Friday, November 11, 2016

The Real Lesson For America As Grubhub Stock Plunges After CEO Tells Trump Supporters To Resign


The blowback began yesterday as #boycottgrubhub took hold on social media. But it appears Americans - as deplorable as they are - are voting with their wallets and dumping Grubhub stock (now down 10% since the CEO explained in a company-wide email that Trump-supporting staff are not welcome and should resign.)

However, there are some deeper lessons from this than the typical intolerance on the left and the "I just don't get it" perspective. As Mark Glennon explains via,
A firestorm broke out today in the national media over an email by the Founder/CEO of Chicago-based GrubHub, Matt Maloney, to all employees, essentially telling Donald Trump supporters to resign. There’s a major learning experience to be had in this affair. It’s not just the usual story about intolerance on the left. It’s about how an exceptionally bright person can be exceptionally blind to the certainty of self-inflicted harm. It’s about why the phrase “just don’t get it” isn’t just some platitude in the Donald Trump saga. It’s deeper than we knew.
I know Matt and worked with him quite closely. That background is relevant, as you will see. The background also contains another lesson everybody should remember.
Seven years ago I was with a venture capital firm and we were trying to negotiate an investment in GrubHub. It was then a very small company operating in two cities with maybe 30 or 40 employees. Matt and his co-founder were unusually talented — gifted in many ways — and I really liked the opportunity. However, they were then both very young, brash and difficult — two other VC firms I knew had turned them down for just that reason.
As a final decision time approached I had a heated impasse with Matt about a few of the deal terms. He was being so obnoxious that I pulled the phone away from my ear and started to hang up on him. I truly and literally had a count to ten moment. “Wait,” I told myself, “this is a great opportunity and Matt doesn’t know any better. Don’t act on emotion.”
I kept talking. We completed the investment and I later served on GrubHub’s board. They went on to do wonderfully — though I take no credit for that, much of which goes to Matt. The company now operates in over 500 cities, is publicly traded and is worth over $3 billion (at least it was earlier today). Matt turned out to be a fantastic steward of shareholder money, and I am very grateful for that. (I no longer have an interest in the VC investments we made in GrubHub, which I disposed of after its IPO.)
But this isn’t about the obvious first lesson, which is not to speak or act when you’re angry. Always count to ten first. This is about Matt’s email to his employees and why somebody so smart would do something so knuckleheaded, insulting to many customers and against the interests of his shareholders.
The full text of the letter is linked here. If you agree with Trump you should resign. I think that’s a fair summary any employee would take away from the email. It says,
I absolutely reject the nationalist, anti-immigrant and hateful politics of Donald Trump and will work to shield our community from this movement as best as I can. As we all try to understand what this vote means to us, I want to affirm to anyone on our team that is scared or feels personally exposed, that I and everyone else here at Grubhub will fight for your dignity and your right to make a better life for yourself and your family here in the United States.  If you do not agree with this statement then please reply to this email with your resignation because you have no place here.
I immediately shot off a profane email to Matt when I saw this in the press today. His response indicated to me that he actually may have thought his email was harmless. I’m reading between the lines on that but I think he might really believe he was just preaching togetherness in the letter. He subsequently released a clarification, linked here, which indeed tries to claim that the “email that was intended to advocate for inclusion and tolerance.”
Even with that clarification, I’d say GrubHub employees now know damn well they better not say anything nice about Trump around the water cooler, have his sign in their yard, his sticker on their car or their name on his list of contributors, which is public.
It’s tempting to say Matt’s explanation is just dishonest, but what about the predictable impact on customers and shareholders? A boycott against GrubHub is now organized which is on Twitter’s trending list at #boycottgrubhub. Upon regaining composure after reading the email today, I tried to short the stock. Too late. It had already dropped by over 4% — $120 million of shareholder value already incinerated.
Didn’t he see the firestorm coming?  Like I said from my experience, Matt has been a good steward of shareholder money. How could he do something this stupid? I don’t think Matt would have knowingly risked the damage done for political principle.
The answer, I think, is blindness more severe than the usual charge of hypocrisy and intolerance by the left. The righteous can’t possibly be intolerant, think the anointed. We know that, but it goes beyond feeling no need for introspection of their own values. It’s so deep that it also never even occurs to them to worry whether others might perceive them to be intolerant — even when millions of dollars are on the line.
That’s what happened here and we’re seeing it frequently, especially in the press. Most Americans now say they know the media have exaggerated Trump’s rhetoric and flaws (though I’m not defending him here). For the press, it’s the same question as for Matt: How can they be so stupid as to insult so many of their own readers?
You’d think this would have ended with the election. “Hey, wait a minute, maybe it’s possible almost half of Americans aren’t bigoted, uneducated hayseeds from the Midwest”  — you’d think that would have occurred to them.
Nope, not yet.