Disrupted

by Dan Lyons

  Nevertheless, back in the furniture factory, the party continues.

  In mid-May I write to a friend describing the atmosphere at work: “Monday was tequila tasting day. Today is a kayaking adventure starting at 2:30 followed by a pizza party. They just renovated the second floor and put in yet another kitchen, this one with beer and cider on tap. Expense is justified because ‘recruiting.’ They’ve raised $100m and I suspect have burned all or most of it.”

  I’m right to suspect that, because in truth they have burned through pretty much all of their money. But at this point I already have one foot out the door—I’ve been offered a job in Hollywood.

  Nineteen

  Go West, Old Man

  Four years earlier, in 2010, back when my life was good, when I was writing for Newsweek and developing a cable TV show based on my Fake Steve Jobs book, I was sitting at my desk one day when my iPhone rang and it was Ari Emanuel. Ari is the head of William Morris Endeavor, a big Hollywood talent agency. He’s the real-life person that Ari Gold, the character in Entourage, is based on.

  I couldn’t believe it. This was Ari. The Ari. Calling me.

  “Who are you?” Ari asked. “How come we haven’t signed you yet?”

  Larry Charles, my collaborator on the cable TV show, was represented by WME. Larry Charles is a big deal in Hollywood, and apparently he had sent an email to Ari saying good things about me. Now Ari wanted me to leave the United Talent Agency, where I had been represented, and come to WME.

  Who says no to Ari? I jumped agencies, figuring I had just taken my first step toward becoming a big player in Hollywood.

  Except then my show got killed, and pretty soon I stopped hearing from WME. I figured they had forgotten all about me.

  But no: Now it’s March 2014, and I’m roaming around the Adobe Digital Marketing Summit in Salt Lake City, fantasizing about hurling myself over the railing of the convention center and wondering whether the fall to the first floor would kill me or just leave me paralyzed, when I get a call from the 310 area code.

  It’s an assistant at WME. He asks if I can please hold for a guy named Ryan, whose name I remember. Back in 2010, Ryan was the assistant who placed the calls on behalf of the agents.

  Now Ryan is an agent. He’s my agent, apparently. Ryan says there is a new show on HBO called Silicon Valley, and they’re just about to start airing the first episodes, and my old pal Larry Charles has told the showrunner on Silicon Valley about me, and if the show gets picked up for a second season would I like to come to Los Angeles and join the writing staff?

  “Dude, I wish you could see where I am right now,” I say. I’m looking at a horde of hungry marketing schmucks who are shuffling down the sides of a buffet table, stacking their plates with pasta salad and various kinds of meat in various kinds of gravy. “If you could, you would not even need to ask.”

  Yes! I’m in. I’m so in. Ryan says it’s not a sure thing, and I will have to interview with the showrunner, Alec Berg, and we’ll have to see if the show gets renewed for a second season, but he thinks it will. Great. Whatever. I call Sasha and tell her what just happened. I’m feeling dizzy. Back in my room, I write an article for the HubSpot blog about some presentation that I just sat through, but in my mind I’m already seven hundred miles away, sitting on a beach in Santa Monica. As soon as I finish the article I start looking at guesthouse rentals in Laurel Canyon.

  I can’t believe this. The gig feels like a gift from the gods, or maybe a cruel practical joke that one of my friends is playing on me. I feel like George Bailey in It’s a Wonderful Life—I was just about to jump when an angel appeared. Ryan, my new agent, is that angel. He’s my Clarence. God bless you, Ryan.

  I talk to Alec Berg. We hit it off. The show gets renewed. Ryan negotiates my deal. As soon as it’s official, I set a meeting with Trotsky. Taking the gig at Silicon Valley means I’ll have to quit HubSpot, but who cares? That’s fine by me, and in fact it gives me a way to slide out of HubSpot while saving face.

  We plunk down on our beanbag chairs and I tell him what I’ve been offered: fourteen weeks on an HBO show. It’s an entry-level staff writer job, but it’s a foot in the door to a new career writing in Hollywood—“a potentially life-transforming opportunity” is how a friend of mine, a novelist who has become a big-shot millionaire TV writer, has put it to me.

  “You have to take it,” Trotsky says.

  “No shit.”

