Disrupted: My Misadventure in the Start-Up Bubble by Dan Lyons
Hachette Books, 267 pages, $13.99 (Kindle edition)
In 1995, 33 years old, I joined Visioneer, in Palo Alto. At that time the company had about sixty employees. I was hired as the manager of an already staffed software quality assurance team (SQA) of seven engineers – mostly men, one woman. Visioneer was similar to the companies where I had previously worked1Ashton Tate, Intuit, and Frame … Continue reading: it produced business application software, and in this case also hardware: scanners. Three of my engineers, men, were easily twenty years older than me, in their fifties or older , and this was a first: at my previous job as an SQA manager, my direct reports has all been only a few years older or younger than me. Because of this age difference, I proceeded a little differently, but as I got to know them, I was quite glad they were on my team: they were experienced, competent, sceptical, and very irreverent.
In 2008, 46 years old, I joined Playlist.com, again in Palo Alto. There were already about twenty employees, and I was the entire SQA department. Playlist was a music search company, with an open seating plan, and most of the employees were relatively young: twenty years or more younger than me. As with the older engineers at Visioneer, I proceeded slightly differently than I would have had the engineers been closer to my age. They were inexperienced, and it often showed, but they were also intelligent and hard working. I didn’t always get their jokes or cultural references, nor did they get mine, but it wasn’t hard to find common ground, and it seemed to work.
At both Visioneer and Playlist.com age differences played a role in my interactions with co-workers and for each I needed diplomacy, politeness, no hint of condescension or derision (the latter at first anyway; as I grew to know my co-workers better, barbed humor about being able to code or test your way out of a paper bag or similar was usually in order). Equally important: the other employees were willing to work with me.
Dan Lyons had a very different experience when working with those of a different age, all much younger. Disrupted: My Misadventure in the Start-Up Bubble is his amazing story of his twenty months working at a company called Hubspot. It is a very funny book. Lyons stated that he wrote this book as entertainment, which it certainly is — I laughed out loud a number of times. I also found it informative, in large ways and small, in things I did not know:
- Many internet based companies (Twitter, Instagram, Salesforce, Hubspot) have rarely or never been profitable, despite being a publicly traded company, and having made a few executives and venture capitalists very rich. Profit is now passé, and instead revenue growth is the new black.
- Companies now offer unlimited vacation because, for slightly complicated legal and accounting reasons, this policy benefits them financially. The unlimited vacation policy is not for the benefit of employeex, and indeed because of this policy, there is no such thing as unused vacation time: the workaholic who took no vacation for two years can no longer expect to be cashed out for that unused vacation time should he leave his company.
- Amazon, unlike most companies, backloads its stock vesting schedule. At normal companies an employee vests (or has the right to buy) 25% of her stock options after one full year employment, then vests the remainder each month. Amazon employees vest only 5% in the first year, 15% in the second year, and then 20% every six months over the last two years.2Page 117. See also: … Continue reading
- Venture capitalists often take on little risk when investing in companies through a particular type of guarantee called a ‘ratchet’: additional equity given to the investor by the company if the company goes public at too low a valuation. VC exposure is minimized, but causes a lowering in value of the shares of regular employees.3Page 126. See also … Continue reading
The story begins in the summer of 2012 when Lyons, a lifelong journalist, is laid off from his job at Newsweek. His fate is not a new one: he is in his early fifties, he is married with two children, and is in need of both a job and the medical benefits that go with it; he worries about ever working again. He eventually lands a writing job at a small web property on the west coast, but it doesn’t go well. In early 2013, in a move that strained my credulity, he applied for a marketing job at an unknown company which he found on LinkedIn. In case that wasn’t clear, here it is again: a guy in his early fifties used LinkedIn to apply for a job for which he had no experience. He gets the job at the company, Hubspot, although it is not the job he applied for; the hiring manager did not think he was a good fit for the original job, but creates another one for him.
