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Full transcript: Tech journalist and author Brad Stone on Recode Decode

His new book, “The Upstarts,” looks at Uber’s and Airbnb’s journey to become successful companies.

“Changing the world” is a cliché, especially when you’re talking about Silicon Valley companies. But Uber and Airbnb have indeed changed cities, both in the U.S. and abroad. They disrupt, to employ another Silicon Valley cliché. And that’s what makes them such a great topic — for a book and for a podcast. Brad Stone, the author of “The Upstarts: How Uber, Airbnb, and the Killer Companies of Silicon Valley Are Changing the World,” joined Kara Swisher for a talk about the book, about Silicon Valley and about the future.

You can read some of the highlights from the interview at that link, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on iTunes, Google Play Music, TuneIn and Stitcher.

Kara Swisher: Today in the red chair is Brad Stone, an old friend of mine and a fantastic journalist who now writes for Bloomberg Tech. He’s the author of several books including “The Everything Store: Jeff Bezos and the Age of Amazon.”

He has a new book out called “The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World.” Apparently they’re changing the world again. I’m so sick of this changing world. Brad, welcome to Recode Decode.

Brad Stone: Thank you, Kara.

Are you required to say, "Changing the world" on book titles, because I haven’t written one in a while.

It is a contractual obligation.

I did, I think I had a ‘changing the world’. I think I did on my AOL book. My god, it’s horrible. I’m not going to have it on my next one, it’s going to be like “Fuck S —”

What is the next one?

It’s called “Fuck Silicon Valley,” really.


At least I ... No, I’ve got a good one, you’re going to be surprised. It’s not what you expect. They wanted me to write a fictional novel of Silicon Valley and throw everybody under the bus, but ...

I can’t wait.

I don’t want to do that.

That sounds like fun.

Yeah, I’m not doing that. I don’t have the time to do that and I don’t want to ... I just don’t think it’s worth it. I’d rather throw a lot of other people under the bus.

Let’s talk about you and your book. Give your background a little bit so people who don’t know Brad Stone ... Everybody in Silicon Valley does, you’re a great a tech reporter, you worked at the New York Times, a whole bunch of places. Talk just very briefly about your background.

Yeah, thanks, Kara. I think we probably first met when I came out here for Newsweek in the late ’90s.

Newsweek? Wow.


Yeah, I was here. I had just gotten into —

I saw the up and then the down, and then remarkable rebound. I went to the New York Times.

When did you get here, do you know?


Oh, so the late —

Yeah, so I get a little —

Right before the fall, right?

A little taste, right, for the first boom. Then I was at the New York Times and covering a couple of companies including Amazon. For a long time it just struck me that no one had written the great Amazon book and so that was now 2013, so a couple years ago. After that one, I just thought, it being a sort of punishing and at times thoroughly demoralizing effort to publish and promote a book, I thought, “Well, naturally, I just have to do this again.”

Yeah, exactly. I haven’t gotten up to it since the ’90s.

Being a masochist, I went right back in, and the first thought was to kind of do something like [Mark] Leibovich had done for D.C., right?

Right, right.

Which is incredibly hard because he’s a remarkable writer.

You’re also not mean enough, Brad.

There’s that possibility, that I’m too nice.

Leibovich is mean, which is why I like Leibovich.

But, he does it with style, right?

Yes, he does.

Uber and Airbnb were always going to be kind of ... I had this idea of having three or four plot lines and those were going to be two.

Mm-hmm, intertwined.

A couple things happened. Actually, in the original conception I wanted to make Andreessen Horowitz one of the focuses too, and then of course Tad Friend did that remarkable story in the New Yorker, but really what happened was Airbnb and Uber, when I started this in early 2014, they just took off, like almost nothing we’ve ever seen. And we’ve seen a lot of companies take off.

Sure, 100 percent.

Not only in revenue and employees and venture capital, which was itself remarkable, but in the amount of conflict and controversy that they left in their wake.

And fate, really. They’re the two companies, if you had to pick two, who’ve done rather well, in terms of — there’s been so many, but these are the two that have gone across the country, not just here in Silicon Valley. Snapchat would be the third.

Of course changing the world is a cliché, but they have changed cities. The way that we get around, the way that we travel between cities, the options that we have. So it kind of happened organically that I just began to focus on this.

To focus on them.

Yeah, at the same time as I started, you know, I work at Bloomberg, I write for Businessweek.

Yeah, you have a day job.

I run the tech coverage at Bloomberg, but this has been my kind of passion project.

You talk about the conception of this, the upstarts, they’re not upstarts anymore but they started as that. They’re sort of scary power players at this point from what I can tell from the way they behave, and they’re very different.

Let’s talk about these killer companies, it’s kind of an interesting way to put it. They’re the new Silicon Valley. Everyone’s always talking about the new Silicon Valley, but it’s pretty much the old Silicon Valley with new companies. A lot of the same players and stuff like that, so talk about what you’re talking about in killer companies, what is that conception? Maybe it’s just a marketing thing for your book.

Perhaps a little bit of both. These are particularly Uber and Airbnb. The book, it’s not just about the two of them, but really the industries — home-sharing and ride-sharing — and similar companies in each and some of the winners but also many of the losers. I spend a little bit of time exploring why the companies that were doing smartphone ride-hailing before Uber, why they failed. Fundamentally, they have been externally disruptive, and to a taxi fleet owner in New York City or a [taxi] medallion owner, these are killer companies. They have in some ways really undermined their living, and so they’re disruptive. It was maybe a little bit harder with a Google or a Facebook to identify exactly who was killed.

They’re silent killers. Oh, they killed.

They killed; they’ve left some remarkable carnage.

Amazon killed, they’ve all killed.

Yeah, but these guys, there’s really been no illusion, they have come after rather large industries, and also we talk about moving the realm of digital into the physical world.

In the analog world, yeah.

Yeah, and that’s what these companies have done, and they’ve had to deal with all sorts of regulatory obstacles that the past generation of entrepreneurs haven’t.

No, they just killed them from a digital point of view by demolishing and then replacing.

Yeah, I think they’ve had to be different. We’ve both interviewed the likes, early on, of Mark Zuckerberg and Larry Page and Bill Gates, and these are not charismatic communicators, right?


They’re a little Asperger-y. But I would say Travis [Kalanick] and Brian [Chesky] are cut from a different mold. They’re storytellers, they’re charismatic, they’ve had to be politicians when called upon, and they’ve woven together political coalitions and activated their customer base. So I think there is something different about these guys.

Let’s talk about each of them. As you know, I wrote a big profile on Travis and had spent a lot of time with him and interviewed him several times onstage. Talk about Uber first because Travis is sort of the exemplification of Uber, but it started in a very different way, much as many companies did. He wasn’t the original CEO or really the creator of the idea. He was around and important to it but it was really Garrett Camp, who had created it, StumbleUpon. Talk a little bit about the beginnings of Uber, for people who don’t know.

Yeah, to me, reporting that, it was all new, right? They, like so many companies, they’ve obfuscated the beginnings because Uber is Travis’s company, right?

Mm-hmm. It certainly is now, yeah.

The emergence of Uber X was really the most important pivot maybe in the history of Silicon Valley. It’s a vast majority of Uber’s revenues, and so that flexibility and the rapid growth and the fighting the battles, it’s all Travis. You can’t take any credit away from him.

No, it was like Steve Case and AOL, it was someone else you’ve never heard of.

Exactly. It is funny how history does repeat itself. Every company has the silent founder. I spent a lot of time with Garrett and the remarkable thing is, Uber was inspired by a scene in “Casino Royale,” the James Bond movie. There’s actually a Sony product placement of James Bond following his car around and Garrett saw that. He had recently sold StumbleUpon, he had a —

Rich and bored.

Yeah, rich and bored, and also dating and trying to get places in San Francisco and he wasn’t an enthusiastic driver. He had a lot of anxiety around parking and driving. As you remember, taxi service in San Francisco was horrible. Pretty soon he started to call black-car drivers and then thought of that scene in “Casino Royale” and that was the inspiration, but that was early and it took a couple of years.

