by Jim Dwyer
Graham argued that the old paradigms of venture capital had shifted. Entrepreneurs did not need to go to business school as long as they knew computer science; learning to program was the hard part. Max was persuaded. By sophomore year, he decided to double major, adding computer science to his communications studies. The world Graham described sounded infinitely more attractive than the ossified music company he’d worked at. In fact, Max was supposed to be writing part of his senior thesis about Graham.
If young people had good ideas, Graham had written, they could take them directly to the public, without risking slow suffocation inside giant companies.
On the Internet, nobody knows you’re a dog. And more to the point, “nobody knows you’re 22,” Graham had written. “All users care about is whether your site or software gives them what they want. They don’t care if the person behind it is a high school kid.”
Moreover, a common condition of twenty-two-year-olds—being broke—no longer mattered, given that the cost of starting a tech company had almost vanished. “It’s so low that it has disappeared into the noise,” Graham wrote. “The main cost of starting a Web-based startup is food and rent. Which means it doesn’t cost much more to start a company than to be a total slacker. You can probably start a startup on ten thousand dollars of seed funding, if you’re prepared to live on ramen.”
If you could start an actual company for no more than it cost to hang around in your mom’s basement playing video games, how much would they really need for a summer project? They could survive on boiled water and noodles in a cup.
Once again, they were staying late in the ACM room, writing lines of code. One night, Ilya arrived with a razor and a comb; he would work late, then hit the couch for a few hours before rising for a rudimentary wash before heading off to class. Rafi was horrified. As the work rolled on, he had a choice between dropping out of classes or dropping his social life. He stayed with the project.
—
Walking along Fourteenth Street, Max glanced at the papers on a newsstand. A word from a headline stuck in his head. He carried it back to the ACM room, and proposed it as the name of their project.
“Diaspora,” Max announced.
“What does it mean?” Dan asked.
“I never heard of it,” Ilya said.
Rafi knew it well. Beginning with the exile of the Jews from Babylon, the word had been used to describe a community that had been widely dispersed. To Max, it reflected the scale of their ambitions. It wasn’t just about Facebook. It was like restoring the world.
Dan was indifferent about the proposed name. It might not have been a word everyone would recognize, he thought, but at least they could call the project something other than “That thing that we’re trying to build.”
Ilya looked up the word, saw that it originated from the Greek for scattering of seeds.
“It’s perfect,” he said.
They coded through the night: headphones on, each one absorbed in building the ladder of logic needed for a function to work.
—
By the end of the month, they faced the first adult test of their scheme. They had to get money for it—not for that very moment, while they were still in school, but for three months down the road. As it happened, Paul Graham, the subject of Max’s unwritten thesis, ran a program for start-ups called Y Combinator. Graham had created a seed fund that would offer up to twenty thousand dollars and three months of advice. Twice a year, Y Combinator accepted applications. Not only were business plans not required, Graham pointedly said that they would not be read. Once they were accepted into a class, the new ventures were required to move, at least temporarily, to Silicon Valley. For three months, they would have regular skull sessions with the Y Combinator partners. They also had to meet once a week with big names in the tech world at off-the-record dinners. (Its name was wordplay familiar to those who had wandered deep in the arithmetical forest: the Y combinator is a mathematical function that generates other functions, and Y Combinator was a company that generated other companies.)
The next cycle of the Y Combinator camp would run from June through August, and the application was due at the beginning of March. The Diaspora guys gathered on the final Sunday in February to work on it.
Name. Company name. Phone number. Link to a one-minute video introducing the founders.
They did have a company name, although they were hardly a company. They were four nerds. Or, when their self-esteem was cresting, four dudes.
Please tell us about the time you most successfully hacked some (noncomputer) system to your advantage. Please tell us in one or two sentences about the most impressive thing other than this start-up that each founder has built or achieved. How long have the founders known one another and how did you meet? Have any of the founders not met in person?
The application form was a blizzard of provocative questions, twenty-seven blank spaces to fill in, most of them requiring responses to three or four deep queries. As a whole, the inquiries were perfectly reasonable, considering that they were designed to figure out if it was a good idea to hand over twenty thousand dollars to complete strangers with little to no history of running a business.
How far along are you? Do you have a beta yet? If not, when will you? Are you launched? If so, how many users do you have? Do you have revenue? If so, how much? If you’re launched, what is your monthly growth rate (in users or revenue or both)? If you’re not incorporated yet, please list the percent of the company you plan to give each founder, and anyone else you plan to give stock to. (This question is as much for you as for us.)
“Man, all these questions,” Max said. “We’re four smart kids.”
Please tell us something surprising or amusing that one of you has discovered. (The answer need not be related to your project.)
There were easily another fifty questions along those lines. Within a few minutes of looking over the application, they bagged it. June was still three months off. Something might come up. In the meantime, they would continue writing code. Unlike the application, it was too interesting a problem to let go of.
