Excellence Is the Capacity To Take Pain | Travis Kalanick, Founder of Uber

I want to start with Adams.

Yeah.

You have this great line on the website that I actually love. It's an awesome sentence:

“Physical-world autonomy requires AI for the physical world. This kind of intelligence requires computation we haven't invented, at an efficiency we can't yet fathom, with deep-learning models to understand and act in the physical world that don't yet exist.”

Tell us what you're building.

Let's start with the mission. It's easier that way: physical automation to transform industries. You start there, and you can sort of go—it's almost Socratic—like, “What does that mean?” In the terms that people use today, it's physical AI and robotics to transform industry. Then you go, “Okay, well, is it a humanoid?” No, it's not. I wouldn't call myself anti-humanoid; it's just that what we're doing is not that.

It's specialized robotics. It's not like we make robotics and anybody can have some. It's more like robotics and AI that go after one industry at a time, in the industries where we think it makes massive moves—big moves. Once we get our sea legs, we go to the next one, and the next. If you're doing it really well, I like to say that the only constraint on our imagination is management capacity.

What does that mean?

We're solving problems every day. If I have to solve lots of small problems because I don't have a lot of management capacity under me, we're not going to do very much. I'm going to be constrained in what portion of my imagination can become possible—like, real. But if you have lots of management capacity, lots of problem-solving capacity, then those constraints unwind.

So how do you broaden and expand the management capacity you have?

Okay. Why don't we step back and talk a little bit about this? I have a lot of frameworks for this kind of stuff. One of them I call the meta-problem. Imagine if you had this equation: the derivative of problem-solving with respect to time must always be greater than or equal to the derivative of problem creation with respect to time. If that's ever not true, you have a real problem. I call that the meta-problem.

What's happening is that if you are creating problems faster than you can solve them, then you're kind of effed. But when you create problems—in an Uber context, it would be like, “Let's go to China.” That's creating a problem. Right now, the way I think about problems, I don't think about them in a negative way. I think about problems the way a math professor would think about a problem. A math professor without interesting problems to solve is a sad math professor. So it's a good thing.

You want to create interesting things to solve. You want to create problems to solve. You have to predict well the nature of the problem and your ability and capacity to solve it. You create a problem today, and you may not understand the nature of the problem-solving you're going to have to do. You have to predict it.

Those problems start coming ashore in 6 months in a real heavy way, and maybe even longer. So you have to be good at predicting the nature of that problem and saying, “Okay, well, what is my management capacity to solve it?” If that equation gets out of balance, then you have to stop problem creation while you get the solving going, so that you're not drowning anymore.

Right. Can you give us an example of what happened in China, then?

China was amazing, but very difficult and, in some ways, impossible to predict. Let's go to China. Sounds like fun. It was a super-awesome adventure, because what happened was I thought, “Sounds cool.” It was probably 2013, or early '13. Uber started in 2010, so it was still early crew. And I got a crew of folks—super-OG guys—and we stayed in an apartment in China for a week or two, a week and a half, two weeks, something like that, and met with everybody we could.

It's actually when I first met Wang Xing at Meituan, and he told me I was crazy. “Don't do it.”

It's the worst idea ever. What was your response when people told you you're crazy, that it's not going to work?

That's the best thing ever.

Okay. There are many threads here. We're already poking through them. We're going to go everywhere.

Okay. So, in engineering, we call this BFS, breadth-first search. I'm not able to go deep; we're painting the breadth of the tree before we're going deep. We had a cultural value for that at Uber, and I've pulled it into the value system at my current company. It's called “Super Pumped,” which is about infectious enthusiasm for the hard things.

The harder it is—the more weird, gnarly, whatever words, whatever superlative you want to put in front of it—the more awesome it would be to solve it. The problems that are more awesome to solve are the ones that people think are impossible to solve. Sometimes people think something is impossible; they perceive it that way, but it's very possible—it's actually easy. There are others that people think are impossible that are super difficult, but possible.

That's how you think about Adams now, right? When I hear you speak about it and when I read about it, you're like, “This is going to be super difficult, but it is possible.”

Adams is the name of my company. We just named it. It came from a crazy, obscure name that was done on purpose. We basically went ultra-stealth.

But the real question is: coming out of Uber, what was the next thing, and why? It is Atmo. We just started calling it that. I had a penchant, an affinity, for something that's super hard and super complicated.

Have you always been like that, or was the experience of Uber what crystallized how important that was? When did this desire—

It's always been this way. I think it's funny how you got there, because it's that feeling when somebody tells you something is impossible and you're like, “Is that right?” And I'm like, “Watch this.” I've always had that.

When I was a kid, I'd always have a sparkle in my eye to do something when somebody was like, “[expletive]”—that kind of thing.

Did you know, when you started it, how difficult it was, or did you think, “This is a hairy problem. I'm going to be fighting complexity”?

Complexity. There's a complexity to it that was part of the attraction.

Okay. And you saw that from the first spot?

Yeah, from the very early days. I knew it was complicated. I didn't understand exactly how it was complicated.

I'm very curious. What you said was very interesting: you're creating all these problems, and some of the problems you're creating are not coming ashore, I think is the word you used.

It takes time to see what the nature of the problem is that you created.

So can you give an example of a problem you're creating when you start in China—how long it takes to come ashore and what happens when it does?

Okay. What you learn when you go and do what we did in China is that when you take your business and go to China, you have to start over. So many people think that you can take your business and take it somewhere—which, by the way, Uber kind of trademarked that, if there's such a thing. We made that a thing, where cities and countries didn't matter. We created a system that was inevitable.

But China was different because of how that country works. Everything's different, and that means you have to start from scratch. Something as simple as the phones—or let's say maps and GPS.

Mhm.

There's a different GPS system in China than there is here.

What does that mean?

It's different. If I want to understand how cars are moving through space, I have to change my GPS system so I can do that.

So I understand. And that's one of a hundred things that are different in China, which means you have to start over. You're starting a new business when you take it to China. You have to be very receptive: “I am going to learn how to do things differently in this very different place,” and be excited and interested in how different it is.

Whereas most Western entrepreneurs that go to China—almost none succeed. Have any succeeded?

At the time? Like Apple?

I'd say the two that you would come up with in our area, in our neck of the woods—there are others, but in our neck of the woods, you're like, “Okay, Elon definitely did,” right? And Apple definitely did. Tim Apple and Elon, right?

Right. Those are the two guys.

So, you start getting into this war with DiDi. Was there anybody else besides DiDi? Were there multiple competitors?

We eventually rolled out Uber Black, which was one thing, much smaller than a DiDi thing. There was another company called Kuaidi. We were just in this corner, doing a niche thing, which was a super high-end thing in China. An S-Class in China at that time was very thin. I mean, we were growing. It was fun, but it was thin.

I think it was 2014. It must have been when we basically said, “Okay, we’re going to do ridesharing in China.” Nobody had done that. DiDi was taxis.

So, it sort of fills in the gaps, but it’s not their main jam.

But we went to full ridesharing, which is peer-to-peer ridesharing, where anybody driving a car could offer a ride to a citizen in the city.

Which, before you, did not exist at all in China.

Certainly not coordinated by an app. This was ridesharing—what was at the time called peer-to-peer ridesharing. Think of what some people would think of as Lyft or UberX, this kind of thing in the U.S. context. But what we called it was the People’s Uber.

And so, in the app, you’d open it up and there were red cars. We became Chinese. We had a massive, awesome brand there because we cared and we were passionate about the user, the customer, in ways that these other companies just weren’t.

What was interesting about what was going on with Didi was that while we were inventing and innovating, they were copying. These guys were so good at copying, it was almost an art form. To be able to copy as quickly and fiercely as they did was like a warrior mentality in its own right.

I like to say the place to be is like Braveheart, which is like the warrior poet. These guys were just pure warriors. There was no poetry. They weren’t creating the new thing. They were copying.

But almost to a level of poetry in their ability to copy and the speed at which they were able to do it.

Right. But while they were getting ready to copy it, it was a very wild, sort of half-technology, half-regulatory-arbitrage situation. Very bold. It took them a while to copy, and while that happened, it went vertical.

Uber did.

Yeah, Uber did. I’d say it was so vertical it almost leaned to the left. It almost started bending. The curve almost bent to the left.

The opportunity was massive. At some point, probably our top 10 cities were all Chinese cities.

