You Only Have to Be Right Once

by Randall Lane

  By focusing on problem selection, rather than rushing out an innovation no one wants, like so many trigger-happy entrepreneurs, Parker put himself in position for the string of blockbusters that his critics blithely attribute to sequential luck. Napster was the transition between CDs and MP3s after the Internet made it possible to strip content from its container. Facebook was a vehicle to create a reliable identity in an anonymous online world. Spotify is an attempt to fix the very music industry that Napster helped break a decade before.

  “He thinks about where he perceives the world to be going,” explained Spotify founder Daniel Ek. “If he doesn’t think there is a company that will win, then he builds it himself.”

  This deep investigative thinking bleeds into everything else in his life. Ask Parker about the genesis of his former company Plaxo, and he starts with theories of how real viruses spread across populations. Before he shares the name of his favorite sushi restaurant—prior to one dinner we had in New York, he called five to find out which chef was cutting the fish that night—he discusses rice density and the ideal geometric shape for sushi cuts (trapezoids). Question this audiophile about the best brand of headphones and you first learn how sound waves are registered by our tympanic membranes. As the expression goes, ask him for the time, and he’ll tell you how to build a watch.

  “We talked for what I originally scheduled for an hour, ended up being three hours,” Reid Hoffman recalled about their first meeting back in 2002. Jack Dorsey had the same experience: “It’s rare to find someone who can have those kinds of conversations. . . . I appreciate any conversation where I can walk away questioning myself and my ideas.”

  Thus, Parker’s life becomes impervious to time, a subject friends and business partners acknowledge with a defeated laugh. Peter Thiel calls it Parker’s “absence of dramatic punctuality.” Ek manages Parker by telling him there’s a meeting at 11:00 a.m. and informing others it starts at 1:00 p.m. There’s even a name in Silicon Valley for this phenomenon: Sean Standard Time.

  “Making people wait and not fulfilling all your obligations feels bad. I probably feel worse about it than people realize, but I don’t do it with malice,” said Parker. When focused on a task, he blocks everything else out and works himself into a trance. The outside world fades; time slips away. “It requires a lot of rescheduling, but I try to focus on things that are the highest value and get those done perfectly.”

  Parker’s definition of “done perfectly” is extreme. On the afternoon of his Forbes cover shoot, Parker summoned three full racks of Italian suits. Twenty dress shirts—still in their wrappings—waited on the wicker couch in his Greenwich Village townhouse. Rows of eyeglasses and sunglasses blanketed the coffee table, piles of suspenders and ties filled chairs, a shoe store’s worth of wingtips, loafers, and boots lined the wall. The shoot was scheduled for 4:00 p.m. Sean emerged at 5:30 p.m., flanked by a proper entourage: a clothes stylist, hairstylist, makeup artist, assistant, publicist, tailor, and his fiancée (now his wife), Alexandra Lenas.

  During the shoot Parker changed his wardrobe more often than a Las Vegas headliner. He switched from streamlined suits to three-piece numbers to casual cardigans over designer jeans. He obsessed over the spacing of suspenders and triple-checked that the red in his skinny tie matched the red in his hipster eyeglasses. At one point he broke for a snack. Ten minutes later he was in the kitchen, dressed in a dark Christian Dior suit, whisking a bowl of homemade ranch dip. He was trying to lose weight and was eating only vegetables. The ranch dressing on hand was too runny, so he added sour cream to firm it up. His assistant (one of three) coaxed him back in front of the camera. After hundreds of photos in four locations around the house, the shoot was finished, at 2:00 a.m.—perfect, calibrated Sean Standard Time.

  Two nights later I arrived at his house at 11:00 p.m. A chartered G450 was scheduled to fly to San Francisco from Teterboro, New Jersey—wheels up at midnight, sharp. Parker was out meeting Spotify’s Ek. When midnight hit and there was still no Parker, I got a little nervous. Everyone else yawned. Parker strutted in at 2:00 a.m. He still had to pack and shower. At 3:30 a.m. a Cadillac Escalade was loaded with luggage and takeout fried chicken from Blue Ribbon, a late-night, New York chefs’ hangout, and across the Hudson we went.

