Oct 25, 2022 · 1h 19m · news
Emil Michael: How I Negotiated the $4B Uber-China Deal, Why DoorDash Caught Up to Uber | 20VC #941 · 20VC with Harry Stebbings
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In this extensive interview, veteran tech executive Emil Michael outlines his elite negotiation playbook, recounts high-stakes dealmaking at Uber and Tell Me Networks, and provides critical insights into modern venture capital dynamics and corporate governance.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 19.7% of the talking time here. How this is scored →
Harry as informed peer 4.6 Guest teaching 4.9 Guest disagreement 2.9 Harry pushing back 3.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 45:22 Emil gives Dara Khosrowshahi an 'F' grade
Emil unreservedly attacks current Uber CEO Dara Khosrowshahi, calling his financial performance an 'F' and describing Postmates as perhaps the worst acquisition in tech history.
Hardest push from Harry ▶ 39:58 Harry defends Bill Gurley against Emil's framingHarry refuses to accept Emil's claim that Benchmark panicked out of loss aversion, interjecting that Bill Gurley is a smart investor who must have had valid reasons.
Biggest teaching moment ▶ 14:06 Emil dismantles standard textbook negotiation theoryEmil instructs listeners to throw out business school negotiation books and McKinsey BATNA frameworks, reframing dealmaking around outworking opponents and human intelligence.
Harry holds his own ▶ 34:52 Harry details liquidation preferences and cap table stacksHarry demonstrates deep subject-matter expertise by analyzing liquidation preferences, pari passu equality, and cap table mechanics in down rounds.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| The Bill Campbell Mentorship and Trillion-Dollar Legacy | 3 | 4 | 1 | 1 | Harry uses question prep from Dave Clark regarding Emil's elite credentials. Emil corrects the premise by stating his traditional pedigree mattered little compared to Bill Campbell's direct mentorship. | |
| Tell Me Networks and the Shift to Enterprise | 2 | 3 | 1 | 1 | Harry prompts Emil with a question from Jared Hecht about Tell Me Networks. Emil educates Harry on the 1999 tech crash and enterprise phone-tree pivot, which Harry lightheartedly jokes about. | |
| The Strategic Microsoft Acquisition Negotiation | 3 | 5 | 1 | 1 | Harry brings up a tip from Hadi Partovi about a fire-sale offer. Emil recounts his high-stakes negotiation with Steve Ballmer that raised the deal from $300M to nearly $800M. | |
| Immigrant Roots, Wealth Milestones, and Founder-First Ideals | 4 | 4 | 2 | 2 | Harry probes how Emil's immigrant background influences downside risk perception in investing. Emil reframes downside risk and outlines his founder-first investment philosophy. | |
| Strategic Dealmaking Frameworks and Human Negotiation | 6 | 6 | 2 | 4 | Harry presses Emil on edge cases in dealmaking, specifically challenging how to handle emotionally unregulated or unaware opponents. Emil drops textbook lessons on information asymmetry and network whispering. | |
| The Masterclass of the $7B Uber-China and Didi Negotiation | 3 | 6 | 1 | 1 | Emil shares the story of negotiating the $7B Uber-China Didi acquisition with Jean Liu in a dark SF hotel room and Macau. Harry asks targeted follow-ups on rapport building and internal alignment. | |
| Strategic Capital: The Saudi Fundraise and the Otto Division | 3 | 5 | 2 | 2 | Harry asks Emil to share his worst deal. Emil breaks down the Otto acquisition and explains why overly complex earnouts and split employee incentives ruined Uber's relationship with Google. | |
| Market Realities in 2022: JOMO, Net Burn, and Cap Tables | 7 | 6 | 2 | 3 | Harry demonstrates strong market expertise, citing public SaaS multiples, liquidation preference stacks, and pari passu equality. Emil details the transition from FOMO to JOMO and net burn priorities. | |
| The Bitter Boardroom Coup: Sidelining Travis and Emil at Uber | 6 | 5 | 6 | 8 | Harry actively challenges Emil's framing of the Uber boardroom coup, defending Bill Gurley's intelligence and citing reports that Travis lost team support. Emil forcefully rejects these premises and calls Gurley a catastrophist. | |
| Grading Dara's Performance and the Lost $200B Uber Vision | 4 | 6 | 7 | 2 | Emil delivers a harsh assessment of Dara Khosrowshahi, rating his tenure an 'F' and calling Postmates the worst acquisition in tech. Harry steers the chat to broader tech cultural shifts. | |
