Weekly Roundup: Travis Kalanick sued by Benchmark, Snap and Blue Apron sink after Q2 earnings

From Ubers former CEO Travis Kalanick getting sued by his companys lynchpin investors at Benchmark to Googles struggles with a recently fired employee over a gender diversity screed that went viral, its been a wild week in tech. Meanwhile, Snap and Blue Apron both reported disappointing earnings something we discuss in this weeks episode of the Equity podcast. From the boardroom to the trading floor, here are the stories that took Silicon Valley by storm this week.

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1. Benchmark sues former Uber CEO Travis Kalanick

Benchmark, the Silicon Valley venture firm and early investor in Uber, has sued former CEO Travis Kalanick. The suit alleges that Kalanick committed fraud, breach of contract and breach of fiduciary duty. Both Kalanick and Benchmark hold Uber board seats. Benchmark accuses Kalanick of being selfish by packing Ubers board with loyal allies, and that the ousted CEO broke the law by trying to pave the way for his own return.If successful, the Benchmark lawsuit could kick Kalanick off the board of directors, makinghis return impossible.

2.Googles Sundar Pichai cancels internal meeting following firing of the employee behind gender diversity memo

After Google fired the employee behinda controversial memo on gender diversity that went viral within the tech industry,CEO Sundar Pichai cancelled a company town hall meeting where discussions about gender diversity were set to take place. Some employees fear that they may become harassment targets if they were to express unpopular opinions. In an email to employees, Pichai wrote, Googlers are writing in, concerned about their safety and worried they may be outed publicly for asking a question in the Town Hall.

3. Snap sinks as Q2 growth and revenue fall short

SnapsQ2 earningsreport was another failure on a long, downward path for the social media company as user growth slowed under the pressure of Instagram, reported TechCrunchs Josh Constine. It looks like Snaps cool factor may be wearing off, and the company will need a lot more than dancing AR hot dogs to fix its problems.

4. Blue Apron stock crashes after the companys first earnings report

Snap wasnt the only tech company having a really bad week. With Blue Apron, The problem quickly became getting customers to stick around and keep buying meals. This time around, the company was able to improve the health of its customer base as they are spending more money and buying slightly more meals, but it still has to show that it can grow that base even as it starts to pull back on marketing, writes TechCrunchs Matthew Lynley.

5. Coinbaseraises $100M led by IVP at $1.6B valuation

Bitcoin reached a record high valuation of $3,000 per coin to complete a rollercoaster week that began with the long-awaited split of the cryptocurrency. Now the most established wallet and exchange service, Coinbase announced a Series D funding round. The startup has been in the right place at the right time to capitalize on the excitement in the industry. In other cryptocurrency news,Filecoin, the much-anticipated cryptocurrency that will eventually power a distributed file storage system, opened its record-breaking ICO for accredited investors after raising $52 million from advisors.

6. SoftBanks Vision Fund backs Flipkart in record India tech investment

Flipkart confirmedthat SoftBank has invested in its business, viaits $100 billion Vision Fund, as part of anextension to the $1.4 billion financing roundannounced in April. The Vision Fund is buying a mix of primary and secondary sales, but the size of the investment is not disclosed. But we do know that the deal is the largest private investment in an India-based tech company, and it makes the Vision Fund one of the largest shareholders in Flipkart.

7. Toyota, Intel and others form a big data group for automotive tech

A collection of prominent names in the tech industry, including Denso, Ericsson, Intel and NTT Docomo, have teamed up with Toyota to work on developing big data systems to support self-driving cars and other future automotive advances. The companies have come together to tackle concerns around data usage in connected cars of the future,a critical component to making real-time mapping, driving assistance and other services go from theory to working in practice. Handling the huge volumes of data in a reliable and secure manner is critical, writes TechCrunchs Jon Russell.

Weekend reads

Breastfeeding mothers have a few options when it comes to next-generation breast pumps, but a lot of them are expensive and the market has not been claimed yet. There can be a lot of anxiety surrounding how much youre pumping and how much your baby is feeding. So what does the future look like for breast pumping tech? Read more in How high-tech breast pumps help new mothers reclaim their time.

Apple reported its earnings last week, and with a surprisingly positive report the shares spiked again as Apple signaled a potential huge iPhone release. The jump pushed Apples market cap to over$800 billion. If Apples promise plays out or exceeds what Wall Street hopes for the September quarter, we may soon be asking ourselves whether or not Apple really will fulfill the promise of a company that could hit a market cap of $1 trillion. Read on in How Apple could become a $1 trillion company.

Read more: https://techcrunch.com/2017/08/11/weekly-roundup-travis-kalanick-sued-by-benchmark-snap-and-blue-apron-sink-after-q2-earnings/

No acting CEO at Uber, no problem?