  We took off at 4:00 a.m., a half hour before FAA fatigue laws would have grounded the pilots. When I awoke to a view of the California desert outside the plane window, Parker was sitting across from me, snacking on a piece of fried chicken, his veggie-only diet already over. “Did you sleep well?”

  We landed in San Francisco at 9:00 a.m., where yet another Escalade ferried us to Marin County. Everyone parted ways to sleep for a few more hours before Parker, eager to meet with colleagues and pitch potential hires, began a sprint through San Francisco and Silicon Valley.

  • • •

  PARKER’S PATH TO SILICON Valley began the day his father, Bruce, formerly the chief scientist at the National Oceanic and Atmospheric Administration, taught him how to program on an Atari 800. He was in second grade. By high school Parker was hacking into companies and universities (alias: dob, which he chose for its aesthetic symmetry). When he was fifteen, his hacking caught the attention of the FBI, earning him community service. At sixteen he won the Virginia state computer science fair for developing an early Web crawler and was recruited by the CIA. Instead he interned for Mark Pincus’s D.C. startup, FreeLoader, and then UUNET, an early Internet service provider. “I wasn’t going to school,” he said. “I was technically in a co-op program but in truth was just going to work.” Parker made $80,000 his senior year, enough to convince his parents to let him put off college and join Shawn Fanning, a teenager he’d met on a dial-up bulletin board, to start a music-sharing site, which became Napster in 1999.

  Parker never did make it to college, but Napster provided an education all its own. “I kind of refer to it as Napster University—it was a crash course in intellectual property law, corporate finance, entrepreneurship, and law school,” said Parker. “Some of the e-mails I wrote when I was just a kid who didn’t know what he was doing are apparently in [law school] textbooks.” Those e-mails, which admitted Napster customers were likely stealing music, would end up as evidence in copyright lawsuits that would eventually shutter Napster. But by that time Parker had already been exiled by management and was living in a North Carolina beach house. “I didn’t understand at the time that when someone asks you to take an extended vacation that’s basically a prelude to firing you.”

  While at Napster, Parker met angel investor Ron Conway, who was funding another company in the startup’s building in Santa Clara. Conway has backed every Parker production since.

  On our first night in San Francisco, Parker and I visited Conway on the porch of his house overlooking Richardson Bay. We drank Brunello and nibbled on prosciutto. “We’ve gone through hell together,” said Conway, who backed Google, PayPal, Twitter, and FourSquare, among others.

  Napster was less a company than an all-hours circus, a strange tangle of people who thought they had joined a renegade social movement rather than a startup. “So much of what I learned at Napster was learning what not to do,” said Parker, as Conway scribbled on a notepad. Conway had learned the hard way to listen to Parker. “When Sean became president of Facebook, he called me and said, ‘You have to look at this company.’ The killer is that I could have been Peter Thiel,” said Conway, referring to Thiel’s investment in Facebook, which made him a billionaire. “But I said, ‘You have to clean up the issues at Plaxo, so don’t introduce me to this Facebook thing.’” He sipped his wine, shook his head and laughed: “These are painful memories.”

  Plaxo was Parker’s first attempt at creating a real company—an online service that aimed to keep your address book up to date. It sounds boring compared to Napster and Facebook, but Plaxo was an early social networking tool and a pioneer of the types of viral tricks that helped grow LinkedIn, Zynga, a
nd Facebook. “Plaxo is like the indie band that the public doesn’t know but was really influential with other musicians,” said Parker.

  Once you downloaded Plaxo, the program would mine your address book and e-mail every contact with a message, coaxing them to sign up for the service. When the next person signed up, the software would pirate the new address book and spread further. Within a short time millions of e-mail accounts had been hit with Plaxo pitches. “In some ways, Plaxo is the company I’m most proud of because it was the company that wreaked the most havoc on the world,” said Parker. Those experiences later changed the history of Facebook.

