TEK2day

Over the past several years as I’ve read articles about Uber, WeWork and a number of technology startups, my takeaway is that many of these companies lack focus. They lack a focused mission. They lack strategic and operational focus. I understand the argument that institutional investors want growth in the absence of yield, but too many companies are pursuing growth outside of their core business and in areas that do not provide sustainable competitive barriers to entry. Further, these growth pursuits are expensive. I recall a decade ago when total operating expenses of $500 million in a given year was a large sum. More recently companies such as SNAP, Uber and WeWork have burned through billions of dollars in a single quarter. Waste pure and simple and for what? SNAP may be on its way to “figuring it out” (expensive lesson). Uber may reach profitability but certainly isn’t taking the shortest route (no pun intended), and WeWork is facing an existential crisis.

Consider the example of Uber. There are far too many headlines about violence committed against and by Uber drivers. Why not pull back on the “growth at all cost” mantra at least until scalable safeguards against violence are put in place? That seems reasonable. Perhaps more women would take an Uber if they did not fear being raped by the driver? Seems curbing violence would be good for growth. Uber has pushed back against driver background checks for years and I’m not sure why they wouldn’t tackle this issue head on given that safety is top of mind with users/passengers. Instead, Uber is investing in grocery delivery – a highly competitive business with minimal barriers to entry, helicopter transportation and boat taxis in Nigeria. If that weren’t enough, Uber’s heavily invested in new app will compete with Google Maps.