Soon the explanation for Lyons hiring become clearer: he has spent most of his career writing about high tech, wrote a satire blog called “Fake Steve Jobs” (I had heard of this but was not familiar with it), and he brings a level of recognition and connections that most of us could only hope for. To be sure he also brings his many years of experience as a journalist. One assumes Hubspot recognizes this and wants to take advantage of it. They won’t.
Luck is more of a factor than we realize with regard to where we work: although Lyons looked at other companies, the favorable recommendations he received from colleagues about the prospects of Hubspot, along with the company’s proximity to his home near Boston, and the opportunity to take his career in a new direction (marketing) — all of these make Hubspot the rationale choice. However, it is a more a case of serendipity than rational thinking: Hubspot turns out to be a wonderful place for someone with a taste for satire.
Once he starts work at Hubspot Lyons finds that truth is stranger than fiction. It’s not clear if the clocks at Hubspot chime thirteen, but there is the Orwellian modification of language and double standard of behavior:
- Employees are not fired or do not quit: when they leave Hubspot they are said to graduate
- Instead of saying something along the lines of ‘this set of features looks really useful to our customers’ or even the awkward if accurate ‘the sum is greater than the whole of its parts,’ Hobspotians say 1+1 = 3
- Things are Hubspotty and there is an emotion called delightion
- Hubspot employees are told they are lucky to be there because the company has a higher rejection rate than Harvard. Hubspot hires “the best of the best of the best” (or was that Men in Black?)
- Employees are expected to be loyal to the company, but as soon becomes clear, no one should expect the company to reciprocate in kind
There’s a company color: orange. Seating arrangements are open and crowded-“a shitty little desk in a shitty little room”, and before the job is over he will be exiled to a worse place — the company’s call center, also know as the spider monkey room.
Taken individually, none of the above described traits are new or necessarily dangerous to technology companies. Tom Wolfe has written how Robert Noyce imposed an open floor plan and few to no offices when he founded Intel.4Tom Wolfe, “The Tinkerings of Robert … Continue reading At Intuit the developers did not call their software defects bugs, but preferred the more sanitized term discrepancy (at that time Intuit used an acronym, DRAT: the ‘d’ was for discrepancy, but I have forgotten the meaning of the other letters) – their code had no bugs, simply discrepancies (right). At an ad network company where I worked, one executive believed that our ads were so good users would be ‘surprised and delighted’ to see them (they weren’t). Yahoo’s color is purple.
Yet at Hubspot these maladies are concentrated to create a toxic environment: not only do employees have no offices but everyone must changes seats every few months5Hubspot calls this a ‘seating … Continue reading; there are many meetings and non-work related activities (Fearless Fridays); there is the obvious and painful copying of the Google model be it the vocabulary (googly, hubspotty), the amenities, or the British red telephone booth.6If Google did it must be good: at one … Continue reading
On his first day at Hubspot Lyons is shown around by a young guy, Zack, who Lyons assumes is someone’s admin. This is a bit obtuse on Lyons’s part: no one paying attention to technology companies would assume that a young employee is an admin, and as fate would have it, Zack becomes Lyons’ boss, at least for a while. Indeed there are a few instances in Lyons’s book, where he seems surprised by an action or event, but really should not have been:
- Lyons calls Hubspot a start up; I wouldn’t: the company is seven years old, has hundreds of employees, and has had at least one hundred million dollars invested in it. To me a start is a company whose history and future are measured in months, and the funding is so uncertain that future is measured in weeks.
- Several times Lyons quotes people saying, “The company can do whatever it wants”, referring to at will employment. This is nothing new and has been a part of my employment contracts for as long as I can remember. See the next item.
