Ina Fried
Featured

Android O to get formal debut on Monday

Screenshot by Axios

Google plans to formally launch Android O just after next Monday's solar eclipse. A livestream is scheduled for 2:40 p.m. ET on Aug. 21.

"Android O is touching down to Earth with the total solar eclipse, bringing some super (sweet) new powers," Google said on an eclipse-themed teaser site. The software, which has been in testing for months, aims to improve battery life and add picture-in-picture multitasking on phones.

The creamy middle: Eagle-eyed enthusiasts noted that one of the accompanying files to a Google+ post had Oreo teaser in the file name, so that could well be the dessert-themed name for O.

The bottom line: Of course, what really matters is when the new software starts to show up on phones. Expect existing Google devices like the Pixel to be the first to get the update. As for new devices, the next Pixel will almost certainly be running O. And Samsung is due to debut the next Galaxy Note on Wednesday. It's either going to be one of the last flagship devices running Nougat or one of the first to pack Android O

Featured

Axios Review: Andy Rubin's phone is gorgeous, if not essential

Essentual

The Essential Phone, the first product from Andy Rubin's new startup, is a beautiful piece of hardware, but at its core is essentially yet another high-end Android phone. Nearly everything that makes it special is on the outside: its titanium and ceramic casing, the wraparound-the-selfie-cam screen and its iconic, if a bit thick, shape. It's also got a unique magnetic accessory connection, but for now the add-on options are limited.

Who it's good for: The Essential Phone is great if you are looking for a phone that looks a little different, is a bit of a conversation piece, or want to support the company's aim of building a new kind of hardware company.

Who it's not: Those looking for the thinnest phone will need to look elsewhere, as might the risk averse, since buying the Essential phone means betting on a startup (albeit a well-heeled one with a highly-regarded founder).

The practicalities: The phone is available unlocked for all four major carriers from Essential's Web site and Best Buy for $699. If you want to buy it at a carrier store, your only option is Sprint, though the No. 4 carrier is offering it on lease at a significant discount.

One important caveat: I haven't yet gotten to test the 360-degree camera attachment, one of the things designed to make the phone stand out from other phones on the market. I have played around with the latest Moto Z and a similar attachment. Making 360-degree capture mainstream is a lofty goal and the arrival of more such cameras will eventually make such images and videos far more useful. But for today it's probably not a game changer.

The company hopes to have additional add-ons at the rate of about one per quarter, but even larger companies have struggled with this approach.

Featured

Essential faces uphill battle in crowded phone market

Essential

In building Essential Products, Android co-founder Andy Rubin insists he isn't trying to build a phone company, but rather a new consumer electronics brand.

Starting with a smartphone, Rubin says, lets Essential kickstart the business by starting with a well understood and huge category.

But, in starting there, Essential is diving into a brutally competitive and demanding market, meaning that a lot of energy is going to be going in that direction.

  • As mentioned in our Axios Review, the Essential Phone is a beautiful (if slightly bulky) device. But at its heart it is yet another high-end Android phone in a world with plenty of options.
  • The company has a second product, a home hub. Essential still hopes to have it out this year, but isn't committing to a time frame.
  • Speaking to reporters this week, Rubin and president Niccolo De Masi stressed the benefits of being small, noting that the company is able to use materials that might not be possible if the company were making millions and millions of phones.
  • But having just 100 employees is also a huge challenge when trying to handle things like manufacturing, customer support and all of the other things that come with selling hardware.
  • Essential has already seen it: the phone has taken longer to bring to market than Rubin had hoped, and is initially shipping only in black and is not yet plentiful enough for Sprint to do a full retail launch.

Déjà vu?: It's something Rubin should remember from his first phone startup - Danger. Its Sidekick was way ahead of its time, but the company had a tough time iterating as much of its time and energy was taken servicing the existing product. That said, Rubin has a decade and a half more experience and tons more funding this time around, having recently closed a $300 million round.

Featured

Login

David is going to be in Aspen for the Technology Policy Institute's annual conference starting on Sunday and would love to say hello to any Login readers who are there (send him an email at mccabe@axios.com). You can also catch him moderating a conversation on Tuesday morning with Newseum CEO Jeffrey Herbst.

