard to attract and maintain that level of capability because those guys unless you're building something absolutely spectacular,
Speaker A
you know, they're not going to be and even if you are, you're dealing with you got to be able to manage that.
Speaker A
Well, what what happens is the management of it becomes an empowerment puzzle. Yeah. Yeah.
Speaker A
So, yes. Okay. By the way, not unlike here, by the way, I was about to say, so you've got you've got I've got, you know, Yeah. I'm running Uber. Let's say I have I don't know five continents going at
Speaker A
any given time. You have an engineering team that's multipplexed across a finance team that's multipplexed across a product. Like there's a lot going on and the only way it works is okay you have that entrepreneur there but they
Speaker A
have to basically empowerment starts with alignment which is okay what's the strategy do are we aligned on it that's the challenge right empowerment plus alignment so alignment on the front end accountability on the back end and we would call this let builders
Speaker A
build and so but way there's is also so you've got alignment but alignment is multi-dimensional because it's alignment on okay what are the goals what are the objectives also what is the culture like yeah what is the behavior
Speaker A
you guys are doing over there because that's going to affect us over here and us over there and so forth so like we can't dilute the culture because we gave you autonomy we've got to have that and that that that combination is uh it's
Speaker A
like a very high level of management skill and that leader has to be good enough to do it.
Speaker A
Yeah. And that leader then has to work with the CFO and the CFO's people, the product, the head of product and the product guys people engineering and engineering people to make sure that it works because if I'm a
Speaker A
single point of failure, it ain't scaling on 24 time zones. There's no freaking way. And I think that's the difference between what we did at Uber versus we're seeing how a lot of other companies are expanding internationally. They're buying things.
Speaker A
Like I was like, well, I buy. We could just freaking do this. A city's a city.
Speaker A
Let's go. And then if you buy it, guess what? You brought another culture. Yeah.
Speaker A
Okay. And now you got another reputation. And then that reputation is going to seep back. And then, okay, now you don't have a culture. And by the way, because how are those [ __ ] getting away with that in Korea when we
Speaker A
can't get away with that in the US? Like all those things. And by the way, your product, your technology is a reflection of your culture. So then what happens is you just have the culture is reflected in the technology and in how even that
Speaker A
techn is built. The product decisions that are made and now you got to fuse these products and technologies together, which is very hard. Two years later maybe.
Speaker A
Yeah. Exactly. That's why I didn't buy Lyft. By the way, that was a very that was a very different culture.
Speaker A
Yeah, I can attest. I this so this was the reason I I couldn't do it.
Speaker A
Yeah. Yeah. Yeah. Super interesting. The And so you're constrained now by by three different industries. What is the You keep taking off script.
Speaker A
No. No. What is the criteria that's going to determine um if and when you go into another?
Speaker A
Yeah, it's the beach head thing and it's the it's the I'll go back to the marathon analogy is that if it's getting easy, you must make it hard again because but you got to get it to easy.
Speaker A
You got to you've got to start. It's a and it's a vibe. It's like a It's like a It's like a feeling where you basically I'm constantly creating problems.
Speaker A
Yeah. I'm a problem creator. A problem creator might be like a like creating a problem might be like, "Hey, let's do Uber in China." Okay, that's creating a real freaking problem.
Speaker A
And by the way, you don't have a full understanding of that problem when you create it. And why is that hard?
Speaker A
Because, well, if you create a problem, you have to solve it. Yeah. So I have this like framework I call the meta problem which is the derivative of your problem creation dt must be less than the derivative less
Speaker A
than or equal to the derivative of your problem solving dt. And if it's not you have a real [ __ ] problem.
Speaker A
Yeah. Well then then then you're underwater. Yeah. then you're underwater and then you can you can drown and if you have yeah if you have multiples of those you're really underwater.
Speaker A
That's right. So when you make when you create a problem you're guessing at what your capacity is to solve problems and you're guessing 6 months 12 18 months ahead with only a certain understanding of what the nature of the problem is.
Speaker A
And when you get it really wrong you're underwater and then you must stop all problem creation so that you can get back above water.
Speaker A
And then when you go from your neck and then you're like at your waist in terms of how underwater you are with your problem solving. When you're at your waist, you're like, "Oh, I could get I could get to here."
Speaker A
You create more problems. You let the problem creation spot open. And by the way, when you talk about capacity, um, a lot of it in this case is he's talking about his personal capacity because he's got to be able if he's creating a new
Speaker A
large problem, he's got to be able to not pay attention in nearly the level of detail to the other parts of his business. does have to be working because if he's solving problems over there and created a big
Speaker A
new problem then that one gets in trouble like then so it's not just like capacity of the team it's also personal capacity and that it's a little bit of both it's a little bit of both and so it's a real
Speaker A
I never felt like I never felt like rid share was solved because what happened oh it's time for autonomy okay all right let's go by the way you were right about that Yeah.