- In late November 2014, when Lyons decides to leave Hubspot, he is both professional and considerate when he gives six weeks notice — this is quaint. The reality is when you give notice and decide to leave your company, you should be prepared to be shown the door that day, that moment. When I worked at Ashton Tate, after an employee announced he was leaving for Borland, he was not allowed to return to his desk, had to exit the building immediately, and told to return later to pick up his personal things. Unless you work at Ben and Jerry’s, before you even give a hint you are leaving, you should have already have all your affairs in order, have cleared your browser cache (all browsers), uninstalled any applications that were not on the computer when you got it, then run a heavy duty disk wipe tool to really erase those deleted files. Then run it again. And even if you’re not planning to quit, it’s probably a good idea to do this every one in a while – you never know.7I use the Eraser: … Continue reading
- The role of money and greed: in the aftermath of his departure from Hubspot, when Lyons begins writing his book about his time there, he learns that the FBI has begun an investigation into the company and Hubspot’s apparent efforts to obtain a copy of his book. Lyons tries to learn more about the investigation from both an unnamed former Hubspot executive and a current board member, Lorrie Norrington. Both decline to meet or talk with him, and why should they? If word got out that either had talked to Lyons, both would certainly be persona non grata in their business circles.
But this is all small stuff, quibbling on my part – in the main this is an important story.
Lyons tries to fit in and contribute, but little comes of his efforts. While the old are accused of being set in their ways, Hubspot seems uninterested and equally close minded when he comes up with ideas that will benefit the company. These include creating a high end publication to support the company’s brand – rejected; offering to help prepare the CEO for an important interview with The New York Times – he’s rebuffed and the interview goes poorly; he makes suggestions for changes to the blog – all rejected; and he advises creating a separate web site sponsored by Hubspot – this one is initially rejected, then later co-opted by Lyons’ manager.
The cast of characters make for good reading, and I’ll leave all that to the book: not just the CEO and CTO, but also the chief marketing officer (CMO), whom Lyons nicknames Cranium — Lyons’s boss who never has a meeting with Lyons the entire time he is there. There is Cranium’s lackey, Wingman; a public relations executive, wonderfully named Spinner; and Lyons’ last boss, a character named Trotsky. There’s a supporting cast of blogging Furies, pilgrims to trade shows conferences, and Lyons’ assorted advisors and friends.
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At Hubspot most employees are less than thirty years hold, for many it is their first job, and most are white. As such a junvenile atmosphere pervades and seems to be encouraged, like kindergarten, with all the appropriate accoutrements: nap rooms, candy walls, and there is even a play room, not for the real children of parents who had to bring their children to work, but instead for the employees themselves.
What’s curious is the CEO, Brian Halligan, even stated in an interview that such age based hiring was Hubspot’s policy:
I take these young kids at HubSpot and I give them huge responsibility. Sometimes they mess it up, but more often than not they get it right. I think, at least in the tech world, gray hair and experience are really overrated. I think my gray hair is overrated…
We’re trying to build a culture specifically to attract and retain Gen Y’ers. I just think cultures are stuck in the 1990s and don’t match the way Gen Y’ers work. So we set it up for them in a way that they really like…8Adam Bryant, “Searching for a Great … Continue reading
I wonder about the real data behind the phrase “sometimes they mess up.” What defines “sometimes” and what is the extent of the mess? What is the value of experience? I’ve seen young developers, or developers switching platforms (say, going from coding software for the Macintosh to coding software for Windows), work long and hard to get some code working, still get it wrong, even after numerous attempts. Eventually they get it right, often with the help of an experienced engineer, or the work is taken over and quickly resolved, again, by an experienced engineer. There’s nothing wrong with this process, and in fact it’s quite important for the junior engineer, but it’s foolish to think this lack of experience comes without a cost, or that one can run a company on inexperience.
How can these companies get away with hiring cheaper and inexperienced people, especially on the engineering side? Consider what they are making: the equivalent of daytime television programming, game shows, or soap operas, not much missed if out of service – indeed we might be better off. No one dies, no planes crash, no mission critical systems fail when the freshman team is coding the show at Twitter, Instagram, Hubspot, or Facebook.