—
In February 1997, a piece of dismal news reached the online message board of the Freaks, the fans of a British and Irish progressive rock band known as Marillion. Their record label had gone broke. The keyboard player, Mark Ryan, wrote that the band would not be touring North America with their new release.
In Bedford, Massachusetts, this seemed outlandish to Jeff Pelletier, a fan of Marillion. They might not have been the Rolling Stones, but plenty of people were devoted to the group; the bulletin board hummed with news and conversation about it. So Pelletier put the idea to the online Freaks: why don’t we raise the money so they can tour? The band members were dubious, and said it would take thirty thousand dollars to cover their touring costs. Even so, they assigned a friend to oversee whatever money did arrive so that the well-meant efforts of Pelletier did not turn into a fiasco.
In short order, small contributions began to roll in, from all around the world. “People were giving money just to see this happen, because it was such an amazing thing,” Pelletier later told the Chicago Tribune. All told, the Freaks raised about fifty thousand dollars. Marillion toured triumphantly, rewarding their backers with autographed DVDs. The market, or the street, got to vote.
Five years later, Perry Chan, who had worked as a day trader and a nursery school teacher, tried to put on a concert during the New Orleans Jazz Festival, but could not risk twenty thousand dollars of his own money. There had to be a way to round up people online who supported good music. He moved back home to New York and found a job in a Brooklyn diner. Wouldn’t it be good, he would occasionally muse out loud, if there were a way to use the web for lots of people to provide small-scale backing for creative projects? One of his regulars, Yancey Strickler, a music critic, thought it was a fine idea.
With Charles Adler
, a graphic designer, Chan and Strickler created Kickstarter, a website where people could pitch projects and perhaps collect enough small change to launch them.
The setup was simple and ingenious: the artists or inventors could post a description of what they were working on, how long it was going to take them, and how much money they needed to raise. The pledges could be made to Kickstarter through a payment system operated by Amazon; the website kept 5 percent. A strict rule gave the fund-raising drives a thrilling, or harrowing, edge: no money would be distributed unless the goal had been met in full by the deadline. It was all or nothing. If people said they needed five thousand dollars to do their project, and they got only thirty-five hundred dollars, well, that wasn’t enough. In that case, the donors would get their money back. The requirement was to drive those seeking support to set realistic goals, and to hustle for contributions.
Kickstarter permitted the drives to go on for ninety days, but a performer or inventor could set an earlier cutoff, if, for example, a show was a few weeks off.
Artists typically used Kickstarter to raise a few thousand dollars or so for videos and comic books and music. So did people like the ecoentrepreneur with plans to rejigger old gum-ball machines that would dispense wildflower-seed bombs; a graphic designer who proposed to fly cameras on kites and balloons along the coastline to create intimate, bird’s-eye maps of the big 2010 oil spill in the Gulf of Mexico; and the young cook in Kansas City who hoped to fix up a trailer so she could expand her sales of 100-percent-natural snow cones. In short, Kickstarter was a way for the far-flung to find and support the far-fetched, the charming, and the essential. It was distant from the kinds of gift giving that result in concert halls and libraries being rebuilt and renamed—the megaphilanthropy that could be seen as an expression of love for humanity, or the graffiti tags of wealth.
One early project backed through Kickstarter was a hackathon run by HackNY, a daylong binge of coding, pizza, and Red Bull, a scheme hatched by Korth and his friends to connect college kids with start-up tech companies.
Teams of students from all over metropolitan New York would have twenty-four hours to hack together a cool project, then demonstrate it. To feed and water the hackers, Korth and company went to Kickstarter for $2,000. They got $5,005.
Convened at the beginning of April, the hackathon was a roaring success, with delegates from schools all around the city.
The Diaspora guys, of course, were there; the event was being held in the building where they had spent most waking moments since abandoning their application for the Y Combinator camp. They had written swaths of code to create the frame for Diaspora, and were starting to build in essential social network functions, but they were miles from being done. So they came to the hackathon with no notion of having a clever app to display after twenty-four hours. Rather than chop off some little piece and put it into the hackathon competition, they seized a chalkboard and worked as if they were in the ACM room, continuing to tunnel toward Diaspora, amiably answering questions from people strolling around.
Fred Benenson, who had spoken with Max after the Moglen talk, spotted them and came over to chat. He had recently started working for Kickstarter and was impressed by the progress they had made in the two months since the speech.
“This could work on Kickstarter,” Benenson said.
That thought had crossed their minds. In fact, Korth had mentioned it to them as a possibility.
“E-mail me,” Benenson told Max.
They soldiered on through the twenty-four-hour hackathon, taking a break at two A.M. when Korth and Hilary Mason showed up with ice cream and toothbrush kits. They ate bagels at dawn, and hung around until noon to watch other teams collect prizes. Then Max charged off to write to Benenson, putting the skeleton of the idea into an e-mail. A social network built around privacy. You owned your data. Decentralized.
