Emil Michael is an investor and adviser who understands hypergrowth and what it means for a booming business. The Harvard University and Stanford Law School alum has been candid on multiple podcasts about his thoughts on hypergrowth. On an episode of “The Deep End” by On Deck, he was interviewed by On Deck’s co-CEO, Erik Torenberg.
“I actually think now there are lessons learned that could make a company more durable through its hypergrowth stage,” Emil Michael said on “The Deep End.” “And I will always say that the business was going like this at a slope of 80 degrees and the company building was going at about 60 degrees.”
Emil Michael says that includes HR, legal, finance, manager training, and all the things that keep a company cohesive. “Now, you know that that’s the risk because other companies have had that issue. You can solve for that, which means the CEO’s time has to adjust to spending more time on HR, legal, finance, and training than you thought in previous generations of hypergrowth startups because you have a long-term mindset,” he says.
As a mentor, Emil Michael says he is often asked his thoughts on hypergrowth and blitzscaling.
Emil Michael: No ‘One-Size-Fits-All Approach’
During his time at Uber, the former chief business officer says he and its founder never set out to change the world. He says they tried to transform transportation and they maintained an ethos about how they wanted to build the company and lead by example. He says he also learned plenty of lessons during the enterprise’s hypergrowth phase. Some of those lessons included deciding what one desires out of a company. “Do you want the leadership to transition after two years, or do you want them to be part of the effort for the foreseeable future?” Emil Michael asks.
During his discussion on The Deep End, Emil Michael says remaining realistic and considering all the potential downstream effects are key. “It’s just hard to have a one-size-fits-all approach on this.”
On “The Pull Request” with Antonio García Martínez, he also brought up the ebb and flow of hypergrowth.
“When you’re [in hypergrowth], it’s war because everything is designed against you,” Emil Michael says. “Societies don’t want to move that fast. Regulators want to cramp you down. There are just so many battles to have. When a company becomes like Expedia or Verizon, it’s got its place and it starts optimizing.”
Emil Michael uses Expedia as a hypergrowth example.
“The No. 1 player in that market was booking.com, which is five times as big as Expedia. What [Booking] did is they had a wartime footing. If you’ve ever met some of the people over there, they’re extraordinary.”
Emil Michael says they started to do creative things such as buying out entire floors of hotel rooms, then effectively surge-pricing to make profits. “They made buckets of money by taking risks and doing new things in new ways,” Emil Michael says. “They became globally dominant and they started at the same time with the same business but had two different approaches.”
Hypergrowth also relies heavily on hiring the right people, according to Emil Michael. “Test for motivation, test for flexibility,” Emil Michael says. “You have to be all [in].”
Hypergrowth’s Role in 2022
As for hypergrowth in a post-pandemic world, Emil Michael says it could present additional challenges.
“I don’t know what’s going to work. We’re about to go through a global A/B test where some companies are going to do things fully in person and some are going to half-and-half and some will be fully remote — and we’ll see which company works and doesn’t,” he says. “Is it a type of company that works better in one of those directions? The in-person excitement thing has not been there for a while anywhere.”
Emil Michael says he values in-person business dealings. He recalls some of his best moments at the ride-sharing giant were when he was about to go home and he’d see some commotion and people debating a really important topic in a conference room. “If you weren’t in the office you would’ve missed it. You see how people’s brains work and you get to solve hard problems collectively. So that is something I don’t know how it will get replicated in the new world.”
Emil Michael says hypergrowth would’ve continued if he had stayed with the popular ride-sharing giant.
“We were way ahead of DoorDash in food delivery in the U.S. by three times and today I believe Uber has less than half the market share of DoorDash,” Emil Michael says on “The Pull Request.” He continues, “And with that change, there’s not only a loss of value but DoorDash is doing DashMart and they’re doing lots of other things that Uber Eats is sort of not doing or not doing as well because they’re playing catch-up on market share.”
Emil Michael, who is an investor in Gopuff, says they would’ve likely come up with an Instacart competitor very quickly as well.
“We would’ve been the market leader in food and grocery delivery in the U.S.,” Emil Michael says. “The idea was for us to be the urban logistics network — moving people, moving hot food, moving things, efficiently around the city faster and cheaper than anyone else in the world.”
Now, the tech executive is keeping his sights on Gopuff, which he feels could become as valuable as Amazon.
“Quick commerce has been tried many times over the years, from Kozmo to Amazon Prime Now, but it never really worked,” he says. “What has changed is that Gopuff has learned how to price the service, which merchandise to carry, and how to use technology to reduce costs and improve logistics.”
Emil Michael also coached the brand with hiring, fundraising, and leadership growth strategies.
“When you are building a brand that you want people to think of when they want something immediately, you want to make sure that the first experiences they have are magical,” he concludes.