Moreover the consequences of such hiring practices create a mental monoculture: desks and desks of lumpers with neither experience nor critical thinking skills to resist stupidity.9Lumpers were the potatoes devastated by … Continue reading In one extremely funny and hard to believe story, the CTO, Dharmesh Shah, brought a teddy bear to a meeting. Shah explains that the teddy bear is there to represent the customer, and the bear is even given a seat at the meeting table. Lyons is rightly stunned by this:
I cannot believe this. Here are grown men and women, who I presume are fully sentient adult human beings, and they are sitting in meetings, talking to a teddy bear. And I am working with these people. No: worse! I am working for them. At Newsweek I worked for Jon Meacham, who won a Pultizer Prize for his biography of Andrew Jackson. Here I work for a guy who brings a teddy bear to work and considers it a management innovation.
Except for Lyons, no one at Hubspot thinks the teddy bear is inane.
Sadly, this is not a new situation. Mike Malone, also a technology journalist, once wrote a very funny article called “The Dark Secrets of Silicon Valley,” in which he characterizes the various types of companies in Silicon Valley (e.g. Bedford Falls (the town in It’s a Wonderful Life) is Hewlett Packard). There is one category of company that Malone labels the S.S. Pequod, where among other things, there is a…
A meeting in which an exec makes a statement so wacky that you start to laugh – only to discover that everyone else in the room is taking notes.10Mike Malone, The Valley of Heart’s … Continue reading
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Halligan, Shah, and other executives Lyons meets seem to have modelled their management style after Ronald Reagan, with Reagan looking a lot better for the comparison: hands off and often absent from the office; Lyons reports to someone who never interviewed him, then spends months trying to figure out what he is supposed to do, and for the most part he is ignored in a ‘what me lead?’environment.
And yet while their company management seems lacking, Lyons writes that outside the office Hubspot execs see themselves as leaders in their fields of marketing and something called inbound sales. In particular Shah has created a 128 deck PowerPoint Presentation called The Hubspot Culture Code, described as part manifesto and part employee handbook.
I had to see this.
I found the presentation on the Slideshare website, and made it to slide #56 before gouging out my eyes. It’s awful, it’s unintentionally funny, full of recycled new age aphorism with the occasionally geek word or neologism thrown in (teamishness). One slide, #44, was rather funny in Lyons’ case, as the slide mentions the policy of having an open door — what difference does it make if the door is open and no one is there? Another two slides, #39-40, mention that because Hubspot is a publicly traded company, and Hubspot values sharing information, all employees have been designated as insiders. This is detrimental to regular employees (as opposed to executives) as insider status limits the days they can trade Hubspot stock.
Where do these prophets come from and who do they think they are? In a recent article about Bitcoin, John Lancaster, writing about today’s technologists, succinctly captured the phenomenon:
The generation of digital ‘disruptors’ and innovators have a shared tendency to imagine that they have important insights into worlds they don’t understand.11John Lancaster, ‘When Bitcoin Grows … Continue reading
Clearly Shah fits into this category, seeing himself more than just a CTO. Although others have tried combine work with the human potential movement, and here Steve Jobs has the most to answer for. From the famous Super Bowl ad in 1984 to the black and white pictures of Einstein or the Dalai Lama displayed next to the Apple logo, along with a grammatically incorrect imperative (Think Different), the billionaire Buddhist insisted that his metal and plastic products were more than just that: essential tools for personal transformation. They weren’t — Jobs was simply exploiting the images of famous people to sell his stuff.
It’s unclear why technology companies feel the need to cover their products and services in the human potential movement. Does this happen in other industries? Law? Medicine? Energy? Maybe these people feel uneasy about the relative ease with which they’ve made a spectacular fortune. Maybe because so often their products and services are just mundane things, as common and necessary as a pair of scissors or the weather report.
And certainly there is nothing wrong with building these web sites or services, but let’s not be fooled into thinking they are any more than just that. And why should we pay attention to their society changing gospel? I don’t think the makers of pinball machines or the owners of bowling alleys see themselves as changing the world.
