85% of our volume disappeared overnight. We had to go through our largest layoff ever as a company. It was over 5,000 people that we laid off. It was during a really difficult, uncertain time for everybody. That was the definition of rock bottom for me.
Welcome to Confession, where I invite tech veterans to share their painful lessons. Everybody has painful stories, and I offer an outlet to talk honestly about the lessons learned. I'm Ali Partovi, and I run NEO, a venture capital fund and mentorship community for startup founders. Today I sit down with Dara Khosrowshahi, CEO of Uber. Dara talks about his time at Uber as well as insights about the importance of transparency, courage, and honesty as a leader. I think you'll really enjoy this episode. This is Confession. Let's begin. Dara, thank you for doing this. Welcome to Confession.
I want to start at the beginning. Tell me where you were born. Tell me a bit about what young Dara was like.
Absolutely. So, you're a little familiar with this.
Yeah, exactly. I was born in Iran, in Tehran, Iran, in 1969. And we were a part of, and you were part of, a very, very big family. It was a merchant family that came to Tehran from Tabriz and built a big business. And this was during a period in Iran where the Shah was the ruler, and he was really trying to modernize Iran and move it from where the Middle East was, which, you know, a society that hadn't really been developed, to a modern industrial society. And our family was a part of that. We had built a very, very big business — pharmaceuticals and consumer manufacturing and other businesses as well. You know, I think both of us probably, if things had been different, would be executives in the family business, you know, someplace, right?
Yeah, exactly. And then in 1977, 1978, the Iranian Revolution happened. I had some family who was involved with the Shah. While we were not political or religious in any way, we thought it was going to be safer for us to actually go to France for the summer to let things cool down, because it was almost unimaginable for us to lose the lives that we had, right, in Iran. And the revolution happened and the Shah was toppled, and we were lucky enough to have an uncle here, our mutual uncle, Uncle Nasser, here in New York. Yeah, here in New York, in Irvington, New York. And so we came to the US to stay with him. And we've never been back. Myself, father, two brothers, and then other... you guys stayed in Iran for longer.
Yeah, we were stuck there for five more years. Were you stuck, or did you decide not to come out?
So it sort of depends who you ask. So my dad, I think, was patriotic and a bit maybe naive and...
I think both of our fathers were. Yeah.
Yeah. And I think he actually — naive maybe not the right word — just optimistic, which I'm an optimist also. Like, he saw that this might be a path to the people of Iran having self-determination, and there were elements of that for sure in the early parts. And so also he was a founder — he was a founder of a university, and that was his life's work, and he didn't want to just ditch it. And so he stayed, or he basically insisted on us staying. But I think there was also — like, once we basically convinced him, 'No, we really need to leave,' it was like really hard to get passports or like getting exit permission. It got much harder and took much longer than the smarter ones who left when you...
And so we came to the States, Irvington, and we got our own place in Tarrytown, New York.
Yeah, exactly. Edgemont. And you guys eventually came to Edgemont too, right?
Yeah. We moved there and we ended up like getting a bedroom in Joda's house, our grandmother.
And you were like a few doors down, or in the same condo complex.
Yeah. And like I like to say to folks too that we lost everything that the family had, but the one thing that we didn't lose was family.
Yeah. And so we were very, very lucky to be so close as a family growing up, and that remains to this day. You know, we've got the family reunions and all that stuff, and it was what held us together, and it really helped me make the transition to the States. And we came to the States during a difficult time, but also a great time. It was a period during which the US was open to immigration, and I do think that immigration is something that has made our country great, and we were very lucky to come then. But at the same time, I think it was a year after I came there was the hostage situation in Iran. So the tensions between Iran and the US were pretty high. But, you know, all of that allowed us to come to the States, and probably the US is the best place to kind of remake your life, and we were able to rebuild just like you guys have.
For those like two years of the hostage crisis, I wasn't in the US then. I was in Iran, and I think I was like seven or eight years old. You must have been like 11 or something.
Yeah, I think nine, ten. Yeah. I mean, from what I understand, it's like every night the news was talking about how bad Iran is and they have our hostages.
Did you feel animosity, or did you feel in any way like people looked at you as one of the bad guys, or other kids, or anything like that making you feel...