He actually subcontracted the work developing it to a friend, a University of Calgary classmate who was Mexican, who then subcontracted out to some Mexican engineers. Travis was a buddy and was an adviser, so was Tim Ferriss — who you just had on the show — and Steve Jang. Pretty soon — it almost took a year of development to just get something that worked. Partly, the iPhone was on AT&T, it didn’t work well, GPS wasn’t ready. They tried it in New York City, it didn’t work. It wasn’t until I think maybe two years after Garrett had had the original idea that they turned it into a business.

Right, they like to tell their Paris story, which is their little Pez thing of eBay.

I think that was important because Garrett had had the idea of buying some cars. That is when Travis started to work on him as an adviser. Why buy these physical assets, why don’t we just enlist drivers and give the app to them? That was hugely important.

What I loved was, at the time, Travis was taking some time off, but he had an idea for an Airbnb-like company called Pad Pass, which was going to be a network of high-end, furnished apartments.

That’s right, I remember that.

And so he didn’t think the Uber idea was all that big.

Right, which is interesting. He did get excited about it later, but again, he wasn’t the CEO for a long, long time. What’s interesting about it, though, is what motivates someone like him — and you’re going to read a little bit from a section about him — but one of the things that I saw — I went and visited his parents and his home and his room and it was interesting to see.

One of the things I found him different from others was that usually there’s these young sort of earnest founders, semi-inarticulate, and they’re very much the same. This was someone who had tried and failed with several companies. I think it’s the failure of his previous companies. One was a Napster-like company, before Napster. The second one was just an, eh, you know?

He worked years on it and then he finally did sell it, but it was an enterprise company.

All his friends were getting rich and he was sort of older.

He did okay in the end but he paid for it, right?

That’s right, he was frustrated and angry. I think he saw his friends getting hundreds of millions. He felt like a loser in a lot of ways. I feel like rage really did motivate him in a lot of ways.

To me, the turning point for Travis and Uber was the cease and desist that Uber got from San Francisco in the fall of 2010. Suddenly it’s a fight.

Right, which he likes.

He loves a fight. Uber — it was called UberCab at the time — and there was some ambiguity with the taxi and limo regulations in the State of California. There was the head of the MTA, Christiane Hayashi — I talk about her a little bit in the book and what her motivations are at the time — and she’s like the archetypal patsy commissioner. There’s one of her in every city and every country around the world, and she was blazing mad because the taxi drivers were blazing mad and there was an injustice. At the same time, she was protecting an industry, not the consumer.

It wasn’t doing the best for the consumers.

It was doing a horrible job.

Right, exactly.

She had a meeting with Ryan Graves and Travis, at the time an adviser, and they found her to be antagonistic and she found them to be incredibly unpleasant. And suddenly it’s a fight and he just loves it.

Right, he does that. It’s so funny because his parents are lovely. When I met his parents, I’m like, “Where’s the asshole parents?” because you know what I mean, like, you can’t grow one like that without [a role model].

In looking at the other companies that tried this and failed, like Cabulous and Taxi Magic, they didn’t have a Travis and they tried to work from the inside and they were too nice.

Right, exactly. Yeah, that was a key part of their success was his pugnaciousness. Read the section you wanted to read about Travis. This is about him when he decides to become CEO, because again, he was an adviser for a long time and had hired different people and they were running it, but it wasn’t him.

Right, okay, so the fight with Christiane Hayashi and the City of San Francisco had started, they had gotten the cease and desist, which had Ryan Graves’s picture on it because he’s the CEO.

Right, they were going to arrest him or something.

Yeah, the fines are going up. I’ll start reading and you just tell me when I’ve gone on for too long. “Kalanick was now prepared to devote himself fully to another entrepreneurial adventure. He stopped angel investing, curtailed his advising of other companies and even broke up with a long-time girlfriend. He also showed early flashes of belligerence toward competitors, an auger of the conflicts to come. Quote, ‘They will be getting into one of the most complex businesses I’ve ever seen for all the wrong reasons and they will sorely underestimate the pummeling they will go through at the expense of my bare knuckles,’ he emailed a friend who was pointing at a tweet critical of Uber by a potential rival. Kalanick signed off with, ‘Bleeding Uber blood.’”

Oh, dear. Wow, that sounds like him.

That’s an internal email. I got a bunch of them in the book and they’re just revealing of a guy who believed in the mission and fought for it, and ultimately, Uber would not have been successful without it.

Was there a negative to this personality trait, do you think? It really did carry them there compared to others.

Yeah, I think there were a couple of negatives. One, in places around the world where perhaps the taxi interests were a little stronger, places like Europe, it backfired. They had executives get arrested, they had ride-sharing services shut down, they spun their ... They came in guns blazing and it was counterproductive. Then the other thing is, they were foot on the accelerator for so long and they should have done better at getting in front of the obvious.

Regulatory issues.

No, no. I mean like background checks and safety issues. You have a business that’s dependent on drivers, non-professional drivers ...

Not being murderers, yes.

... looking at phones in their cars and people have gotten hurt. I think Uber, early on, probably — and they would probably admit it — could have done a better job on things like background checks and safety checks and technology that ensures safe driving.

This was one of the big issues was this heat, this rush, into growth.

That’s right.

Didn’t think of the consumers, didn’t think of the possibilities of dangers to consumers.

And, was fueled by Travis’s competitiveness, because ride-sharing was started by Lyft and Sidecar and Travis thought it was illegal. I talk about that in the book. Really they lobbied for the PUC in California to shut Lyft and Sidecar down. It was only months later when that never happened that he was interested.

“Oh, that must be a good business.”

Yeah, Uber started it and it was his ferociousness and really unwillingness to see the ride-hailing category that Uber had pioneered yielded to anyone else, that they flung themselves into this rapid growth. Literally, there were casualties and then it ended up in some parts of the world being counter-productive, they came in too hot.

They did definitely, and some of the criticism seemed to get to them a little too much, their famous Emil meltdown with the BuzzFeed reporter. Have they recovered from that, have they learned from that? To explain it, they essentially threatened another journalist, Sarah Lacy. She had been writing some very critical stories on dangers to women and why would these privileged white men understand why women might worry about things like this. Not just that, but that there were serious dangers and this was a misogynistic company.

I think that’s really the essence and they weren’t thinking about the safety and people should be clear about that and so Emil [Michael] seemed to, as usual, walk right into it and threaten her and Ben Smith from BuzzFeed. Have they moved beyond that? Have learned something from that? Because it really, that to me was the ...

I think I call that chapter, and I work out the whole thing. It’s like, yeah, Uber’s Rough Ride, it’s 2014, and no it wasn’t just that. It was the tracking of your reporter, right?

Yes, right. Johana Bhuiyan.

Johana, right.

She was working at BuzzFeed at the time.

Right, with the God View tool.

Which many companies had done, I remember Facebook had that controversy in the beginning.

Right. It’s just a complete absence of privacy protection inside a fast-moving company. And there were other mistakes, like the tweeting of some sexist images by Uber Team in France.

The company has matured remarkably and, yeah, we could let them off the hook by saying, “Oh, they were young and moving quickly,” but they had raised a lot of venture capital and they’re in a business that requires a good [public face]. It’s a public service, moving people around, and so they should have been more mature and they should have spoken with more maturity. I think the fact that they were a kind of shoot-from-the-cuff company back then, it was a complete manifestation of Travis’s personality; he’s just a fighter.

I do think in this case we shouldn’t quite let them off the hook.

No, I don’t think so.

The issue is it’s not like there’s ... You get the wrong search and they make some dumb thing. You’re not hurt by that.

Right. No, people are dying.

A lot of these companies, you think of Theranos, you can think of a lot of them.