Essential faces uphill battle in crowded phone market

Andy Rubin

Andy Rubin (Photo via Essential)

In building Essential Products, Andy Rubin insists he isn't trying to build a phone company, but rather a new consumer electronics brand.

Starting with a smartphone, Rubin says, lets Essential kickstart the business by starting with a well understood and huge category.

But, in starting there, Essential is diving into a brutally competitive and demanding market, meaning that a lot of energy is going to be going in that direction.

  • As I mention in the review below, the Essential Phone is a beautiful (if slightly bulky) device. But at its heart it is yet another high-end Android phone in a world with plenty of options.
  • The company has a second product, a home hub. Essential still hopes to have it out this year, but isn't committing to a time frame.
  • Speaking to reporters this week, Rubin and president Niccolo De Masi stressed the benefits of being small, noting that the company is able to use materials that might not be possible if the company were making millions and millions of phones.
  • But having just 100 employees is also a huge challenge when trying to handle things like manufacturing, customer support and all of the other things that come with selling hardware.
  • Essential has already seen it: the phone has taken longer to bring to market than Rubin had hoped, and is initially shipping only in black and is not yet plentiful enough for Sprint to do a full retail launch.

Déjà vu?: It's something Rubin should remember from his first phone startup — Danger. Its Sidekick was way ahead of its time, but the company had a tough time iterating as much of its time and energy was taken servicing the existing product. That said, Rubin has a decade and a half more experience and tons more funding this time around, having recently closed a $300 million round.

Axios Review: Andy Rubin's phone is gorgeous, not essential

Essential

Andy Rubin's new smartphone is a beautiful piece of hardware, but at its core is essentially yet another high-end Android phone. Nearly everything that makes it special is on the outside: its titanium and ceramic casing, the wraparound-the-selfie-cam screen and its iconic, if a bit thick, shape.

Who it's good for: The Essential Phone is great if you are looking for a phone that looks a little different, is a bit of a conversation piece, or want to support the company's aim of building a new kind of hardware company.

Who it's not: Those looking for the thinnest phone will need to look elsewhere, as might the risk averse, since buying the Essential phone means betting on a startup (albeit a well-heeled one with a highly-regarded founder).

The practicalities: The phone is available unlocked for all four major carriers from Essential's Web site and Best Buy for $699. If you want to buy it at a carrier store, your only option is Sprint, though the No. 4 carrier is offering it on lease at a significant discount.

One important caveat: I haven't yet gotten to test the 360-degree camera attachment, one of the things designed to make it stand out from other phones on the market. I have played around with the latest Moto Z and a similar attachment. Making 360-degree capture mainstream is a lofty goal and the arrival of more such cameras will eventually make such images and videos far more useful. But for today it's probably not a game changer.

The company hopes to have additional add-ons at the rate of about one per quarter, but even larger companies have struggled with this approach.

The walls are closing in on big tech

Rebecca Zisser / Axios

Once treated with kid gloves as the goose that laid the golden egg, Big Tech is coming under regulatory scrutiny from all sides of the political aisle.

In particular, Google, Facebook and Amazon are feeling the heat over both their size and their increasing influence in society. Whether it's Donald Trump criticizing Amazon for hurting small business or people on the left saying that Facebook and Google need to do more to fight hate and "fake news," the volume of criticism has certainly been heating up.

The bottom line: Though it's mostly rhetoric rather than action at the moment, that could change quickly in the current political environment.

Go deeper: David has a look at some of the key emerging fights and it's definitely worth reading the full piece.

NBC is getting a big audience for its Snapchat show

In less than a month, over 29 million viewers have watched "Stay Tuned," NBC News' daily Snapchat Discover show, Axios' Sara Fischer reports.

That's a big deal for both Snapchat and NBC. Here's what it shows:

  • Millennials will actually watch the news: Getting nearly 30 million young people to watch a hard news show is an enormous feat, given that millennials don't typically watch TV news show on cable. (The average cable news viewer is over 60 years old.)
  • Video news is going mobile: Snapchat uses its own measurement techniques that are different from television ratings (they measure a view as a video being opened), so a direct comparison cannot be made to TV, but the success of "Stay Tuned," combined with the success of Snapchat's original political newscast "Good Luck America," demonstrate a major shift in how TV news will transition to mobile in the digital age.
  • Snapchat can be more than just a place for Kardashian selfie videos: The success of "Stay Tuned" speaks to Snapchat's ability to successfully serve hard news content to its millennial audience, not just tabloid gossip and reality TV.
  • It's an example of NBC's digital investments paying off. The network hired a 30-person, standalone staff to produce the show to reach younger audiences, and it's working. It's part of its larger goal to expand its digital footprint and extend its reporting on more platforms. In June, NBC News launched "Left Field," a new digital video journalism unit following a site-wide redesign.