I wouldn't describe it as that, in that there wasn't hostility or animosity, but it's mean things that little kids do. So I remember at our school we would play a game called Hostage Crisis.
Yeah. And so it was a very, very sophisticated game that consisted of locking me, the hostage, up. So they would like lock me up in a broom closet, and like the cleaning lady would find me. 'What the hell are you doing here?' You know, I'm not showing up for class or sports. So that happened once in a while.
Wait, hold on. Low-key, this doesn't sound like a particularly healthy game. You weren't traumatized?
I learned to appreciate the dark and cleaning supplies. I'm just, you know, put me in front of a mess and I'm excellent. And, you know, you can choose to make a big deal of these things or not. And I think at the time, maybe I was clueless, maybe I worried about other things. It didn't mark me in any way, one way or the other. Yeah, you felt the tension between the US and Iran. But I tell you, people were so friendly. People were so friendly. And again, we always had our family to come back to. And if you have that base, then a lot more becomes possible.
Did you ever like get into trouble as a kid?
I was a pretty good kid. And again, I don't know if it went back to the sense of responsibility. My older brother got me drunk when I was a freshman to demonstrate that I shouldn't drink, you know, like just I got into the typical kinds of trouble that young kids do, but I'd say I was a decent kid. I didn't get into anything heavy one way or the other. What about you? Were you a surface good kid, or...
I was always trying to see what I could get away with and still not get into trouble. It's a pretty good strategy. I think I was mischievous, but also like I had such good grades and also like I was friends with the teachers. I was definitely a teacher's pet. But then as a result, the mischievous side was like, how much can I do without getting into trouble? Also being an identical twin, it's like anytime people learned I was a twin, it was like, 'Have you ever, you know, switched with your brother? Have you ever like played tricks on your teacher?' So of course we had to try that.
Had to amuse yourself one way or the other. We definitely did things like swapping classes with each other. I once was in Hadi's French class and there was a pop quiz and I was like, 'Fuck, I'm going to bomb this quiz for him.' So I got him an F.
Mom, it wasn't me. It was Dara.
Because we were financially insecure, we only — once we were driving, we only had insurance for one of us.
But then I had like a pretty serious car accident. Hadi and me together. I was the one driving. He was the one who was insured. It was like serious enough that police came and the car was totaled, and it was like late night and in the rain and so on. And so they took us back to the station, and while there, Hadi and I like changed clothes in the bathroom because like he...
Yeah, of course. As the driver, neither of us was in any trouble.
I never interacted with the police this way before. I didn't know what was going on. So it definitely felt risky. Like, what if they know that I wasn't really insured, or he's not really the driver? Yeah, a few things like that. I actually want to ask about something else, and I've never asked you this, and I always wonder. I mean, even within our family, and I know other families that, you know, who came from Iran and the revolution, not everyone reacts to loss the same way. The way my parents and I reacted: first of all, like losing all of our wealth, we went straight to like learning how to save money. My mom worked two jobs. I definitely felt motivation that like I need to somehow reearn the greatness that our family once had.
And I think, I mean, for sure I had pride in our grandparents and, you know, so on, who had built all those enterprises in Iran from the ground up. They weren't like inherited wealth or royalties.
Totally. They were entrepreneurs, and so I felt like that's in my blood. I can do it. But I'm wondering if like did you have the similar kind of feelings of duty to build something back for the family?
Totally. And the funny thing — I'm curious as to how you felt.
It was never communicated to me.
Like not once did my dad say anything about losing, you know, everything and rebuilding here, or my mom, or even my brothers. We didn't talk about it, but there was this weird undercurrent that all of us were aware of, and like clearly you were aware of as well, and this almost a responsibility, which is we're getting a second chance.
I knew that for my parents, again, they were a little bit idealistic or dumb, whichever one you want to say, but they didn't take their money out of Iran. You know, a lot of people who made their wealth in Iran took it out of Iran during those times. I think our family wanted to rebuild. They wanted to reinvest. You know, that part of it was building a local operation that could expand in the Middle East and hopefully globally. And so we lost everything. And my brothers and I knew that my parents won't — obviously our lifestyle got much smaller.