Yeah, and we’ll make the connection to Airbnb, but there have been people who have died in Airbnbs, and I don’t let them off the hook in the book. I think one of things that Travis has always said to his CTO, Thuan [Pham], is, “Anything you can predict I expect you to handle.” A lot of the drawbacks, a lot of the difficulties that Uber has had, have been completely predictable and they handled them poorly, so by their own standards they made a lot of mistakes and I think that they would admit that.

I want to talk about Airbnb in the next section, but talk about the money that they raised. It’s enormous, what is it right now? $20 trillion?

It’s extraordinary. It’s over $10 billion. I would say that we have a better standard for it in the history of tech, but Amazon — it wasn’t as much but certainly, and they went public early — but they raised all sorts of debt in secondary stock offerings. In a way, these guys are all disciples of Jeff Bezos. The difference with Uber is that it had some big competition, Didi in China and Lyft here, that also had access to the capital markets.

Which Didi, he handed them their hat there quite a few times.

Then the environment that we’re in with all this overseas capital coming into the U.S. and the sovereign wealth funds and so the money was there at good terms and Travis and his board availed themselves of it and it’s, you know, it’s amazing.

Yeah, so where are they going now? IPO?

Most certainly.

With Goldman Sachs.

It does seem that way, yeah. I think the existential question for Uber is obviously self-driving cars, right?


I can’t think of another business where we can say, “Uber’s strength now might mean nothing. It could literally be zero in a decade."

Which Travis addressed in an interview with me, which I think he regrets saying.

He said, “It was,” rather brusquely, “For drivers.”

Yes, I said, “What do you think about self-driving cars — this was right at the dawn of self-driving cars. He said, “You know, the real problem, I think, is the guy in the front seat, we got to get rid of him.” That’s essentially what he said.

Yeah, and that’s in the book and actually that ... Was that All Things D or Recode by then?


Okay, so that Code was very significant because Sergey also is at that Code.

Showing off the self-driving car.

Yeah, and he ... It’s all in the book, and you’ll enjoy this because it was almost, it was what they communicated to Uber beforehand. They basically said, “We’re going to launch a competitor,” then they pulled back on that but then it was also Sergey onstage with either you or Walt basically dismissing the partner, Uber.

After is when Travis goes and decides that Uber needs to make the investment in driverless cars. I think that was smart because this is a reset for the industry, and if Uber could lead in driverless cars, it has an incredible future. If it’s Google or Ford or GM then they’ve got problems.

Right, absolutely, but one of the things I was thinking of, let’s just be clear, Google’s a big investor. Several parts of Google are big investors in Uber, so it’s an interesting problematic situation. They took David [Drummond] off the board, right?

Yep, Uber’s working on its own mapping service to try to get off the Google platform and so it’s, they’re — to use the horrible term — frenemies.

Frenemies, yeah, it’s sort of like the Apple-Google kind of thing. How do you think about their move into self- driving? They’ve had some ups and downs, again, but it’s a big-ticket item for a smaller company. They’re still a small company no matter how you slice it, and self-driving cars is a huge capital investment no matter how much money they raise. When you have, again, the GMs, the Googles, Apple seems to be ... You’re not clear where Apple is on this. You know, I always thought they would just get bought by one of them and become the reservation system.

They’re so expensive now, who’s going to buy them?

Yeah, right.

I’d say this, I’d say it’s amazing what you can do when it’s an existential crisis, when it’s your future and your whole business and Google ... It’s not Google’s business, it’s not Apple’s business. It’s the car company’s business, but we can both be sort of privately pessimistic about the chances that they’ll become real technology companies. In that respect, I think Uber has a tremendous advantage. They’re well capitalized, they’ve got an amazing business that could fund the research and everything is hinging on it. In some ways I think they’re the company to beat. At the same time, Google, it had a 10-year head start but then there’s not a great track record there at maintaining talent and what is now called the window.

Yeah, they’ve already lost. Yeah, they’ve lost Chris Urmson and others.

They’ve got way more problems, right.

They have Waymo problems, that’s very funny, Brad. A little pun from Brad.

The low-hanging fruit. So I think Uber has some challenges, but I wouldn’t count them out.

How do you look at them when they’re going into other ... I just did an interview with the product guy, I’m blanking on his name, who was talking about vertical lift and just all kinds of other vehicles for people.

Are we talking about UberEATS or ...

No, no, no. This is a vertical lift and takeoff, it’s a helicopter.

Oh, I look at them as marketing trivialities.

Right, that they’re trying to do things, but other places like ...

It’s interesting, Jeff Holden from Amazon is working on some of that stuff for Uber now.

Yeah, Jeff. It’s Jeff.

Yeah, so it’s not completely frivolous, but as Ashlee Vance and I reported over the summer, Larry Page has two companies ...

In vertical lift and takeoff.

Z-Arrow and Kitty Hawk are working on, basically, flying cars.

Flying cars, right.

I think that Uber has seen that and they know that they need to ... Their business is urban mobility.

Moving people around.

Yeah, and so they need to be in any change.

To finish up on Uber, how do you look at the world thing, because they’ve got a real competitor in Didi, and at the same time they had a little truce with them this summer after quite a bit of ugly fighting, as I’m sure you are subjected to all their different dueling press releases.

Oh, yeah.

You know, “I hate them, I hate them, I hate them ... And, now we’re partners. By the way I still hate them,” like, “Shh.”

Right, but Uber left the Chinese market with a significant position, I think 17 percent.


That’s a tremendous outcome.

Of course, they say what we really want to do ... I’m like, “Mm? Maybe not.”

No, I think it was hard for Travis.

Mm-hmm, he really wanted to compete there.

I think he thought Uber was a global network. Actually, it’s a good point, because I think that Uber had this belief that it’s superior technology would win, but we look at the strength of Lyft and there’s a bunch of companies in New York City and you just start to conclude that maybe good enough is good enough, that as long as the car’s there within four minutes there are going to be a lot of players and if that’s the case ...

Right, Austin’s a good example now. There’s been tons of local players since Uber and Lyft were kicked out.

If that’s really the case and Uber doesn’t really have the kind of network effects Airbnb clearly enjoys, it’s a fight, it means it’s a fight in every city. That means they can’t lift fares to a more natural level. Uber lost $3 billion in 2016.

It was given that.

Maybe that does not get better.

Right, well Amazon went on and on for years doing that, right, until they figured it out. Now they’re the darling. We’ll talk about Amazon in a second, but what do you think their prospects are then, speaking of that? They are losing money, they are, but they’re so popular, they’re so useful. I think it’s one of the apps that people have in common across the country as opposed to just Silicon Valley. It’s really, everybody who uses an Uber knows what it is.

Yeah, and the $3 billion from last year was in large part because of China, so I think the financial picture improves. I don’t think they get the profitability because they’re still fighting a lot of these local incumbents, plus the well-capitalized Lyft. On the positive side with things like UberEATS, it’s beginning to take hold and the package delivery and everything else, they have created a sort of urban mobility layer that they can start to take advantage of. Look, it’s changed my life and the fact that you can go to any country and instead of the concierge scrawling your address in Chinese on a card, you open one of these apps and it has, again cliché employment, it’s changed the world. I think, ultimately, they’re in a fairly good position. They’ve got an extremely professional management team and a board, obviously, and they have their challenges, but I guess I’m still optimistic about the future of Uber.

Interest in going public?

I would say just Travis seems to have ... Is not in a rush by it.


I’m going to guess 2018 for Uber.

Me, too.

2017 for Airbnb.

For Airbnb?

I think that happens a year sooner.

All right, we’re going to get to Airbnb next, but right now in the red chair we have Brad Stone, he’s a journalist from Bloomberg Tech but he’s the author of several books and his new book is called “The Upstarts: How Uber, Airbnb and the Killer Companies of the New Silicon Valley are Changing the World.” That’s a mouthful, but when we get back we’ll talk about Airbnb. We’ve just talked about Uber, now we’ll talk about the second company, the nicer Airbnb.

By the way, if you keep pointing out my subtitle is too long, I’m going to point out that this chair that I’m sitting in is not red.

