> Co-founders are supposed to have confidence in the business they built

The business they built and still either run or largely preside over, however Travis was ousted— I'm not sure he'd agree with their current direction as a result.

He's still on the board...

The board supported him being ousted as CEO [1].

He can have a seat at the table, but the table is largely comprised of people who wanted him out, and can continue to make decisions he disapproves of.

This isn't a case of Larry Page and Sergey Brin at Google, or Bill Gates at Microsoft, where the founder is well-respected, left of their own will, and still maintains an influence in a meaningful capacity.

[1] https://www.reuters.com/article/us-uber-ceo/uber-ceo-travis-...

You can still want to maintain influence without having personal/financial exposure to the consequences.

But that sends a wickedly powerful statement to the market that you as a remaining board member would not hold the shares of the company you oversee... That's the discussion here.

There are a lot of reasons a board member might reduce their stake in the company. Lack of belief in the company's strategy is a common reason, especially when boardroom drama is involved. I don't think investors will read anything into it other than Kalanick is rebalancing the risk profile of his portfolio now that he no longer has control of Uber.

Activist investors play this game all the time so it says nothing about the strategy one way or another, just that the appetite for risk is higher the more control you have.

Of all the negative signals Uber sends, this is the one the market is going to take issue with?

Touché! But cult-like stocks have a stronger relation than usual to their founder(s)' actions.

Stock price doesn't seem to notice FWIW:

https://i.imgur.com/Z8XaO2P.png

Travis should have confidence in the business he built while he’s running it.

He’s not in charge any more so why should he have unwavering confidence?

If Uber can only succeed with him in charge, and nobody else, then it’s not a very good let alone realistic business is it?

> Co-founders are supposed to have confidence in the business they built - if they don't, why should other investors?

But what's in it for the co-founder? Usually it's that they have lots of power over the company, e.g. being a CEO, and have more freedom than someone who still has to prove that they deserve that power. Jeff Bezos for example "only" owns 100 billion USD but controls a 800 billion USD company, with the freedom and power of a cofounder. After a certain amount of money, say 10 million, you can fulfill most of your dreams. And there are plenty of people who have that amount. But few can say they are in control of a 0.8 trillion dollar company.

As the other comments point out, Travis was kicked out though so he lost his power. So it's only understandable that he diversifies his portfolio.

There are realms of wealth. Even 100m is not enough to comfortably afford a private jet. Several ultra wealthy like Bill Gates diversified a billion dollars from their company which seems to be about the limit where more money mostly becomes an abstraction.

One example is people who actually own mansions generally live in a relatively small space inside. You can only really use one room at a time and walking around takes time.

This comment reminds me of another comment [0] on Reddit that talks about the different levels of wealth. An eye-opener for the rest of us for sure.

[0]. https://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_i...

Throwaway for obvious reasons, apologies.

FWIW, I kno(e)w four billionaires through my work (one deceased, one I lost contact with), and their life is not at all like described here, though they could afford that and more they keep a pretty low profile and you likely have never heard of them, and likely never will. But the 'controlling interest in a company you've likely heard about' is a common factor for three of those four.

The people that throw money around as if there is no tomorrow are typically the ones that have an unhealthy urge to be recognized as wealthy, the really wealthy people are relatively quiet about it in comparison.

That may of course be a reflection of the group of people that person connected to, I can see how there are very different circles of wealthy people just as there are different circles of people that are not wealthy.

Billionaires are just like the rest us when it comes to variety of personalities and motivations. The wealth just lets them indulge more in the extremes (like complete privacy or flamboyant fame).

Hmmm that's a very interesting reddit comment. Thanks for sharing! I guess my comment was a bit too imprecise. Of course you can always afford additional luxuries, and money still remains a big factor in relative pecking order questions (which become more important the more super-rich friends you have!). But power over personal staff, even if it travels with you in your private jet and occupies half of the hotel when you arrive is not the same as power over tens to hundreds of thousands of employees. Also, that private staff is a net loss while the company is making you money.

This is an amazing discussion of wealth in the linked reddit comment.

Shows how easy it is to underestimate how different lives we all live, depending on our experiences and outlook - even in the same country. Money is probably just one big parameter, but there are surely many others.

