It appears they’ve come to a compromise. The company will raise another pile of money, on the condition that they bring in a new C.E.O. in a move which, I assume, means bringing in an “adult” to grow the business.
It’s not really uncommon among Valley companies, I’d say. Everyone always points to Eric Schmidt or Sheryl Sandberg coming in to help the founders of Google and Facebook, respectively, with building a viable long-term company. And it worked!
I do wonder, though, about SoundCloud’s chances. The music industry is particularly brutal. Go ask Pandora, Rdio and Spotify.
Katie: One big difference for Google and Facebook is that they were on their way to being wildly profitable when the grown-ups came on to guide them. SoundCloud’s management issues have been wildly exacerbated by the fact that streaming music providers can’t make money. How many companies have overcome both problems to become huge success stories?
SoundCloud’s best hope is to stabilize and sell itself to a buyer who can handle the losses and protect what has made the platform unique. As our colleague Jenna, the Beyoncé Whisperer, Wortham points out, SoundCloud has been the place to find lesser-known, cool, diverse and unique artists. SoundCloud’s valuation was reportedly slashed by about half, making it a much more attractive buy than it was at $700 million. So here’s hoping.
Mike: Amen. Also, I need Jenna’s advice on how to join the Bey-hive someday.
Moving on, Bitcoin is surging to record highs on a near daily basis. On Friday, it was at well over $3,500 per single Bitcoin, which is being compared to the volatility of the gold markets. Perhaps people have decided to diversify their portfolios in light of the looming threat of nuclear escalation? Risk-aversion in the time of war is funny to me, if not terribly ironic.
Katie: Jack Dorsey thinks Bitcoin is going to be big. And he’s the guy who introduced the world to being woke. I think it’s time to put all of my assets into two things only: Bitcoin and shares of The New York Times.
Mike: Well, maybe I’ll skip Bitcoin and go right to Ethereum.
I’m obliged to note the ongoing fighting over at Uber, where most recently Benchmark, a major investor with a seat on the company’s board, sued Travis Kalanick, the former chief executive. It’s all about control over the Uber board, which is highly dysfunctional and trying to steer the company out of its current struggles and toward a new C.E.O.
At this point, nothing surprises me about what’s going on over there. But where do you stand on this? This is certainly not common among Silicon Valley company boards, right?
Katie: My latest theory is that the whole board loves reporters very much and has fabricated this complete meltdown because they want to give us the gift of many headlines.
Mike: It’s like Christmas in summertime!
Katie: Barring that, we’re seeing a pretty much unprecedented board implosion. One thing that hasn’t been touched on much is that Uber, valued at $70 billion, has been the poster child for staying private for as long as possible. We sort of forget that being public also imposes operational discipline and rigor on management teams that, hopefully, curbs some of the behaviors that got Uber to this point.
I think Bill Gurley, one of Uber’s ex-board members, wrote about the benefits of going public in one of his great blog posts. But then he was totally ignored by one of his most prominent founders and had to sue that founder to make the same point, so he’s been too busy to write a follow-up.
Mike: Indeed! Lastly, we have to talk about the thing that has completely overtaken Silicon Valley’s consciousness: The infamous “Google manifesto.”
If you haven’t been paying attention, last weekend a Google employee’s 10-page memo on Google culture went viral internally and created quite a controversy with some of its assertions, which included specious reasoning around why women were not as prevalent in engineering positions at the company.
Cut to a few days later, when Google fired him for breaking some of its policies with the text. Almost instantaneously, the guy was embraced by the alt-right, which harped on the idea that James Damore, the employee in question, was being unfairly silenced by a liberal tech company.
The way this played out has been extraordinary and yet predictable, a narrative in which corporate culture has been highly politicized because of the current divisive tenor of American cultural discourse.
I’m just curious for your perspective on it, and where you think it may head from here.
Katie: Damore put forth that there are biological reasons for there being fewer women in the tech industry, and argued that Google itself is not being honest if it pursues gender parity and doesn’t acknowledge these biological factors. But he tried to protect this argument — the sort of thing that would have caused a meltdown if it had been directed at ethnic minorities — and wrapped it in another argument: that tech is so liberal it can’t hear dissenting opinions. The maneuver immediately positioned him as a victim and aimed to shield him from being held accountable for his words. His being fired was a big lesson that free speech is not the same thing as free speech without consequences.
One of the things that has made this company-specific debate go national is the fact that Silicon Valley has long held itself apart from the rest of the country, exempt from the things that trouble other places. People here proudly say that they live in a bubble, that they’re out of touch with the rest of the country and that they “live in the future.” And Google is the Silicon Valley standard-bearer. But here we are in 2017, with culture wars engulfing politics, education, health care and religion, and Silicon Valley is not exempt.
Mike: Who’d have thought we’re just like other people? Well, maybe not Farhad.
Thanks, Katie, see you soon.