No, it is not, thank you. All subtitles are too long, so I will give you a break.


We’re here with Brad Stone, well-known Silicon Valley journalist and also author of a new book out called “The Upstarts: How Uber, Airbnb and the Killer Companies of the New Silicon Valley are Changing the World.”

We talked about Uber, let’s talk about Airbnb. A very different CEO, couldn’t be nicer. Brian Chesky literally couldn’t be nicer.

Yes, but I would say that one of the themes in this book is that they’re not so different, that they have bended the rules and pushed forward aggressively where they needed to. He’s every bit the entrepreneur Travis is.

Sure, absolutely.

Yes, he does a much ... Airbnb’s game is strong, right? They have created a mystique around what Craigslist was doing 20 years ago.

Sure, “Sharing, community, it’s so good for you.”

There’s an evangelism and a spirit that you might find almost in some religions, right?


I think that’s been useful to them to create a bond with their community and to enlist political support in the places where they’ve needed it.

Absolutely, and they’ve got their ups and downs and we’ll get to that in a minute. I remember meeting them when they first started, the three or four founders. I think there was four at the time, they had a coffee shop down in SoMa and they had just had some success with one of the conventions or something like that, and had really just started it. It seemed it was one of those things, I remember thinking, “This is a really good idea,” like, “That’s a really interesting idea.” I think their big challenge was getting people to have people in their house and think of that differently. I thought, “Young people probably would do this kind of thing.”

It was definitely a different tone and tonality, even though they immediately got into big trouble with a lot of things. Remember, I guess it was the orgies, there was all of kinds of things, people wrecking the apartment and all kinds of anger by rental advocates ... Rent advocates in cities, that soon became a real problem for them, and they didn’t really know how to react to it initially, so talk a little bit about that, when they started.

Sure, well, the first thing is that there were people already doing this, there was a site called Couchsurfing.


However, the name is even similar to Airbnb, but they made a huge error, which is they were registered as a nonprofit and they were extremely idealistic and it wasn’t a great experience. The one thing that Airbnb had was, Brian and Joe were designers, and they did a great job. They also had Nate Blecharczyk, who was the CTO, who I describe his history as a high schooler and at Harvard as really a creator of tools for spammers. As a result, he was what we now call the growth hacker, very clever, kind of ingenious, but all these tools to build Airbnb’s audience in the early days, including cleverly getting their hooks into Craigslist, which had a much larger audience. They spent years, they literally spent one year before Y Combinator just getting rejected. That’s what they did all year, and so they finally emerge and around 2008 ...

Around the election.

Well, right, the election, they did the conventions as you mentioned, they went to Obama’s inauguration. Then they start to get some traction. Immediately two things happen, the Samwer Brothers cloned them.

Which is sort of a right of passage, right?

Right, yeah, and then an apartment in the East Bay gets trashed and the owner ...

Boy, was that a story.

Right, and the owner starts blogging about it. Right, they handled that pretty poorly. It’s funny, the similarities with Uber, but the first thing that they did, perhaps persuaded by their legal counsel, is to try to evade accountability.


The internet community just wasn’t going to let them get away with it, and Brian, to his credit, pivoted fairly quickly and came back and did something that he does now. We see with the questions around African-Americans and minorities getting discriminated against on Airbnb. They’re fairly good at just accepting responsibility and pledging they’re going to do better, and talking to their community in a sympathetic way.

Right, which is interesting, which is funny because I’ll never forget during that time, I did an interview with him at some random event and I think the orgy thing was coming out; someone had an orgy at someone’s apartment. There were condoms everywhere.

Is that wrong?

Yeah, I live in San Francisco so it’s just fine. I remember him going, he goes, “You know, people have been having orgies at hotels for years now.” I was like, “I like the answer for me, but for you?”

Probably not the right answer.

His point was that the things that hotels are attacking him about have been happening at hotels. Like all kinds of the same crime.

It’s a little bit worse.

Death, orgies, whatever it was. It was like, “People aren’t thinking of hotels like that.”

It’s also not really true.

Most people don’t.

Hotels have to conform with a lot of regulations. They need to put carbon monoxide monitors and CO2 monitors in hallways and rooms, and there were Airbnbs that did not have that.


Airbnb, early on, did not do a great job of warning its hosts what their obligations were, vis a vis safety or local regulations. They didn’t want to, because they didn’t want to slow down the growth of their supply.

Right, “We don’t really want to check, we don’t want to protect.”

Right. “We can do it. It’s too hard. We don’t want to.” But really, they didn’t want to slow down. Airbnb ... Unlike Uber, Uber took advantage of some regulatory ambiguity. Airbnb in New York City was always illegal. There is a law that’s not really meant to address home-sharing, it was more about the big, illegal hoteliers that were popping up and taking advantage of European tourists and whatnot, but the laws were there. You could not rent your home, if you weren’t there, for less than 30 days. Airbnb didn’t ... It had a big market there, a big community. It didn’t want to stop that. It felt the law was unjust, which it might have been, but nevertheless they were all systems go. I talk about some of the people, the hosts, who get evicted or that there are some who get sued by the city and have two years of legal drama.

Everyone tries to celebrate it as the best thing ever, and it is, I use it all the time. That’s another thing I use all the time, but when you use it you start to think about, not to the detriment of hotels because I could care less about it. They either get better or cheaper or something, I’m not really worried about them as much, although I do think about the workers and things like that. I’m more, people in a neighborhood where you’re in a building and there’s people you don’t know who they are and there is an element of, “This is not so safe.”

Yeah, that sort of negative externality.

Right, exactly, and so you start to think, “Do I really want my neighbors to do it?” but I don’t have control. On the other side, I’m like, “Well, people can make extra money on the side, it’s really good.” Then I think, “Ah, there’s enough rent in San Francisco.” It definitely creates a lot of, like more than most businesses. Especially in San Francisco, rents are so high that it does force rental properties off the market, although the San Francisco rules are horrible around rentals. It’s a fascinating thing because you like this product, the same thing with Uber, and you have issues with them. You start to go, “Mm?” That you don’t have maybe with ... Maybe you should have with other businesses.

Just full disclosure, I use Airbnb all the time, too. Next week, I’m staying at an Airbnb in Brooklyn as I launch the book. At the same time, yeah, if I had tourists going into and out of my neighbor’s home at two in the morning, I wouldn’t like that. I actually think that you’ve identified why, Uber seems to be having fewer regulatory problems now — ride-sharing has gotten critical velocity in North America — and Airbnb seems to be having more problems.

It flew under the radar but in some of these dense cities which now just has a general problem with housing stock, where rents are high, we’re seeing big pushback. Not just San Francisco and New York City where they’ve been losing battles, but you’ve got little towns on the coast like Laguna Beach where it’s basically illegal. I do think that Chris Lehane now runs their policy department. I think Airbnb has a lot of work to do to find an equilibrium of cities and they’ve had all successes in some cities where ...

How does that happen? It seems like there’s no particular answers unless we have adequate housing for people. Cheap and adequate housing.

What they’re doing is they’re identifying a number of nights where it’s going to be suitable. Let’s say, I think in San Francisco now, you can only host for 90 nights a year. The city council tried to move it to 60.

They did.

That got vetoed.

They’re quite hostile to Airbnb.

They are. A lot of it’s emotional. Housing is an emotional issue.

Yes, I’d say it certainly is.

Politicians said, “Right, we’ll use it as a weapon.” It’s tied up in inequality and, of course, there’s ...

It’s also an actual problem.

It is, it’s a very real problem, but I don’t think Airbnb has caused the housing shortage.

Right, but it’s just another brick in the wall.

It’s a contributing factor, probably a small one, but genuine, a genuine nuisance sometimes for people in communities that don’t ... That live in residential communities. I always say that it’s great that we have Fisherman’s Wharf in San Francisco because it takes all the tourists and gets them out of our communities.

For a little crab.

For a little simulation of San Francisco. The promise of Airbnb is ...

You live in the city.