Insane. I'm not sure if it's real or not based on the users post history but it's just hard to think about.

That's not completely true. Ignoring the tax and operational hedges I can employ if I legitimately use my plane for business purposes, if I fly more than 200 hours a year it's not that (relatively) expensive to own a personal jet. Admittedly, I'm not talking about a Gulfstream G5 or Lear 75, but something like a Citation III or Lear 31/35 cost US$500K-US$1m to acquire (refurbished) and cost less than $10/mi to fly (so less than US$1m for around 200/hrs/yr all in). That's not a big chunk of $100m, especially if you can justify it for business reasons. At the local GA airport where my niece is getting her pilots license, there are lot's of businessfolk and small businesses that justify owning an 8-12 place jet, and they have significantly less than $100m in liquid assets.

To be clear I am speaking of someone living off of 100m in assets. You can have negative net worth, be pulling in 35m/year and reasonably splurge on a 1m/year expense.

But, if you’re living off of say 5m/year from your assets a 1m/year splurge is a huge chunk of your income. At that level renting one would be far more appealing to most people. Though sure if owning a jet was a major hobby vs a means of transportation it’s easily possibly, just as I said a major expense.

If I'm making $100k/yr and I spend $20k cash on a second car (e.g. I don't use that often), or a pool, it's the same ratio, and people do it all the time. And that's just luxury items, not things I can justify from a business perspective. And I don't disagree for most people renting or fractional ownership of planes are undoubtedly better deals (200 hours is a lot of time in the air), but none of that is what you said.

It’s both 1m upfront and 1m every year after that. So, buying a second car for 20k every year is a different story.

Put another way, someone making 100k/year could send their kid to prove school for 20k/year, but it’s a major expense that would impact their lifestyle or savings significantly. It’s possible, but not affordable.

Planes and boats at all levels are known for being a sink for money - no experience personally, but come on, you know operating costs are huge. Like, at an ordinary person's scale, you buy a used German luxury car for $10K, but it's still the same car that was $60K new, which means fixing it will be proportional. And if you can't personally pilot it...

$100m can very comfortably afford a private jet. Maybe not a brand new G6, but a small to mid size jet could be comfortably purchased and maintained while barely spending more than the market appreciation of that $100m.

A new mid-size jet will run you $10-20M.

Pilots and maintenance will cost you $1M+ per year. Depending on how much you use it, that could be significantly more. Spending 10-20% of your net worth on a vehicle up front + 1% pa going forward is not "comfortably afford".

If my net worth was $2M, I would not say that I could comfortably afford a lambo.

Don't buy a new mid-sized jet then...? You can certainly afford a small, used private jet if you have $100 million. Not to mention a lot of people that own private jets rent/lease them out, just like they do with yachts, which can help to offset a lot of the recurring costs. I know a guy that owns a relatively small business and he has a modest private jet (as modest as you can get while owning a jet) and he certainly doesn't have 100mm. Aviation is one of his hobbies, which likely plays into his decision, but it is feasible

Why buy a new mid-sized jet? I was responding to the comment that a $100m net worth can't afford a private jet, which is just not true. There are a LOT of options between commercial and a -new- mid-size jet. Buy used or get a brand new HondaJet for less than $5m. Can be flown by a single pilot and can fly anywhere in the continental U.S. with no more than a single re-fuel stop.

Or, fly anywhere in one swoop with a less than 10 year old Citation CJ4 or similar that will run you less than $6m and seat 10 passengers. And the annual operating costs will not get you anywhere close to $1m. Even a G650 isn't going to run you much more than $1.5m annually unless you are putting a ton of hours on it.

But I will also say that 10-20% of your net worth (wouldn't be up-front, it would be financed.) is not that big of a deal when you have a huge net worth. It's a lot when you make just enough to survive. It's not a problem when you still have enough left over for several lifetimes of comfortable living. Just depends on your priorities.

This is something silly one would do if they suddenly got a windfall - spend a chunk of it on a flashy purchase. You can just charter one for the once in a while you want a jet. How many flights is that, even for the 1M a year maintenance? Or fly 1st class. Or, you know, spend it on something that appreciates instead of losing value, like luxury real estate.

$1m maintenance is on the high end. Only a bigger jet would cost that much.