Disclosure: NBC parent company Comcast is an investor in Axios.

Take Note

On Tap: It's National Mail Order Catalog Day, though not sure how long that will go on.

Trading Places: GitHub CEO Chris Wanstrath plans to cede that post once a successor is found and become executive chairman. ... Twitter's Jeffrey Graham is headed to BlackRock.

ICYMI: Apple is adding a feature in iOS11 that lets iPhone owners more easily turn off the Touch ID fingerprint sensor by clicking the power button five times; that's important with court rulings that have held people can be compelled to physically unlock devices with biometric sensors. .. Former Uber CEO Travis Kalanick filed his reply to a lawsuit from Benchmark, saying the case should be handled through arbitration. ... Gab, a social network that has been banned from the major App Stores has raised $1 million in crowdfunding. ... After seeing execs bail on two other advisory bodies, the Trump Administration has pulled the plug on its Infrastructure Council, which was to have tech execs among its members.

After you Login

I got a pitch yesterday with the subject line "We Have the Attention Spans of a Goldfish:"

That's as far as I got.

But if you have a juicy news tip, I promise to read it all the way through. I'm ina@axios.com or just hit reply.

Featured

Login

Man oh man, what a day. Once again, Trump talk trumped all else in tech.

Online hate strains one of tech's core principles: free speech

The recent events in Charlottesville and resulting debate have all manner of tech companies, from Web platforms to payment processors, rethinking where to draw the line between protecting free speech and allowing the promotion of hate speech.

Background: Historically tech companies have tried to remain as hands off as possible, for a variety of ethical, practical, and financial reasons. While nearly all firms have terms of service that allow them to cease doing business with whomever they want, internet companies have long held themselves out as content and viewpoint agnostic.

Doing so has allowed the companies to avoid having to separate content into good and bad. That allows the companies to do the maximum level of business and to be able to say that they are promoting free speech. Plus, in some cases, too much moderation could shift a company from a legally protected internet service provider to a publisher that is liable for what lands on their sites.

Yes, but: Even companies that have been among the most ardent free speech advocates are starting to feel there are limits.

David and Sara have more, including a timeline, here.

Meanwhile: Writing for TechCrunch, Taylor Hatmaker argues that, press releases notwithstanding: "Tech is not winning the battle against white supremacy."

Trump goes after Amazon — again

President Trump took another swipe at Amazon, tweeting Wednesday that the company is paying no taxes, killing jobs, and damaging "towns, cities and states throughout the U.S."

Why Trump is wrong: As of April, Amazon does collect taxes on goods sold from its own inventory for every state that has a sales levy.

Why Trump is right: Amazon has been a buzzsaw through big swaths of traditional retail, including brick-and-mortar bookstores, department stores, and apparel shops. Tens of thousands of jobs have been lost, along with sales taxes that fund local services. And Amazon doesn't collect sales taxes on goods sold by third-party affiliates, unless it is contracted to do so by those sellers.

Note: Amazon declined to comment, but has said previously that close to half the items sold on its site are from third-party affiliates.

My thought bubble: It's worth pointing out that the tweet came just as the Jeff Bezos-owned Washington Post printed a particularly scathing indictment of the president.

Christopher Matthews has more here.

Meanwhile, Tim Cook takes on Trump

Apple CEO Tim Cook issued a passionate email to employees Wednesday night, pledging to use Apple's cash and stature to fight the kind of hateful messages embraced in Charlottesville last weekend.

"Hate is a cancer, and left unchecked it destroys everything in its path," Cook said in an email to employees across the globe and obtained by Axios. "Its scars last generations. History has taught us this time and time again, both in the United States and countries around the world."

"I disagree with the president and others who believe that there is a moral equivalence between white supremacists and Nazis, and those who oppose them by standing up for human rights. Equating the two runs counter to our ideals as Americans," Cook wrote.