That’s wild—in rides.

Yeah. Not in revenue, because the rides, instead of being $13 or $15, whatever, in my day, were like $3 or $2 type stuff, right?

I remember we were doing this fundraise in China. We had to raise money in China because we were pulling a huge amount of money.

You mean you were burning a ton of money?

We were burning a lot of money, but we also needed a partner. When we first went to China, everybody told us that we needed a partner.

And they’ll just tell you that.

We were like, “What is a partner?” They were like, “Well, that person or that entity has like 50% of your company in China.” I said, “Why is this a law?” They said, “No, but if you don’t do it, you’re totally screwed.”

I just never got it. Nobody could tell me why, or why I had to. I just said, “I’m going to try. Screw it.” Again, Apple and Tesla—these guys said screw it and they just did it. We eventually did get a partner, but instead of giving up 50%, we gave up, I think, 7%.

And it was to Baidu, but it was because we were getting massive regulatory heat. As long as we had a partner by our side, we could be Chinese.

Yeah.

Right. When you start meeting with ministers in China at the highest level, you have to be vouched for by somebody in China, or things start to get weird.

And that’s what the 7% is for.

That’s what the 7% was for. We needed a partner inside China that was trusted, essentially.

I remember right about the time that we got that partner, we were, of course, doing this, and there was a strike—a pan-European strike for all taxis in all European cities. At some point, I think this was July 2015, there were vehicles being lit on fire in Paris. It was like every major city. They just tried to shut the whole thing down.

What were they protesting?

Progress.

So, I’m going and meeting with the transportation minister in China, and he throws down 3 newspapers—Western newspapers, top-of-the-fold, old-school newspapers. Remember those? There were pictures of this chaos across all these cities, and he says, “This is a problem, and this is not something we’re okay with.”

I said, “Why?” I knew what he was going to say. I said, “But this is all Western democracies.” In Western democracies, as we know, it’s a popularity contest. What that means is that the politician succeeds by being popular. He doesn’t succeed when progress comes.

The only way to get progress in a democracy is for that politician who seeks to be popular to be under threat. When there is a threat of disruption or instability, that’s the only time you’ll get progress in a Western democracy.

I said, “But so what? We’re here in China, and it’s totally different.”

He said, “What do you mean?”

I said, “Well, the only time I’m able to get progress in China is when stability is in harmony with progress. Those 2 must be harmonized. You will only get progress when it is in harmony with stability.”

I said it in that way, those 3 words, and that was very Chinese. It was totally different. If there was ever any hint of instability that we were to bring to China, we would be shut down immediately. But as long as we created a foundation of stability, progress was super welcome. Progress must be in harmony with stability. It was totally different.

So, when did they take the viewpoint—if they took the viewpoint—that Uber was injecting instability into their city or area?

They never did.

Yeah.

But at some point, they felt like we might win. Instead of really seeing super problems at the city level, we didn’t. For the most part, we were treated fairly in the cities. Not completely, but for the most part.

What happened was, what I’d say at the time, the China war went global. We were spending, let’s say, tens of millions of dollars a month fighting Didi in all these cities.

The fight was like this: I needed to subsidize rides to gain market share. When I gained market share, there was a network effect, because if I was bigger, then my system was more efficient. If I was more efficient than them, they had to subsidize more than I did to compete with me.

So, how do I subsidize—where, when, and how—to get that efficiency edge, that network-effect efficiency edge, so that I subsidize less than them? This is why Lyft is smaller than Uber, because we were better at this part of the thing, and people don’t really know that’s what it takes.

But how do you get an efficiency edge? The efficiency edge starts when somebody even downloads the app and signs up. If it’s easier to sign up on one versus the other, you have an efficiency edge. If it’s easier to call a vehicle and get it to you without problems, you have an efficiency edge, because you’ll have less support. People are getting higher completion rates.

If the cars are moving to where the demand is because the driver app has good ways to point drivers to the right place, that means you have shorter pickup times.

Efficiency edge. Efficiency edge means you get bigger faster. Getting bigger faster means you have a bigger network of drivers, which means wherever you are in the city, you're going to get a faster pickup. It will be cheaper because if there's less dead time for the driver to pick you up, then, if he's generally trying to optimize for dollars per hour, the whole thing just starts working better. That's the network effect.

So you're like, "Okay, how do I get bigger?" Well, I'll make the rides really cheap. That's one way of doing it. And if your rides are cheaper than theirs, then all of a sudden your network gets bigger. Your network gives you efficiency, which then means you can get to a lower price point without subsidies that the competitor still has to subsidize.

You'd make a profit at a place where they would make a loss. And the robber barons all understood this, like Carnegie—

Yeah. When you're talking, I'm like, "[Expletive], this is Rockefeller."

Exactly. So I read—I think it was a Ron Chernow biography.

Titan.

Yes.

Okay, there's actually a better one. I'm going to send you—

And what it is is this book from 1970 by David Freeman Hawke. It's called John D. Rockefeller: The Founding Father.

Titan is 800 pages, and you get a lot about his family history. This is like 250 pages about how he built Standard Oil, and it's [expletive].

It is exactly what you're describing. I want to interrupt you for 1 second before you go back to my question. I spend thousands of dollars a month on Uber, and I only use Uber Black SUV. It's insane. In a mature market in the United States, in these big cities that I'm using Uber in, how would the network effects of Uber be reversed?

Okay, so there are a couple of things. First, a small player competing against Uber has certain advantages. Let's say a small player said, "I'm going to have cheaper rides than the big player." Okay, the small player, let's say, is 1/10 the size. Let's just say their subsidies on an absolute basis are somewhere around 1/10 as much. So if I am the small guy and I go and subsidize rides, I'm going to gain market share unless the big guy is spending 10 times as much as me. Now, the efficiency edge can make it—instead of 10x—it can make it 7x.

Mhm.

Okay. But ultimately, a well-funded competitor—you have to let them grow to some degree so that they have to feel the weight of the size of what they are. So when they're subsidizing, it becomes a problem, and it hurts some more. I like to talk about situations where, if we had a competitor, we weren't exactly sure what was going on, because what happens is you have to guess when you're subsidizing: Do I have an efficiency edge on them or not? You try to make yourself as efficient as possible, but you don't know if you are more efficient than them or not. So you need a signal to determine whether you're better.

One of the ways you could totally do it is let the competitor get to 50%. So it's 50/50: You have the same network size. Then you would start to see, "Okay, is my price lower than theirs while maintaining a 50% market share, or is my price higher than theirs while maintaining a 50% market share?" If I can maintain 50% market share while having a higher price, then my system is more efficient than theirs.

Mhm.

Then I could start dialing back because I know they'll lose. Why? Because at some point, efficiency outstrips subsidy. What I mean by that is, when you're subsidizing, you go through huge growth, and at some point you get so big that you can't really subsidize a lot. Like, if you're doing 10 billion rides a year, you can't subsidize $2 a ride because you run out of money.

Just $20 billion a year. Nobody's going to fund that.

Okay?

Right?

And so, as you get bigger and bigger, the amount of subsidy you can actually put to it is smaller and smaller. At some point, the amount of subsidy you can put to it realistically is smaller than your efficiency gain by just being better. And so then your efficiency outstrips subsidy. Anybody who's a small player in a market has a natural advantage if they're well-funded: You can gain market share very quickly, and you can force the big guy to burn money.

But why wouldn't the big guy be able to drown the smaller competitor faster?

Well, there are ways to reverse it. So, for instance, the other way, where there's asymmetry going the other way, is recruiting drivers. So, for instance, I could give subsidies to drivers if I'm the big guy. I can give subsidies to drivers that are like—they're like $1,000 if you join Uber and you do 100 trips in that first week.

Mhm.

I could suck up that supply. The only way they're going to be able to keep those drivers is they're going to have to subsidize across all of their drivers, even though I just took a small number of them.

Mhm.

So I'm going to suck up all of their drivers unless they defend their driver base. There's a lot of little things like this, and I'm almost remembering—it's been 10 years since I did any of this—but I'm trying to remember all the ways where it's asymmetric one way versus the other way.

