Handing Over the Keys: Uber’s Ryan Graves on the Transition from CEO

Uber’s first CEO and current VP of Operations Ryan Graves opens up about his role in launching the company, his surprisingly smooth transition, and the secret to successful CEO succession planning.

 

Editor’s note: This is the first post in a two-part interview with Ryan Graves, the first CEO and current Head of Operations of Uber, a venture-backed on-demand car service that, since being founded in 2010, has expanded to 17 cities in four countries, and has accepted $49.5 million in venture and angel funding.

We’ve all heard stories of startup CEO succession planning gone wrong.

Management transition can be tricky at any level, but especially when company founders are involved. As a result, it’s unfortunately not uncommon for founding CEOs to find themselves not so gently nudged out of their role by their board members or co-founders. In worst-case-scenarios, the discussion to fire them can even be made embarrassingly public.

A failed transition can be a major distraction under the best circumstances, and in the worst instances it can slam the breaks on any momentum a scaling business has achieved.

Then again, there are also plenty of examples of startup CEO transitions that run smoothly and actually accomplish what they were designed to do – benefit the company.

Take, for example, the CEO succession that on-demand car service company Uber executed when Ryan Graves, its first CEO, happily stepped down as the business’s chief executive to become its general manager and VP of Operations in 2011.

The reason for the smooth transition was simple. Graves and current Uber CEO Travis Kalanick (who came up with the original idea for Uber in 2009) had discussed it from the beginning. And, as Graves explained in a recent conversation with OpenView, that transparency — coupled with a strong desire to do what was best for the business — made Uber’s succession planning surprisingly drama-free.

“It definitely requires a little bit of an ego/gut check. When you spend a year investing yourself in a project, you feel pretty strongly about how it should be run or which direction it should be taken in.”

Can you describe how Uber was founded and what your initial role was?

In 2009, I was actually working as a project manager for General Electric and hustled my way into a three-month internship with Foursquare. Before that, I had founded a company that never really took off. Long story short, I met Travis Kalanick in 2010 and he and his co-founder Garrett Camp showed me this idea for a new on-demand car service that could really change the way the world viewed transportation.

At the time, he was working on a couple of other projects, so he asked me to be the company’s GM and, eventually, CEO if we were able to raise capital.

As an entrepreneur at heart, I gladly accepted and ran the company for about a year, orchestrating its launch in San Francisco and guiding it through its first round of financing.

Uber’s CEO succession plan was something you knew about from the beginning, but was it still tough when it came time to transition?

It definitely requires a little bit of an ego/gut check. When you spend a year investing yourself in a project, you feel pretty strongly about how it should be run or which direction it should be taken in.

But I think my situation — relative to a lot of other founding CEOs — was a little bit unique. I wasn’t being forced out, and the position Travis was asking me to accept was one that I thought really aligned with my strengths.

As Uber’s head of operations, I knew I’d still have a lot of responsibility helping to guide the business through its domestic and international expansion. So, when Travis asked me about the transition, I told him that I was excited about it. I think he was a little thrown off by that, because very few CEOs embrace their succession plans so willingly.

The key for me was that I knew our CEO succession plan was the best thing for the business. So, ultimately, that made my decision a pretty simple one.

What advice would you give founders facing their own possible transition from CEO?

I’m not sure that my transition really translates to the average CEO’s experience, but I think there’s one piece of advice that applies universally: Do what’s best for the company.

I think the best way to avoid any kind of CEO succession drama is to make sure you surround yourself with good people — investors, advisors, a board of directors, fellow founders — who you trust wholeheartedly.

If you do that and those people are all telling you the best thing for the business is to implement a CEO succession plan, then it will be easier to accept. If, on the other hand, you’re getting the boot from people you don’t trust or if you’re too stubborn to see the forest for the trees, then your transition may get pretty messy.

Come back Monday for Part II of our interview with Ryan, when we’ll discuss the unique challenges Uber has faced and overcome in its mission to scale.

 

You’ve heard from Ryan, now we want to hear from you. What are some additional examples of CEO transition gone right? What about gone wrong?