Cook said Apple would donate $1 million each to the Southern Poverty Law Center and the Anti-Defamation League. Apple also will match employee donations and make it easier for customers to contribute via iTunes.

Other tech and business leaders have distanced themselves from Trump in the wake of his handling of the events in Virginia, with two CEO advisory councils disbanding earlier Wednesday.

Delayed reaction: After declining to say anything all week about her continued presence on a Trump council, IBM CEO Ginni Rometty issued a statement Wednesday condemning the violence in Charlottesville while justifying her company's longstanding policy of engaging with U.S. leadership.

Michael Dell, who was also on one of the Trump councils, had even less to say, telling USA Today's Jon Swartz simply that the matter was "resolved" with the council disbanded.

Lansing has the best wireless service in the U.S.

Sam Jayne / Axios

When it comes to wireless service, being in the biggest city doesn't necessarily equal getting the best service. Indeed, in the most recent RootMetrics study, it was Lansing, Michigan, that had the best wireless service, with Modesto, Calif., and Port St. Lucie, Fla., also in the top five for the first half of 2017.

Among the big cities, only Chicago ranked in the top five, coming in at No. 3. New York slid a few places, from No. 66 to No. 72, while Boston showed the biggest jump among the ten largest cities, climbing 42 spots, to No. 55.

How it's measured: RootMetrics measures factors like network reliability, the speed of data and texts, and call quality.

Ina has more here.

Why VCs are tapping into the cryptocurrency boom

Top-tier venture capital firms are quietly taking advantage of the recent explosion in new cryptocurrencies, with many backing so-called "crypto hedge funds" that trade and invest in cryptocurrencies, usually at their earliest stages. Others are experimenting alone.

Why it matters: More than $1.5 billion has been raised through initial coin offerings — or ICOs — so far this year. In many cases they can serve as an alternative funding mechanism to traditional venture capital, so backing crypto hedge funds can help VCs maintain a piece of the action.

For example: In the spring, venture firms including Sequoia Capital, Andreessen Horowitz, and Union Square Ventures reportedly invested in a crypto hedge fund called MetaStable. Another crypto hedge fund called Polychain has raised from some of the same shops, while other VC firms like CrunchFund are directly participating in cryptocurrency token sales.

More: Kia goes deeper, including a handy explainer on how these things work.

Take note

On tap: Ford is hosting a daylong "City of Tomorrow" symposium in San Francisco.

Trading places: Zenefits plans to announce later Thursday it has hired former Workday executive Lisa Reeves as senior vice president of product.

ICYMI: Altspace VR may not be shutting down after all. The company says it is "deep in discussions" with others to keep the virtual world going...Fiat Chrysler is joining an autonomous car effort among BMW, Intel, and MobileEye (soon to be part of Intel), per The Verge...Cisco posted earnings that beat estimates, CNBC reports.

After you Login

One word: Ouch.

Featured

Big cities aren't always best when it comes to cell service

Sam Jayne / Axios

If you are looking for the best wireless service in the country, you might need to look in some unexpected places.

Indeed, in the most recent RootMetrics study, it was Lansing, Mich., that had the best wireless service, with cities like Modesto, Calif. and Port St. Lucie, Fla. also in the top five for the first half of 2017.

Among the top 10 cities, only Chicago ranked in the top five, coming in at No. 3. New York slid a few places, from No. 66 to No. 72, while Boston showed the biggest jump among the ten largest cities, climbing 42 spots, to No. 55 from No. 97.

RootMetrics measures factors like network reliability, the speed of data and texts and call quality.

Our thought bubble: It also matters a lot which carrier you have. These rankings reflect performance across all providers and you are only signing up with one. Some are better in some cities than others and it pays to look at the coverage maps in your area and talk to friends.

Here are the top cities for wireless, among country's the 125 largest regions. Their population rank is in parentheses.

  1. Lansing, Mich. (117)
  2. Indianapolis, Ind. (32)
  3. Modesto, Calif. (104)
  4. Chicago (3)
  5. Port St Lucie, Fla. (100)

Meanwhile, here are the bottom five:

121. Indio, Calif. (110)
122. Omaha, Neb. (57)
123. Hartford, Conn. (46)
124. Bridgeport/Stamford, Conn. (47)
125. Hudson Valley, N.Y. (88)

Featured

Tim Cook takes on Trump, says "Hate is a cancer"

Marcio Jose Sanchez / AP

Apple CEO Tim Cook issued a passionate e-mail to employees Wednesday night, pledging to use Apple's cash and stature to fight the kind of hateful messages embraced in Charlottesville last weekend.