  There are diverging stories about Parker’s swift exile from Plaxo. His take is that Ram Shriram, a former Google board member recruited to help manage the company, conspired to throw him out and strip him of his stock. “Ram Shriram played this very vindictive game not only to force me out of the company but force me out broke, penniless, impoverished, and with no options.”

  Shriram would not speak about this, but cofounders Todd Masonis and Cameron Ring shared a different story: that Parker was essential in creating the company strategy and raising money but grew bored with the daily grind of running it. Masonis claimed that Parker was often absent, and when he was around, he was distracting: “It was the sort of thing where he doesn’t come to work, but then maybe if he does it’s at 11:00 p.m., but it’s not to do a bunch of work, it’s because he’s bringing a bunch of girls back to the office because he can show them he’s a startup founder.”

  Whatever the motivation, Parker’s removal was messy. He insisted that investors had hired a private eye to build a case. There were allegations of misconduct and drug use—claims that went unproven. “It happened poorly; we should have done a better job being up front about it and doing it ourselves,” said Ring. “But looking back, it was the right decision for us and for Sean.”

  Parker was on his own, isolated from his cofounders and close friends. “I felt a complete loss of faith in humanity, impending doom, a sense that I couldn’t trust anybody,” said Parker. He thought of suing but knew the battle could drag on for years. So he let it go. After all, he had already discovered a new company with potential to get really big.

  • • •

  WHEN PARKER WAS FIRST shown Facebook by a friend’s girlfriend (not through a one-night stand, as depicted in Aaron Sorkin’s screenplay) he was already a social networking veteran, both because of Plaxo and, more directly, as an advisor to Friendster, the ill-fated Facebook forerunner he stumbled across when reporters asked him if it was connected to the similar-sounding Napster. He knew the larger college market was ripe for its own social network—there were several small sites functioning at individual universities—and Facebook, which had already leapt off Harvard’s campus, gave him a play. He wrote to Facebook’s generic e-mail address and later met Zuckerberg and Eduardo Saverin over a Chinese dinner in Manhattan in the spring of 2004.

  A few weeks later, by chance, he ran into Zuckerberg and crew on the streets of Palo Alto and shortly moved into Dustin Moskovitz’s room at the rented Facebook house. “It’s the only thing the movie got kind of close to right,” deadpanned Adam D’Angelo, Facebook’s early technology chief, whom I met at the Palo Alto headquarters of his company, question-and-answer site Quora.

  Just twenty-four, Parker was Facebook’s business veteran. He helped the college-aged Facebook founders network around Silicon Valley, set up routers, and meet benevolent investors like Thiel, Hoffman, and Pincus.

  “Sean was pivotal in helping Facebook transform from a college project into a real company,” Mark Zuckerberg said in an e-mail. “Perhaps more importantly, Sean helped ensure that anyone interested in investing in Facebook would not only buy into a company, but also a mission and vision of making the world more open through sharing.”

  D’Angelo credited Parker for recognizing that design was as vital as engineering. “Our first employee [at Quora] was a designer, and we knew to do that because we saw how important that was at Facebook.” Together with Aaron Sittig, an early Napster friend who would become Facebook’s key architect, Parker helped drive Facebook’s minimalist look. He was adamant that the site should have a continuous flow and that tasks like adding friends be as frictionless as possible. “We wanted it to be like a telephone service,” said Sittig. “Something that really fades into the background.” Later Parker helped push Facebook’s photo-sharing function. It would be one of his last acts as Facebook’s president.

  In August 2005, Parker was questioned in North Carolina after cops found cocaine in a beach house rented under his name. He was never arrested or charged, but the incident swiftly kick-started his downfall at Facebook.

  Because of agreements, the principals can’t discuss how or why he was ousted. The Team Parker take was that Accel Partners resented him because he forced the VC to invest in Facebook at a then-high $100 million valuation (Accel has since invested in Spotify, and its star Jim Breyer now says Parker had “exceptional insight”). Parker had many supporters, and the cocaine controversy caused a rift between the founders and the investors. In the end, Parker decided it was best for Facebook if he resigned. He had been pushed out of his third company in five years. He moved to New York in the fall of 2005, crashing with Grateful Dead lyricist John Perry Barlow, a friend from the Napster days.