| Board Dynamics, Term Limits, and Growth Capital Misalignments | 7 | 5 | 3 | 3 | Harry calls out VC clichés about founder-investor alignment as 'bullshit', sharing insights from top-tier funds. Emil agrees and suggests term limits on early-stage board seats to eliminate fear-driven decisions. | |
| Venture Evolution: The Rise of a16z/Sequoia and Stagnancy | 7 | 5 | 5 | 6 | Emil claims Benchmark is stagnant by staying small. Harry pushes back, asking if boutique funds like Benchmark and USV are simply 'sticking to their knitting' rather than failing to innovate. | |
| Fatherhood, Hyper-Growth Limitations, and Campbell Mentorship | 5 | 4 | 3 | 5 | Emil argues tech hyper-growth is a young person's game due to time constraints. Harry counters by explaining why he prefers mature, older founders during market highs and lows. | |
| Quick Fire: Sun Tzu Strategy, Tribal Civilization, and SPAC Demise | 5 | 5 | 4 | 3 | In a quick-fire round, Emil dismisses SPACs as dead financial engineering products. Harry probes on SPAC financial incentives and Elon Musk's Twitter deal dynamics. |
Statements from this episode (32)
Bill Campbell coached Steve Jobs and Google founders simultaneously
“They call them the coach, the trillion dollar coach, because he would, as you know, coach Steve Jobs, who no one in the world thought was coachable, and then he would coach Larry Page and Eric Schmidt and Sergey at Google on two of the most important companies…”
Tellme Networks raised $150M across four rounds in 12 months
“We started telling me in 1999. So if you think about the timing of that, we were unbeknownst to us, 18 months from the world coming to an end from a technology investing standpoint. So we had done the things four rounds in one in 12 months. Raised a hundred an…”
Emil Michael: Business executives are not top of Silicon Valley's hierarchy
“I was a business guy, and as you know, business guys are not top of the totem pole in Silicon Valley, right, in general.”
Microsoft offered Tellme Networks an acquisition term sheet for $800M
“By the end of the weekend, three days later, I had a term sheet for seven hundred sixty million dollars. Plus the cash and imbalances. So just about eight hundred million dollars.”
Emil Michael: Outworking the counterparty is the most important negotiation rule
“Number one thing in negotiations is outwork whoever you're negotiating with.”
Emil Michael: Staying emotionally regulated gives leverage over uncentered counterparties
“I never get emotional back and that gives me power, right? It gives me power to, because I'm regulated, They're unregulated and uncentered, and that means they make more mistakes than I would. And so if you could be a shock absorber to emotion in negotiations,…”
Emil Michael: Uber China was valued at $7B in Didi acquisition
“And then tried to charm them into buying my company for a seven billion dollars.”
Emil Michael: Small talk during serious negotiations betrays naivete
“The small talk stuff is fine, but it's, it sort of betrays a little naivete, like that you care, or they care, because if there's, you're in a serious negotiation, no one cares about that. They just care about, like, what you're trying to do.”
Emil Michael: No US consumer tech company operated in China before Uber
“Think about what consumer tech companies operate in China. Zero. There was, there's enterprise tech like Hewlett Packard and IBM and all those guys, but no one else had done that.”
Emil Michael: Uber burned $100M monthly competing against Didi in China
“And we were spending A hundred million dollars a month competing there.”
Emil Michael: Uber's acquisition of Otto destroyed its relationship with Google
“I'd say that the deal that Was under my watch. I didn't like it at the time, but I, you know, it got done was Uber acquiring auto, which was the autonomous car division that that gets started out of Google guys. It was, and I didn't like it for different reaso…”
Emil Michael predicts tech down rounds in Q4/Q1, shutdowns in Q2/Q3
“I think we're at the end of the beginning, though, not the end of the end. The next phase is structured rounds, down rounds, like true down rounds and then sales were, unfortunately, companies sort of not making it, and I think that'll happen in Q one, you kno…”
Emil Michael: Pay-to-play recaps never work for tech startups
“These pay to play things never work. It didn't work at bird. It didn't work at Lime.”
Emil Michael: Benchmark Capital lost its nerve ousting Travis Kalanick from Uber
“I was taken out with Travis because benchmark capital lost their nerve.”