And at the same time, my parents were investing everything that they had to send us to private school. And there was this unspoken sense of responsibility for, I think, all of us in our family, which in hindsight might be why we've done quite well in life and careers, etc., to rebuild. It was much harder on my dad because he tried his hand at being an entrepreneur in the US, and for various reasons he took a couple of shots and he missed, and after those couple of shots he kind of gave up a little bit. He should have just been a starving researcher like my dad.
He should have anticipated the AI revolution. Can you imagine?
But my mom, she got to work. So just like your mom, she worked as a salesperson, etc. She got to work, she put her head down. And then I think we as kids adjusted very quickly. And I think that's one of the great things about being a child. You can adjust, and, you know, while we didn't have everything we had in Iran, we had a pretty good like middle-class life in the US. And that's certainly nothing to sneeze at.
It's so interesting what you said about it being unspoken, and I had the exact same experience. There was one thing my mom said when — and this was even before we really lost everything, but we had lost a lot — and, you know, my mom told me that her family had been extraordinarily wealthy before, and she said, however, I never let my mom or dad give me any money, like, you know, that she was proud of having like built her own, being independent. And just that my takeaway was I need to learn how does one make money.
I didn't even know the concept, but it just implanted in me that that's something to be proud of.
I still remember my first job. It was at a gas station.
That's — I was literally going to say the other memory that came to my mind. I remember driving past this gas station and pulling over and seeing you there and being like, 'Why is Dara the one filling our gas tank?' And my mom being like, 'Dara got a job and he's earning money.' And that for me was like, I remember being so proud of you and so impressed because like you were contributing to the family. It was so cool, that sense of freedom and that satisfaction of making money. And how old were you? 16?
I think 16. Yeah. Yeah, I think I worked in summer camp one summer and then started working at the gas station, and it was fun.
Yeah, it's funny because given that Uber is now obviously related to cars, and then also you were the one who drove us to school and was not such a good driver back then, but it was okay.
I always remember like, you know, waking up at 7:30 or what, coming out in the cold at 7:30 in the morning and my Buick Bonneville ready.
Let's fast forward a little bit. You went to school at Brown. Like when and where did you start thinking about entering the business world, and what was your path?
I was always interested in the sciences. I read science fiction like crazy when I was growing up. And when I went to Brown, I studied engineering, and I studied bioelectrical engineering because I don't know about your father. My dad's like, 'Dara, you can study whatever you want as long as you can be a doctor or an engineer.' You know, take your choice. The world is your oyster. So I figured I would study bioengineering because it would give me a path to either go be a doctor or an engineer. You know, I was a good son. Lo and behold, I fell in love with a woman in New York City.
And I had a job in Kentucky, I think was my job coming out of school, but I wanted to be with her. So I called up my brother Kaveh who worked at Allen & Company, and I asked him, I'm like, 'Hey, can you get me a job because I want to be in New York City because I want to be with my girlfriend.' So I went into the world of finance completely accidentally. And one of my clients was Barry Diller, who was in the entertainment business, and he had moved over to home shopping, QVC, then Home Shopping. And at one point he took control of this entity, Silver King stations, and Home Shopping was merging it together and bought a company, USA Networks, because he wanted to bring kind of commerce and entertainment together. And he asked me to come work for him as his deal person. And I think Barry at the time was the one person in the universe that could get me to leave Allen & Company.
So I went to work for him, and he was half entertainment, half commerce technology. I was more technical. So I helped him on the technology side, and we wound up spinning off all the entertainment businesses and really focused on e-commerce. It was Ticketmaster.com, a bunch of travel assets. The travel assets, we combined them all into an asset called IAC Travel, included Expedia, Hotels.com, Hotwire. And at some point that entity ran into trouble, and the CEO at the time, Eric Bluford, wasn't really up for it. He was more the founder type. He was part of the founding Expedia team. So he decided that he was going to resign. And we had no one to turn to. At the time I was the CFO of IAC, and I'd always wanted to go from kind of being a deal person to CFO. I liked broad business more, and I was much more attracted to technology. So when that happened, we didn't have a CEO. I raised my hand. It was ignorance and desperation.
It was desperation on Barry's part because he didn't have anyone else, and it was ignorance on my part, which is, hey, I can do the CEO gig. But, you know, when the two come together, sometimes crazy things happen. And so Barry hired me on as the CEO of IAC Travel, which then was spun off of IAC and became Expedia, the public company. So long road, weird road that was completely unplanned. It was a great choice, kind of a random choice, and that put me on the course of being a proper technology executive, so to speak.
