By Katie Benner
Dec. 2 (Bloomberg View) — So now that Dan Primack has told us all that Goldman Sachs’ high-net-worth clients will be able to buy pieces of Uber, a privately-held, venture-backed, cabbie- threatening, richly-valued startup, it feels so…familiar.
Remember Facebook’s pre-IPO days?
The Uber story of 2014 – filled with a Goldman private placement deal, a series of public relations setbacks and privacy-related backlashes – feels very much like the Facebook story of 2011.
It’s hard to imagine now, but only a few years ago Facebook was known for stumbling about, tone deaf and clumsy, alienating users and launching products that customers hated. The company was criticized for having a culture that seemed dismissive of users. In the meantime it struggled to strike a balance between user privacy and the demands of advertisers on its site. (Some of these concerns persist. With only minor tweaks, a 2010 Wall Street Journal story about the social network coming under fire for privacy policy changes could have been penned today.)
And if you think Uber’s much criticized “God View” violations are bad (and they are), remember that not so long ago Facebook employees could access any user profile it wanted. As former employee Kate Losse wrote in her tell-all book about her life at Facebook:
A Stanford grad introduced me and another newbie to the janky application through which users’ emails to Facebook flowed. Once we learned how the software worked, he taught us, without batting an eye, the master password with which we could log in as any Facebook user and gain access to all messages and data. “You can’t write it down,” he said, and so we committed it to memory.
A Stanford grad introduced me and another newbie to the janky application through which users’ emails to Facebook flowed. Once we learned how the software worked, he taught us, without batting an eye, the master password with which we could log in as any Facebook user and gain access to all messages and data. “You can’t write it down,” he said, and so we committed it to memory.
Press reports about Facebook’s privacy violations caught the attention of Congress. Members of the House Committee on Energy and Commerce asked Facebook’s chief executive officer Mark Zuckerberg for more information about how the company deployed user data. Similarly, Senator Al Franken asked Uber’s CEO Travis Kalanick for more information about “God View” and other use privacy issues.
Just as users threatened to walk away from Facebook, many have tried to rally support for a #deleteuber campaign in the wake of the company’s latest issues. Just as Facebook didn’t ultimately suffer from a few user defections, I’m told by Uber employees that not enough people have deleted the Uber app to dent the company’s fortunes. For all of the faults at Facebook and Uber, they beat out competitors by building the very best products in their respective markets. So users remained loyal, even if they disliked the executives that made the products and ran the companies.
People who looked beyond the snafus and the bad behavior saw that Facebook would likely be the company that owned our online identities, and in the process become a dominant digital platform. Facebook lured away top employees from other companies, most notably Sheryl Sandberg. Its privately-held shares traded hands on a special exchange and at a price that valued the whole company at $42 billion. Goldman played a pivotal role that process.
Today, Uber’s backers envision a world where the company builds a similarly massive platform like Facebook, but one that exists in the real world. Goldman has now flexed its financial muscles for Uber, as it once tried to do for Facebook, by hooking up its wealthy clientele with the company’s backers. You can click here for an account, from Bloomberg View’s Matt Levine, about why the Facebook deal was a headache for Goldman, why an Uber deal should be much smoother sailing, and why all of Uber’s investors hope to cash out in an IPO one fine day.
In addition to all of these similarities, Facebook and Uber also have power. As venture investor Semil Shah told me the problems created by shortcomings in Facebook and Uber’s corporate cultures don’t just point to their flaws – the controversies also have showed just how much influence both companies have on certain parts of our lives.
Facebook eventually succeeded, in part, because it changed its culture. Zuckerberg founded the company when he was still in college, and then he grew up. He stopped being and acting like a kid. The company followed suit, and that allowed it to more effectively wield the power it had already amassed.
Uber’s guiding light, the 38-year-old Kalanick, is practically a senior citizen when measured in Silicon-Valley- founder-years. If he can’t grow up soon, then it may prove that there is one crucial thing that Uber doesn’t have in common with Facebook: the ability to redirect its corporate culture so it can become a mature company.
In the long run, all of Goldman’s money won’t make a difference if Uber can’t do that. – BLOOMBERG
