22 Feb 2018

Barry Diller dishes on Dara, succession planning, and the true impact of artificial intelligence

Covering events is always a marathon — from deciding which sessions to attend, managing interview requests, and capturing content from the keynotes, there are many moving parts. Often, this means that there’s coverage of stellar content that gets overlooked in the crush of other stories — and then is relegated to the ‘one day soon’ pile of audio waiting to be transcribed.

Recently, a treasure was unearthed: Barry Diller’s fireside chat with Expedia CEO Mark Okerstrom during last December’s annual Expedia Partner Conference.

Yes, this is a few months’ old. And yes, it’s still interesting. Read on for Mr. Diller’s characteristically-humorous recounting of the drama behind Dara’s appointment as Uber CEO, as well as musings on the future of the company that Dara led for many years.

Mark Okerstrom: Let’s just jump into it. Lots of crazy headlines that happened in the world this year. On Sunday, August 27th of this year — I really remember that date for some reason — so news dropped that the board of Uber was offering our longtime colleague and friend, Dara Khosrowshahi, the job of CEO. Can you describe to me where you were before that, what happened then, and what happened the following week from your perspective?

Bary Diller: Well, OK. It’s a nice little story. It’s a great story for Dara. He certainly deserved it. Not a great story for Expedia…but that depends on you [nodding towards Mark Okerstrom].

Dara and I talked about this a few weeks before when he was in Canada. And I took some time to try and convince him that there were a lot more challenges left at Expedia and that he should stay home. Rather than go into the chaos of the completely dysfunctional Uber and the senior level.

But pretty soon it was clear that the challenge of revolutionizing [transportation] which is what Uber has done and continues to do, in its early stages, and certainly has more of that to do – was really compelling.I thought, alright, if this is what you want to do, let me try and help the process.

We kind of collaborated over the next couple of weeks, as he was going to make a presentation to the board. And that penultimate weekend, I was in the South Pacific and I spent a few hours on Friday and an hour on Saturday commiserating with Dara because it was clear he wasn’t getting the job. Because it was pretty much said that the job was going to Meg Whitman.

I said to Dara, look. It was fun, it was a few weeks of fun. Now you go back to ordinary nice life, it’s not boring, this has been an exciting little journey please don’t feel bad.”

I was just trying to make him feel better. And Sunday, I was on the phone with him, and this is absolutely literally true. I was on the phone with him and I, again we talked a bit about the craziness of how Uber was dealing with this. Because their board — sieve is too minimal of a word for telling you what that board did.

And I’m talking to him about, you know, that it’s best you didn’t get this job. And literally there’s an email from Kara Swisher from Recode. And I open the email and she says, “Dara is it.” I said, “Dara, I have this very interesting email.”

“Dara,” I said, “has anyone called you?” He said, “No of course not. I’m on the phone with you.” And actually, of course, the board or people around the board leaked that they were giving the job to Dara before they bothered to tell him. So inadvertently, I was the one who told him he got the job.

The wonderful part about that was — we talked a bit earlier about it but then, once this was a reality, we talked about, “Alright, what are we gonna do here?” The great thing about, if you’re really serious about succession planning, which is a really hard thing for companies to do…It took us, I don’t know, 90 seconds and here he is.

So we’ve never actually talked about this, but I was on the way back from that fantasy football trip I take every year, and Alan our new CFO called me and said, “Hey have you seen the news about Dara?” And I said “What news” and he was like, “Apparently he’s going to Uber.” And I said, “Oh, really? Let me call him.” So I called him and I said “Hello?” And he said “Hello?” “Anything you wanna tell me?” He’s was like, “It was not supposed to happen like this.” And that’s how I found out…

The great thing actually, the really nice side of self-respect, in a way, is that there are three candidates. One was Jeff Immelt who was the head of General Electric. The other was Meg Whitman. And they have been out there in the news for weeks and weeks and weeks. Dara had never ever been mentioned — until he got the job. And we were very proud of that.

We were so careful of how this was handled. We didn’t wanna do any damage unnecessarily. And so that was the first moment anybody knew about it. As you found out.

Remarkable. And then Wednesday appointed, Friday done,  Monday business and usual. So…Why do you think so many have a problem with the succession thing? Why do you think it’s so hard?

Well, because by definition it’s kind of awful. You know? I mean, when you think about it, somebody is in whatever position they’re in. I mean, business, marriage, girlfriends, boyfriends. So, you’re in the job, you’ve been in the job a long time and now someone else is gonna be in it.

Now, whether you plan it, how well you plan it…. I mean there’s a great example with Jack Welch. One of the great business leaders of the last century or so; spent years on succession planning. And chose actually Jeff Immelt. And then very quickly realized that he made his terrible mistake. You know, 17 years later, the board finally dealt with it.

So, it’s a hard thing to do and get right.