Benchmark turned a $33M Uber investment into $10B in four years
“Bill Gurley was on our board, lost her nerve. And the reality is there's another economic principle called loss aversion, right? If you invest thirty three million dollars in Uber and it looks like ten billion four years later, ten billion on a thirty three mi…”
Emil Michael: Benchmark's Bill Gurley is a catastrophist who constantly fears crashes
“I believe he's a catastrophist. Catastrophists are one who the sky's always falling”
Emil Michael would have told Travis Kalanick to reject Benchmark's coercion
“Had I talked to him that day, I would have said, Travis, walk out of the room. If you want to rip up the papers in front of them and we'll get, you know, get a lawyer and whatever. This is ridiculous. You know, there's, this is unfair. This is coercive. And we…”
Emil Michael: Uber's valuation under CEO Dara Khosrowshahi trails the Nasdaq
“The company's valuation Is lower today than it was when Dara took over. And even if you account for the macro environment, the Nasdaq's still up 50%, he's down 50%.”
Emil Michael: Uber is among few global ride-sharing firms with net debt
“It's one of the only ride sharing the companies in the world with net debt.”
Emil Michael gives Uber CEO Dara Khosrowshahi an 'F' grade for performance
“He was a diplomat. He was able to get the company public, but in terms of hiring talent, innovating, and succeeding from a financial standpoint, you know, it's not, it hasn't happened. It's a, it's an F, you know.”
Emil Michael predicts Uber's Postmates and Careem acquisitions will be total write-downs
“I think we, instead of buying Kareem in the Middle East, Postmates, Jump Bike I think all of those will be a hundred percent write downs. Those are some of the worst acquisitions done in tech. Maybe Postmates may be the worst acquisition done tech in the last …”
Emil Michael: Uber Eats would have beaten DoorDash under original leadership
“So I would have beaten door, we would have beaten DoorDash, guaranteed. We were ahead by 30 points when Travis Night left, so letting that atrophy was not an option.”
Emil Michael: Startup board seats should have term limits after 10x returns
“So, so, or when early stage investors Get to this point where there's just a lot of paper gains. We, there should be sort of term limits on board seats, like term limit out. If I get to, you know, a 10 X return and can get you some liquidity, then you can move…”
Emil Michael: Uber should have forced scared early investors to take liquidity
“And so more, the thing we, I wish we did more of Uber is give more investors liquidity when they get scared. I would be like Venturex sell. Like, I'll find you someone to sell to sell, go get the second G six and the, you know, the whatever. The discovery prop…”
Emil Michael: Loose capital cycles enabled Uber to launch Uber Eats
“For founders, it's more a good thing than a bad thing. That means that there's more capital out there. So if your business model requires more capital, you can get it. And look, people are going to say, oh my God, it's loose capital, free money, blah, blah, bl…”
Emil Michael: Andreessen Horowitz continues to rise due to rapid innovation
“If you want to talk institutional brands in recent Horowitz is certainly on the way up despite whatever's happened in crypto. And I'll tell you why, because they're innovating. They're innovating on how they communicate their PR stuff. They're innovating on th…”
Emil Michael predicts Benchmark's fixed $435M fund model will fail
“That's why I think Benchmark ultimately is going to, is, has no innovation. Forget the reputation, which most entrepreneurs, if they do their deals, will find out about, but just not innovating stuck at four hundred thirty-five million for the next 10 years is…”
Emil Michael: Antitrust pressure will sharply reduce mid-market tech acquisitions
“There are going to be fewer tech acquisitions in this antitrust environment. Fewer, much fewer. So your outcomes for mid, middle companies like tell me are going to be farther, you know, fewer and farther between.”
Emil Michael: VC funds must go multi-stage to survive fewer mid-tier exits
“And to win big, you've got to try to invest across multiple stages. And that's what Sequoia can do. That's what age can do. That's what rivet can do. That's what DST can do. And I think if you can't, You're just going to get, have to get lucky because there's …”
Emil Michael: Uber grew faster than any company in history, including Google
“We grew faster than any company in the world, both geographically And revenue wise, including Google.”
Emil Michael: Hyper-growth startups must transition from tribes to governed civilizations
“Cause what I described companies when they're startups as tribes, And as your tribe gets bigger, you start to intersect with other tribes and you better become a civilization or the tribes are going to be at war. So you build these companies. They're actually …”
Shorts cut from this episode
▶ Uber Exec: How I raised $3.5B from Saudi Arabia 🇸🇦💰 · 20V (@26:59)
▶ What was it like working in the Obama Administration? · 20VC (@1:07:35)
▶ How to Negotiate with Highly Emotional People 🧐 #shorts · 2 (@16:15)
▶ The WORST Acquisition in Tech History 🙅🏽👎🏽 #shorts · 20V (@28:54)
▶ How we got $3.5BN from Saudi Arabia - Former Uber Exec Emil (@26:59)
▶ Two steps to becoming a better negotiator 👑 #shorts · 20VC (@14:24)