Yeah, I think you hit on it. It's paying attention to every single little detail. So when you were speaking about even the sign-up flow, how fast the ride comes, and how easy it is to put in your credit card information, everything else, what I'm sitting here thinking is not necessarily about you and Uber and China. I'm thinking about Rockefeller walking by and saying, "Hey—

You guys are putting 50 drops of solder on these barrels, and you're doing that because you think it's 50 so it doesn't leak. Try 48." They try 48. This is in Titan. They try 48; it leaks. What about 49?

Forty-nine doesn't leak.

And he says the first year, that only saved us $2,500 a year because of that 1 drop. But we were tiny. Now it's hundreds of thousands of dollars. And he did that with 1,000 different things. So by the time he got to his scale, you're not competing at all. It's impossible.

And so that's super important. Now I read Titan after Uber. [Laughter.] And I'm reading him going, "Holy [expletive], this dude was way more hardcore." But the reason is that we had antitrust attorneys at Uber, and they were making it very clear: There are certain things you can do and certain things you can't. They were training me and educating me on antitrust law.

Yeah.

At first, when you hear that and you're just a startup kid—literally just getting started—you're like, "Antitrust law?" [Laughter.] But it ends up being obviously very important. Rockefeller didn't have that.

No. The laws were passed because of him, of course.

But it's like he's the super—people use "OG"; they use it the wrong way. It means original gangster. He's the OG. OG.

I think the other thing about monopolies, too, is there are different ways—they're different things—because sometimes the monopoly emerges because the company is so competitive. Sometimes the monopoly emerges because the company is anticompetitive, and they're different.

That's interesting. Say more about this.

Yeah. Well, where I ended up at Uber, basically, the motto was more like, "The one who serves the customer best gets all the customers." Very Bezos. That's where we ended up. So you can be highly competitive. And look, at Uber, we had never gotten a regulation passed that would hurt a competitor. We never would do that. That's just not how we rolled. We never donated to a campaign ever to try to get something passed.

You wanted to win because you built the best service.

That's right.

I'm reading this biography right now. It was published in 1975. It's on the founder of Honda, who was competing in Japan. He founded Honda in 1948. Japan was in ruins, and the technology in Japan was really low at the time.

Yeah.

And so all of the people building motorcycles and cars were like, "Let's get together and petition the government not to allow imports." And he was the only one who voted against it. He goes, "No, no, no. The way to win is to build the superior technology."

Yeah.

Because if we have the best product, that product will go. It won't just be profitable in Japan; it'll spread throughout the entire world.

Very much like what you're saying here. It's like, “No, I don't want protectionism. I want to win because I built the best product and customers are choosing me.” Also remember what we were overcoming to do what we do was a system that was perfectly anti-competitive.

Can you explain a government-condoned monopoly or a government-condoned cartel called taxis? People don't understand this. Can you explain the environment in which you started Uber?

Let's start with what a taxi is. Okay, what is a taxi? We'll do New York because it's the best way to tell it. In the early 1900s, there were people picking up other citizens who needed a ride across town and charging them for it. Eventually, the city decided, “Hey, look, we want to have this licensed and controlled in some way,” or certainly have rules of the road—just rules of the road.

So you'd get a license, but anybody could get a license. You'd get that license for free, and they would make sure you weren't a felon and different things like this, which you'd go, “That sounds great. Good idea.” But anybody could get a license, and get it for free—a taxi license in New York. Eventually, that number got to, I don't know, somewhere around 13,000.

And then those 13,000 people who had licenses—this is now, let's call it the 1920s or the 1930s—decided that they would lobby the city to give no more licenses out. The city did some deals. Who knows? You know that era in New York, you know how that went down, but there were no more licenses.

Of course, that was great for the people who had them because as the city was growing, there was more and more demand to get across town, but there was a fixed number of licenses—people who could do it, who were allowed to do it. Then the taxi guys go to city council and they lobby again. The next version of the lobbying is, “We want to be able to sell the license to somebody else.”

So now I have this thing. It's known as a medallion. Now I can sell it to somebody else who wants to get a cash flow that's artificially high because nobody's allowed to compete, essentially. Then they went to city council one more time and said, “We want to be able to lease out this license to an individual on a daily or weekly basis.” And that is the modern taxi system today.

When Uber rolled into New York, the driver was getting a 12-hour shift 7 days a week, but there were 2 12-hour shifts. Each of those drivers was paying $40,000 a year to rent a car for half the time.

Insane.

Which means the guy who had the license—whose grandpa got it for free—the guy who has a license whose grandpa got it for free is getting $80,000 a year renting a car to a taxi driver. That taxi driver is paying $40,000 a year for 12 hours a day. He's renting a car for $40,000 a year. For that privilege, he gets to be impoverished.

That is the taxi system, and it's over 100 years old. It's like Stockholm syndrome or regulatory capture. It's so freaking tight that the difference between the regulator and the taxi company is almost indistinguishable.

And it had to be jarring for you to walk into a system where you were just describing corruption.

It is not—

Legalized corruption. Legalized corruption. So remember, what is a taxi system? It is a government-condoned cartel that outlaws competition. But it had to be jarring for you because then you come in with a better product at a cheaper price that customers love. You caught me in 2010, or whenever you opened up in New York. You've kept me since then. I've never opened up another app—16, 17 years, however long it's been.

It's like I'm choosing to do that, and then the governments are like, “No, no, this legalized corruption is good. You, Travis, and Uber, get the hell out of here.”

So what happens is, being anti-competitive is illegal in the United States unless you get a government official or regulator to do it for you. Then it's legal. Pretty interesting.

We were talking before we started recording about capitalism, and you have some interesting thoughts and ways to describe it. I would also say this show is a love letter to capitalism. It's very pro-entrepreneurship. I'm the son of a Cuban immigrant. I grew up meeting people who came over here on rafts.

From the time I was 9 years old, I knew I was obviously born into a very special place because these people risked their lives to get here, and because of the wealth that this country has created. What I think also has to be called out is this crony capitalism, where you don't—I like the Hondas of the world, where it's like, “No, no, I want to win because I'm the best,” not because I gave you a bunch of money and you shut down my competitors. That shit should be called out.

So it's super interesting because you go, okay, well, in this case Uber was the symbol of hyper-capitalism in many ways. It was embracing all of the values and principles of capitalism, but it started with the most important, which is an individual has a right to choose between different suppliers of a good or service.

It's like a pro-competition thing. The consumer has a right to choose between different offerings. The other side of that is an individual can start a business to provide that service or offering.

So you go, okay, capitalism at its foundation is somebody can start a legal business, make a product or a service, and offer it to people, and the people have the right to choose which one they use. That's capitalism. So the question is, what's anti-capitalism?

Anti-capitalism is the constraint on people being able to start a business or have a vocation that they choose, and/or individuals not having the right to choose which service, offering, or product they buy. At the core, that's what it is. Now, people get confused. Sometimes they think something is capitalism that is not. It's pretty obvious: anybody watching any part of this conversation on taxis, it's super clear that taxis are definitely not capitalism.

Mm-hmm.

But that's why they are not very good, and it's why they are more expensive than they need to be. If people are taking Ubers today in New York and wondering why it's so expensive and why it's getting more unreliable, it's because after I left Uber, they started passing a bunch of laws that are turning Uber into the taxi system.

I didn't know this.

Yeah. They have a limit on the number of drivers that can be on Uber. They've turned it into a medallion system that cannot be traded. As people retire from driving, the number of Ubers—I believe I may have this wrong, but it's either fixed or shrinking right now. That is why the prices are going up and the service is going down.

Uber is thought of as a capitalist thing, but actually the government is constraining it. And why? Because of the taxi owners who want their medallion prices to go back up.

This is madness. Have you ever read Atlas Shrugged?

Of course. Yeah.

I mean, a lot of people are like, “What's happening now feels like the scenario—the scenes in that book.”

I hadn't. It was recommended to me a million times. There are a bunch of guests who've been on the show who've talked to me about it in private, and finally I was like, “All right, the 12th person that recommended it—I finally read it.”

Then I looked it up, and I was like, “Wait, this was written from, like, 1946 to 1956? I think the 10-year period she was writing?” I was like, “This sounds—the people in this book are exactly the same kind of person today.”

Yeah, yeah. For sure. I agree with that.

The whole book is like, we have these prime movers, and then we have these people that are just trying to restrain their—

Progress.

Yeah.

But what happens when the people building the progress then go on strike? That's a very fascinating theme throughout the book.

Yeah. I mean, we get to some pretty interesting places with this kind of thing.