Cook said in an e-mail to employees across the globe and obtained by Axios:

  • "Hate is a cancer, and left unchecked it destroys everything in its path... Its scars last generations. History has taught us this time and time again, both in the United States and countries around the world."
  • "I disagree with the president and others who believe that there is a moral equivalence between white supremacists and Nazis, and those who oppose them by standing up for human rights. Equating the two runs counter to our ideals as Americans."

Cook said Apple would donate $1 million each to the Southern Poverty Law Center and the Anti-Defamation League. "We will also match two-for-one our employees' donations to these and several other human rights groups, between now and September 30," he said.

Other tech and business leaders have distanced themselves from President Trump in the wake of his handling of the events in Virginia, with two CEO advisory councils disbanding earlier Wednesday.

Here's the full e-mail:

What occurred in Charlottesville has no place in our country. Hate is a cancer, and left unchecked it destroys everything in its path. Its scars last generations. History has taught us this time and time again, both in the United States and countries around the world.

We must not witness or permit such hate and bigotry in our country, and we must be unequivocal about it. This is not about the left or the right, conservative or liberal. It is about human decency and morality. I disagree with the president and others who believe that there is a moral equivalence between white supremacists and Nazis, and those who oppose them by standing up for human rights. Equating the two runs counter to our ideals as Americans.

Regardless of your political views, we must all stand together on this one point — that we are all equal. As a company, through our actions, our products and our voice, we will always work to ensure that everyone is treated equally and with respect.

I believe Apple has led by example, and we're going to keep doing that. We have always welcomed people from every walk of life to our stores around the world and showed them that Apple is inclusive of everyone. We empower people to share their views and express themselves through our products.

In the wake of the tragic and repulsive events in Charlottesville, we are stepping up to help organizations who work to rid our country of hate. Apple will be making contributions of $1 million each to the Southern Poverty Law Center and the Anti-Defamation League. We will also match two-for-one our employees' donations to these and several other human rights groups, between now and September 30.

In the coming days, iTunes will offer users an easy way to join us in directly supporting the work of the SPLC.

Dr. Martin Luther King said, "Our lives begin to end the day we become silent about the things that matter." So, we will continue to speak up. These have been dark days, but I remain as optimistic as ever that the future is bright. Apple can and will play an important role in bringing about positive change.

Best, Tim
Featured

Angry Bird maker Rovio plans to go public

The problem with Rovio going public isn't that the Finnish game maker is best known for its years-old hit, Angry Birds. The problem is that it is onlyknown for the Angry Birds franchise.

The company has proven itself adept at making the most of the hit game, to be sure, spawning years of sequels, merchandise galore, and even a blockbuster movie. The Angry Birds Movie, along with strong game sales, allowed revenue to nearly double last quarter, according to Rovio's earnings report Tuesday.

Yes, but: For a company that has touted itself as the next Disney, Rovio has failed to produce a second hit, let alone the steady string of successes needed to build a true entertainment powerhouse. Despite that, Bloomberg reports that the company wants to go public as soon as next month, raising as much as $400 million at a $2 billion valuation.

My thought bubble: Would-be investors would be wise to study a bit of company history. The company had released dozens of games before its first hit, the original Angry Birds, and nearly went out of business. More recently, the company had to retrench after its growth stalled and in 2015 the company was forced to make massive job cuts as its business came back to earth.

Featured

Login

It's great to be back in your inbox. Is it me or did you clean up a bit?

Rovio has IPO plans but still searching for elusive second hit

GIPHY

The problem with Rovio going public isn't that the Finnish game maker is best known for its years-old hit, Angry Birds. The problem is that it is only known for the Angry Birds franchise.

The company has proven itself adept at making the most of the hit game, to be sure, spawning years of sequels, merchandise galore, and even a blockbuster movie. The Angry Birds Movie, along with strong game sales, allowed revenue to nearly double last quarter, according to Rovio's earnings report Tuesday.