I agree that chartering is usually a better way to go. But private jet life is comfortably affordable at a $100m net worth. Maybe not private-jet-life, and mega-yacht-life, and rare-original-art life all at the same time. But you could definitely choose one or the other.

If you have tens or hundreds of millions, I imagine you could find ways to do the stuff associated with billionaires without spending anywhere near as much. If you want to fly on a private jet, you can buy a fractional share. If you want a mansion, you can buy almost anything, you just don't buy a dozen and forget about them. You would just have to have a scaled up middle class budgeting sensibility instead of viewing your wealth as unlimited.

If there is anything that really is limited to billionaires, it seems to me logically it's going to be status, proximity, location, attention that are in limited supply. Not material things.

That doesn't make any sense. You can be more confident in one asset than another, yet you should still diversify. In investing, you don't look for that one asset you're most confident in and put all your money into it. If I were a founder, I'd try to convince you to invest in my company, but I wouldn't try to convince you to put all of your money into it. Not putting all of his assets into uber doesn't mean other investors shouldn't put any of their assets into it. After all, it's still 20% of his portfolio, much higher than most of the shareholders, I'd bet.

he's no longer involved in uber as CEO, why would he want to tie his wealth to something he's no longer steering? there's not even an argument for Optics here.

I agree. Although there are norms for the practice of selling large personal stakes, generally someone who is/has been a founder would announce their intent to diversify with a schedule — ie I’m going to sell x% over the next 3 years regardless of the price for purposes of diversification. Most investors accept that. I think in this case, his image is so tarnished that pretty much anything he does will be greeted with scorn.

So it can only succeed if he’s steering it? Doesn’t sound like a good business

? Would you want a majority of your wealth tied to a business you used to work at? Or would you rather use it towards things you are actively working on?

I want it tied to a good business. I’d tie my wealth to Google (when they were the same age as Uber), whether I’m the CEO there or not. It doesn’t matter because it’s a great business. If Travis is selling then he agrees it’s a bad business.

That kind of changes when one is forced out of the company.

Might even get a kick out of devaluing the stakes of those who forced him out. And I don't even write this in the tradition of "mean things Travis Kalanick would do", I believe that that the desire to do so would be there even for the best of us.

I do hope that vengeful behavior like that would subsequently hurt one's ability to find investors for future projects. Unfortunately there is also a lot of that "this only shows that he is ruthless, we like ruthless" attitude in the world so I'm not sure that it would actually be taken as a negative signal. But that surely won't be an issue for someone with a reputation so firmly dialled in already as Kalanick.

On top of that, the idea of him going back to square one doesn't fit too well with the mental model I formed back when he was constantly on the news, I'd rather type him as the rare exception amongst founders who can easily leave it all behind and indulge in the spoils - but that's just a gut feeling of course, I know less about that guy than I know about some people who have been dead for more than a thousand years.

Aside from the point that he has been ousted at which point does a co-founder's requirement to hold a major stake in a company disappear. As a co-founder are you condemned to never diversify your portfolio?

How much confidence should anyone be expected to have in a company that canned them?

That's true, but I don't think that makes it any less rational for them to diversify. 20% of your net worth is still a lot of risk to trade off just for a bit of investor confidence.

Generally true but when you're no longer running the show, these rules are less true; it's no longer about your own confidence in your ability to navigate to better outcomes.

Yeah but he's not running Uber anymore. Also, clouds have gathered...

I don't agree with this logic: you can be confident but prudent. Self-confidence leads to bias, I wouldn't consider it a bad sign that the co-founder stays prudent.

However, going from 75% to 20% means that something changed, and that's not a good sign

I'm pretty sure the thing that changed was that he was allowed to sell...

What do you think changed for the worse beyond he's no longer part of the company, no longer party to the 'inner circle' decision making, and no longer has a vested interest in maintaining the perception everything is perfect?

Uber's stock price has been steadily falling since it went public. There are many people who believe it still has a long way to fall.

When most of your net worth is tied to a stock of a single potentially volatile company like UBER, you sure as hell want to sell that off and diversify your portfolio. He's not involved with the company any-longer, he has no reason to keep his stock. If he was still in-charge I get that you want to display confidence in the business and keep the stock.

TLDR: Most of your net worth in a single stock is insane.