To give them an authentic experience. As a traveler I love it, and enjoying our quiet neighborhood, I don’t necessarily want it to be overrun with tourists. Even though you could add another factor, they do bring a lot of economic activity to neighborhoods.

Sure, absolutely. Talk a little bit about where they go from here. Again, they also didn’t do themselves any favors when they put up those ads and said, “We’re paying taxes. You’re welcome.” I’m like, “I’m sorry, I pay taxes. I don’t ask for a ‘you’re welcome,’ but you can give me one.”

That was a big mistake.

As they’re starting to expand — and going public this year, as you’re saying — what are their challenges?

First of all, that’s a guess, I don’t know, but we recently reported at Bloomberg that they’re profitable now, or they were in the second half of 2016.

That’s profitable-profitable? Not Ebitda profitable? Which profitable is it?

I’m sure there’s some disclaimers there in the profitability, but they’ve got a professional CTO right now and it does feel like they’re laying the groundwork. They’ve got some regulatory questions to sort out for sure, and then this expansion into trips, which is a great idea.

Explain that, Experiences. They asked me, “Kara, do you want to come to an Experience?” I’m like, “Absolutely not. I do not want to.”

Go collect some mushrooms. The idea is Airbnb is a platform to find lodgings and they’re going to offer you more around a trip.


Tours, meals, restaurant reservations and maybe one day book your flight for you. Yeah, so now they’ve got a great foothold in the enormous travel industry and this is a horizontal expansion.

Do you think that’s a good idea?

Yeah, it sounds like a great idea, and there’s a mission behind it that I kind of buy into, which is that a lot of travel experiences today are corporatized. We go to Mexico and we stay in a resort with a bunch of other Americans. Are we really experiencing the country? Are we getting served something artificial and paying a lot for it? I think that is what the travel industry has become. If they can come in and create experiences that do seem authentic and it’s people serving people and not companies serving people then I think there’s a great opportunity there.

You’re going to read another section about Brian [Chesky] and Travis Kalanick being similar. I literally could not imagine. I want to hear this.

I don’t know if it’s a similarity, it’s more like these stories are intertwined in my book and that these guys learned a lot from each other.

Sure, that’s nice.

“In the years following their first meeting in New York, Brian Chesky and Travis Kalanick struck up a sporadic friendship. A few times a year they would go out to dinner in San Francisco, first by themselves, then with other entrepreneurs or with their girlfriends, to discuss their companies’ twin successes and their common experiences battling regulators and lawmakers. Quote, ‘I think we learned a lot by watching each other,’ Chesky says. ‘There are so many people in the world that can relate to who share your position.’ Employees of both Airbnb and Uber remember these dinners well. Says one Airbnb exec, who was also close to Uber employees, quote, ‘Brian would come back saying, ‘We have to be tougher,’ and Travis would come back saying, quote, ‘We have to be nicer.’”

I got peanut butter in your chocolate and chocolate in your peanut butter.

Yeah, exactly. There’s one other, let me just summarize one other episode from the book which is, this is at a time when Airbnb is considering an expansion into other markets. This is years ago and it seems like they might have looked at actually acquiring Lyft. Travis barges into The Battery, this club in San Francisco, and walks up to Brian and says, “I hear you’re going to buy Lyft.” Brian denies it and says, “No, no. It’s not our business, our business is trips.” Travis says, “Our business is trips.”


They have a nice laugh about it.

Were they going to buy Lyft?

It never became real.

Uber was almost going to ... I think Uber just pretends to buy it, just to fuck with them.

I’ve got that scene in the book. There was a dinner with John O’Farrell at Andreessen Horowitz and Amil and Travis and John Zimmer from Lyft. Lyft wanted a larger percentage of Uber than Travis is ever going to give and it went nowhere.

Yeah, well, I’d say also Andreessen Horowitz missed that opportunity to invest in Uber, didn’t realize Travis would say “Go screw yourself,” which they weren’t used to.

A big mistake.

Yeah, it was a big mistake and then Shervin Pishevar, you know, now is enjoying the fruits of that. What’s interesting about that is the idea of doing your own fate with venture capitalists, like that pushing back on them. I think a lot of these times a lot of these entrepreneurs are in control. Can you talk about that?

Yeah, I think the connection between ... The missed opportunity between Andreessen Horowitz and Uber is interesting. They misjudged Travis, right? He is someone who from the very beginning, almost the beginning, where he became CEO, saw what a huge opportunity he had. Andreessen Horowitz, not only did they not see the extent of the Uber opportunity back then, and few people did, but I think they also, they misjudged Travis. He didn’t fit, he didn’t look like a Mark Zuckerberg or a Larry Page. He is pugilistic, he probably doesn’t make all that great an impression the first time he’s presenting to them. Not only did they lowball him, they tried to put in a big option pool and at the last minute he pulled out. It probably goes down as one of the biggest misses in Silicon Valley history. Andreessen Horowitz was founded on the idea that it would get the big hits every year and, look, they made up for it. They invested in Lyft.

Right, what are Lyft’s possibilities? It seems to me ... I had a dinner for Jeff Zucker, he wanted to meet some Silicon Valley people and I had Dick Costello there and John Zimmer came over and he was like, “You know, Kara,” this was early, he goes, “Think about it. A car is 80 percent empty, and that’s just bad for the environment.” You know, because there’s one person in it, there’s five seats or whatever. Anyway, he’s going, “We’re here to help humanity and blah, blah, blah.” He walks away and Dick Costello turns to me and he goes, “Trav is going to fuck with that guy all day long,” like, “He’s dead; dead meat,” because he was so nice and so earnest. Talk about Lyft, because they managed to hold on.

A couple of things ...

It’s not bad for Uber to have a competitor.

It’s amazing how Travis ... He might never admit this, but I think he got a lot of his idealism and some of Uber’s mission from listening to John [Zucker] and Logan Green, the CEO of Lyft.

Yeah, both of them.

They were talking about the empty seats in cars and highways and traffic.

I know, and they truly believe it.

Yeah, well, and that’s their background.

Mm-hmm, yeah, they started with the nonprofit.

I think Travis rightly identified that. Look, people have been predicting Lyft’s death from the very beginning. I think it goes back to what we were saying before about certain services, as long as they’re good enough, you can’t outspend someone into oblivion. An Uber board member might say that Lyft’s existence is just a reflection of this capital environment and the fact that capital is so easy to get and Lyft has been able to raise money and do irrational things. Lyft says it’s on a path to profitability. I think it says something about the market that it might not be a winner-take-all and that is a problem for Uber.

You feel Lyft ... There’s been all the rumors of selling and everyone’s reported back and forth and back forth and back forth.

I think it seems natural, perhaps, that GM might one day buy them and we might look at this year as just a protracted negotiation between Lyft and one of its largest shareholders, GM. It’s funny, Lyft is not that differentiated from Uber, but they have in people’s minds created a different brand for themselves.

He’s super-nice.

There’s not only one rental car company and there was never only one taxi company.

Sure, absolutely. It’s interesting because Lyft is ... They’re more chatty. I have to say I like Uber better. I’m like, “You stop talking to me right now.”

“I’m on my phone.”

I once by accident got in an Uber Pool and I literally want to kill myself.

That’s awesome.

You know, “Blah, blah, blah,” and unfortunately in San Francisco he was stopping at startups and people do, they know me.

Oh, so they’re pitching you in the car.

They were like ... And I was like, “Oh, my God. What?”

That’s awesome.

It’s funny how Uber defaults to Uber Pool. It’s easy to make that mistake.

I was too freaking old when I was 22 for sharing cars but I get that ...

That’s not my thing to do.

Some people love it, they want to flirt and date. I just really want to be left alone and not speak to anybody.

When we get back we’re going to talk a little bit about what’s coming next and where these things go. Not just these companies, but you have such a perspective on Silicon Valley, so when we get back we’re going to talk about that and I’m going to have Brad make some predictions and give advice to companies, if you don’t mind.

I’m looking forward to it.