  I’m ready to give my notice, but Trotsky asks me to hang on for a couple of days and let him get back to me, because he has something else in mind. He comes back with an offer: I can take an unpaid leave of absence from HubSpot for the fourteen weeks, and then return to work. I’ll keep my health insurance coverage. I’ll also continue vesting my shares.

  It’s an amazing deal for me. Trotsky reckons it’s a great deal for HubSpot too. The local press and the tech bloggers in Silicon Valley are bound to write articles about their journalist buddy getting hired to work on a TV show. HubSpot will look cool and get some good publicity.

  Trotsky sets up a meeting with Spinner and Tracy, the woman who runs brand and buzz. Cranium doesn’t attend. Before the meeting Trotsky tells me, via email, that Spinner “is eager to put heads together to discuss how HubSpot can derive value from your HBO gig.” In the meeting, Spinner expresses astonishment that I’ve been recruited to work on a TV show. “How did this happen?” she says.

  She seems to know nothing about my background or what I did before coming to HubSpot. I’m pretty sure I’ve told her that a few years ago I developed a TV show for a cable network. I told her this because Cranium was tossing around the idea of having HubSpot make a documentary film, something along the lines of The Naked Brand. I asked if I could be involved with the project, since (a) I’m friends with the guy who made The Naked Brand and could ask him for advice and guidance, and (b) I have some experience working in TV. No one was interested.

  Spinner believes HubSpot can milk some favorable publicity out of the news that I’m going to work on the show. She also wants to do some horse trading with HBO. Can we get them to plug HubSpot on the show? Could Halligan get a cameo? Not likely, I tell her.

  Trotsky makes a big deal of reminding me that he is the one who cut this great deal for me with HubSpot. He also seems oddly dismissive of what I’m doing, as if I’m some kind of eccentric.

  “Not many people would do what you’re doing,” he says.

  I don’t know if he really means that, but in the world I come from, people would give their left nut to be a writer on an HBO show. Maybe he’s jealous. He’s a huge movie buff, and supposedly he once hoped to become a novelist. He has all those crazy tattoos on his arms, and refers to himself as “a creative.” I find it hard to believe that he wouldn’t leap at the chance to work in Hollywood.

  The plan is I will leave in May and return in September, just in time for the Inbound conference, which is great timing, because I can give a talk about storytelling and my experience working on a TV show, or something. Maybe I can get one of the stars from the show to give a talk as well. Or we could do a panel.

  Sasha and the kids come to Los Angeles with me. We rent a little guesthouse in Topanga Canyon, way up in the woods, far from civilization. The kids go to surf camp at Zuma Beach in Malibu. Sasha rides horses at a ranch in Topanga. In the morning we hike in Topanga State Park, where mule deer graze in the tall dry grass. At night Sasha and I sit on the deck vaping cannabis oil—I’ve obtained a prescription—and listen to coyotes howl. HubSpot seems very far away.

  I’m working on the Sony lot in Culver City. It’s a classic Hollywood Golden Age lot, built in the 1920s, with huge soundstages and big gates and people zipping around on bikes and golf carts, the place where Metro-Goldwyn-Mayer made The Wizard of Oz. On my first day at work, I stop across the street and snap photos of the archway over the Madison Avenue gate. I walk to the gate, give my name to the security guard, and she actually lets me walk in. Our offices are in the Rita Hayworth building.
I want to pinch myself.

  One big difference between this and HubSpot is that I’m back in the world of grown-ups. I’m no longer working with people half my age, with a boss who believes gray hair and experience are overrated. Here my boss is Mike Judge, age fifty-one, who created Beavis and Butt-head, King of the Hill, and Office Space. My other boss, Alec Berg, is in his mid-forties and was a top writer on Seinfeld and Curb Your Enthusiasm. The others have worked on 30 Rock and The Office, among other shows.

  Here, you are allowed to tell dirty jokes and to be a cynical, sarcastic prick. In fact, it’s encouraged. There are ten of us, and it is an intense room. The writers are smart and funny, but they’re also a lot friendlier than people at HubSpot. For more than a year I’ve had to bottle up my disgusting sense of humor. I’ve even started to feel ashamed of it. Here, everyone is disgusting. We sit around trading the worst poop-related stories we’ve ever heard, and pitching jokes about enormous cocks. We get paid to do this. It’s bliss.

