As an indirect investor (via Benchmark Capital and Coatue) in both Uber and Didi, it was hard for me not to be happy about the recent announcement that Uber has surrendered to Didi in China in exchange for an equity stake. The battle between Uber and Didi in China has burned billions of dollars and yuan, and investors on both sides were begging the companies to call a truce and stop losing several dollars per ride (over 10 million per day, reportedly) in their hunger for market share. The merger of Uber China with Didi should bring rational capitalism to the giant new Chinese ride-hailing industry, setting it and consumers up for a healthy future.
So, as an investor, I am happy — but as a free-trader and proponent of globalization, I am sad. I was listening to President Obama’s great speech this morning from Singapore in support of the TPP (Trans Pacific Partnership), of which China is not a party, and I was reminded once again of how closed the huge Chinese market is to non-Chinese companies. In industry after industry, countries outside of China have been ripped off or beaten back through a raft of Chinese protectionist regulations and traditions. Yet, Western markets are wide open to Chinese goods and services. It’s simply not fair.
I have some first-hand experience with this in my internet media and commerce businesses. In my interactions with Chinese internet entrepreneurs, I’ve found them to be smart, driven and creative. I also find they are happy to share their experiences and strategies with me and my American companies, which, at first, feels encouraging. Upon further reflection, however, this is probably because they have zero fear of my companies every coming into China and competing with them.
To be clear: I think Trump’s positions on international trade are naive at best and dangerous at worst. However, I do believe the U.S., along with China’s other trading partners, needs to push much harder on the Chinese government to open up their domestic markets to our companies and products. Uber’s capitulation in China is just another brick in the great wall that China has built around its economy to protect it from perceived foreign invaders.
On Wednesday, I was honored to participate in the CGI America meeting in Denver in a panel moderated by Bloomberg Special Correspondent Willow Bay. Other panelists were Former Treasury Secretary Robert Rubin and Jacqueline Hinman, president and CEO, CH2M Hill, a global engineering and manufacturing firm. The title of the discussion was: A New Competitive Era: America in the World.
This was a stimulating hour as Willow navigated us through a range of topics about American competitiveness in the increasingly global economy. As the resident tech guy, I had some opinions about the lack of computer science training and programming being taught in U.S. schools. (I leaned on and promoted my friends at Code.org and their important efforts to push states and U.S. schools to include computer science as part of STEM [science, technology, engineering, and mathematics] curriculum.) What I think surprises most people is that only 1 in 10 U.S. schools offer computer science classes, and when they do it often doesn’t count toward graduation. It’s unbelievable really, especially since it’s not news that we have a supply shortage in the area of computer science and engineering, impacting most tech companies. This led to a discussion about the need for immigration reform to allow qualified workers into this country to fill these jobs, and help fuel even greater growth and innovation. I’ve long supported the simple idea that we should staple a green card to every PhD earned in this country.
Geekwire’s John Cook tuned in via webcast and captured some of the discussion in a post.
After our panel, former President Bill Clinton joined Willow for a one-on-one discussion. I had a great vantage sitting in the front row watching one of the rhetorical masters of our time.
While this was my first exposure to CGI, I was impressed with the format and caliber of attendees, and the emphasis on commitments and follow up. After all, it’s important to have these conversations, but it’s more important to fix the problems and address the barriers that inhibit progress. I like the fact CGI is focused on being more than a forum, but a platform to create solutions across industries, and across the aisles. So far, it seems to be working.
Fellow Seattle-based entrepreneur/venture capitalist, Nick Hanauer, has been been poking the hornets nest of 1%ers recently with a Bloomberg Op-Ed he authored which argues that we capitalists are not job creators, our customers are. If Nick had singled out high-finance types, well, okay, those guys are everyone’s somewhat-deserved favorite target. But Nick couldn’t be talking about me, a founder a several companies including Expedia and Zillow, that now employ thousands of people, could he? Read More…