We’re here with Brad Stone, a journalist who writes for Bloomberg Tech. He is also author of a new book out called “The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley are Changing the World.”

Brad, let’s go a little bit broader now. I would be remiss, because you wrote a book called “The Everything Store: Jeff Bezos and the Age of Amazon”, which got Jeff and everybody pissed, which was great. Since then Amazon’s never been bigger. It’s really amazing. It feels like Amazon’s everywhere. As you know, the Echo is my favorite thing of all time, right now for this week. Talk a little bit about them and then where things are going in Silicon Valley in general because I think you’ll have a neat perspective on that.

Since “The Everything Store” came out, I think the market cap of Amazon is up by a factor of three. I’d like to say I predicted all that but it really, it is .... Yeah, it’s the everything company right now. Despite the criticism of the culture, and the New York Times did that famous piece, and I get into it a little bit in the book. How it’s a thankless culture and people burn out and the average tenure is short and sometimes people don’t have nice things to say. All that’s true, but you have to give ... There’s something about it that has yielded a kind of decentralized innovation.

Well, completely customer-focused. I don’t know how else to put it. It’s just like you’re never displeased with Amazon. I can’t think of the time, and when it happens ...

Yep, they give you your money back.

Fixed immediately. It’s a little like Nordstrom, and I remember thinking in Seattle when I first met Jeff when he had like five employees or something small like that, he talked about Nordstrom, which was a big, at the time, was a very iconic ... I was there to see Nordstrom when I was also there to see him and so it was interesting that they’re both from Seattle in a weird way. Where did they go, what is their ... Do you think they ...

I think that if we’re getting into irresponsible predictions, I say it’s Amazon that becomes the biggest company in the world one day and is maybe the first to a trillion dollar market cap. Every new fulfillment center, every time they get closer to the customer, it’s not like Apple, where they have to reinvent that the next year to compete.

Right, you just get better and better.

It’s progress. So in the newsletter I called it the Flywheel of Doom. As they get closer, it’s shorter delivery, there’s more variety for people in terms of instant delivery.

It anticipates. I’m expecting Jeff Bezos to show up at my house with a toothbrush, “Kara, it’s been a month. You need to change it.”

He might do that.


I think that unless you’re a Nordstrom or a Costco and have something to differentiate in retail you go away. I don’t see how you compete with Amazon and the ingeniousness of Prime and the way it locks you into their ecosystem. And look, all you need to do to predict the future of Amazon is to get a Prime customer to open up their Amazon account and to look at the spend over annual spend every day. It’s more and more.

I like it every day.

You know what? It’s better. Maybe it’s less expensive.

The boxes.

I sort of have this vague ...

You need to do something about the boxes.

Yeah, and the trash, for sure, but you have this vague idea that it’s less expensive, it may not even be but it’s just convenient and then you start to get impatient with even standing in line somewhere.

It’s interesting, because I literally bought something I could have gotten at the Walgreen’s down the street. And I was like, “What am I doing?” I almost bought toilet paper and I said, “No, I shall not. I shall hold out for the ... I will walk home with my giant thing of toilet paper.”

Then you look at the new businesses and the TV shows are pretty good. They’re not quite as good as Netflix’s but ...

They’re good.

They’re good.

Are you kidding? They’re good.

Yeah, “The Man in the High Castle,” “Transparent” is excellent. There’s one, “Red Oaks,” that I loved, and the “I Have an Echo,” as well, “The Heat.” This says something about Amazon, they get creamed on the phone, just humiliated.

Creamed, that was a good phone.

Now they have rebooted that device strategy and are leading in this whole new wave.

It amazes me that they beat Google and Apple, still beating Apple.

Apple got to Siri before Amazon got to Alexa and Google which should be ...

Not really, you don’t have a useful Siri device.

No, and Google, which should own that because what are they if not an AI company, has copied Amazon.


You know, to me it gets back to Bezos.

Although there’s something about ... I haven’t used the Google device, but I don’t want them in my home. But I don’t mind Jeff spying on me. I guess I don’t know what it is.

That’s okay.

I’m like, “Eh, what is he going to hear?” Like, “Who cares?” He’s selling me shit so I don’t care, but Google I’m like, “Uh-uh.”

That’s interesting.

Can’t have Larry Page snooping around my house.

They’re a little too good is the problem.

They know everything. They know where I go, they know what I use.

Amazon knows everything you buy.

I don’t care, so does Safeway. You know what I mean, it’s not ... I feel ... I don’t know, it’s ridiculous. It’s a ridiculous thing.

I was just going to make one more point, which is Jeff is the smartest guy in the business.

Are you doing a sequel? Are you going to do a sequel?

I thought about that.

Yeah, you should.

There is, it’s the most interesting, accomplished company in the world.

He is the smartest, after Steve Jobs died, I think he is, to me. Because everyone’s goes, “Elon Musk,” I’m like, “Eh, Jeff Bezos.” A very complicated person, too. Not quite the smiling pleasantries that he does, as you know. You were on the receiving end of that. Do you think he’s more under threat under the Trump administration having on the Washington Post? He’s sort of tried to be a little nicer but ...

He’s gone in there like everyone else with the ...

He can’t help himself.

Phony jobs pronouncement and whatnot.

Right, yeah, that tweet he did was very ...

I think it’s the Post. What looked to be a kind of brilliant strategic acquisition, now five years ago, and the Post has flourished under his ownership.

By the way, he loves it.

Yeah, he loves it and it’s a great paper, now it’s a national paper. The coverage of Trump is ...

I was just there, it’s fantastic.

… has been great but I think in terms of right now, considering the president that has been elected, and the tenor of the Post coverage, which is as great and as harsh as anyone, even he ... Considering the temperament of Trump, he might have a business problem.

Right, meaning taxes, all kinds of things.

Antitrust, temperamental two-in-the-morning angry tweeting that hurts his stock. It’s not that he cares but ...

The only thing that I would say is, people love Amazon. They’re attacking a company people love.

What do you do?

I don’t know. Is it going to work, like, “Why are attacking Amazon?” Like, “Fuck you.” Like, “Lockheed, yeah, those plane makers, yeah, those defense contractors,” but I don’t know. It’ll still be interesting.

You’re probably right, there might be things on the margin in terms of the permits for the drones or something where he can kind of make Jeff’s life miserable if he decides ... Look, there’s a lot of questions about how Trump governs and whether we ever get back to a rationality or not, but there’s something ... I agree with one of your stories, there’s something really unsettling about seeing all these CEOs walk into Trump Tower and make their jobs pronouncements when they’re just totally artificial. They’re all being pragmatic and they’re trying to protect their businesses and yet Jeff with the Post, I think, will be set up as an adversary.

Yeah, so tell me about that. Talk about that, because you know I’ve been out in front of this and I’m going to keep going. This prepping story in the New York Times, I’m like, “Those …” I’m not going to say what I think. I’ll write what I think, but the selfishness, the self-regard, has it changed here? Some of it now has become literally like a constant episode of “Silicon Valley,” like, “Are you kidding me with that?” or not standing up or not speaking out. I get the pragmatic part but you know when things happen you say ... You have changing the world in your headline and I was joking about it but it seems to me they brag about changing the world, but when they actually do they don’t want to take responsibility for the negative aspects of it.

Do you think that or are you ... For some reason it feels a little sour at this point and it’s not just the Trump people, it’s the behavior of Silicon Valley in the wake of it. I think they have acted like they’ve had a higher mission than, say, I don’t expect a bank to do anything but the most venal thing of all, but Silicon Valley I do expect more from or maybe I’m being ...

I guess maybe I would ... Maybe I’m more cynical than you are, Kara. I think the idealism has always been marketing. Even back in the early days of Apple and the pirate mentality. They were building a computer that they wanted to differentiate from IBM and Microsoft and I don’t remember Steve Jobs saying anything about the Gulf War and the invasion of Iraq. We haven’t been very political in this community. To the extent that we have and these, the upstart CEOs have needed to be, it’s for their own means. Elon is close with the administration now and on that council of economic advisers for one reason.

