The tech sector teardown is more catharsis than crisis

The rules of the game are changing for venture-backed startups.

Image of a person in front of a graph tracking investment performance.

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Following a series of “super clarifying” meetings with shareholders, Uber’s chief executive, Dara Khosrowshahi, emailed employees on Sunday night with an arresting message: “we need to show them the money.”

Mangling his metaphors, Khosrowshahi explained that the market was experiencing a “seismic shift” and the “goalposts have changed.” The ride-hailing and food delivery company’s priority must now be to generate free cash flow. “We are serving multitrillion-dollar markets, but market size is irrelevant if it doesn’t translate into profit,” he wrote.

For the boss of Uber to be trumpeting cash flow and profit would once have seemed about as likely as Elon Musk shouting about the benefits of personal humility and petrol-fueled cars. No company has been more emblematic of the long, crazy, capital-doped bull market in technology stocks than Uber. Founded in 2009, the company floated a decade later at a valuation of $76 billion without recording a single quarter of profits. Its belated conversion to financial orthodoxy shows how much markets have been transformed since the turn in the interest rate cycle and the crash of the tech-heavy Nasdaq market, which has dropped 26 percent this year.

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