Yes, but: For a company that has touted itself as the next Disney, Rovio has failed to produce a second hit, let alone the steady string of successes needed to build a true entertainment powerhouse. Despite that, Bloomberg reports that the company wants to go public as soon as next month, raising as much as $400 million at a $2 billion valuation.

My thought bubble: Would-be investors would be wise to study a bit of company history. The company had released dozens of games before its first hit, the original Angry Birds, and nearly went out of business. More recently, the company had to retrench after its growth stalled and in 2015 the company was forced to make massive job cuts as its business came back to earth.

Uber investor makes new claims against Benchmark

The already tense standoff among Uber investors is getting even uglier.

What's happening: In a letter late Tuesday, seen by Axios, Shervin Pishevar made new claims against fellow Uber investor Benchmark Partners, which is suing former Uber CEO Travis Kalanick for alleged fraud.

Pishevar accuses Benchmark of trying to force Arianna Huffington off of Uber's board, among other new allegations. He also reiterates his earlier critique of Benchmark's actions, saying they are hurting the company's efforts to land a new CEO.

Dan Primack and I have more here, including the full letter.

Meanwhile: Bloomberg reports Uber is trying to move ahead with efforts to land new investors and hire a CEO, though all is contingent upon resolving things with Benchmark.

Texts show Kalanick and Levandowski united by ambition

No good legal dispute these days is complete without a good string of private text messages between the key players. On Friday, after several complaints from Waymo, Uber finally submitted to the court scores of pages of messages between Kalanick and Anthony Levandowski, the former Uber and Alphabet employee at the center of the dispute.

Remember: After Levandowski left Waymo in early 2016, he started his own self-driving truck company, which Uber acquired several months later. Waymo says the whole thing was a plot to steal and use Waymo's trade secrets.

Takeaway: The exchanges provide a glimpse into the relationship between the two men, who seemed to bond over their ambition to "[t]ake over the world...[o]ne robot at a time," as well as their big worries at the time: Completing their secret acquisition and staying ahead of competitors.

Our resident Uber expert, Kia, has more here.

Doctors question app for crowdsourcing a patient's diagnosis

Rebecca Zisser / Axios

What if a doctor could use an app to crowdsource the advice of specialists from around the country to double-check a patient's diagnosis? A group called the Human Diagnosis Project is getting a lot of attention for its initiative to help doctors do that in underserved areas — an initiative that got the backing of the American Medical Association last week.

You can read more about the project elsewhere (here's a good writeup from Scientific American), but we wanted to check in with doctors to see how useful they thought the new technology would be. Turns out they had a few doubts.

David Nather has more here.

Dell and IBM chiefs remain on Trump councils

On a day where more executives exited President's Trump's American Manufacturing Council, the heads of Dell and IBM yesterday showed no signs of leaving their advisory roles.

In a statement, Dell (the company, not CEO Michael Dell) said "While we wouldn't comment on any council member's personal decision, there's no change in Dell engaging with the Trump administration and governments around the world to share our perspective on policy issues that affect our company, customers and employees."

IBM declined to comment on CEO Ginni Rometty's continued presence on Trump's Strategic and Policy Forum.

On the other hand: Hewlett-Packard CEO Meg Whitman wasn't afraid to take on the president, praising Merck CEO Ken Frazier for leaving the manufacturing council. "I'm thankful we have business leaders such as Ken to remind America of its better angels," Whitman wrote on LinkedIn. "Americans expect their political leaders to denounce white supremacists by name. Hate must not be given refuge in America."

Take note

On tap: Cisco reports earnings.

Trading places: Waymo, Alphabet's self-driving car unit, has hired Senate Commerce Committee staffer David Quinalty as its new head of federal policy and government affairs...Chris Saad, head of product for Uber's developer platform, said he is leaving the ride-hailing company after two and a half years and is open to ideas for his next gig.

ICYMI: Fresh from exiting Trump's American Manufacturing Council, Intel CEO Brian Krzanich said he was accelerating the company's diversity goals...Facebook redesigned its News Feed...Database maker MongoDB has confidentially filed for an IPO, sources told TechCrunch...Blockstack today is launching a $25 million investment fund to back development teams for its blockchain apps.

After you Login

GIPHY

Looking for a good self-improvement book? You'll have to wait until next April, but Cookie Monster has authored a new advice tome, "The Joy of Cookies." Entertainment Weekly has a few more crumbs here.