But if you don’t plan it out, the chances of making a mistake in having somebody leave a situation and having some new person come into it… that failure rate is really high. What is less high is what happened with you.

Which is, you were not coming from the outside. It was not part of a search process. Succession here was as natural as you know, making a little pie. You know, from one day to the next day without a slip. Because you were there and in the position that you could succeed. So, hopefully, you will.

Alright, so let’s shift gears for a moment. You, and of course your wife Dianne von Furstenberg, are obviously very interested in giving back. Some of the things to really distinguish here is what you’ve don’t with the High Line in New York. You’ve had this ambitious plan for this island off Pier 55 which was off, now it’s back on. You know a lot of giving to the arts and public spaces. What motivates your giving?

It’s what motivates anything that I do and what most people do. They’re kinda the things that you, if you’re a citizen, the things that you just have to pay attention to.

Which a lot of it is: What do you have to support that people in your world in and in your community are doing? And that’s kind of mandatory. I mean look, if you’re lucky enough to have resources. Then you’re going to, if you’re sentient, you’re going to participate in the areas that are by necessity are demanded of you just by where you live, what parts, etc. But for me, the interesting part of being able to do this is in your own imagination. What are you interested in. And I’ve always been interested in public spaces.

I’ve always thought, that any time I see something that was done 50-100 years ago, just walk upon some statue or park that didn’t exist before. I’m amazed and impressed with the fact that someone actually got something done that was clearly not easy to do. Because it interrupted whatever was happening before. And you had to convince a lot of people to do a lot. But over years, [it] brought so much pleasure to people wandering by, participating, just looking at something beautiful.

It’s not curing disease, for sure. But I believe that the responsibility of bringing pleasure to people that are in the community or who visit the community is something without which we would really be bereft. In almost every city, there are people who, over the years, had this idea of establishing this thing, and they did it. And now it still exists, and we get to see it. Long story, but I love public spaces, and I’m lucky enough to be doing what I’m doing.

We’re doing projects in New York, projects in California, in Los Angeles, and we’re going to keep expanding this. I don’t delude myself that we’re going to have an effect on some of the huge social projects, that for instance the Gates Foundation, are involved in. But I really hope, that if we actually can bring millions of people surprise and pleasure at coming across something that hadn’t existed before.

That’s what happened with the High Line in New York. When we did it, we thought we would have 350 or 400 thousand people…every projection we had. The first year we had 3 million people. Last year we had 6.5 million people. And it has influenced city planners all over the world. There are many cases of people erecting their own kinds of High Lines.

[HomeAway President] John Kim just gave a presentation about the pace of change, and how technology and innovation are accelerating. I felt a little bit sad after that, but I’m coming back. 

Why were you sad? What’s going to replace you, artificial intelligence?

We’ll see! So let’s start there. There’s lots of concern about artificial intelligence, self-driving cars, the disappearance of the knowledge economy, all essentially taking jobs away. As you think about the future, is technology a friend or foe of jobs? Are you an optimist?

Oh yeah, I’m always an optimist. As my wife says, discount me on any conversation about this stuff because I’ll always have some ray of [sunshine] somewhere. But, like anything, there’s going to be some destruction. And out of the concept of creative destruction, out of that is going to absolutely come all sorts of new things.

Yes, you can make those projections and say, well, there are 800,000 truckers and what will happen to them when they don’t have to drive anymore. I absolutely believe there will be replacements plus, in all sorts of areas that we can’t even conceive of today.

If the industrial revolution took people, farms no longer needed all those people, what were they going to do? Well, a revolution came and figured it out. We’ve been through these cycles so many times that I really do believe that, while there is going to be a dislocation period, we will be ok.

In terms of how old you are, there is the luck of timing in almost everything. There’s going to be a period where there’s destruction before there’s production. I think that’s going to happen in 5, 10, 20 years or so. And that’s going to be disquieting and worse for a lot of people. Out of it, though, is going to come such bounty in so many areas. I’m more optimistic than most.

I also believe, in that period where we’ve foraged through to the new without in fact figuring out the consequences — because you can’t figure them out until you get there — I do believe that all the conversations about guaranteed income are going to take place for a while.

What technology do you think is going to be the most disruptive in the next five years? 

Voice, in the next five years. Voice is coming before ‘true’ AI. You take all of the things that you’ve read about, that you’ve thought about, in terms of the possibility of AI replacing so many functions. But. That’s going to take some time. And infrastructure. Those who say self-driving cars will be in the next few years, it’s crazy. I will be the last person driving, I promise you. I will not have that taken away from me. My cold dead car, I will still be making dangerous moves on the road.

The thing about all of that is…I really think that voice, near-term, is going to have the most impact. Voice is going to change so many things. And it’s just really in the beginning and it’s adoption is going to be enormous. It’s going to affect a whole lot of things.

For more on our previous coverage of the Expedia Partner Conference, click here