Speaker A
Yeah. Yeah. Just despite uh Yeah. I'm not going to even mention names. And so if you if you had still been running Uber um you know in this other universe or some of the vision that you have here with Adams, would that have
Speaker A
been you know could you have gone to mining with Uber? Like it's a continuation of the same vision.
Speaker A
Yeah. Right. So the digitizing the physical world the atomsbased computation that was already set.
Speaker A
Yeah. And so if the future of food is about uh infrastructure, automated production, automated logistics, that's the future of Uber Eats, too.
Speaker A
Now, it doesn't mean when you're an OEM and you make a food computer, it doesn't mean you have to make all the parts, right? And so but but it but the future is the same.
Speaker A
Yeah. And so um so that's my point is that is that once you have that framework why is the framework important? It's because it tells you what the future's going to be.
Speaker A
Yeah. It's correct and it also it's also compelling. Like it's interesting once you start seeing things like by the way I built with my team like 500 cloud kitchens facilities around the world.
Speaker A
Like you could just look at it as like why are you building kitchens which of course I would I sort of would go around all the time and tell people I'm just your local humble k uh I'm just your
Speaker A
local humble kitchen builder you know just sort of messing around. But like when you're hiring it's like why does this matter?
Speaker A
Yeah. Oh, that's right. It's a food computer. Yeah. But once So, it's a mix of it's telling you where the future's going and it's pointing the way towards where the interesting things are and it's helping you describe this in a way
Speaker A
to really top quality talent who now can see what you see and can get excited about it.
Speaker A
Yeah. Yeah. And and there are there's another kind of interesting thing which uh we went through when we were understanding the business which is unlike in a computer where you have storage and that storage kind of becomes obsolete over
Speaker A
time in the physical storage world in real estate if you have the computer uh optimizing the storage the storage becomes more valuable. So you build the food computer and the storage is essential to deliver the end service, you know, particularly before there's
Speaker A
OEMs and everybody knows there's a food computer available, but that food computer multiplies the value of the real estate. So it's it's weird. Imagine a computer that multiplied the value of its storage. Uh I I guess it's a little
Speaker A
like in AI, like if you've got data, all of a sudden data be has become valuable.
Speaker A
Yeah. Uh in a way that it wasn't really before. Yeah. Well, or you think of it this way. We could go to a data center. That's real estate. Yeah, right.
Speaker A
How much h how many how many tops are now happening at a data center today versus 20 years ago?
Speaker A
Yeah. Exactly. Yeah. So, and how much value is coming out of those tops, right?
Speaker A
So, the value of a data center in terms of what it provides society is going up over time dramatically.
Speaker A
And there's a lot of happy data center owners right now because of it. No doubt. Yeah. No doubt. my friend Rob Roy.
Speaker A
Yeah, shout out to Rob. Yeah, we'll get him on soon. So, speaking of, you know, painting this vision to talent and just talking about where the future is going, talk more about the emerging category that Adams sits within you're calling industrial
Speaker A
AI. Yeah. So, look, I I did a a vision letter when we launched Adams that outlined sort of vision for like physical AI, where we sit in it. um and even went into like what a physical AI stack is and it's really in some ways I
Speaker A
it was like it was philosophy about where the technology world in the in in the the the tech industry in the physical world where it's going to go.
Speaker A
But what I didn't do was get to the brass tax and sort of when you look at okay well there's software there's bits that are affecting how atoms what happens to atoms like how they're assembled where they go what function do
Speaker A
they do in the physical world um we basically we started I'm all over the place right now cut edit But um we wanted to create we wanted to create an easy way to understand what it means.
Speaker A
And I would I said okay Adam's mission physical automation to transform industries. You're like okay okay kind of gets me there but what does that mean exactly? Well, it means we take entire industries and that are ripe for
Speaker A
automation and AI and in doing so that these are physical industries and in doing so just completely transforms them in a sense you've had one idea like the Uber and Adams Adams is the evolution of Uber in a sense in that
Speaker A
you kind of said okay we're the Cisco of the physical world. Um, and then you're like, well, what about the other parts of the physical world?
Speaker A
And you built that that you extended that vision into the computer and now you're adding the parts. Um, but the computer is around an industry.
Speaker A
Yes. So, we make computers for industries. Yeah. Those computers are right. That's a that's an important kind of distinction. They're industry specific computers, but generalized networks in some sense. Yes. So you go, okay, why are we doing transport? Well,
Speaker A
because you've got to have wheelbase for robots. Okay, cool. But like actually what it means is every industry is moving things. There's some movement of things eventually and you must have wheelbase as part of what they do if you want to automate
Speaker A
full stack that industry as an example. But transport itself is an industry too. Yeah. But maybe a horizontal one versus a vertical, right?