In your career, did you only run into this government corruption in Uber? Have you run into any in City Storage Systems? CloudKitchens was in City Storage Systems. Now you renamed it Adams[?]. Have you run into other forms of it? Because your whole thing, what I love about you, is the physical world. I think you said you consider it a calling.

Yeah—to digitize—

The physical world. I love that you use the word “calling,” though. I think that's really important. Have you run into other forms of—

It's everywhere, but taxis are by far the most intense. Literally, competition is illegal. We talk about anti-competitive things and antitrust law and Rockefeller and things like this. No, no, no—taxis. Competition is illegal.

But why do they still have power? They've captured the regulators through lobbying, through donations, through legalized corruption. It's not the only industry where this exists. There are obviously many other industries, but in terms of what I've seen, competition is outlawed.

How does the China–DiDi–Uber story end? Did the government put its hand on the scale and favor DiDi over Uber?

So they ultimately did. What happened was, the China war went global, and the sovereign wealth funds in China started pouring billions of dollars into my competitors—Uber's competitors—in different regions so that they would subsidize those regions and drain my resources.

Wait, before you go there, take me through your mindset when you realize the game that they’re playing.

Yeah. You’re like, “Damn, that’s real.”

What are you like? Not sleeping, or are you like—

Well, I mean, the entire Uber thing was a lack of sleep, you know? It wasn’t like this was a new lack-of-sleep thing. It was new, but lack of sleep was generally a thing because I had a global business that was really intense and very game-theory-oriented in the ways that I’m describing. It was always on, and crazy, weird things happened in cars at night.

The first time I got woken up in the middle of the night was because there was a drive-by shooting from an Uber. You know what I mean? That’s not good. The thing is, what happens in a city happens in an Uber.

So you’re exposed to all the vagaries of human behavior.

Yeah. The roads are the cardiovascular system for the city. There’s nothing that happens in a city that a road doesn’t touch. People are people. They do things they shouldn’t do.

Our goal was to make Uber the safest place in a city, and I think we accomplished that. We got pretty close to that. I know they take it pretty seriously today.

But go back to the stress. You wanted the stress, right?

It was fun.

Okay. So, Herb Kelleher—do you know who that is?

Founder of Southwest Airlines, the most successful airline in history. It was profitable for 40 straight years.

And you know, he was a gangster, right? He’d drink a fifth of bourbon every day and smoke cigarettes on the planes. He was an unfiltered guy. I would love it if he were still alive. He’d be one of my top guests I’d want to talk to.

I love this interview he did one time. They asked him, “You undergo a lot of stress. How do you handle it?” And he goes, “I don’t handle it. I like it.”

Yeah.

I get that same vibe from you.

The lifestyle of an entrepreneur, I believe, at its core—there are a couple of other things, but this is one prism, one part of it, one pillar of it—is, “I can take more pain than the other guy, and I’ll prove it.”

Once you take on that lifestyle, it’s a real thing. It’s not just that I choose to take it on. It is the nature of the thing that I’m doing. You are taking on a life of adversity and overcoming it all the time. Once you’re seeing adversity all the time and overcoming it, it just becomes normal.

The downside is that you can get used to adversity. It just becomes very normal.

Why is that a downside?

Because you almost start accepting it. Something bad happens, and you don’t even get mad.

You’re like, “That’s interesting.”

But wouldn’t it be beneficial to be unruffled like that?

There are benefits, but you need to make sure you don’t get so used to it that it doesn’t even bother you.

You can get so Zen that you’re unbothered.

You still act, but there’s something special about the extra fierceness of being bothered—being upset about something that is wrong.

What is adversity?

Usually, adversity is some bad shit went down that shouldn’t have, and it was done to you. That’s adversity. For a farmer, it’s a drought. It’s terrible.

It could be a lot of things. Somebody could have stolen his crops. It could be pests. It could be anything.

Are you just getting numb to it? Is that what you’re saying?

I’m just saying that once you fully embody the lifestyle of adversity and overcoming it, you have to be careful of the ease with which you walk through it, because there is an extra power in being bothered by something that is wrong. You can get too used to wrong things happening.

Have you reached that point in your career before?

Well, no. I would say today there are very few things that actually stress me out.

Are you worried about that?

Of course. I remember the things that are important, and that’s where I channel fierceness through what is right and what is wrong.

You’re almost telling me you’ve been inoculated from pain.

Yeah. Something like that. There’s a Zen that can happen when a warrior has fought for a long time. You can get used to it.

Yeah. But still, at least from the outside, you still have this crazy intensity. I told you, you’re the most intense person I’ve ever met, and I’ve met almost all the top founders in the world.

But imagine fierceness with calm on the inside.

That’s what you want, or that’s what you’re—

That’s what I got. Yeah. That’s where I’m at.

Yeah. You weren’t calm on the inside when you were building Uber. That’s what you’re saying.

I’m just saying, as one entrepreneurs longer and longer and does it properly—

I’ve never heard it used as a verb.

You get to that place. You just get to that place.

Entrepreneurs for longer and longer—I’m using that line, man. You just get to that place.

Well, I love what you said about the pain, because there are a bunch of maxims from the history of entrepreneurship that I love. I think something that we both support is trying to win based on providing the best service.

One of my favorite maxims comes from Henry Ford, where he says, “Money comes naturally as a result of service.” If you read his autobiography, you see how he organized Ford Motor Company: “We’re going to provide the maximum amount of service, and the money will take care of itself. If I’m delighting the customer, the bank account will be fine.”

But my favorite maxim from all of the history of entrepreneurship is, “Excellence is the capacity to take pain,” which is exactly what you said.

Oh, I love that one. That is 100% true. Once you say entrepreneurship is the lifestyle of entrepreneuring, the lifestyle of entrepreneuring is this sort of pride of, “I can take more pain than the other guy.”

You go, “Why?” Well, the best example is a world-class marathoner on mile 21. Have you ever seen a marathon? Have you ever seen mile 21, probably on TV? Is that dude smiling?

Fuck no. Of course not.

Why? Because if he were smiling, if he were just not feeling pain, there’s somebody else who will. What is the difference between feeling pain and not feeling pain? It’s that extra push.

That extra push means he loses if he’s not getting into that pain. That’s what excellence is. Excellence is about pushing into the extent of what a human is capable of—the full potential—because if you don’t, somebody else does.

Yeah, and then that becomes the standard of excellence. All of human progress is through that push toward excellence. That is a push through pain. If it is not painful, you’re clearly not pushing hard enough.

I love that you’ve tied this to the idea that if you’re doing something that’s easy, you’re doing something that’s not valuable. If you’re doing something that’s easy, it may be valuable, but you’re about to get your ass whooped. Or it may not be valuable. It just depends.

Easy could be sitting on the beach for 6 months. It could be valuable to you, for rest, and that’s all good. Everybody has that choice. But you’re not bringing human progress.

Then you go, “Well, that’s interesting. If somebody sits on the beach for 6 months, they’re not participating in human progress.”

I’m like, “Well, how could they?”

You’re like, “What if they start thinking deeply about life, philosophy, and society, and they have really amazing thoughts?”

I’m like, “Well, did they write them down?”

“Okay, he wrote them down.” So now he’s on the beach writing it down.

And I’m like, “Okay, but there are lots of people doing that. He’s got to be better than those other guys if he wants to be part of progress.”

So now he’s really fucking writing them down, and he’s honing those words to such a degree that it’s beautiful and perfect before somebody else has that thought and does it themselves.

How long did it take from when you left Uber—which obviously had to be devastating, heartbreaking—to jumping into the next thing? Did you sit on the beach for a little bit? What did you actually do?

No. It was 7 months—6 or 7 months, something like that. Most of it was fending off lawfare.

So, wait—the lawfare, was it criminal? Were they trying to—

It was civil and criminal, for sure.

Yeah. So, you’re fighting that off for—

Yeah. It’s like corporate cancel culture and lawfare—all the things on the corporate side of all of those things.

Remember earlier when we talked about—

Business became politics. We were talking about this off camera. Can you talk about this now?

Yeah. In the 2010s, there was something that happened in the media: business became politics.

If you just think about your favorite politician and go on the internet today, do you think you’re going to see a lot of happy-go-lucky stuff about your favorite politician? Of course not. We know that because politicians—basically, the nature of what it is they do—there’s a lot of mudslinging, and a vast majority of it is just untrue.

