Interview, Fireside Chat
Dara Khosrowshahi: How I Became CEO of Uber; Uber Eats vs DoorDash; The Postmates Acquisition | E994
- Dara Dara describes his professional philosophy as one where "making mistakes and learning from them" is intrinsic to leadership, contrasting it with the risk-aversion of treasury bond management.
- Dara's family lost their entire business in Iran; he views the family's current ambition as a drive to "rebuild essentially what we lost" rather than running from the past.
- He defines success not as an end state of worthiness but as "joint success and shared" with family and team, emphasizing the "pursuit of excellence" and "putting in the hard work" over results alone.
- Dara left Expedia after 13 years to join Uber after Daniel Ek convinced him that the role was about "impact" and "society" rather than personal happiness or comfort.
- He identifies three key career criteria: working with people you like and learn from, having a tangible impact at the company, and ensuring the company itself affects the world.
- Dara defines high performance in leadership as "sustained excellence over a long period of time" rather than short-term glory, noting that a great CEO's legacy is measured by the company's performance after they leave.
- He advises leaders to be "willing to be misunderstood for a long period of time" and to avoid groupthink, quoting his mentor Barry Diller: "I didn't bring you here to be average."
- Dara characterizes Uber's current environment as "wartime every day," citing the difficulty of balancing a turnaround with the need to keep the business running while rebuilding technical platforms.
- He identifies the core constraint of Uber's marketplace business as the real-time, spatial, and temporal variability of matching supply and demand for multiple customers.
- Uber's stated value is being "trip obsessed" rather than just customer obsessed, aiming to orchestrate the "magical match" between riders, drivers, eaters, and couriers.
- Dara notes that 2 billion trips occur quarterly, emphasizing the massive scale of the logistics required to match supply and demand globally.
- Regarding capital allocation, Dara agrees that CEOs must act as capital allocators over the long term but acknowledges the need to "earn the right" to invest by managing short-term resource allocation effectively.
- Dara cites investments in "marketplace tech" and machine learning algorithms as a successful bet that resulted in significant returns.
- He admits to capital allocation mistakes, specifically the autonomous vehicle division (ATG) and hardware investments like electric bikes (Jump), attributing the latter to Uber's inability to master hardware complexity compared to software iteration.
- Dara explains that Uber Eats' initial strategic error in the U.S. was betting on "speed and urban centers," while competitors like DoorDash succeeded by targeting the larger "suburban" markets and offering "selection."
- Uber is now correcting its strategy by targeting suburban markets and accepting longer, but predictable, delivery times in exchange for increased restaurant selection.
- Dara claims Uber Eats is the "global leader" alongside DoorDash, noting that Australia, France, and Taiwan are among the company's best markets, with Australia being a "home run" due to strong integration of mobility and delivery services.
- The acquisition of Careem in the Middle East is described as a major success, driven by the founders' capability and the region's favorable demographics, covering mobility, delivery, and payments.
- The Postmates acquisition was executed to consolidate the U.S. delivery space, specifically to scale faster in the West Coast market and integrate Postmates' backend onto Uber's infrastructure to save costs.
- Dara identifies the Uber Freight and Transplace acquisition as a future "big hit," contrasting it with the failed hardware ventures.
- He categorizes hardware ventures as "two-way doors" that he initially underestimated in difficulty, noting that software and hardware operate on fundamentally different constraints regarding firmware, shipping, and manufacturing.
- Dara advocates for a "plastic mind," stating that if a leader is not making mistakes, they are not taking enough risks, though he distinguishes between "two-way doors" (fast iteration) and "one-way doors" (slow, careful decision-making).
- He notes that "one-way door" decisions at Uber include major acquisitions and changes to earnings algorithms, where the "blast radius" and impact on third-party earners requires extreme caution.
- Dara's primary advisor is his wife, who serves as a "judge of people" with a high bar for trustworthiness and a talent for identifying "bullshit" in hiring and business scenarios.
- He hires technical talent based on their ability to explain complex concepts simply, viewing this as a sign of "clarity of thought" rather than a desire to dominate others intellectually.
- Dara operates on a "start with full trust" model, granting autonomy to his team while holding them accountable for mistakes and learning from them.
- He describes his marriage to his wife Sid as working because they "are in love but we like each other a lot" and spend significant time together.
- Dara believes he was "too soft" with his children as a parent, learning from his wife that protecting children from adversity fails to prepare them for the real world.
- He critiques modern generational entitlement, arguing that society has become "too soft" and that discomfort, adversity, and mistakes are necessary for shaping character.
- Dara resolved a "conflicted board" at Uber by shifting the board's focus from "control of Uber" to the "success of Uber," a change facilitated by bringing in Ron Sugar as Chairman.
- He acknowledges the difficulty of the transition from "Uber 1.0" to "Uber 2.0," noting that the pandemic crisis ultimately helped unite the "old guard" and "new team."
- In a quick-fire round, Dara cites Isaac Asimov's Foundations as the book that sparked his passion for science and engineering.
- He identifies the "best thing" inherited from Travis Kalanick as the high "bar for talent" and the "worst thing" as the "brand damage" that required rebuilding public sentiment.
- Dara credits Barry Diller as his primary influence, praising Diller's 20-year tenure as a mentor and his unquenchable curiosity and humility.
- The most painful professional lesson Dara cites is the 2020 pandemic, which caused an 85% drop in volume and $2 billion in losses, forcing layoffs but ultimately resulting in a "lean and mean" organization.
- If he could give advice to himself before his first day as CEO, Dara would say: "Go faster," admitting he did not move quickly enough initially.
- Dara's chosen epitaph word is "Persistence," though he humorously prefers to be remembered as a large oak tree rather than a tombstone.
- He identifies Uber's decision-making speed as an area for improvement, citing the complexity of coordinating inputs from product, tech, ops, and legal teams.
- Dara rejects the ability to predict the next five years for Uber, stating he wants to remain "open-minded" and "humble" to avoid confirmation bias and detect weak signals early.
- Dara notes that while Wall Street demands "predictable earnings," his approach requires accepting "volatility but more growth," managed by a specific "budget of mistakes" that he must not overspend.