  My commute home every night takes me past the beaches in Santa Monica, then up a long switchback road into the Santa Monica Mountains to Topanga, a place where the sixties never ended, full of unreconstructed hippies and stoners. I am a long way from home, and I love it. I don’t want to go back.

  I’m not sure I can become a TV writer, or even want to become one. But the longer I stay in Los Angeles, the more certain I become that there’s one thing I definitely cannot do, and that is work at HubSpot. I cannot return to work among those earnest, upbeat kids who spend their days sending Cheers for Peers on TINYpulse—Ashley for president!!!!!—and who would never, ever sit in a meeting and pitch jokes about someone’s enormous horse cock.

  I’m still in touch with Trotsky. We trade emails and talk on the phone. I’ve been helping out with the Inbound conference. I’ve persuaded a friend of mine who runs a PR agency in New York to give a talk about dealing with the press. A producer for Silicon Valley has agreed to do a presentation.

  But I’m losing heart. Maybe Trotsky picks up on this, because on a Tuesday morning in August, about a month before I’m due to return to HubSpot, I get an email from him, sent from his personal account:

  Consider this question as coming from a friend: Why do you want to work at HubSpot? I am pretty sure you aren’t crazy about the leadership, the “culture,” or the business. I would be surprised if you enjoyed the work. I think the novelty aspect—doing marketing, seeing how marketing works from the inside—has its appeal; and there’s probably a voyeuristic pleasure in drawing back the curtain on how a business runs. The IPO could be a feather in your cap—from a variety of perspectives (some $, the professional experience, and a great item on a future resume)—and the salary is reasonable. But other than those things, combined with the relatively small Boston market for one like you, what’s keeping you here?

  I remember how Trotsky got rid of Zack, by “helping him understand that he would be happier somewhere else.” Right away I call him and ask him if that’s what he is doing to me. Is that what this is about? He insists that’s not the case. But I’m pretty sure he’s lying.

  As soon as we hang up I start sending email messages and hunting for a new job. I’ll leave as soon as I can find one. Until then, I will stay at HubSpot, if only for the paycheck. I would like to get out quickly and make a graceful exit, politely and painlessly. Unfortunately, that won’t be possible.

  Things are about to get ugly.

  Twenty

  Glassholes

  For the past few years one question has hung over Silicon Valley: Are we in a bubble? Some say yes, some say no. Some argue about what the term bubble even means and how to define one, and no matter which camp you’re in you can cherry-pick examples that support your case. I’m in the camp that says bubble refers to a period when valuations of companies are no longer connected to their financial performance, and that we are now in such a period. Silicon Valley has officially become unhinged from reality for the second time in two decades, and even the smartest, savviest investors have thrown in the towel and are admitting that they can no longer tell good ideas from bad ones and have simply begun throwing money at everything, hoping some of their millions might land on a winner. Spray and pray is the actual term used by investors in Silicon Valley for this roulette-wheel approach. Some people embrace this philosophy and even celebrate it. “A lot of it is luck” is how blogger-turned-investor Michael Arrington once described the art of investing in tech start-ups.

  In April 2013, Google Ventures published a photograph that captures the essence of the second Internet bubble. The photograph appeared on countless websites, but when I asked Google for permission to use it in this book, the company asked what context I would be using it in, and when I told them, they refused. So instead of running the full photograph, I will just show you two of the people in it:

  The one on the left, with the cone head, is Marc Andreessen of Andreessen Horowitz. The one on the right is John Doerr of Kleiner Perkins Caufield & Byers. Look how smug they are, how sure of themselves! These two grown men wearing the hideous face computer called Google Glass are two of the most respected investors in Silicon Valley, and they represent two of the most important venture capital firms.

  The photograph from which these images are taken was released as part of the announcement of the Glass Collective, a special fund created to invest in companies that would develop applications for Google Glass, which Andreessen and Doerr described as a “potentially transformative technology.” Glass had a tiny computer display embedded in a box in front of your right eye and would display information as you walked around. You could check the weather, get directions, take photos, record video.

  These glasses were going to change the world! That’s what all of the smart money in Silicon Valley believed, and all of the smart money was wrong. Google shut down Glass in 2015, but not before gullible suckers all over the world dished out $1,500 to walk around looking like idiots and inciting people in bars to throw things at them. In the summer of 2013 I had the pleasure of spending a day at Google’s headquarters in Mountain View, California—the Googleplex—with a bunch of dorky visitors who all wore Glass and acted as if this were a perfectly normal thing to do. Glass Explorers, they called themselves. Everyone else called them Glassholes. One thing I noticed during that day at Google was that none of our hosts—a bunch of executives from Google’s mobile phone division—wore Glass. That’s when I knew the gizmo was doomed.