Though I’d say with some of our politicians today, maybe a lot of it is true. But it’s just a dog-eat-dog mudslinging thing, and the headlines are often not true. I think we know that in politics.

What we didn't know in the 2010s, or what was just starting to happen, was that business was becoming politics. The headlines you were starting to read about business were just narratives and often fabrications, with substantial material perversion of truth.

And you were exhibit A for this.

For sure. I would say so.

Yeah, I would say so too.

Yeah. Talk to anybody who knows me, and they would basically say the difference between, especially if you talk about 10 years ago, the public persona and the actual person couldn't be more different.

Well, I can speak to this. I know when we started recording—and I've been chasing you for a while—I saw you at Michael's house and everything else, which was funny, by the way. When you walked up to us, I was like, “Do you remember me?” You were like, “Yeah.” I said, “It's time to do the fucking show,” and you said, “It's time to do the fucking show.” [laughter]

I love that. But what I would say is, in terms of founders that actually know their shit—

Your reputation is—

Perfect.

Sterling. If you're a killer entrepreneur—

You say great things about Travis.

It's the only shit I've ever heard that comes from investors. This is why—

I don't necessarily believe it comes from investors, but—

I'm saying what I hear.

No, it's interesting because where I—

Yeah.

A lot of times it's from the gallery. Sometimes investors are in that category, but when I go and do pitches and fundraising, I don't feel like—

You're Travis K. Come on, bro. I'm just saying shit, Tra.

Of course. You're basically unlimited.

This is one I was texting Daniel Ek about. I was going to see you, and he was like, “You've got to get him to talk about fundraising,” which we'll get to in a minute. I think we have to hit on something really important, because what I loved about our dinner is that you just straight-up interrupted me, which I loved because you should have. I was trying to tell you, “Man, listen, there's just something weird: all the content and the podcasts that entrepreneurs and founders are consuming are created by VCs.” Then I went to say another thing, and you cut me off. You put your hand in my face, which is hilarious. You were like, “Real founders don't listen to VCs.” We need to talk about this because—

Sure.

If you're friends with founders, you hear atrocious horror stories and bad behavior by investors all the time that they will not sit and talk about publicly, right? You went through one of the worst of the worst. Going back, when you were doing Uber, was it just that you raised money from the wrong people? How do you look at it now? What would you tell a young founder who has to raise a ton of money? I always have to first shoot the arrow, which is: you definitely shouldn't raise from Benchmark Capital. I had to get that out there. Now let's get into the real stuff.

Look, I think it's really interesting to start with: Where did it get weird? Basically, at the peak. 2017 was my problem year. It was always hard, but this is when it got dialed up. Benchmark was running a war room. They were an unspoken activist investor that was creating a once-a-week crisis, but without—

Against you.

Yeah, against me, without speaking about it. Again, there are some things I don't know, but the best I can tell is that they wanted liquidity and they felt like I wouldn't give it. We were already preparing for an IPO, but I didn't tell them that.

Why didn't you tell them that?

Because we wanted to make sure we'd done the right thinking and gotten prepared, so we could just say, “We're going to do it, and here's how we're going to do it.” Bill Gurley is a bit of a catastrophist. It's always the end of the world. That forces you to do really weird things if you think the world is always going to end, including trying to take me out. So instead of dealing with that catastrophism, let's just go do the damn thing.

I can give you lots of examples. We had a fundraise in mid-2014, and the last round we did, in August 2013, was at $3.5 billion. That's when we brought Google and TPG in. Then, in mid-2014—9 months later—we did a round. Gurley was convinced it was the end of the world, and we had to raise. He said, “Just take your first term sheet. Just fucking take it.”

And you have a whole philosophy on this: if you want a round to go well and to go fast, you have to have a process. If you just take the first term sheet, getting the round done will actually take longer because there are no alternatives. You don't have alternatives. Then it gets weird, and the VC will just keep pushing, pushing, pushing, getting more and more, and it gets weird to a point where it's actually highly likely that the deal just blows up.

I like to say I never get attached to a price. I get attached to a process. That process is about excellence in fundraising.

Anyway, can you explain that process, though?

We'll get there.

Okay.

Don't let me forget.

I won't. [laughter]

BFS. Okay, we're going to have to sit here for 10 hours to cover everything. But he was convinced, like, “Hey, just take the first deal. Just do a $6 billion.” It was like, “I think you could get a $6 billion round valuation done right now. It's 9 months after the $3.5 billion. Just go take the first term sheet. Make it happen.”

Now, if you're a founder hearing that, you're just like, “Dude, I hear you. But even if the world is about to end, the best thing you can do is have alternatives, and the deal will actually get done faster.” So we got to a place where I just wouldn't talk to him. If he reached out to me, I would talk to him, but I just wouldn't try to engage because it was always that.

Emil Michael would handle this part. He would handle a lot of the investor relations, especially as a relationship.

Shout-out to Emil Michael. That dude is loyal as hell to you.

Well, he's just an awesome guy. Not because of loyalty, but because he's just an awesome guy. But, of course, that too. He would do it in a genuine, authentic way, trying to handle the objections or whatever. Anyway, 2 months later, we got a round done at a $17.5 billion pre-money valuation.

Whoa.

So that's my point. When you want to do things right, you have to do things right. VCs don't—not all, but many, most—they're worried about other things. We were already planning the IPO stuff. They didn't know it, but they also never expressed the desire to say, “Hey, dude, you've got to IPO.” It was never brought up.

It was this weird catastrophism mixed with the idea that, if you think the world's about to end and you've got this thing that's worth a ton of money, you can get to a weird place. Especially when you're in a VC, you don't have any control. You're not running anything. So now your entire holy-shit-big outcomes in life are due to this guy, and you think the world's about to end and he doesn't. You're like, you could get into a place where you're running a war room to destroy him. That's kind of what happened.

What's the alternative scenario if you raised just from somebody who wouldn't have done that? I'm just going to make this up, but how Founders Fund says that, no matter what, they'll never remove a founder. They will not do a warfare war room against them.

Well, I think there are 2 parts. First, I'd say that a super-high bar for a VC is: do no harm. There are a lot of reasons why that's hard for a VC.

Elaborate, please. This is important, man. No one talks about this shit.

Everybody wants to make a mark on the world. Everybody wants to make a mark on the world. You might believe one thing or another, but you want to make a mark in the world.

The way I think about it is, an operator who's running a company, if they're good, is a grandmaster of chess. That operator entrepreneur is playing this chess match somewhere between 60 and 80 hours a week, really knows this thing, knows many moves ahead, sees things other people don't see, and is in it as well. [snorts]

Mhm.

The VC is a chess enthusiast. They check in on the chess match once every 3 months, and they're trying to make a mark with their opinion. They're trying to make a mark: “Hey, why don't you do this or that?” You're like, you know, don't go to Jordan and tell him how to dunk, and definitely don't go to him and tell him how to dribble.

But it's hard because everybody has an opinion, and whatever you believe, you really believe it. If you're not in a thing all in, all the way, every day, 12 to 16 hours a day on this game, it ain't a thing. But that's a hard thing for most people to take who aren't running shit.

Why do you think it's hard for them to take?

Because VCs are glamorized, and they have a seat at the table in some fashion. There are certain powers, and you can make a mark. The way to think about it is, you're on the Serengeti, and if an antelope limps in the Serengeti, the lion will take it down even if it's not hungry. It can't even fucking help it. It's just what it does. That's kind of the nature of most VCs.

This is the nature of it: if you are on the Serengeti and limping, you will be eaten. It's just the nature of it, and the lion doesn't even know why. Sometimes you're just like, "This is what I do." Yeah.

So, when you're talking to other founders, younger founders, you're saying priority number 1 is just to find an investor that does no harm.

That would be a high bar.

So, achievable—what percentage of the time, then, would you guess?

10%. And then 1% is helpful, but it's hard.

How the fuck are they supposed to be helpful?

There are different times to be helpful, though. Helpful is in hard times, when you actually need real help, right? Helpful is there when maybe it's personnel—you need epic people—but it's still hard for them to participate because they're just not in it that deep.

So, can you explain excellence in the fundraising process and how you think about it—the system you developed for this?

Yeah, it could be changing over time, but I certainly have my approach. It's interesting because I'm just finishing a fundraise right now, and it's interesting to see the world change.