Space. Cars.

Right, and renewable resources. He has an agenda that he wants to see enforced and it’s been slightly amusing to see someone like Eric Schmidt cultivate the Obama administration for eight years and he’s now cultivating the Trump vote, so I’m like ...

That ain’t going to work, you got that, right?

It probably won’t, but this is ... They’re all businessmen and they always have been and the idealism has been marketing and smoke and mirrors. Look, they’re business people with responsibility to their investors and their employees and the mission is sometimes real but then it’s also something they use to motivate and inspire and attract employees and draw customers to your company.

I find the employees are getting a little bit ... That’s who I’m hearing from a lot.

A little cynical?

No, they’re like, “What?” Like, “Are you kidding me?” Because they do believe it. Some of them really do, a lot of them do. Even higher up at Google, I was talking to them and they’re like, “Thank you for kicking their nuts.” You know what I mean, like, “Thank you for saying something that they should have said.”

I think there are some things, I’m thinking of IBM being the first company to integration, gay rights. There are some impacts that a lot of these companies can have for the positive social good that they have stood for, tolerance, presumably, inclusion, all kinds of immigration. It’s not that hard to go out on limb here.

Right, it’s also true that we live right now in just a desperately divided time, and let’s say your Facebook, a large percentage of your user-base is Republican. They don’t have the same values as you do and it’s your job if you’re running that company to offer the same kind of service to them as to everyone who does share your political values so there is a little bit of a tricky situation because of where we are as a country.

What about ... I’m going to have to make a joke about not fake news, but alternate facts.

What are we calling it now, what’s the euphemism?

Alternative facts.

By the time this comes out we might have a whole other construct.

Well, lies.


Lies is the word I use.

Yeah, lies.

Truthiness, as Stephen Colbert says.

Right. Let me to try to get my personal politics out of it, which is that Donald Trump won. He got the majority of the electoral votes, a large majority, and I think it would be patronizing to say that the people in Florida and Ohio ... The majorities of people in Florida and Ohio, smaller majorities in Wisconsin and Michigan, that they voted for him because they were misled.

No, I don’t think they were misled.

No, I think that they have their beliefs and I think it’s up to everyone who doesn’t agree with those beliefs, to the Democratic Party to go and enlist those people and make your argument to them and not to go and blame technology companies. Look, I think Facebook has a lot of work to do to try to make sure that people are seeing meaningful things and not garbage. I don’t think that you can lay the current situation at the feet of the company.

I do believe social media’s become weaponized and that it can be used in ways that are ... That there are things they could do not to move people around, but there’s ... And for business reasons. We see what’s happened to Twitter. It’s become, as Casey Newton here calls it, a screen scape.

Was it Tim Ferris who said on your podcast recently that, “Social media’s making us miserable”?


I agree with that, I think it’s all unwatchable.

It’s not good for the businesses.

You can’t look at it right now and not have your blood pressure go up.

It’s like cable news. I just turn it off and so there are, and it’s interesting like a place like Snapchat whether you verify publishers where it feels like there’s some ... Not imposing editorial guidelines, I think is just a canard. You do it every day and on Twitter there were a lot of people on the board arguing, “We impose them all the time.” We have to get rid of all the bullying, we just have to. They didn’t and look what’s happened. They’re sort of in a situation, they can’t sell themselves. One of the issues is, the sort of cesspool mentality that goes on there.

I feel that these companies have not taken the responsibility for their platforms’ impact at all, and they don’t want to. They sort of want to ... The media companies every day try really hard to be accurate. No matter what people say, it’s never been my experience that they haven’t. That said, these companies are having just as much impact with distribution, do not. Just don’t even want to get near it. Are they going to?-

I do think, and I think we’re talking about, interestingly, the same thing that Airbnb faced when they were just a platform and then things are happening on their service that they didn’t want ... Then they didn’t want to take responsibility for it and then they realized that they had to walk in the shoes of their hosts and do better. I think this is, it’s almost the same question. It’s the Facebooks and the Twitters had an open platform and people come in and abuse it. Two years ago we were talking about news farms and spammers and they had to tweak the algorithms to address that. It was lowering the quality of the content on the site. Now, it’s goes by a different name.

It’s more malevolent.

Yeah, and it’s fake news. Right, there are cases in which it’s malevolent and they need to do better, yeah, they need to be constant arbiters while maintaining free speech and allowing people to express themselves, even if they don’t personally agree with what’s being expressed.

Right, but in your book you’re talking about two companies that are ... I hate to use the word disrupting, but they’re decimating things and so is Amazon. All the companies you write about are decimators of other businesses. Yet when it comes to replacing ... I think about San Francisco a lot because when Wells Fargo or Bank of America started here, they had an interest in the civic life of a city. Not just that, obviously Uber’s moving to Oakland, Airbnb is here. The interest in the civic life and the responsibility of their wealth, and not just their wealth, but their impact, their businesses, the penny does not seem to have dropped, that they feel that have responsibility.

You have Gates giving away billions. You have others, Mark, moving in that direction, but do you think these companies, do you understand there are social and societal impact ... Not social, but societal impact, well enough. Like because Airbnb didn’t take the issues around rentals very seriously at first. Uber did not take the issues of safety, at all when think of them kind of thing. Amazon, decimating Main Street, that kind of stuff.

Yeah, and they exploited sales tax loopholes and so even as they are undermining retail, they’re arguably reducing the tax rate.

Do they have a greater responsibility or not? Or is this just the way it’s going to be? These sort of rapacious companies taking all the good and taking all the good stuff and leaving behind damage? Or don’t they do damage?

I think that I don’t quite look at it in that way. They have fundamentally provided better service and more options, right?

Right, I don’t want to defend the tax industry because you know what they got, they deserved it. They got it coming kind of thing.

Yeah, and I also think — and this is going to sound like letting them off — but they’re still young businesses and they’re pre-IPO. And look, Amazon was incredibly insular and is now doing incredible things in the city of Seattle and that’s 20 years. You know Microsoft … we talk about Bill Gates now but did he care in 2000, 2001?


He didn’t at all, so there’s a natural life cycle to these things and we’re seeing Salesforce, now, a much larger company, engage in the city of San Francisco in some truly incredible ways. Marc Benioff is a great example to follow. I don’t hold it against Travis or Brian right now being at formative times in the creation of their companies, pre-IPO, still with these large questions facing them about their survival, that they’re not being better public citizens. I don’t know that they have an immediate obligation. Over the long term, as I conclude in the book, I want to see them live up to their promises. If Uber’s vision is to reduce or eliminate traffic, then let’s see that happen. If Airbnb’s is to restore some human connection to the travel industry.

Make everybody an entrepreneur.

Yeah, and then let’s see that happen and maybe we do conclude in five years that it hasn’t been worth the price of disruption but these are still incredible experiments that are under way.

It’s certainly good for consumers, the time has never been better. I make that old joke that San Francisco is assisted living for millennials and it seems like ... you know what I mean, like everything you want.

You never have to leave your house.

You never have to leave your house kind of thing, and it creates a convenient society for consumers, but then you worry about the society at large.

All right we’re going to finish up talking a little bit about your predictions, Brad, broader predictions. You see everything, as I do, and give some things you think are over-hyped, under-hyped, what you think people should be paying attention to now. I’m thinking a lot about this lately. It feels like we’re in a lull, maybe I’m wrong. It doesn’t feel hard-charging. It seems like a lot of feature creep right now and things like that. What do you see as really important to focus on as a tech writer right now?

First of all let me start off by saying if I was an incredible predictor of the future I would probably be in a very different business. I think one of the lessons of this book is that even the so-called experts couldn’t predict Uber and Airbnb, right?


I’ve got the Angel List number in the book of something like 130 of 150 people on the list back in 2010 didn’t even open or return the Uber email, they just missed it, and so I have no idea. We’ll start off with that.

All right, that doesn’t stop a journalist.