Featured

Uber shareholder lashes out at Benchmark in new letter

Sam Jayne / Axios

Venture capitalist and Uber investor Shervin Pishevar has ramped up his battle with Benchmark Capital, based on a new letter obtained by Axios.

Quick history: Benchmark last week sued former Uber CEO Travis Kalanick for fraud, in an effort to get him booted from the company's board of directors. Pishevar and two other Uber shareholders launched a petition to get Benchmark to instead step down from the board and to divest enough of its shares to remove its board appointment rights. Benchmark replied with its own open letter to Uber employees, while Kalanick also has begun fighting back.

In the new letter, which is addressed to the Benchmark partners:Pishevar reiterates his original concerns about how Benchmark's fight vs. Kalanick has impeded Uber's CEO search, but also adds three allegations:

  1. Chris Sacca's Lowercase Capital has been working with Benchmark, beyond its previously-disclosed role in supporting the original resignation request of Kalanick. Sacca could not be reached for comment.
  2. Benchmark wants Arianna Huffington off Uber's board of directors, and has "made quite derogatory remarks about her."
  3. Lowercase helped Ryan Graves, Uber's first employee and original CEO, coordinate his resignation letter, which was released on the same day as Benchmark filed its lawsuit. It's worth noting that both Huffington and Graves signed onto a board letter Friday night, calling for Benchmark and Kalanick to work out their differences.
Below is the letter, as obtained by Axios:

Benchmark Partners,

Many investors and shareholders are confounded by Benchmark's behavior regarding Uber Technologies. The lawsuit filed by you last week against our co-founder, the company and the thousands of hardworking employees is irrational in the extreme, seemingly designed to achieve the exact opposite of the goals expressed in your recent letter to the Uber family. Furthermore, your position on the board gives you privileged access to facts that you know are counter to what you state in your own complaint. The litigation is making it difficult for the company and its employees to move on and hire a world class CEO and raise additional funds from strategic investors that would create tremendous value for all.

It has also come to our attention that Benchmark has been conferring with Lowercase Capital in their efforts that are adverse to Uber. Based on a conversation with a representative of Lowercase Capital, we have learned that Benchmark also desires to remove Arianna Huffington from the Board of Directors and have made quite derogatory remarks about her. The Lowercase Capital representative also said he coordinated with Ryan Graves on writing his announcement of his departure from his operating role at Uber and released it the same day of the Benchmark lawsuit.

Benchmark is holding the company hostage and not allowing it to move forward in its critical executive search. The claim in your letter that your litigation efforts speed up on-boarding a CEO disingenuous or delusional.

Benchmark has threatened to block investments that could bolster Uber's competitive position in global markets by bargaining over board seats and its own control.

Benchmark has turned their $27M investment into a $8.4B position in the company. Benchmark's stake in Uber is worth as much as every exit Benchmark has had in the last 10 years combined. Those are historic potential returns, however, your litigation and letter to employees is unprecedented in the history of Silicon Valley.

We beseech you to take the right and moral action by stepping off the Board of Directors of Uber, divest your shares and drop your ill-advised lawsuit and public campaign against the founder and the company. We also request that you desist from further communications with the company's employees, which is the province of the Board of Directors as a whole, as it may so choose, and authorized officers; your transparently destructive ululating missives continue to hurt morale and execution of the company's strategy. The irony of your self-described criticism of Uber's governance is that you have broken all governance protocol by 1) pressuring the founder and CEO to resign without the Board's support and 2) communicating unilaterally with the employees of a portfolio company. A venture capital firm communicating with the employees of a portfolio company in such a way is unheard of.

Please leave the employees alone and let them be at peace so that they can continue to build a a great company without these unnecessary obstacles. Your actions are culpably wrong-headed and can only be corrected by ceasing and desisting from any further interference with employees and the business of the company.

Sincerely,

Shervin Pishevar
Uber Investor, Former Uber Board Observer (2011-2015) and Advisor
Coordinator, Uber Shareholder Alliance

Counterpoint: Benchmark subsequently replied, via a spokesperson:

"Resorting to litigation was an extremely difficult step for Benchmark. But the Holder report cannot be ignored. Failing to act now would mean endorsing behavior that is utterly unacceptable in any company, let alone a company of Uber's size and importance."