But I think part of what we're seeing right now is that we're in a supercycle, or a super-high, very bullish cycle. I don't want to call it hype, but that's sort of what's going on right now, which means different things happen than if it's sort of average.

When it's average, it's super important to tell a beautiful story that's woven together—a story that numbers are woven through. It's a beautiful, entertaining, interesting story with analytical numbers woven through it.

You basically get to what I would call QED, which is you've dissected the chess match to such a degree that it's very clear what it takes to win and that you have the winning formula. You get to the end of the thing and you're like, "It's just proven." It's not even a question anymore. It's QED.

That's in normal times. And I think in supercycles, or whatever we want to call what's going on right now, that rigor isn't as important. If you go too far on that rigor, it could be too much.

Explain that.

You hear stories of entrepreneurs who just sit down around a table, have an idea, and get money. That's the opposite of QED. But if you have a 2-hour-long presentation that goes QED in a supercycle, you probably should shorten that to 45 minutes.

Why?

I don't know how to put it. It just looks like too much. Why are you going so far, dude? You'll talk yourself out of the deal.

Why are you so detailed?

It's this weird dynamic. It's very funny, like it's cool, bro. [laughter] You know, maybe it's also because you're projecting many years out. So, the more supercycle you're in, the more forward you are, the more into the future you are. And that future can't really be presented as tightly with numbers.

Yeah. So, when you're talking 2 hours forward, you don't know.

So, then it's about the theory of the case.

In many ways, and so maybe that's why it's a little bit different today.

What's common in your approach in a normal cycle and the supercycle you just described?

Normal cycle is 2 hours, QED.

What is something that you'll use in both, whether it's normal or super?

Well, I still do some version of it. My style is QED.

And then the multiple-bids thing is mandatory, correct?

Correct. I would call it this: QED is the storytelling, and then there's sort of an auction process that you hone when you're doing it. This has to be measured against how many resources you have to do QED and how many deal resources you have to manage a full auction.

Explain that part to me.

If I have 5 rooms going at the same time, I have to have that. That's a thing that you do: 5 rooms simultaneously for an entire week.

Where did you even get that idea?

It was just the expression of the right thing. It's sort of like if you keep incrementing on something and keep making it better and better, you will end up there.

What was the quality of the business when you were running this 5-room process?

That's peak Uber.

Peak.

So, it's like you can put money to this or nothing. Nothing's even close.

No, there are other things, but it was peak Uber. But the point was I did it QED. I showed at the atomic level how the whole system works, with a very analytical view, but also sort of a bit of performance art because you're storytelling.

Okay. Explain what's happening in these 5 rooms, then.

5 rooms, 12 hours, 1 week.

Who's in the rooms? You don't have to say the people.

No, it's okay. So, I'm in the $250 million check-or-over room. Then there's a $100 million room, a $50 million room, and a $25 million room. And there'll be a guy in the $25 million room who works for a guy who works for a guy who works for me, right?

And what are you guys saying in all these rooms?

We're telling the story.

Mhm.

That story is the core.

And now you have it being performed in 4 rooms at a time, and there's a deadline. The price is going up?

Well, no, it's not prices going up. That's the misunderstanding.

Okay.

The right way to do it is to start with a low price.

Explain that.

A lot of entrepreneurs get attached to the price and not the process. And you have to be careful. It's very easy to get sucked into that, where you get some signal that it should be a price and you get attached to it, and then that becomes your price, but you haven't cleared the market. So you have to be very careful about that.

You get attached to the price, and then when I throw a price out, you're on the other side of the table and you come in under it, and now we negotiate, right? It's a very bad place to be from my perspective.

Where you really want to be is to start at a low price and say, "Look, I don't know where the price is going to go, but I know it's at least here." And if it's low, it's like, "Okay." Now, once they give you that read, once they lean forward like that, you're like, "Okay, we're good." You have a bidder, and then you go to the next guy.

It depends on the nature of the round. If you're doing a winner-takes-all round, then you would just go to the next guy and say whatever that guy said—X plus 5, whatever. Just say X plus 5. And that guy does the same thing. Then you go to the next guy, and it's X plus 5 plus 5. The next guy: X plus 5 plus 5 plus 5. All the while that's happening, it's a winner-takes-all deal.

You go back to the original guy and you're like, "Dude, it's going up. It's going up." And you're telling people it's going up. That's a winner-takes-all approach.

Then you sort of do a going once, going twice. When you start to peak out—when people are getting a little, when it's starting to get a little high-altitude sweaty—then you're like, "Okay, going once, going twice, sold." And then you close it down. It's winner takes all, and they take the deal.

Most deals that are big deals today aren't working that way. When you're doing multiple rooms at a time in something like this, it's more like, "How much would you put in at this price? And how much would you put in at, let's call it—I'm just making this up—$8 billion? And how much would you put in at $9? And how much would you put in at $10? How much would you put in at $12? How much would you put in at $14? Fill the sheet out. You decide how much you'd put in at any price that we end up at." And you do that across everybody.

Is that what you're doing now?

Hold on. Slow down. Then you aggregate how much demand you have at every price. As the price gets higher, the demand goes down. You now have your demand curve, and you're like, "Okay, I want to raise $1 billion."

At the really low price, I have $3 billion of demand. At the higher price, eventually I have $1 billion worth of demand. And I go, "Okay, that's the price that I could close at right now."

Then you go and tell all the people that got cut out because they didn't get high enough of a price. There's less demand at this price, which means there are certain people that didn't bid here. You go tell them they're out, and you're like, "But you could fill out another sheet if you want to make some moves." So they fill out the sheet, you do the demand curve again, everything moves a little bit to the right, and there are other guys who now get pushed out. You do it one more time, then you clean it, and you're done.

So, what are you doing now?

I'm about to close a deal.

Do you want to say how you did it, though? You don't have to say numbers, but—

I can't do that.

Okay, fair enough. Come back on in a few months and—

Yeah, like, a couple of years ago, here's how this one went.

You've got to put time in between because you just did a deal. You know what I mean?

But I would say I did a slightly different—slightly different this time around.

I'm very curious how you protect yourself from what happened with Benchmark and Uber from ever happening to you again. How are you selecting partners? Is it just, obviously, the price? You're not taking the highest bidder, so how are you picking your partners?

Yeah. You also have to be careful. You have to be really careful not to get into a victim mentality. What I mean by that is: What was my part in that dynamic?

I was thinking while you were speaking, I was like, what if we could ask them what they would have wanted you to do that you weren't doing? Maybe say, "Hey, we're about to IPO." [laughter] That probably would have saved me, but also, I didn't kiss the ring. I think Gurley wanted to feel like he was on the home team with me, and it just never was home team to me. That's different than kissing a ring, though, but it's similar. Okay, just put it in that category; we don't have to go there.

So, there's that. That's one thing I could have done differently for sure. It would have changed everything. There were people inside the company who became his partners in the coup. Those individuals shouldn't have been there.

Did you suspect them at all before?

Yes. Wow. There was definitely something wrong, is what I would say. Okay, let's put it that way.

Every decision I made at Uber, I defend to this day. I wasn't 100% correct, but I always had good intentions and was always coming from the right place. I generally just did the right thing.

One of my lawyers put it this way. He made a sports analogy: "Did you have chalk on your shoe?" That would be like going out of bounds or doing something you shouldn't have done. I'm like, "I never had chalk on my shoe." But in order to know, [snorts] you would need a scanning electron microscope with reverse-angle slow-motion replay to verify that there's no chalk on the shoe.

The problem was, I ran too close to the line in too many situations. When you are big and important, the scrutiny and the expectation are that you don't run that close to the line, even if it's correct. That is something I definitely did not understand.

It comes from what I did before Uber, which was doing a really hard startup. The first 4 years, I had no salary, ran out of money several times, and was in a super grind. I lost all my friends; everything was just the hardest kind of—I like to say—the non-luckiest entrepreneur journey of all time. You can't call it unlucky. I eventually sold, but you would definitely never call it lucky. That's for damn sure. [snorts]

Basically, it was so hard that I had to be epically precise and hardcore just to pay the bills and go to the grocery store the next week. That precision and intensity made Uber what it was, but I was running a $70 billion company the way somebody who thought he was going to starve the next week would run it.

