Alexandre Taillefer: Who Will Buy the Burgers if Robots are Flipping Them?

Alexandre Taillefer has more than a few irons in the fire that is the Montreal business world. He chairs three boards, including the Musée d’art contemporain de Montreal, is a director on two more boards, and is the managing partner of his fund XPND Capital, which is also invested in Real Ventures that backs dozens more companies. Rather than being seen as spread too thin, he is completely present, both physically and mentally.  When he shows up to check in on a project he digs into production details, while still hanging onto the big picture.

Alexandre's business decisions haven’t been blind luck.  He has benefited from placing himself at the intersection of society and technology. Lately, his attention has been on how our transportation decisions are changing thanks to Uber. With his new venture, Taxelco (a sort of "for Montrealers, by Montrealers" all-electric taxi company), he believes he can create a business that does a better job of marrying new technology and our societal values. This focus on “deep values” will, he thinks, be the underpinning of the best performing businesses in the next 10 years.

Thane: It’s too early to say for Taxelco, but the companies you started have all been pretty well timed, including their buyouts. What is the trigger for you to say you’re jumping into, or out of, these things?

Alexandre: I think it's important to understand that the last thing I want to be in life is bored. When you're familiar with an industry or business after three/four/five years, you can do add-on acquisitions, you can try to re-invent the business a bit, but the business can't move as fast as you'd want it to move, or you need to make bold changes that sometimes your investors won't accept.

I started off with Intellia and I'm not sure there was a trigger at the time—I think it was a lot of luck. It was more interests than science. And the more knowledge you have, the more skills you develop, the less you rely on luck, that's what I think now. So Taxelco is less luck than Stingray, which was less luck than Intellia, and hopefully the next venture in five to 10 years will be even less luck.

Thane: What’s the knowledge behind the decision to start Taxelco?

Alexandre: Taxelco is larger than the Taxi business alone—there are deep values that are driving our business decisions.

I really think that businesses driven by deep values, deep social values, will perform the best over the next 10 years. Generation Y will be influenced by businesses with deep values, and support them.

I really think that businesses driven by deep values, deep social values, will perform the best over the next 10 years. 

But, they're also the ones currently supporting Uber—and there seems to be a disconnection between what people believe is the new economy and the deep impacts of allowing companies such as Uber to shuffle society around.

So, I'm very confident about the new generation, but, on the other hand, I see stupid decisions or stupid orientations from 25 year olds.

What they think is the future, what they think should be supported, will have a deep impact on society and should be stopped.

Thane: So you feel Uber is acting somewhat irresponsibly in their approach?

Alexandre: I think Uber is evil. I think a lot of businesses are evil, and they're actually hurting societies all around the world and they don't care about the social impact of what they're bringing to market. All they care about is their own profit and this for me is Wal-Mart. And actually I think that Wal-Mart is getting to a point where they understand they've made a lot of mistakes and they need to take into account social issues, otherwise they will die.

Wal-Mart is currently in the situation where they're promoting Fight for 15 in the US.

The lower class is buying at Wal-Mart but they're getting poorer and poorer and poorer, so if they eventually can't buy anything at Wal-Mart, Wal-Mart will die.

Fight for 15 is probably the best thing that happened in our society over the last 40 years.

Thane: Who do you see as the guys to build these companies? SpaceX made their team 90% 20-somethings, with brains and hunger and drive, but matched them with seasoned senior dudes and they’ve been able to pull off incredible feats. Do you think that's the model to go towards, the wise cat with a lot of young energy around them?

Society will be saved by people with deep values, but also by hackers.

Alexandre: I think so. Society will be saved by people with deep values, but also by hackers.

All these young people are coming up with small solutions for the health industry; and, I think you need to be very precise on what solution you're trying to get. If you get too broad you'll become a CGI and you'll try to fix everything at once—and you can't fix that over a weekend, that's for sure.

If you can take little steps and fix problems in society, one after the other, by combining wisdom with venturous people, I think that's a very interesting combination.

I also love people that have failed. People that have failed don't make the same mistake again, which is a big asset. Bill Gates taught me that in one of his books. He said, “I love to surround myself with people that went bankrupt.”

I also love people that have failed. People that have failed don't make the same mistake again.

Thane: Just not too often?

Alexandre: You do it once; you don't do it twice.

Thane: And so you’re applying this to the taxi industry?

Alexandre: The taxi industry in Montreal is totally broken; it's the worst market in North America, if not in the world, because there are 4,000 independent owners of licences.

Uber is a necessary evil. It pushes the industry in the right direction, service-wise. It pushes taxi companies to reinvent the way they've been operating—otherwise they wouldn't care.

So, evil sometimes is necessary and then we tweak the model. We look at the model and we're very creative: creative financially, creative operationally, creative in the way we're analysing how we can improve profitability in an industry.

Uber is a necessary evil.

Thane: What's the role of digital going forward?

Alexandre: Well it's a must-have. People that have the skills required to change businesses upside down are great, but I think you need to work with the current assets, the current companies. I think it's better to work with companies that are in place and that can be helped because it doesn't have as much of profoundly negative impact on the social tissue.

If, for example, we let the 4,000 owners of taxi permits in Montreal lose their house because Uber X is in Montreal, we won't be more advanced.

By doing this, you're going to hurt everybody deeply and, at the end of the day, the consumer won't win. They're going to end up with more taxes because we'll need to support 4,000 people that have gone bankrupt—it's terrible.

Thane: But if we go forward a little and we look at Google Self-Driving Car Project, there's been a driverless car for the last couple of years. There have been 11 accidents, all of them caused by people and not by the actual driverless car. Is that the future?

Alexandre: So there are very deep questions related to what you just mentioned. Obviously “driver's assistance” is a no-brainer. But one thing you'll need to realise is: if robots handle all the jobs that the poor people in our society currently handle, what will these people be doing?

I don't think that society will be able to absorb the impact of what's coming in the next 30 years. We'll need, as human beings, to vote with our wallet, to support human made products.

We'll need, as human beings, to vote with our wallet, to support human made products.

Thane: So are you on the side of Bill Gates and Elon Musk who are a bit fearful of AI?

Alexandre: Let's be very, very careful. I think that society—the cities, the provinces and the states, the countries—should be very careful as to what they approve, and the rules they change to allow robots to take a bigger place in society.

Thane: So your fear is that those robots will be taking people's jobs?

Alexandre: There is the AI part and there is the job side. For GM, hackers took control over one of their cars and the car fell down a hill because the hackers were able to control it. So, AI and hacking are big issues.

But socially speaking, if you can flip burgers with robots, which is currently happening, you don't need workers at McDonald's any more. Who's going to afford the burgers at McDonald's if they don't work? That's the biggest challenge our society will be facing in the next 30 years.

“Fight for 15” is a first step, that's great—“made by humans” is the second step. We'll need to support staff. We’ll need to support them not only politically, but the best way to vote is by the way you're using your wallet.

Who's going to afford the burgers at McDonald's if they don't work? 

Thane: So who's not evil?

Alexandre: Well I think you will see more and more less evil companies because they will have really deep social understanding of what they're accomplishing and how they can take great brains to change society.

What I'm trying to do with the taxi industry is to make sure that drivers can make $15 per hour driving a car in Montreal. That's my goal. I'll make millions doing this, but the goal is $15 per hour—they're currently making $8 per hour.