by David Burkus
So she began organizing and hosting a monthly discussion series, which she called CreativeMornings. It started as a solo effort, an attempt to bring creatives in New York City together. After some early trial and error, she settled on a one-morning-a-month format. The events are free to attend, with coffee and a light breakfast paid for by a sponsoring company. The event features a speaker relevant to the community and some discussion, and that’s it. Unlike conferences, it’s not a multiday event that demands significant time from attendees. Of course, just to be helpful, the CreativeMornings website still features a section aimed at convincing bosses to let their people arrive late on Fridays in order to attend.
It didn’t take long for CreativeMornings to spread enthusiastically through New York City. Eventually, hundreds were attending every month, connecting with fellow creatives, and reaping the benefits of clustering while avoiding the negative effects of silos—since every month the community comes together, connects, and then disperses back into the larger industry.
These get-togethers allow attendees to build a mix of arm’s-length and close-knit ties as they add new contacts each time but also reconnect with longtime friends—just as Uzzi’s earlier study suggests is vital. As word spread nationally, and then internationally, CreativeMornings started enlisting volunteers in other cities to host their own events. Today over 150 cities host monthly CreativeMornings events. As a global community, CreativeMornings sets a theme for the month and encourages meeting organizers in every city to find a speaker who addresses that theme. Every month thousands of people throughout those cities meet and connect through the ideas arising out of that theme. “It’s like a global conversation with all these chapters,” Eisenberg said.22
Eisenberg didn’t envision this global community when she started. In fact, at times she figured it was just going to be a regular coffee appointment once a month for her and a few friends. But today she cites CreativeMornings as the biggest achievement in her career. It’s now grown beyond her control into a global movement precisely because it provides the same key element she herself was looking for by starting it: access to a community that meets frequently enough to be meaningful and makes no overwhelming demands. “What I was craving was an accessible event, that connects me with my local creative community, and that inspires me with one talk—before work,” she explained.23 Apparently, so were thousands of others across the globe.
The Summit Series team and Tina Roth Eisenberg stumbled upon the same discoveries made by Hemingway and Stein, Lewis and The Inklings, and the glassmakers of Murano. Rather than being trapped, they all found that being in a small cluster—part of a small group of similar people—can be vital for growth and development. Likewise, the research suggests that industry networks and geographic communities benefit as well from faster knowledge-sharing when some level of clustering is in the mix. However, the trick is to not get so comfortable inside a cluster that we become stuck in that silo. Finding a real and meaningful balance between deep community and wide networks is vital for professional success. We need clusters to help develop our skills and knowledge so that we can have an impact that resonates across the network.
From Science to Practice
Despite the widespread warnings in the modern business literature about silos, research suggests that having a regular cluster with whom you interact, share, learn, grow, and develop is a vital part of a successful career. The most connected, most successful individuals oscillate between working with a variety of teams and acting as bridges from their primary team to elsewhere in the organization or network.
Like Gertrude Stein’s Paris salons that helped Hemingway, or the Summit Series events that inspire modern entrepreneurs, you need to be plugged into a community that you can grow in. If you don’t have a team that you can interact with briefly but regularly, it’s time to be like so many in this chapter and just start your own. Here’s how:
Make a list of ten to fifteen people who work in your profession or do something similar enough to have shared experiences. These can be people you know already or people who would respond to a cold invitation to be a part of your cluster. (If reaching out with cold invitations to strangers or mere acquaintances, it’s better to have commitments from a few contacts already so that the group is already a certainty.)
Commit to a regular interval of meetings. Once a month is a good starting place, but you can adjust the regularity depending on the people in your cluster.
Commit to a set structure for your conversations. This doesn’t have to be a rigid agenda, but it’s good to have a map to follow in each meeting so that no one feels their time is wasted. If you don’t know where to start, consider asking these three questions and going around to each member of the cluster for answers:
What are you working on right now? What project is top of mind and dominating your time right now? This gives everyone in the cluster a sense of each person’s priorities.
What is holding you back? In other words, how can the group help you? Maybe the group can help with advice, access to resources, introductions, or something else entirely. Spending time on this question helps ensure that everyone leaves each meeting with something valuable.
What do you need prompting on? What can we do to keep you accountable? Everyone has projects or tasks they know they need to do but forget about from day to day or week to week. One of the benefits of enlisting a team is that they can remind you to check those items off your list each time the team meets—making it harder for them to hide from your attention.
For the first few meetings, you may need to act as a moderator to keep everyone on task. Likewise, you may find that the questions you ask change or the overall agenda is revised. That is okay. The important thing is that you’ve found and built a community that you can turn to regularly for growth and accountability. And bonus points if you can come up with a clever name like the “The Inklings” for your cluster.
Practicing Online
While ideally every meeting would happen in person, often travel schedules or geographic locations can make that difficult. Fortunately, there is a vast collection of tools online that can help make virtual meetings a reality. From video conferencing programs to the small-groups features on most social media services, you and your cluster have a lot to choose from. (Because the technology and software worlds change so frequently, I’ve included a regularly updated list of tools in the downloadable template at http://davidburkus.com/resources/.) If you do hold some of your meetings virtually, it’s still a good idea to commit to a regular cycle of in-person meetings. Even if it’s only once a year or once a quarter, being face to actual face is an important element of growing the trust and commitment of group members.