Yeah, but here I go. Here I go anyway. The things that we’re talking about now, like AI, and virtual reality, seem to me to be over-hyped. I don’t think we’re quite there yet. I was in an Otto self-driving truck recently.

Which Uber bought.

Which Uber bought, and here we are, we get on the highway, it’s perfect weather, no rain, no traffic. I press the button and here we are driving, but the guy’s hands are hovering nervously over the steering wheel and it’s perfect conditions. When I heard that they delivered some beer in Colorado I thought, “These are artificial conditions.” The challenge has always been the point .01 percent that something anomalous happens.

In that case I do make the ... I always use this example, which is like, “Are you the asshole reporter at Kitty Hawk that goes, ‘You know that was just very short and it looks like it was going to break.’” Who knows? It was just a beach and they didn’t manage ...

It’s just a bicycle with wings.

To get more than ... “They got what, 10 feet up? Big freaking deal.”

It’s possible.

You know what I mean?

It’s possible.

Like, “Hey. Hey. It’s sort of the beginning.”

You know the Alexa, the Echo that we have, is a great novelty and the kids love it and I love it but it doesn’t understand as often as it should understand. It has a long way to go. I think we’re at the very beginning of AI making the meaningful impact that everyone predicts for it.

Right, right.

I think virtual reality seems like a great gaming platform but I haven’t seen implementations that have impressed me all that much.

Don’t say that to Eric, he loves it.

Sorry, Eric.

No one else does, Eric.

I get dizzy every time I put on a headset and I think, “Oh, that’s great.” That’s the future and I really don’t want to own one of those things.

Right, it’s interesting because I was just seeing one that it was a bunch of ... Jon Favreau, we did a podcast with him, and he has this one that’s more dulcet, [with] gnomes and stuff, and I liked it. It was beautiful. I did, and then I was like, “Okay.” He goes “Lean over and say, ‘Hi’ to the gnome.” I’m like, “All right. Hi, gnome.” It was like, I’m waiting for it to blow my friggin’ mind. Now it’s like, “You can touch the key!” I’m like, “Why? Why do I want to touch the key?” I’m like the Larry David of tech journalism.

At the same time I do think that when we’re in the old folks home, that virtual reality — and hopefully this is several decades away — that this will be an incredible escape.

I see that, we’re sitting there.

Yeah, so I think it’s there, but I don’t think it’s ...

I’m not going in an old folks home, Brad.

Oh, good.

No, I’m going to be like shot through the head by someone at some point. It’s inevitable, but I see what your point is, that it’s a lot of hype now.


A lot of hype now.

A little over-hyped.

Then what else?

I don’t know, I’m curious to hear what you think about this, but it feels to me like we’ve always gone in seven- or eight-year cycles in the Valley and we’re getting to the end of one here, but look, all these companies are still private, you know?


Snapchat’s going to start soon going public and so we’re not really at the end. This era has been defined by these companies like Uber and Airbnb, so there’s a lot of runway and I don’t ... That’s where I’m focusing. Obviously, I’ve spent a lot of time with these two companies and these two industries and, yeah, I’m excited for what’s happening next but I need a ...

Anything you think that’s, “Whoa, that’s freaking cool”? I’m obsessed with life extension right now.

That would be nice.

Mm-hmm. They’re like Replicants.

I’m rooting for those guys. That would be nice.

After that Elon interview we did where he talked about neural networks. We were talking about something and I said, “You know, the human body can’t really go to Mars without dying freaking soon.” He’s like, “Replicants," and I’m like, “Oh, my God, that’s fantastic.”

I’m rooting for Larry Page with the driverless car stuff.


Yeah, I think that’s fascinating and feels far out and unlikely.

The hovering car or the driverless car? The flying car?

No, it’s the flying car. The flying car.

I thought you said driverless cars. I was just like, eh, eh.

The vertical takeoff and landing, society, city, it would change everything and they’re testing them. They’re incredibly secretive. It’s unclear how far they are. There’ll be a big regulatory fight on that one. Can you imagine?

Sure will, boy, howdy.

But boy, that’d be fun to get down to San Jose in 15 minutes.

Right, anything else?

Hyperloop, it feels fanciful to me but ...

You’re so nice, let’s use other words besides fanciful. What a nice word from Brad Stone.

I would, as long as they-

Hype, hype.

As long as there are restrooms on the Hyperloop, I’ll take that.

I think that’s going to be goods. Do you think it’s going to be people? Come on. It’s going to be like Amazon shit to get to you faster.

They got their drones, they don’t need the Hyperloop.

Is there anything you’d like to see invented, Brad Stone?

I’m not sure I can answer that right now. I could think about that.

All right, think about it.

Book-writing robots.

Oh, good idea.

So I could take some time off.

That’s going to happen Brad Stone. You and I have timed our careers perfectly. We just get to retire and these young ... “Too bad.”

Yeah, the idea of AI somehow taking over journalist jobs, I’m sure this is what everyone says before they see the robot at their desk, but that feels unlikely to me. I don’t think a robot can replicate ...

All right, last question: You have to give advice to young journalists, you have to do that. What do you think is critical right now? It’s a very tense period in the media and to see Mr. Bannon wants us to shut up. Bannon should shut up. He’s trolling everybody. What do you think? What would you say?

What I say is, learn from someone good. Find a Kara Swisher or someone who can teach you, where you can learn good habits because this stuff is hard. Writing is hard. There are very few people, and unfortunately they exist so everybody gets their own impression, but there are few people who spring fully formed, be able to write good sentences and report and hit the scene at the age of 22. It took me 10 years working at newspapers.

Yeah, to watch them work.

Right, we paid our dues and a lot of young people today don’t have the same opportunity to pay their dues.

Plus they do not want to pay their dues.

Perhaps there’s something there, but I think you got to find somebody good, you got to be willing to listen and you have to suffer. Being good involves getting your draft back just torched with all sorts of criticism that hurts and then spending the weekend doing nothing else but picking up the pieces again. You’ve got to be willing to pay your dues and to get better.

Would you be a journalist if you were 22 right now?

I think so, I was drawn to this, yeah, I love it.

Nothing else you wanted to do except being a journalist?

I don’t know that there was anything else I could do. I don’t think I was qualified for anything else, but I love it and I love learning.

It’s called “Jack of all trades, master of none.” I think that’s the journalist.

You know what I love about it? It’s we get to go out every day and learn from people that are smart. I like that.

See, I have a whole different ... I’m like, “I get to go and irritate people all day long.” It works and it pays off.

I do that as well and it’s part of the business. Maybe I enjoy it a little less than you do but that is part of the business so I don’t shirk away from that.

I was arguing with a Facebook exec and I literally, it was like, “No.” He was like, “Yeah.” I was like, “No, you’re lying.” It was so enjoyable for me and I felt bad for him. He was all hurt by my questioning of his perfection.

Thank you so much, Brad. Get the book, it’s called ... Get both of Brad’s books, actually. I really loved the Amazon book and I have not finished his “Upstarts” but both books are great. “The Everything Store: Jeff Bezos and the Age of Amazon” — you should do a sequel. You absolutely should do a sequel because what a fascinating ... To me he’s the most fascinating person of all and this was the first book that really started to explain why he was so important. The second is the new book, it’s out now, correct?


“The Upstarts: How Uber, Airbnb and the Killer Companies of the New Silicon Valley are Changing the World.” There’s a nice new excerpt on Bloomberg Tech and I’m sure they’ll be several others.

There’s a couple more coming as well.

Good, so just please buy it, it’s a great book. Did you do an Audible version of it?

There is an Audible version, I did not read it.

Aw, man.

I know. I know. They got a professional.



You should read it, I’d like to hear you talk about it.

It seems like a lot of work.

It is a lot of work, I did it once. You have to eat apples so you don’t go all dry.

That’s good advice.

It dries out your mouth, just so you know.

I’ll do the next one.

All right, okay, good. We’re here with Brad Stone, one of my favorite journalists of Silicon Valley. Thank you for coming to the show.

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