  Although no longer on the Facebook payroll, Parker continued to advise Zuckerberg on strategy and to recruit key executives like Chamath Palihapitiya. Sittig said he still helped with the site’s design and was a strong outside influence in the development of Facebook’s “share” platform, which allowed users to upload news articles, video, and other third-party content. Still, likely Parker’s greatest contribution to Facebook was his creation of a corporate structure—based on his Plaxo experience—that gave Zuckerberg complete and permanent control of the company he founded.

  Parker’s plan fortified Zuckerberg with supervoting shares that resisted dilution during fundraising and armed him with enough board seats to stay in power for as long as he wanted. “Sean was pretty material in setting up the company in a way that Mark retained as much control as he does, both in being able to get high-valuation, low-dilution financing but also in terms of the board structure itself and details of control,” said Facebook cofounder Dustin Moskovitz. “He’d been coming off the Plaxo mess and was sensitive to that.”

  This is what made his portrayal in The Social Network so frustrating to Parker. Justin Timberlake’s Parker is a cruel, cocky opportunist who forces Eduardo Saverin out of the company and robs him of his shares. At Plaxo, Parker had endured in real life what the fictional Saverin suffered in the film. “I don’t mind being depicted as a decadent partyer, because I don’t think there’s anything morally wrong with that,” said Parker, quickly adding that the partying was exaggerated, too. “But I do mind being depicted as an unethical, mercenary operator, because I do think there is something wrong with that.”

  The movie debuted in October 2010 to critical and commercial success. It cut Parker deep. “I was a mess at that point because the movie had hit, the depiction of me was so far from reality I was having a hard time psychologically dealing with it,” Parker said. “I was all bummed out, I had just broken up with my girlfriend of four years and I just had knee surgery, so I couldn’t walk.” Before the film’s release he laid up in a suite at the Peninsula Hotel in L.A. for two months. He gained thirty pounds. He was also juggling his duties at Founders Fund, Spotify, and startup Airtime.

  It got to be too much. He took a break from Airtime, his knee healed, and a mutual friend introduced him to his future wife, the twenty-two-year-old Lenas, a singer-songwriter.

  • • •

  FOR ALL THAT HE has accomplished, Parker remains a hacker at heart, motivated less by money—though Facebook’s IPO catapulted his net worth, by mid-2014, toward $3 billion—than the drive to disrupt. Hence, he has never stopped thinking about
Napster. In 2010, eight years after Napster had been sued out of existence, Parker was still searching for a company that could fulfill its promise of sharing music, but this time in a way that would pay the musicians, too. Like Facebook’s photo sharing, he envisioned that music would thrive on the social graph. He just needed a vehicle to share the songs on Facebook.

  Two years before, a friend had told him about a Swedish music site called Spotify that offered unlimited, legal songs. He scoured his network for an introduction, and without seeing the product in action, blindly e-mailed founder Daniel Ek, outlining his ideal music platform, hoping Spotify fit the description.

  Ek had been a huge fan of Napster, and Parker’s suggestions caught his attention: “This was someone who had spent more time thinking about this than I had done myself.” After a series of e-mails and a test drive of the platform, Parker was sold and tried to invest. Armed with a cash infusion from Hong Kong billionaire Li Ka-shing, Ek wasn’t looking for any more. Parker would have to prove his way into the company. He introduced Spotify to Mark Zuckerberg (a Facebook integration plan followed) and helped open doors at Warner and Universal, winning over Spotify’s board: Parker eventually invested about $30 million.

  In 2012, Parker also put money and effort into Airtime, a site where friends could post videos and react to them, which reunited him with his old Napster partner, Fanning. Parker had been coy about the platform’s specifics, saying only that it would offer communication and sharing in real time—something he thought was underserved on the Web. “My pitch is eliminating loneliness,” said Parker. Airtime included a random video chat function similar to 2010’s voyeuristic flameout, the now-defunct Chatroulette. The ideas hit the same thread that has run through all of Parker’s projects: sharing and discovery. (Unfortunately, like Chatroulette, Airtime flopped.)