For a downloadable template to use when completing this exercise, go to http://davidburkus.com/resources/ and look for networking resources.
—5—
Build Teams from All over Your Network
Or
Why the Best Teams Don’t Stay Together Long
Knowing that clusters and collaboration are important, we can easily assume that the best teams are those that have stuck together for a long time—those that have performed well again and again. But research offers a different lesson, revealing that many of the most successful teams are successful only because they are temporary—they meet for a time and then disband, with some members going to other teams. In the end, having a large network and a tight-knit team isn’t as valuable as having a loose network and temporary teams.
IN THE SUMMER OF 2005, a few friends in the Silicon Valley area got together for a backyard barbecue—one of many that probably happened that day across that region of California and across the country.1 This barbecue, however, would end up being a milestone event that led to a dramatic change in the history of technology and in the way individuals interact online. During the get-together, Jawed Karim, a then-twenty-six-year-old computer science programmer, showed a website he was working on to Keith Rabois, a man ten years his senior. Rabois was impre
ssed with the website and told another friend, Roelof Botha, who happened to be a partner at the venture capital firm Sequoia Capital.
Botha, also impressed, arranged a meeting with Karim and the other men working on the project. A few months later, Sequoia had invested $3.5 million in the new website.2 Just a few weeks after that, the website officially launched for all to use, even though over 8 million people were already visiting it daily.
Post-launch, the website would soar. Within a year of the first investment from Sequoia, the search engine powerhouse Google jumped in and purchased the website for $1.65 billion.3 The website, YouTube.com, would continue its rocketlike trajectory even after purchase, eventually becoming the second most visited website in the world.4 From the backyard cookout to the Google buyout, Karim and his friends had taken YouTube from a one-video demo website to a $1.65 billion company in just eighteen months. Needless to say, the investment from Sequoia Capital helped them get there, and it helped Sequoia make a substantial profit. It seems like an amazing fantasy story, a near-fluke, except that YouTube isn’t the only company that has received significant investment based on a small idea. It’s not the only company to go from idea to billion-dollar valuation in less than two years. It’s not even the only company that got its lucky break at a small backyard get-together.
The truth is, those kinds of things happen all the time when the mafia gets together.
No, not that mafia. The PayPal Mafia.
Jawed Karim and his YouTube cofounders, Steve Chen and Chad Hurley, along with friend Keith Rabois and venture capitalist Roelof Botha, all worked together at the financial start-up PayPal before it was acquired by eBay for $1.5 billion in 2002. But they aren’t the entire PayPal Mafia, not even a majority. Other members include Peter Thiel, Elon Musk, Reid Hoffman, Andrew McCormack, David Sacks, Ken Howery, Max Levchin, Russel Simmons, and a few hundred more. (There is a debate about just how many people count as the PayPal Mafia, but former PayPal CEO Peter Thiel estimates the group at around 220.)5 The “mafia” label had floated around Silicon Valley for a while before being solidified in a 2007 Fortune article on the group.
The companies the Mafia has started or invested in are renowned, including LinkedIn, Yelp, Yammer, Keva, Palantir, Slide, Flickr, Digg, Mozilla, Tesla, SpaceX, and even Facebook.6 It’s an incredible story not just of how start-up genius loves company, but of how those individuals who are plugged into a network can have a dramatic effect on not just their own careers but an entire industry.
The PayPal Mafia got its start, of course, at PayPal. Founded by Max Levchin, Luke Nosek, and Peter Thiel, PayPal started to send mobile payments from person to person using Palm Pilots and other personal digital assistants (and originally carried the name Confinity). From the beginning, the company focused on recruiting through its founders’ networks and then building a company where everyone felt connected. That meant heavy recruiting from nearby Stanford University (Thiel’s alma mater) and also from the University of Illinois at Urbana-Champaign (Levchin’s alma mater). “We didn’t only hire our friends,” said Thiel. “But we did hire people who we thought we could become really good friends with.”7
Within a few years, the company had pivoted to offering a means to send payments via email and found success as a trusted transaction partner on the eBay auction platform. But PayPal wasn’t the only company rushing to make peer-to-peer electronic payments a reality. In the summer of 2001, PayPal merged with X.com, a start-up founded by Elon Musk. Musk had started X.com with the money from selling his first company, Zip2, and he envisioned building an all-inclusive financial portal where users could manage not just their checking and savings accounts but also their retirement and investment needs. That all-inclusive portal included a means to send money to friends electronically, and soon X.com and Confinity had realized it was better to join forces than to fight each other. In an interesting quirk of history, both companies actually leased space in the same office complex for a time before the merger, and when PayPal moved to new offices, X.com expanded into its old space.
Despite the fast growth, or most likely because of it, it was not all smooth sailing. The company fought with regulators, fought with hostile credit card companies, fought off fraudsters and thieves, and even had to fight competition from eBay, its biggest source of users. There were internal fights as well. Disagreements could even turn physical and result in wrestling matches.8 The CEO position at the company was wrestled over for a time. Post-merger, the company was led by Bill Harris, who resigned quickly after a dispute over strategy with Musk; subsequently, Musk took the reins. Musk, though, was fired by the board over a dispute about technology, and Peter Thiel then became CEO.