  The suckers who plunked down good money for Glass can perhaps be forgiven for being naïve, but Andreessen and Doerr have no such excuse. They manage billions of dollars and are paid enormous sums of money because supposedly they know what they’re doing. Not coincidentally, Andreessen and Doerr also played leading roles in creating the new tech bubble, by (a) paying too much for investments, forcing other investors to overpay in order to keep up, and (b) investing huge resources into generating hype.

  Stock market manias are heaven for venture capitalists. Eugene Kleiner, a co-founder of Kleiner Perkins Caufield & Byers, the legendary VC firm where Doerr works, once said: “Even turkeys can fly in a strong wind.” Kleiner Perkins was founded in 1972 and is one of the oldest, most respected VC firms in Silicon Valley. Kleiner’s maxim about flying turkeys is one of ten “Kleiner’s Laws,” a set of rules that people all over Silicon Valley still live by. Pump money into sales and marketing, generate enough hype, and you can sell almost anything if the market gets frothy enough. “I love bubbles,” Tom Perkins, another co-founder of Kleiner Perkins, once declared. “We made a lot of money in bubbles.”

  You can’t blame VCs for feeling this way. They are in the business of making money. Most, however, at least try to play the game with a certain amount of subtlety. Not so Andreessen and Doerr.

  Doerr joined Kleiner Perkins in 1980 and has been called “the Michael Jordan of venture capital,” a hall-of-fame moneyman, one of the best ever to play the game. Doerr’s big hits include Sun Microsystems, Amazon, Netscape, and Goog
le. But somewhere in the 2000s he seemed to lose his touch, making bad bets on so-called cleantech (renewable energy) start-ups while missing out on big hits like Facebook, LinkedIn, and Tesla. “Doerr made (Kleiner) the gold standard of venture firms” but he “is also largely responsible for the firm’s fall,” tech blog Pando wrote in 2013.

  Doerr has a degree in electrical engineering from Rice University and an MBA from Harvard. My theory is that when investing in start-ups required the ability to understand technology, he was without peer, but when the Valley turned its attention to social networks, photo filters, and games for teenagers, Doerr was out of his element, and so he started chasing fads. In 2008, when the iPhone became the cool new thing, he announced the iFund, to invest in app makers. In 2010, when Facebook got hot, he announced the sFund, to invest in social media companies. Doerr even started wearing a T-shirt and hoodie, just like Mark Zuckerberg. Forming the Glass Collective in 2013 was just another attempt to latch on to something trendy.

  In the end Doerr got nothing out of Google Glass except some publicity, but maybe that was the point all along. In the old days, Silicon Valley venture capitalists embraced a California version of clubby East Coast white-shoe culture. All of the top VC firms literally sit beside one another on the same street, a big boulevard called Sand Hill Road in Menlo Park. For decades these firms resembled snooty private gentlemen’s clubs—in the British upper class sense of the word. They were almost exclusively male and were run by former engineers who shunned publicity and quietly voted Republican.

  Today generating hype has become a central part of the venture capital business. There are so many new firms and so much new money floating around that VC firms feel pressure to raise their profile. They make kooky videos, just like start-ups. They hire publicists. They launch blogs and podcasts, and hire former journalists to run them. Every year only a handful of Silicon Valley companies deliver big paydays. If you’re a VC, you must have money parked in those companies. But getting into those deals is not so easy. Investors actually have to compete to get into hot deals. How do you get that entrepreneur to take your money? How do you stand out? You generate publicity. You have your picture taken wearing Google Glass and call yourself a visionary, someone who can “see around corners,” as they say in Silicon Valley. Even as valuations climb to record levels, you insist that you are not overpaying. “It’s not a bubble; it’s an unprecedented, long boom,” Doerr told Bloomberg in June 2015. Then again, Doerr is in the business of selling companies to the public markets. What do you expect him to say? Asking a venture capitalist if private companies are overvalued is like asking a car salesman if he thinks you’re paying too much for the new Mercedes he’s selling you.