Further, that the world is in fact still the same, has not changed, that the rich get richer, and tech companies are a part of this trend, gives the lie to and shows the hypocrisy of missions statements, manifestos, plans to change the world, and 128 deck slide presentations (better would have been 64, but at least it wasn’t 256!).
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Lyons briefly discusses the state of affairs regarding federal fiscal policy changes that increased the availability of money for investing, the behaviors of the venture capital community, and in particular, the increasing difficult environment for regular workers. Lyons sets the changes in the worker employer relationship at around 2009, and in particular notes a manifesto about employment from Netflix, but in my experience the squeeze has been around for longer, it was just more discrete.
Earlier I mentioned about at will employment; in the early 1990’s Apple and Microsoft faced lawsuits brought by contractors who claimed they were de facto employees, and therefore eligible for all the company benefits enjoyed by full time employees (it’s cheaper to hire contractors than full time employees); this battle is being fought again by Uber drivers; H1-B visas have been used to bring in cheaper engineers from abroad, and related — many jobs are moved offshore.
These are not the moves of companies who want to make the world a better place; these are the moves of companies that want to improve their bottom line (the cover phrase for these actions is “fiduciary responsibility to shareholders”).
There continue to be more impediments and constraints: employment contracts that in the case of legal disputes require an employee to use arbitration versus public courts (arbitration generally favors the company, not the employee); non-compete clauses which make it harder for workers to find new jobs; and last, make sure you’re not too old.
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“Young people are just smarter,” said Mark Zuckerberg in 2007. Lyons includes this quote in his book, and in the original talk when he said this, Zuckerberg goes on to mention that chess grandmasters have already peaked by age thirty.12A bit off topic but there’s nice … Continue readingThe comment is certainly crass, not quite accurate, but does contain a grain of truth about the abilities of the brain at a certain age. Robert Noyce observed that some gifts blossom only early in life, therefore the bias towards hiring younger semi-conductor engineer in the 1960’s:
The rest of the hotshots were younger. It was a business dominated by people in their twenties and thirties. In the Silicon Valley there was a phenomenon known as burnout. After five or ten years of obsessive racing for the semiconductor high stakes, five or ten years of lab work, work lunches, workaholic drinks at the Wagon Wheel, and work-battering of the wife and children, an engineer would reach his middle thirties and wake up one day; and he was finished. The game was over. It was called burnout, suggesting mental and physical exhaustion brought about by overwork. But Noyce was convinced it was something else entirely. It was…age, or age and status. In the semiconductor business, research engineering was like pitching in baseball; it was 60 percent of the game. Semiconductor research was one of those highly mathematical sciences, such as microbiology, in which, for reasons one could only guess at, the great flashes, the critical moments of inspiration, came mainly to those who were young, often to men in their twenties. The thirty-five year-old burnouts weren’t suffering from exhaustion, as Noyce saw it. They were being overwhelmed, outperformed, by the younger talent coming up behind them.13Wolfe, p. 362.
Leave aside Wolfe’s obsession with status. Let’s also not bother to compare the relative value of a flash that lead to a break through in the semi-conductor industry versus another sort of flash that lead to a Facebook sort of thing (although there were Facebook antecedents). Under the right circumstance: starting in a field at a young age, getting the right education, and being in a fertile environment, then there certainly are cases where the young have an advantage.
The breakthrough can be important, but Noam Scheiber captures nicely why we might not want to fall all over ourselves:
Even if it’s true that the young are more innovative, it’s not entirely clear that we’d want to elevate them above the rest of us. For one thing, there’s something to be said for marginal improvements, which have worked out quite well in other countries. Ben Hammersley, a programmer and author who has advised the British government on creating a technology hub in London, points out that the incremental model largely explains Germany’s economic strength. “The majority of the German economy is light engineering. It’s family-owned businesses engaged in long-term planning,” he says. “‘We’re going to be around for another hundred years. What can we do to make a 5 percent improvement every year?’” By contrast, he says, economies that embrace the Silicon Valley model writ large—throwing massive amounts of money at highly speculative investments—are suspiciously bubble-prone.