Uber has bucked convention from the outset, so it wasnt entirely surprising when, earlier today, company cofounder and CEO Travis Kalanick announced that hes taking a leave of absence from his San Francisco-based ride-hailing juggernaut without naming an interim CEO or disclosing a return date.

Instead, Kalanick told employees, the company will be run by his direct reports. Meanwhile, owing to the results of a probe led by former U.S. attorney general Eric Holder who was hired to look into allegations of harassment, bullying, and discrimination at the company some of Kalanicks responsibilities will be shared or given outright to other senior executives when he does return.

Of course, it all begs the question of how long a 12,000-person company thats valued at between $60 billion and $70 billioncan operate without an active CEO.

Jeffrey Pfeffer, a renowned professor at Stanfords Graduate School of Business who has writtenextensively about organization theory, suggests the answer is, pretty long, particularly given that Kalanick will still have his hand in executive decision-making.

My sense is that most of what Uber has done is to signal that they are changing, says Pfeffer. Whether they are [truly implementing change] is another matter.

Consider: If there are disagreements between sales and operations, who will settle them? If one of Kalanicks direct reports threatens to quit or takes another job, who has the authority to fill that role? Assuming Ubers COO search continues, who is doing the interviewing? If its Kalanick who said today that hell still be available as needed for the most strategic decisions then hes not really taking a leave.

Still, Uber had to do something, says one well-known crisis communications expert who asked not to be named. As long asTravis was in the CEO role, the company would continue to be the focus of media attention and would be likely the focus of criticism. I think this maneuver puts an end to it, because the focus of all that media criticism is now gone.

Ubers move isnt entirely unprecedented though it comes close. Pfeffer notes, for example, that its not uncommon for CEOs to take a leave of absence, pointing to Oscar Munoz of United Airlines, who took a leave of absence in 2015 to have a heart transplant, and who returned to the role in 2016.

Another CEO who recently took a leave of absence: Ron Wainshal, the CEO of the commercial aircraft leasing company Aircastle, who was granted time away in January to focus on his health (and whoannounced yesterday that hes now resigning entirely to focus on a speedy recovery).

Of course, both Munoz and Wainshal stepped aside for medical reasons. Jeff Cohn a succession planning expert at the New York-based leadership development firm Elevate Partners says he has never before seen a CEO step aside when there wasnt a medical reason for it.

Perhaps it has happened, says Cohn. But I cant think of any high-profile situations where a board has encouraged its CEO to step aside in the context of becoming a better leader.

Theres a reason for that, says Cohn, who claims it doesnt work. You can take a week-long executive leadership course on empathy or resiliency, but you dont develop these skills in weeks or months. It takes years to address fundamental leadership issues. Anything else is window dressing.

In fairness, says Pfeffer, Kalanick has likely been knocked a little off kilter by the unexpected passing of his mother in a boating accident late last month. Surely that profoundly affected his family, on top of all the media blitz, he notes.

Yet a far stronger motivation for Kalanick not to name an interim CEO, presumably, is to minimize the possibility of a power struggle upon his return. Says Pfeffer, His return is more certain as there is no one in the role.’

Only time will determine the impact of that decision. For his part, Cohn thinks its a mistake. Leading from the shadows when youre such a powerful founder it wont work. [Kalanicks direct reports] will always be second-guessing themselves now and wondering what Travis would do in a particular situation. Even if hes not physically there, theyll be wondering if they have to get his approval. Its a terrible way to lead.

Ultimately, says Cohn, I think the board and even Travis will figure out that they need to get an interim CEO in there.

Pfeffer disagrees wholeheartedly. Yes, some senior friends of Travis are gone, and some people he hired have left. But my forecast is for the company to push along. Some things with respect to the culture, and particularly their treatment of women and customers will and should change, Pfeffer says. But Uber is going to be Uber, mostly because it is actually not that different from many of their brethren.

Either way, it seems increasingly likely that unless Kalanick has a massive charge of heart, it may prove impossible for dislodge him from his role. Not only does he have a famously hard-charging personality, but he has super voting rights that protect his position. As the New York Times reported this morning, Kalanick has also separately established a mechanism through which he garners more controlevery time an employee sells some shares.

That kind of foresight is whats turned Uber into such a valuable company; it has also rendered Ubersinfluentialboard members somewhat powerless.

Ever since the Steve Jobs saga at Apple, Silicon Valley founders have tried to make sure they wont have a similar experience, Pfeffer notes, and for the most part, have done exceptionally well at that.

The idea that a strong founder like Kalanick would be be pushed aside? It was always far-fetched, says Pfeffer, adding: Ms. Holmes still runs Theranos, in case you didnt notice.

Read more: https://techcrunch.com/2017/06/13/no-acting-ceo-at-uber-no-problem/