So what are you here to confess about today?
So my confession is actually my early, I would say, early years as CEO at Expedia. And I was a rookie CEO and not a particularly good one at the beginning. The stock, when we had spun off the company, the stock was around 40, 45 bucks a share, and it had drifted down. Trends weren't great. Travel trends weren't great. A lot of sites were going direct for the first time, you know, because the first instantiation of online travel was really the online travel agents — us, Travelocity, Orbitz, etc. And then the hotels and the airlines especially started getting their act together, and more and more of the traffic was going direct, whether it's a Delta or a Hilton or Marriott, etc. The growth of the industry really started slowing down, and as a result, the stock was suffering.
And how many people worked for you at this time?
I think at the time it was about five or six thousand people. Wow. And it was a pretty scaled business, and it was structured as a holding company. We had Expedia.com, Hotels.com, Hotwire, TripAdvisor, all operating independently. And I wasn't an operator's operator. I was more of a portfolio manager. During that time, one of our largest competitors was Priceline, and they had just bought what was then a small company called Booking.com.
I had gotten to know them, and we had negotiated a deal to buy them out.
Them meaning Booking.com?
It was Priceline at the time.
You weren't competing to buy Booking. You had gotten to know Priceline and you were...
And they had bought Booking. So this was the original mistake, if you want to call it that, which is — but it was not my mistake. We didn't buy Booking.com because we poo-pooed them. Priceline bought them. And I had gotten to a deal with Priceline, not because I thought Booking was going to be amazing. It was a nice business that was growing at respectable levels at the time, but because Priceline at the time — I don't know if you remember the William Shatner commercials, all that stuff — was a really big low-cost competitor of ours. And I had the deal basically done, and we had a board meeting to essentially approve the deal, and I missed a quarter. We had earnings. They were terrible. The stock that was already in the 20s went down. I think it's like 16, 17 bucks a share. And at the board meeting when I was presenting the Priceline deal, the board started pushing back, including Barry, and I think rightfully so, and said that, 'Hey, Dara, if you can't get your own house in order in terms of the earnings of the business, the growth of the business, why should we give you another billion and a half dollars to go buy this other company, Priceline?' You know, so shouldn't you get your own house in order first? And I think that the board did it because they were making a proper case, and a board should act as a check for the CEO, but I think they were partially doing it to test the veracity of my wanting to go forward with this. You know, they were pushing back to see how much I wanted this deal. And, you know, I asked Barry about it one day, which is if I had laid my body down on the train tracks, I'm sure they would have approved the deal. But I lost confidence. I was a first-time CEO. It had been a rough, you know, year, year and a half, and I just backed off.
So you were just like, they're not going to approve it. I'm not going to push for it.
I didn't push hard enough. I am sure if I pushed hard enough, I would have got it done, but I didn't push hard enough. Now, yes, they were pushing back, 'Why should we do this,' etc. But they were making all the typical arguments that you should when you're testing someone else. I said, you know, we're going to wait for a quarter or two. It's fine. I'm going to get my own house in order, etc. By the time we did, Priceline was also suffering to some extent for the same reasons. And by the time we did, that stock price had gone up. They weren't willing to do the deal. And that, you know, if you look at now Booking.com — Priceline renamed itself Booking.com because the Booking.com business has completely taken over. You know, that company's worth 140, 150 billion.
So it was a very, very, very expensive mistake of mine. Whether the mistake is missing the quarter, but I think the real mistake was not being confident in my own convictions. And I knew it was a good deal. But...
How did you know it was a good deal? Like if you take yourself — if I was in Dara's body, you know, going back then, like what would I be feeling?
I knew that the travel business was a great business. Travel would grow at GDP plus. I knew it was very, very early in the adoption of online travel. Probably travel, you know, online is probably 60% of the travel market. It's probably 10%. So you knew that all of the long-term metrics were on your side and there was wind at your back, but I just let myself be off balance because of a bad quarter or two. It was absolutely the right bet to make.
And you knew it, and you had worked on it and built the deal.
I knew what I needed. You know, my background was banking, so I was pretty good at the deal business, but I just lost confidence.
What were you afraid of? Like what was at stake if you had pounded the table?