Speaker A
Yeah. Peter Teal a decade ago, you know, famously, you know, sort of talked about how we've had so much progress in bits, but not in atoms and because of regulation or for whatever reason, it was just easier in bits and Yeah.
Speaker A
Here we are and we're finally Yeah. get into it in a real way. Well, and it's like I think the entrepreneurs that are coming up since the Uber time are not scared of regulation the way the bits Yeah. Well, that was a breakthrough in a
Speaker A
large sense that you made. Yeah. Yeah. And so what it means Well, then they've been trying to regulate bits lately.
Speaker A
Yeah. Totally. But these go together because it's like once the bits start controlling atoms in the physical world, then the regulators are in the game big time.
Speaker A
Yeah. And because that's generally how regulation works. It's about our physical world. And that's how it's been for thousands of years. Really, certainly hundreds. And so um yeah once you once you get in the physical world you're like okay
Speaker A
regulatory is a thing and you you say okay when in the past have we seen something like this and it's like if you start studying the second industrial revolution there is so many parallels between what the Carnegies the the Rockefellers uh the Fricks like
Speaker A
you just go through the list Fords the Fords what those guys had to deal with in that massive rapid change at that moment.
Speaker A
Same very similar political climate. Yeah. That's right. The the the New Dealers were not that different than the the you know the the the current uh in terms of their complete hatred of the uh industrialists.
Speaker A
Okay. So like there's a guy Frick who I think was Carnegiey's partner and this is about steel and how to process steel and and do it at scale.
Speaker A
I I believe this story is accurate. Uh let's just say mythology possibly true but I believe it's true. He a anarchist broke into his office while he was working. This is in like the eight like the early 1900s or late 1800s. an
Speaker A
anarchist. Yeah. Broke into his office, shot him in the neck. Wow. He got it stitched up, went back to work that day.
Speaker A
And like somebody's going to look it up. I I believe it's true. Yeah. But somebody should should fact check.
Speaker A
But you get the vibe of what's going on and how those guys rolled. And think about some of the entrepreneurs today that roll that way. Not all of them do.
Speaker A
The Bits guys don't necessarily roll this way. Elon R, but the Adams guys rolled this way.
Speaker A
Definitely, right? And so the second industrial revolution and you look at the characters and what they had to deal with and the adversity they had to go through.
Speaker A
Um, by the way, they're also none of these guys is Jesus. So they had their they had their flaws too.
Speaker A
Um, they were amazing. But there's a country. Yeah. There's a very interesting parallel to what's happening slashabout to happen now with like the coming industrial age. If we're selling our own book, we would call it the Adams Age.
Speaker A
Yeah. Yeah. Yeah. There's a book uh actually that that's very interesting on the kind of building of the war machine by the industrialists which won us World War II. No question. Um and the resistance that they got. It's called Freedoms
Speaker A
Forge. Um, and you know, it was this guy Bill Nudson who was like the complete badass who figured out like the mass production at Ford and then got in an argument with Henry Ford and went to Chevy or went to GM and like
Speaker A
yeah built Chevy and like all that kind of thing. Then went to work for the government for a dollar and to industrialize the nation. and the way he got fought by the press and everybody like like on on the most basic
Speaker A
thing like he's like well if we tell him to shut down making cars and cars by the way employ 20% of America at the time if we tell them to shut down making cars to make tanks and and other things then
Speaker A
we're going to have to give them some money. So like can we give them cost plus 7%. and which you know like seemed very reasonable like reading about it they're going to profit on the war like in every Eleanor
Speaker A
Roosevelt like everybody was just out to kill this guy and uh you know somehow but th that kind of resistance is like very similar to what we're seeing in data centers today and that kind of thing where I think the governor of New
Speaker A
York just banned data centers in the state there's a lot of parallels politically which actually I would just call that resistance to change.
Speaker A
Yeah. And nature very fast change. Yeah, that's correct. So I, you know, I like, you know, I sort of think of it as like the most important truth seeeking is the seeking of valuable unknown truths. But if you're good at finding
Speaker A
valuable unknown truths, you're creating change. Then you know things other people don't know, which means you can do things that other people can't do. And the better you are at it, the faster the change comes. And the matter that
Speaker A
and the faster the change comes, the more nature will do what it does. It's called resistance to change.
Speaker A
Yes. And so you have to figure out how to bring big time progress to overwhelm resistance to change. And you also have to build trust as best as you can so that you have more advocates versus adversaries.
Speaker A
And this is the dynamic. And one of the things I want to say just on the industrial the industrial very hard to do by the way.
Speaker A
Very hard. Everybody loves progress. It's change they can't stand. Yeah. Those two happen to go together.