That is fascinating. Super-intense precision, perfection, obsession, because he's not sure that he's going to be able to pay the grocery bill next week. Did you understand that was your approach at the time, or did you have to leave and look back and figure it out?

It's probably a little bit of both. Yeah. But I take pride in that. At the time, it was a pride in going all the way, but maybe not understanding it the way I understand it today.

I wonder how much of that is a benefit. You're one of the most aggressive founders in history. You're wiser and more experienced now, with more access to resources and a better network. I wonder if this version of you could compete with that version, or if that aggressiveness is what created the entire category.

Yeah. No, I understand. It would be super fun if there was a universe where I could compete with my younger self. That would be awesome. I would love that so much. I would kick his ass.

Okay. [laughter]

There would be certain things he's doing because he's younger, and there's a certain thing to that. Remember I talked about the passion for right and wrong, right? As an example, there's something to that.

But also, what I notice today is that most of the things that would take me X amount of time 10 years ago, I can do in X divided by 3 today. And not because I got clawed over there, right? That's a whole separate thing. I'm just saying, I don't know. You read my Atoms vision note.

Yeah.

Okay. That would have taken me—I don't even know if I could have written that back in the day. Not that good. I can just flow and get it done. The core of that was written in an hour and a half.

Mm-hmm.

You know, that kind of thing.

What is it that caused you to accelerate, though?

There are different things. A lot of early founders have a fear of failure. But what that does is create blockage around making progress, because you're just bogged down. The psyche around fear of failure interferes with your ability to get there.

Well, the fear of failure could either stand in your way or push you from behind, right? It can push you from behind, but ultimately, you will never be truly world-class if you have a fear of failure.

I understand that. I'm just saying that it will get you places, but it won't get you all the way.

Okay. In that version of Travis, where you're running a $70 billion company—

No, no. I would say I was transitioning out of fear of failure—

Toward the end, in 2017?

Let's just say we don't have to put a specific date. It's just a spectrum, and I'm transitioning out of it because, remember where I came from. It's just before, so I'm transitioning out of fear of failure.

How old were you when you started Uber?

33.

33. And you had a couple million bucks, right?

Yeah. I put all of that into all my friends' startups.

Okay.

I had nothing.

Yeah.

It was kind of funny.

Yeah.

It was kind of funny.

Did that work out?

I was the first investor in Expensify. There's a healthcare IT company that still hasn't gone public.

It's really funny. Okay, so not a lot of resources, still young—33 is still young—so it makes sense why you felt the way you felt.

Yeah, but it's just about the background. It's just about what the previous experience was, not about my age per se. It was just about what experience I had just come out of.

I love where the conversation has gone, because what I'm hearing from you is that there's just this theme that runs through you as a person and then your approach to company building throughout these companies. We barely touched on what you're doing now. Let's get into Atoms.

You said you wanted to start with the mission, where it says, "Physical automation to transform industry and move the world." AI and robotics totally transform industries, but one industry at a time, using specialized robotics to do so.

For instance, if you want to make 1,000 pancakes an hour, you wouldn't have a humanoid do it. If you wanted to get a car to move down the street, you wouldn't have a humanoid drive it. I think humanoids have their place, which is, let's call it, low-scale tasks in human-designed environments designed for humans.

For example, you're in a house and clothes need to be folded, but it's not like you're folding clothes all day long. It's one of the things you do, but there's no way you'd buy a robot for tens of thousands of dollars just to fold clothes, because it's not a big enough problem. So now you need a machine that can do many different types of things in the home. It needs to fold clothes, take out the trash, and probably wash dishes. There are a bunch of things, but that's a very generalized thing. It has to be able to do a lot of different things, and it's in a very human environment. The best form factor for this thing is a humanoid.

But take the example of 1,000 pancakes an hour. Imagine a humanoid making pancakes. It would make them like a human. It would be like, "Okay, by the way, if you were just making pancakes at home once a week, on a Sunday, because you need a machine that can do many different things, including make pancakes, it's all good." But if you needed to do 1,000 an hour, you'd probably need 100 humanoids in a row doing this, right?

That is versus a very simple iron apparatus where the batter gets pushed into it, it's already hot, and it's pushing out maybe even 100 pancakes every few minutes. You know what I mean? Specialized robotics—specialized machines that are specialized for the task at hand—is sort of how I look at what we do.

It's at industrial scale, where there's real change to an industry by automating the whole thing. So you go, "Okay, well, I've got a lot going on in food already." The idea is, can you get a meal that's prepared and delivered to you so efficiently that it starts to approach the cost of going to the grocery store? It would be pretty awesome if you could. It's got to be a high-quality meal, of course.

But the question mark there—can you?—requires you to have what I would call industrial real estate for food e-commerce. What do I mean by food e-commerce? We know what e-commerce is. It's got Amazon warehouses everywhere, or major hubs like big distribution centers, DCs. But food e-commerce is a little different. It's a warehouse-type operation; you need to do logistics from it, but you also need to do manufacturing.

There's no manufacturing happening at an Amazon warehouse, because everything is manufactured somewhere, delivered to this big warehouse, and then goes from there. But with food, it has a 30-minute half-life. The manufacturing and the logistics have to happen at the same place, and it always has to be 15 minutes from where you are.

So now you have a very different situation where you have real estate in urban and suburban environments that's always 15 minutes from anybody. So you have an urban logistics and production fabric across a city, which is: I have the real estate, then I have robotic food production because I'm taking the labor cost out, and then I have robotic logistics, because right now your $15 bowl that then gets delivered to you somehow became $30.

Mm-hmm.

It's of course expensive to produce, but every time there's a drop by a courier, that's another $12.

Mm-hmm.

Industrial real estate, robotic production, robotic couriers.

Was there a specific reason you started with food, though?

It just caught me. I don't have a list. Well, first of all, of course, I did Uber Eats, so I'm very familiar with this part of things, but nowhere close to the atoms that are necessary to do what I just described.

You know, I like to say I have lots of ideas all the time. I'm an idea factory, but other people have great ideas, too. An idea comes to you, if that makes sense. I like to say you go out on a date with the idea. Was it a good date? Did it go well? How did you and the idea get along? It's very much related to who you are, which is going to be a big part of which idea works for you.

You call this finding your sport.

Yeah. Finding your sport or your business soulmate.

Mm-hmm.

Be in touch with who you are, and then when the right idea comes your way, you just know. You just know.

I thought I understood how you thought.

Yeah.

And now we've been talking for several hours, and I think I'm getting a little closer there. But then I read what you wrote, where you're just like, "Well, look around, dude. Everything that you see in a city, in a civilization, has either been grown, mined, or manufactured."

And so I'm like, "Oh, you're into details, like you were describing the Uber signup flow earlier—"

But you zoomed all the way out.

Yeah.

So it's like I'm going to start with the material constituents of everything that exists in the world. When you look around, everything around you is grown, mined, manufactured, and moved, and that's how we look at the world.

And then you go, well, when you think about physical AI—the automation of movement and action in the physical world—you look at what I call the physical AI tech stack. Real estate is part of that for the reasons I've described as it relates to food. If you didn't have the industrial scale, what I call high infrastructure—heavy-duty energy, heavy-duty mechanical systems, because you're extracting air and then tempering it and pushing it back in—real estate is a big part.

What is a mining company? It's actually real estate. So the ability to take land and turn it into productive progress, essentially, is an underappreciated and not understood thing, and it is most definitely a big part of what I would call the physical AI tech stack.

You can look at Tesla and all the things Elon is doing. It's obvious that real estate is his jam, or certainly his team's jam. He doesn't talk about it as much, but it's a big part of what happens. He's got a freaking city. He's starting a freaking city, right? The head of HR is basically the mayor of a city that he's building.

You can go further than that, which is everything we're seeing in technology. A lot of times we talk about superintelligence as sort of the function of: I need to have energy and I need to have minerals at the very base. Lots of energy. We talk about data centers now in gigawatts or megawatts. I need to have energy, and I need to have the minerals. Then I have those 2 things, and I can get superintelligence eventually working those things hard.

But where does the energy come from? You're like, "Oh, it comes from the sun." Okay, but how do you capture it? It goes back to minerals. Land is the whole damn thing.

So there's a really interesting perspective about how land plays a role in the future of physical automation. Physical AI and just autonomy in the physical world are very dependent upon it. That's why mining is so interesting.

You're not owning the mines.