These fights eventually gave way to a common enemy, and a surprising one at that. To compete with PayPal, eBay had purchased a money transfer company and was making strategic moves to eliminate PayPal from its platform. PayPal battled back, both by improving its product and by rallying support from eBay’s users. At a June 2002 eBay user conference, PayPal threw a party and gave everyone who attended blue PayPal shirts to wear for the conference. Amid a sea of blue, eBay’s senior leadership must have seen the light. A month later, eBay announced that it was purchasing PayPal.
While the acquisition worked out well financially for PayPal employees, it didn’t work out as well culturally. PayPal was already a misfit in the Silicon Valley culture of the late 1990s and early 2000s—a time when start-up mythology wasn’t as prominent as it is today. PayPal’s culture was a precursor to the “move fast and break things” ideology that companies in the region would later become known for. At the time it acquired PayPal, eBay was a large company with a team of professional managers—a culture that the PayPal folks found to be a stuffy bureaucracy. From the very beginning of the integration, the PayPal folks were beginning to question how long they would stick around.
For instance, early on in the integration, eBay leaders scheduled a three-hour-long meeting and arrived with a 137-slide PowerPoint deck. “In the history of PayPal, there has never been a three hour meeting, period,” said Keith Rabois, a former executive vice president at PayPal. “And they started off the integration meeting with a three hour time block.”9 Within a few months, a number of the founding team members had left. Eventually, nearly half of PayPal’s 200-something employees had left and gone elsewhere. Just 12 of the first 50 employees at PayPal were still there four years after the acquisition.10 “With PayPal, you essentially had this mass exodus of highly entrepreneurial people who had learned all these techniques, that were very innovative, that could make a new product explode, at a time when everybody else had given up,” said David Sacks, the former chief operating officer of PayPal.11
And making new products explode is exactly what they did.
Almost immediately after cashing out from the sale, Peter Thiel founded the hedge fund Clarium Capital, where he was joined by PayPal veterans Andrew McCormack and Ken Howery. Thiel would also become the first outside investor in a fledgling start-up called Facebook, getting his friend and former PayPal coworker Reid Hoffman involved. It wouldn’t be Reid Hoffman’s only social network either. After his exit, Hoffman and a few others started LinkedIn, which quickly accepted investment money from Keith Rabois and Peter Thiel. Another member of the PayPal Mafia even provided the space for LinkedIn’s first office.12 Even Elon Musk, who took his earnings from the sale and founded Tesla Motors and SpaceX, still relied on help from the PayPal Mafia for ideas and funding. When Musk’s attempt at building a more cost-efficient space rocket failed three straight times and seriously drained his funding for SpaceX, it was a former colleague from PayPal who invested enough to keep him experimenting.13
One reason for their tight-knit circle of new start-ups was the set of friendships that remained from their PayPal days. But another factor that dramatically strengthened those bonds was the economy. In the early 2000s, when the colleagues went from being eBay employees to free agents, very little money was flowing to consumer-ba
sed technology start-ups. “Nobody would fund them,” said Keith Rabois. “Basically, there was just Reid [Hoffman], Peter [Thiel], and a few of us, as well as Sequoia to some extent.”14 But the PayPal Mafia didn’t just control the money, they also shaped the ideas. Because most of the new companies started by PayPal refugees also featured new members, the philosophy and culture of the PayPal Mafia spread. Even where the Mafia didn’t directly work with a new company but merely invested in it, their influence was still strong. Part of what explains the culture and ethos of Silicon Valley today is the very clear impression the PayPal Mafia left on each new venture they touched. After several billion-dollar companies and tens of billions of dollars in market capitalization, it’s safe to say that impression was positive. In sum, a rogue band of misfits, driven out by eBay, became the central nodes for a strong network of astounding innovation.
But it’s not just the former relationships and their considerable wealth to invest that explain the success of the PayPal Mafia. Recent research into how network connections best interact suggests that it’s the specific way in which the PayPal Mafia collaborated that now explains their success.
The Best Collaborations Are Temporary
In the early 2000s, Brian Uzzi took an interest in how top-performing teams find each other and collaborate—specifically, how the social networks of their respective industries affected the people who found and collaborated with each other. At first, Uzzi was just looking at the realm of science, but his investigations would span a variety of domains. In science, for example, Uzzi and his colleagues found that scientific breakthroughs were increasingly becoming a team affair. In one study, Uzzi, along with researchers Stefan Wuchty and Benjamin Jones, found that the rate at which expanding collaborations were resulting in impactful scientific papers was rising quickly. The researchers gathered nearly 20 million peer-reviewed papers and over 2 million patents published between 1955 and 2000.15 What they found was a steady increase—almost a doubling—in the number of people on collaborative teams. In 1955, for example, the average team size for a published paper was just 1.9 people, reflecting a strong tendency at the time for researchers to work alone. Five decades later, the average team size had grown to 3.5.