How Uber crossed the line with its threats against Sarah Lacy

You probably know that, at a dinner last Friday, Uber Senior Vice President Emil Michael suggested that his company should hire four top political opposition researchers and four journalists to investigate the personal lives and families of journalists who write negative articles about the company. Michael focused his anger on PandoDaily's founder Sarah Lacy, and said that the Uber "smear team" could, according to BuzzFeed's Ben Smith, "...in particular, prove a particular and very specific claim about (Lacy's) personal life."

Since BuzzFeed broke the story, there's been a firestorm of media attention, which led to apologies from Michael and a tweetstorm from Uber head Travis Kalanick, in which he disavowed Michael's statements and said that they didn't represent Uber, but that he wouldn't fire Michael. Uber's response, or lack thereof, hasn't dampened the firestorm one bit, and the company has managed to alienate much of the press that it needs for future publicity.

One thing to keep in mind is that it's been long-standing policy at some tech firms to retaliate against journalists and publications that report stories negative to the the companies' interests. Apple and Microsoft are most notorious for doing this, but many other companies in Silicon Valley have done the same. However, with one known exception, the method that the companies have used is to withhold information from the targeted journalists. Both Microsoft and Apple have documented cases in which they barred certain journalists and publications/websites from embargoed previews of new products, reviews of unreleased products and announcement events. Without access to new and forthcoming products, those journalists and publications were at a competitive disadvantage, because they couldn't review or cover the products until they were released.

Where Michael's threat crossed the line is that it moved from withholding proprietary information, which any company has the right to do, to digging up and revealing negative information about journalists with the intent of damaging or destroying their reputations. Even in the one case that I mentioned above, which was Hewlett Packard's hiring of private investigators in 2006 to identify the source of leaks by lying to phone companies in order to get journalists' call records, HP's objective was to find out who leaked the information, not to gather information to destroy the reputations of the journalists.

Both Michael and Kalanick have characterized Michael's remarks as, essentially, a revenge fantasy rather than anything that the company would actually do. However, by making the statements in front of Kalanick at the dinner, and with Kalanick not disavowing them immediately, both Michael and Kalanick reinforced the increasingly common view of Uber as an amoral, out-of-control company that will do anything in order to win, up to and including breaking the law and ignoring court rulings. I would remind Kalanick and Uber that Microsoft had the same philosophy, and believed that it was too big to touch by anyone. However, both the U.S. Justice Department and European Union successfully prosecuted Microsoft for antitrust violations. That in turn led to a loss of management focus, disillusionment and loss of morale for employees and damage to Microsoft's reputation, all of which contributed to the company's decline and loss of direction.

In essence, unless Uber starts making fundamental changes in the way that it does business, it's setting itself up for an eventual battle (or battles) that it can't win. There is always someone who can take you down if they really want to.

Be your own role model

I was browsing at my local Barnes & Noble last night, and I noticed that the Business section seems to be getting its own "Steve Jobs" department: In addition to Walter Isaacson's biography, there's "The Presentation Secrets of Steve Jobs," The Innovation Secrets of Steve Jobs," "The Steve Jobs Way," "Steve Jobs: The Man Who Thought Different," "Insanely Simple," and on and on. There's clearly a big market for books about Steve Jobs, reflecting a great deal of interest. Does that mean that you should model yourself after him?

Consider that when Steve Jobs first started Apple with Steve Wozniak, the leading company in Silicon Valley was Hewlett Packard. Company founders Bill Hewlett and Dave Packard, and their "HP Way", were the models for many technology companies in the Valley and beyond. Wozniak had even worked at HP's calculator division for a time. Yet, Jobs and Apple didn't try to emulate HP. Jobs had his own philosophy about how a company should be run and how his employees should be treated. The signature companies that were founded in HP's model, Tandem and ROLM, no longer exist.

Founders' personalities and their companies are very much a matched set--either the combination works or it doesn't. Trying to emulate a successful founder's personality rarely works; trying to model that style and then impose it on a different organization almost never works. The most successful people follow their own path; they take lessons from others, but they don't try to emulate them. That's why slavish mimicking of how Steve Jobs thought, or how he ran Apple, is doomed to failure. The best that you can possibly be is a second- or third-rate imitation of Jobs. You're much more likely to be successful by being a first-rate version of yourself.

The future is coming early to college bookstores

The trend toward print-on-demand books in college bookstores is gathering momentum. Last month, I wrote about the Espresso Book Machine, and now Hewlett Packard is getting into the act. Both Arizona State University and the University of Arizona have installed print-on-demand systems in their university-owned and operated bookstores. ASU is using the new HP system, while U of A has used an Espresso Book Machine for a year. (Portland State and the University of Kansas are also testing the HP system in their bookstores.)

The biggest goal of both universities is to drive down the cost of college textbooks. In the three largest Arizona universities, students will spend an average of $3,200 for textbooks and supplies over four years. Nationally, the average price of new textbooks went up 12% in 2009, far faster than inflation. Only a small selection of titles are available for print-on-demand at the two universities, but according to Dennis Mekelburg, the associate director of ASU Bookstores, if his school can replace conventional printed textbooks and materials with print-on-demand for 5% of its courses, students would save $500,000 per semester.

McGraw-Hill, John Wiley & Sons and Cengage Learning are supplying a small selection of their titles to ASU for print-on-demand, and the savings can be significant. One Marketing instructor at ASU switched from a conventionally-printed textbook and workbook that sold last year for $250 new to a softcover version of the same textbook and a workbook printed on demand, together priced at about $62.

In the long run, I believe that the most textbooks will be sold as electronic versions, and print-on-demand will be used to provide paper copies for special situations. The sophistication of eTextbooks and the devices used to read them is increasing so quickly that paper textbooks will soon be considered relics.

One big question is what the impact of these changes will be on the bookstores themselves. To date, the print-on-demand phenomenon seems to be limited to schools that own and operate their own bookstores. Publishers are demonstrating a willingness to negotiate better deals directly with colleges and universities, and some schools are in turn showing a willingness to cut the private operators of their bookstores out of the channel in order to lower the prices that their students pay for textbooks and materials. (In the U.S., the largest private college bookstore operators are Barnes & Noble and Follett.) If the college bookstores no longer sell textbooks, or no longer make any money selling them, what will be the role of the private operators? Probably not much. In fact, I wouldn't at all be surprised to see general retailers, anyone from 7-11 to Wal-Mart, compete for the contracts to run these "bookstores". They're likely much better positioned to sell general merchandise than the existing private bookstore operators.