Travis Kalanick's Return and the 'Bad Boys' Who Always Come Back

Uber founder Travis Kalanick is a CEO again, after investing $150 million in a real-estate company that owns parking lots.
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Former Uber CEO Travis Kalanick invested $150 million to gain control of City Storage Systems, which owns and redevelops parking lots.Mike Coppola/Vanity Fair/Getty Images

Travis Kalanick, Uber’s founder and former CEO, wasn’t gone very long. After he resigned from Uber in June 2017, Kalanick spent time hobnobbing at elite conferences like Davos and getting good at smartphone games. This month, he announced 10100, a fund for his personal investments.

On Tuesday Kalanick elaborated on his plans: 10100 acquired a controlling stake in City Storage Systems, a holding company which invests in distressed real estate assets, for $150 million. The company is focused on converting real estate once used for parking and industrials into food and retail services uses. CSS has 15 employees, and Kalanick is its CEO.

In other words, Kalanick is not taking the route many successful entrepreneurs do, playing around with his billions as a part-time VC vanity gig. No, he wants to build another big company. As CEO.

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Kalanick’s return to a CEO role, after a messy exit from a company plagued by many scandals of his own making, should have made more waves. Lest we forget, Kalanick oversaw Uber during its major missteps: The video showing his poor treatment of an Uber driver, the email showing his company’s drinking and sex-fueled culture, the improper use of privacy-violating “God View,” the programs designed to sabotage rivals, the plan to dig up dirt on reporters, the obtaining of medical records of a woman who was raped by an Uber driver in India, the company outing to a Korean escort nightclub, the deception of authorities with its “Greyball” software, the acquisition of Otto that led to a lawsuit over trade secrets, the alleged violation of foreign bribery laws, and the major cyberattack the company tried to cover up, to name a few.

Kalanick is fueling his comeback with his own money---earned from selling Uber shares---but it wouldn’t be surprising if outside investors stepped in to back him. In tech, scandals never seem to stick to a person for long. Ousted bad boys are somehow able to change the narrative.

Take Parker Conrad. He resigned from Zenefits, the employee benefits software startup he’d founded, in 2016, after the company admitted its employees cheated on mandatory compliance training. Investors slashed Zenefits’ $4.5 billion valuation and the company laid off two-thirds of its staff. Yet Conrad returned to a CEO role a year later with Rippling, a new startup with a near-identical strategy to Zenefits. Rippling had no trouble raising $7 million from Initialized Capital, SV Angel and Ben Ling. Parker spun a story of lessons learned---he now feels “better prepared” for the demands of VC-fueled hypergrowth, he told the Wall Street Journal.

Likewise Mike Cagney, who stepped down as CEO of banking startup SoFi amid sexual harassment allegations in 2017. Three months later, he was plotting his comeback, pitching investors on a new fintech startup focused on home-equity lines of credit, according to Recode. This week the startup, called Figure.com, emerged from stealth mode.

Kris Duggan stepped down as CEO of enterprise software startup BetterWorks in 2017 after an employee sued him and the company over an alleged sexual assault. In January Duggan announced hiring plans for his new, stealthy company on LinkedIn, noting that he’d already acquired some staff and raised funding. Duggan says an independent investigator found that no harassment occurred and the lawsuit has been dismissed. "I am still on the board of BetterWorks, and now committed to working on a new company that can benefit the world," he says.1

Justin Caldbeck, the venture investor accused of sexual harassment, sparking a broader reckoning in the startup world, has spun his experience into a teachable moment of sorts. Months after Caldbeck’s firm, Binary Capital, imploded as a result of the accusations, he delivered a speech at Duke University about the dangers of “bro culture,” telling WIRED in December he planned to deliver more presentations to college students, but has no interest in coming back to the tech scene.

Not every techie who was accused of or admitted to bad behavior quickly returns to a role of power and prominence. Lucas Duplan, the founder of Clinkle, a well-funded, high profile startup which imploded in 2015, has not resurfaced with a new project---yet.

But the list of those that have returned is long enough that it raises questions of whether they deserve a second chance. After all, shouldn’t everyone get an opportunity to learn from their mistakes? Investors who made money by backing a certain founder may long for a repeat, or have a fear missing out, assuming the founder avoids reprising the missteps.

It would be easier to grant a second chance to those founders if tech offered an equal playing field to everyone. Only 2 percent of venture funding went to female-only founding teams in 2017. Why should harassers and rule-breakers get a second chance when so many women and minorities are never offered a first chance? Making matters worse, many of the so-called “bad boys” have contributed to that inequality through harassment or discrimination. It’s a troubling trend for an industry that, having amassed power and riches, is desperate to shake its reputation for hostile treatment of women and minorities while disregarding ethics in pursuit of disruption.

Robert Sutton, a professor of management science at the Stanford Engineering School, attributes the trend to boring old capitalist greed. While the range of fundraising options may be more narrow for founders with a scandal in their past, Sutton says, "[Silicon Valley is] a pretty severely capitalist place, and there is always going to be a certain percentage of people who will look the other way and either not care or forgive them."

1 UPDATE, March 23, 3:15PM: This article has been updated to include a statement from Kris Duggan.

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