Correct. You're just making them more productive with gainfully employed robots.

Correct. Yeah, what we call gainfully employed robots—

Which is hilarious, by the way.

Yes. But right now, I do think, of course, humanoids are going to be gainfully employed. They're not there yet, but they'll get there. Right now, the demos are dancing and doing martial arts. You know, I talk about Beijing. There's a humanoid Olympics in Beijing, and they're doing a marathon. You're like, "Okay, they're not quite there. They're going to get there."

But I kept thinking, man, imagine if you put wheels on them, right? This gets back to humanoids being good at certain things and not others. Having a purpose-built machine for the task is important.

So wait, you said 2 very interesting things. Your life's work is digitizing the physical world, and then you're saying for Atoms, you're going to attack 1 industry at a time.

Mm-hmm.

The physical world far outstrips the digital world. Therefore, you almost stumbled into—or picked; you didn't stumble into it—you picked an infinite game. So there's no limit to what this company can expand into.

Look, I have a little bit of an issue with "infinite," but it goes very far. The dream—okay, look, the mission for mining is "more productive mines to power Earth's industries."

Because we can go to a gold mine right now, go to a gold mine CEO, and ask whether he wants 20% more gold per year. Why? Because when you automate it, that's the output. You make it cheaper to go to other places and even get more gold out of that mine that you wouldn't have gotten before.

So it's getting more per year. It's getting more than you otherwise would, and the totality of that mine, plus being able to go and do more mines than you otherwise would because the opex is so much lower. But if you're increasing the raw materials, then you're also increasing overall industry in the world. Period. And then you could go and automate and enhance those industries as well, right?

The point is that if you get really good at minerals and materials and land, you get good at automating, making land productive, and powering progress with land. It's sort of the lever that moves the world.

Exactly. So if you automate the thing that is the lever that moves the world, it's like the ultra-lever. This is kind of fun. It's actually cool. If you see a picture of a machine that, loaded, is over 2 million pounds and is the size of a building, autonomously moving around, it's pretty cool.

The dream—and this is really, Elon willing, really—but one day he's going to be sending missions to asteroids to mine them. Maybe we can help out in some way. That'd be a lot of fun.

You have mining, you have food—

Transport, and the thing we call the ignition there is wheelbase for robots. If you have specialized machines that act and move in the physical world, that's what we do for a living. You have to have wheelbase. You have to automate how they move.

Some people think about ride-sharing when they think about this, but there's a lot of things you're not thinking about. I was talking to one of the large food suppliers in the U.S. They supply all the food to the restaurants. They're spending $3 billion a year on the labor that moves the pallets on forklifts. This is just a little drop in the bucket of all the things that are moving, right?

What about freight? What about parcel delivery? What about food delivery? We talked about that on the food side. Once I knew I had to get into autonomy to complete the food story, this is when the Adams thing sort of came together beyond just food.

One of the things I was talking to Daniel Ek about that he finds most fascinating about you is your propensity to build a ton of separate companies inside of 1 company. You did this, obviously, at Uber.

Yeah.

You're doing it again at Atoms.

Yeah.

Is that just your natural instinct? Is that what you meant by your business soulmate? You just don't want to work on 1 product or 1 business? You want a conglomerate? How do you think about this?

I mean, this goes back to: no, you don't. That's not how it works. Remember, the only constraint to our imagination is management capacity.

So then the question is 2-fold: Do you have an imagination, and is it any good? But if you do have an imagination, and it's good, you're going to have interesting ideas that should happen. There are many ideas that maybe either shouldn't, or somebody else should do, but there are going to be many ideas that you should do.

So what does the actual organization inside of Atoms look like with all these different businesses? Does every business have a CEO? Do they report directly to you? How did you set it up?

You have a business-unit line leader, and then you might even have sub-business-unit leaders as well. You really try to empower them to do their thing.

I sort of look at that as alignment up front, accountability on the back end. What are we trying to accomplish? How are we going to try to accomplish it? What do we view as risky, and what's sort of a no-brainer? How do we do accountability as we go?

Then you approach it with a management style, which I call "problem solver-in-chief." I spend my time on the most impactful problems that are not already being solved.

That's how you dedicate your time.

Yeah.

Is that the directive that you give to everybody?

Yes. I've got a certain number of hours per day, but that's a tiny fraction of the problems that need to be solved.

Yeah. That's what I'm trying to figure out.

So that flows down. Now, everybody's got their remit, let's say. They solve problems in this area. It's flowing down, but they are the problem solver-in-chief, deputized for their area all the way down to the bottom.

Do you still put an emphasis—I’ve heard you speak about this in the past—on hiring and empowering young people? Is this business different from when you were launching new cities at Uber, for example, where you gave a lot of responsibility to aggressive young people?

Well, there are really interesting ways to do it. I have this concept I call the line, and maybe the framework is finding the line. On one side is order—lots of structure. As you pull further and further back into order, you have lots of rules, lots of structure, lots of process, and eventually lots of bureaucracy.

If you go too far back from that line, you're going slow and people are bummed. If you go to the other side of the line, which is chaos—lack of rules, lack of process, lack of structure—as you go deeper and deeper into chaos, you also get to a place where you're going slow and people are bummed. That line between order and chaos is innovation at speed and at scale. The job of every leader is to find that line.

It's not in 2 dimensions; it's in 80 dimensions. The best leaders are able to find that. Probably the most approachable way to describe this is: the fewest number of rules while staying out of chaos. But you go back to launching at Uber, and you could think of it as, “Okay, there's a bunch of 23-year-olds launching cities.”

What happened was, at the beginning—the first 20 or 30 cities—I was deeply involved in whether that city was going to get launched. Somebody would go out and be told, “Go launch a city. Make something out of nothing.” There'd be some kind of playbook there, but a lot of it was undefined.

Nothing would actually launch until they got to a pricing call, because pricing in the transportation space is the sum of all strategy. The pricing call would then go, “What's the regulatory environment? What car type are you going to use because of that regulatory environment? What is the average wage in the city?” That's on the driver's side and part of the cost.

You basically go through every aspect of the city that relates to transportation. How long does it take to get around? Where are people going? You ultimately get to a price, but it means you have to understand everything. And how you get to that price matters.

In the first 20 cities, I was on a pricing call in some of those cities. Man, it would be like 8 pricing calls. It could be 8 or 10 hours of pricing calls before we launched London, as an example. But I never solved the same problem twice.

Once we solved it, it became part of the playbook, and eventually we'd get to city 20 and that pricing call would take 5 minutes. I stopped going to them. It didn't matter anymore.

But the key that I was trying to get to is: you have a 23-year-old who can then go and launch a city. Even at the beginning, when I was still involved in that pricing call, they wouldn't see me until the pricing call, but they knew I was going to be at that pricing call.

The one rule was, “You can't launch until I say yes at that pricing call.” So they would come ready to play at that pricing call, and they knew that if they didn't, I'd be like, “No,” and then they'd suck. They would put everything they had into making that successful, which means all the other things they were doing before were going to be organized toward doing it right, because they wanted to win.

Now I've got 1 rule, which is that pricing call—the fewest number of rules while staying out of chaos. If you didn't have that 1 rule, you would have 23-year-olds running around doing crazy shit.

That's awesome. It made me think of another line that I love that you put on Adams' website, where he said that chaos was the law of nature and order was the dream of man.

My interpretation of that line, now having spoken to you about this, is that I feel you're imposing order on the chaos of the physical world. That's what your company is trying to do.

I almost think of it as negentropic, which means it's kind of—you could get into a very interesting, very energetic debate with certain people about negative entropy—but civilization is an attempt to locally slow down entropy and maybe even go negative. It's building structure against nature, toward chaos. That's what civilization is.

And so, Adams is essentially the structure to defend civilization and move it forward into progress. There's another line: when you speak, there's a lot of things that you say that remind me of Rockefeller in the early days of the oil-refining industry.

He used that word. He thought it was a chaotic industry. He's at the very beginning. This is when the oil industry—it's solely concentrated in Pennsylvania, for God's sake. And he goes, “I'm going to impose order on this chaos.”

Progress is the organization and structuring of the world toward human happiness, liberty, and transcendence in some fashion. That's how I view what we're doing at maybe the very highest level.

I think that's an awesome place to close. Travis, it really means a lot to me for taking the time. I really appreciate it, man. Thanks. Great.