And then there is the question of what purpose our economic growth actually serves. The most common advice venture capitalists give entrepreneurs is to solve a problem they encounter in their daily lives. Unfortunately, the problems the average twenty-two-year-old male programmer has experienced are all about being an affluent single guy in Northern California. That’s how we’ve ended up with so many games (Angry Birds, Flappy Bird, Crappy Bird) and all those apps for what one startup founder described to me as cooler ways to hang out with friends on a Saturday night.14Noam Scheiber, “The Brutal Ageism of … Continue reading
Scheiber goes on to note in a report about the age distribution of Novel Prize winners for the fields of chemistry, economics, medicine, and physics. The largest percentage was people in the thirties, who contributed 40 percent of the innovations; and those in their twenties came in at 14 percent, exactly the same for people over fifty.
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Soon after Lyons left Hubspot he began writing his book. Word of this got out, and spawned a Nixonian response inside Hubspot: some individuals attempted to get a copy of his book, possibly by trying to break into one or more of Lyons’ electronic accounts. So instead of Haldemann and Ehrlichman there is Cranium (fired from Hubspot for breaching their code of ethics) and Trotsky (resigned before any wrong doing could be determined); Halligan, the CEO, was sanctioned by the board of directors, but is still on the job. There followed the expected cover ups, investigations, and stone walling: no one is talking, and why should they? It might hurt the stock price.
In September 2015 Lyons met with FBI, but he does not report what took place in the meeting nor does he seem to know very much about their case. In interviews since his book came out he has stated he has filed a Freedom of Information Act request to find our more about the FBI’s investigation, but at the time of this writing there is no additional information.
In response to his book there have some tantrums and attempted rebuttals; this one is best summed up by it’s title, Working For This Startup Wasn’t Hell, You’re Just Old (the writer states she has not read the entire book; she wrote her review based upon an excerpt). Halligan and Shah wrote a rather flaccid response on LinkedIn. None of the assertions or observations that Lyons makes in his book are refuted.15See … Continue reading
All this left me thinking: assume for a moment that Lyons has exaggerated his story by half: the incompetence, the poor judgement, the lack of ethical behavior, and the hyper-sensitivity. Even given that, why in the world would you want to work with any of the people Lyons writes about: Halligan, Shah, Cranium, Trotsky, Spinner, and all the rest? The only answer is that either you don’t know about their previous behavior, or you do and are comfortable with it.
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There’s nothing wrong with being inexperienced, whether you’ve just graduated from college and are at your first job, or a fifty something ex-journalist trying something new — at some point we are all inexperienced. Still, the benefits of hiring outside one narrow age group should be self evident, yet ageism is a problem in Silicon Valley, both in hiring and firing.16Not only as Lyons experienced at … Continue reading Given the difficulty of finding a remedy, at least when hiring into a new small company, I’ll accept the cover phrase ‘cultural fit’, meaning too old, for a company of fifteen, maybe fifty, but for a company of five hundred, that’s simply hard to believe.
In 1998, between Visioneer and Playlist, I worked at Claria, an advertising network. I was one of the first twenty employees, and this start up was a little different: everyone in engineering had at least ten years experience. Inexperience was a liability: we wanted people who had been there, done that. It wasn’t that we didn’t distrust anyone under 30, it’s just that they weren’t qualified. Many of us were married, with one or two children, and after work went home to family, wood working projects, swim laps in the pool, build telescopes, or gardening. We worked a lot, drank beer or wine at work, and even shot off nerf guns once or twice. But mostly we were at work to work, not be a part of the human potential movement, and we weren’t delusion about changing the world.
Eventually we hired younger engineers, some were just out of college, and they were intelligent, hard working, and very welcome. It became a good mix of experience and fresh perspectives.
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