Speaker A
So yeah. So like but on the industrial AI thing it was like my whole vision note was physical AI and like this theoretical thing and it was very academic and theoretical and I want to say I want to get something that's
Speaker A
practical brass tax. Industrial AI is basically this stack of software, sensors, robotics, machinery that automates an industry and we take it one industry at a time and it just became much more real and clear about what it is. You go physical AI, you're like,
Speaker A
"Oh, so you're doing a humanoid." I'm like, "No, no, we're like the non-humanoid guys. I don't have a problem with them, but that's not what we do." You're like, "Oh, do you do like some military thing?" You're like, "No,
Speaker A
that's not my thing either." You know, it's like so this felt very clean about what it is we're about and how we're going after it.
Speaker A
By the way, you know, a really interesting point on this whole thing is one of the things that we completely forgot how to do. We were the best in the world by far. We taught the world how to do was manufacture. And now we've
Speaker A
basically forgotten how to do it as a country other than like Elon. Like if you need somebody who knows how to manufacture, you literally have to get them from Elon.
Speaker A
Yeah. And we're going to have to relearn that. And actually the beginnings of that are are literally data centers. That is a manufacturing problem to a large extent, you know, with the cooling and the power and you know, you've got to build your
Speaker A
own power and all that kind of thing. And there's so much resistance to that from the exact people who were just harping and harping for years about all the manufacturing jobs are going away.
Speaker A
Well, they're back, but we don't want them. And so like that's how that's how tough this this story is and this kind of narrative Yeah. is thank God there's still enough places that are still welcoming data centers.
Speaker A
Yeah. That it's not like I the federal system is a wonderful thing because it's like you have this competition of some kind.
Speaker A
States. Yeah. It's really interesting how that works out. Yeah. Otherwise we'd be Europe. Yeah.
Speaker A
Okay. So, we were talking offline you were saying when you started Uber um you you know worked with people who would choose to work with you. Now you're in a different position. You have, you know, a bit more choice. You've been building
Speaker A
in stealth. Sure. Now you're this your coming out story. Talk to us about, you know, what kind of team you're you're building here. How how folks can help.
Speaker A
Well, look, we multi we just multiplied the number of industries we're going after by three.
Speaker A
So that's a kind of a thing. And each of them is a multi- trillion dollar Yeah.
Speaker A
opportunity. And you know, look, I had I had some awesome guys. Like, you know, this is kind of a funny thing to say, but when you make somebody hundreds of millions of dollars, it's hard to hire them again.
Speaker A
So uh so I've never had great success hiring rich people. Yeah. So, there you go. So, you know, but but you know, there's the crew like Emil Michael's now under secretary of defense, but uh he was my right hand on
Speaker A
doing just epic deal making and strategic moves. I need the next Emil Michael if that makes sense. Uh like a head of corp dev bisdev that can build an inspired team, an inspiring team as an example.
Speaker A
Um we're we're uh we're in the market for a general counsel. So, we're looking for somebody who can ride shotgun and Yeah.
Speaker A
and uh and make sure that I'm, you know, so I I like to go to the line. We should be like a few inches off the line.
Speaker A
That's a good thing to do. Um and then of course it's just the like I I need a I need a CEO of my mining business.
Speaker A
Yeah. like I uh I need to be build technical leadership across the board from autonomy, heavy duty robotics and it's really like we have lots of folks coming in like all the time but it's like those epic leaders that can inspire their team to
Speaker A
just go above and beyond and do really like make magic. Um, so we're all, no matter where you are as an entrepreneur, the the the talent game is the game.
Speaker A
And, uh, again, when you multiply the industries by three, you you're we're back in the flow. And because we were stealth for so long, we weren't in the flow. We were cold calling everybody.
Speaker A
And I think it's one of the beautiful things about us being back out there is okay, like we can we can now have like a a a place for people to understand who we are, what we're about, and I can
Speaker A
start putting teams together that can be out there in a very public way and and and let people know the great work we're doing. So, and if you're joining now, you're you're joining both with the benefit of having,
Speaker A
you know, uh all the lessons you've learned and things you've proven out with cloud kitchens and of course Uber before that. So, almost two decades, but early enough such that there's the upside of, you know, enormous opportunity going forward.
Speaker A
Yeah. And and and the ability to do something like super meaningful, I mean, yeah.
Speaker A
Save kids from working in the mines. uh you know basically making it so that everybody can have great food like you know instead of like eating super healthy food that gives people their time back.
Speaker A
Yeah. Yeah. Um while also saving money. Yeah. And saving money. Yeah. Yeah. It's a it's a hell of a mission.
Speaker A
Yeah. So we're we're having a lot of fun. It's good times. Yeah. It's a great place to wrap. All right. Thank you.
Speaker A
Awesome. Thanks, guys.
Topics:Travis KalanickUberfundraisingstartupstealth modeventure capitala16zentrepreneurshipboard of directorsSilicon Valley
