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“The university is so many things to so many different people that it must, of necessity, be partially at war with itself.”
Clark Kerr
On the show Creator Lab, Bilal Zaidi asked me whether I would take investors for Trends.vc. I said no.
Trends.vc already had three interest groups. Me. The people I employed. The subscribers who paid for it.
Each decision had to balance all three.
An investor would have added a fourth group.
Craigslist ran into this when Phillip Knowlton, who held 28.4% of the company, wanted his money out.
Craig Newmark founded the site and Jim Buckmaster ran it.
In August 2004 eBay paid $32 million for Knowlton’s stake. The purchase came with a seat on craigslist’s board.
In June 2007 eBay launched Kijiji, a classifieds site aimed straight at craigslist, while still holding that board seat. Newmark and Buckmaster moved to dilute eBay’s shares. Delaware’s Chancery Court ruled in 2010 that craigslist breached its fiduciary duty to the very competitor it was trying to purge.
Craigslist spent 11 years in litigation before buying the shares back in June 2015.
Bringing in an outside stakeholder binds you to their interests by law, even when those interests actively work against yours.
- Uber’s riders want fares low.
- Its drivers want them high.
- Its investors want the rapid growth that cheap rides buy.
If you book a trip, you want the lowest price.
The driver taking the trip needs a living wage.
In February 2017 a dashcam caught Uber’s CEO Travis Kalanick arguing with driver Fawzi Kamel about fare cuts. Kamel said the cheaper rates on Uber Black cost him $97,000. Kalanick shot back that Uber cut prices to stay in business against competitors.
Kamel kept pushing.
Kalanick finished with “Some people don’t like to take responsibility for their own shit.” He apologized the same day the video went public and admitted he needed leadership help.
The more groups you answer to, the harder it gets to keep any of them happy.
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Who are you trying to please who shouldn’t have a vote?
