Super Pumped
Travis Cordell Kalanick

Born on Aug 6, 1976.

Parents: Bonnie and Donald.

Donald, worked for most part at City of LA. Bonnie worked at LA Daily [local news paper].

First startup: Scour.net. Google-like search engine that gives users ability to “scour” millions of files and then download them, like Napster. Scour didn’t have business model. Scour competed directly against Napster for file-sharing dominance, though Scour’s edge was ability to search for files other than music.

Silicon Valley maxim: Growth was paramount. Path to profit could come later.

To have a relationship with Kalanick, you had to work alongside him. He had few personal relationships.

First brush with VC world

Ron Burkle & Michael Ovitz.

Burkle, known for philanthropy and private equity & venture firm The Yucaipa Companies.

Ovitz, legend in LA entertainment industry, talent agent and co-founder of CAA [Creative Artists Agency], one of world’s highest profile sports & entertainment agencies. He was previously, president of The Walt Disney Company where he got unceremoniously pushed out by then chief executive Michael Eisner.

No Shop Clause

Term sheet offered by Burkle & Ovitze; detailed charter of investment terms stipulating % of company in exchange for their money.

It contained: No Shop clause wherein Scour couldn’t solicit other investments for money.

Term sheet offered by Burkle & Ovitze; detailed charter of investment terms stipulating % of company in exchange for their money. It contained: No Shop clause wherein Scour couldn’t solicit other investments for money. Ovitz sues Scour for breaking no-shop clause

VC acquires more than half the company for $4M, wrestling control away form founders

Hollywood fights back with RIAA [Recording Industry Association of America] suing Napster for $20B

RIAA, Motion Picture Association of America & others sue Scour for $250B

Ovitz uses “backchannel media connections” to distance from Scour

Company that was to grow into a “global destination for media” got solved for parts in bankruptcy court.

90s Dotcom Bubble

4700+ companies went public from 1990 to mid 2000s

Highlights of 90s bubble: Amazon, eBay, Priceline, Adobe: startups founded in 90s that outlived the dotcom

Why Bubble? Low federal interest rates aka wide investor access to cheap capital; Cash injection in the form of companies; Wall St. pumping tech stocks; Avg investors advised to sink savings in favor of internet startups

shopworn San Francisco adage: It’s better to sell shovels during a gold rush than to actually prospect for gold.

Website dedicated to chronicling startup death: Fucked Company

Post bubble burst: empty offices, copies of Wall Street Journal piling in front of the door, Fedex missed-delivery stickers stuck to windows

Travis’ Revenge Business

Red Swoosh, peer-to-peer file sharing. However, unlike Scour, this time files wouldn’t be illegal downloads; media companies would supply files themselves.

Proposition: What is the fastest, simplest way to transfer something from one place to another?

Red Swoosh seen as the ghost of Akamai Technologies

Akamai, a network software firm, pre dotcom bust $50B; post bust: $160M

Cashflow for Red Swoosh was month-to-month adventure.

Sold to Akamai for $20M after 6 years.

Travis' personal net gain $2M.

Sub-prime mortgage crisis 2007

Sub-prime house loans doled out by banks

Affordable adjustable-rate mortgages packaged into derivates for investors

Sky-high monthly payments, defaults and a full-blown crisis.

Sept 7, 2008 Bush administration seized control of Fannie Mae and Freddie Mac, US’ largest mortgage financing bodies

Henry Paulson, secretary of treasury promised bailouts for world’s largest financial institutions: AIG, JPMorgan, Wells Fargo.

Positives from the bust

Separated poseurs from the actual valuable companies Lowering of entry-barrier for startups due to cloud [aka AWS] Mobile phones

Amazon started AWS in 2002 as an engineering side project; grew into one of the most successful innovations of Amazon.

iPhone

Steve Jobs, already accomplished for Macintosh, founding Pixar [the beloved animation studio], iPod & iTunes store [revolutioning the way the world listened to music].

Job’s legacy was already cemented thrice over.

Jobs noted iPhone didn’t have “fucking ugly buttons” that characterized BlackBerry. iPhone was sleek, glossy, gorgeous.

Just like iTunes for iPod, Jobs planned to do the same for iPhone via “ apps ”

” iPhone radically reimagined what a smartphone was supposed to be.

iPhone took luxuries of enterprise-level business device and opened mobile computing to the masses.

iPhone democratized email, media & internet access.

John Doerr

Intel engineer turned VC; an industry titan; partner at Kleiner Perkins Caufield & Byers, the storied Menlo Park venture form.

Doerr made early investment in Netscape, the world’s first consumer internet browser.

Doerr invested $12M in 1999 in Google, then a search engine co. run by couple engineers in the garage.

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