Fred loved it.
The calendar had to be taken into consideration. Although Kickstarter allowed up to ninety days to collect contributions, this was a summer project, so they had less than two months to raise money.
Before they got to that problem, though, they had to find out if Kickstarter would even let them post. Certainly, it helped to have someone on the inside, like Fred, pulling for them, but real estate on the website was valuable. Benenson gave the matter some thought. He could simply extend an invitation to Diaspora—Max, after all, was his friend—which would practically guarantee the guys a spot, but it seemed that going through the Kickstarter review process would sharpen their presentation. The guidelines broadly required that the pitches be for projects that had some creative purpose, like making a film or a new game, and a clear end point. It was not a place to raise money for overextended credit cards.
Fred coached Max and Dan. The project had to be clearly, concisely explained for the website. They should also make a video introducing themselves and the project; it would give people a chance to connect with them as humans, not just concepts. It was one more thing to do for the end of the term. Max had a senior thesis to write for his favorite teacher and adviser, Biella Coleman, the anthropologist who introduced him to the study of hacker culture. Dan was thinking about jobs. And their nights in the ACM room, grinding away on Diaspora, were getting longer and later.
—
On April 15, Max and Dan simultaneously started getting messages from other students that they had better get over to the ACM room, fast. Max was blocks away in his apartment, but Dan was nearby, and he arrived in a few minutes.
All the computers were gone. One of the systems administrators had come down and seized them because the university network had not registered any activity on the machines in the room for months. They had virtually disappeared from the network. The systems administration wanted to know how that could be.
“I was one of the people who broke into them,” Dan said, explaining that they had hacked into them so the door could have a Twitter account.
“So,” the administrator said. “You thought this was a good idea.”
Dan considered this formulation. They had wanted to make them better. Filing a service ticket and waiting for however long it would take to get the system updated did not make a lot of sense.
“We weren’t doing anything bad,” Dan said. “We were just exploring the machines.”
“So you thought this was a good idea,” the administrator repeated.
It seemed that the man wanted Dan to say those words.
“Really, we didn’t do anything malicious,” he said. “When are we going to get the computers back?”
Negotiations ensued. Korth, the adviser to the ACM club, was brought in as an intermediary. The settlement was a letter of apology, which only the seniors signed, under a tacit understanding that they would take the blame, such as it was, for breaking into the machines and making them work better. The computer club really did need computers in the club room.
A final tweet was issued by the ACM Room Door account:
@acmroom
Just lost the game.
—
Diaspora owned them. Besides coding all night and hustling to get the Kickstarter appeal in shape, it turned out that they had to come up with premiums for people who contributed money. What the heck was this, a public radio fund-raiser? Stickers they could manage pretty easily. T-shirts for people who gave a bit more. Benenson had a suggestion for the midlevel contributors: as a kind of joke, they could give out CDs with whatever code they came up with by the end of the summer, signed by them as if they were rock stars. For megadonors of two thousand dollars, they would give computers loaded with Diaspora and a promise of easy support. These were outsize promises, but the only ones they expected to donate anything like two thousand dollars were their parents, who were unlikely to fuss if they didn’t get a new computer from their sons as a fund-raising premium.
Korth suggested that they give a presentat
ion on Diaspora to the Internet Society, since the project was inspired by the talk Moglen gave at one of the group’s meetings. It was a freewheeling session.
Later that night, they had to make the video for Kickstarter. The four of them sat in a classroom, writing discussion points on a blackboard. Who are we? What is it? Why does it matter? Their dress was motley, but they came by it honestly, not in the practiced manner of hipsters: a few T-shirts, a bowling shirt, some stubbled chin, a few coffee cup accessories. They sat behind a teacher’s desk. No cameraperson: Max perched a pocket-sized video camera on top of an overhead projector.
After introducing themselves, the stilted recitations began.
Then Dan jumped in.
“Hold on,” he said. “What is this project? Because I have absolutely no idea.”
Cue to Rafi: “In real life, we talk to each other. We don’t need to hand our messages to hubs and have them hand it to our friends. Our virtual lives should work the same way.”
He spoke in robotic bursts: “We don’t know what’s going to happen to our data. It’s going to exist into the foreseeable future. So—[he seemed a little flustered]—we need to take control of it.”
Max broke in: “Because once you give it away once, it’s no longer yours. You cannot stake claim to it.”
“That’s why my mom won’t put anything on the Internet unless she’s ready to see it in a newspaper,” Rafi said.
“But we know that’s bogus, because sharing is a human value,” Max said. “Sharing is what makes the Internet really awesome. I think it’s what gets us all excited whether it’s a silly little LOL cat or your newborn nephew—”
“My newborn kid,” Dan said, drawing a giggle.
Ilya, whose only contribution up to that point had been warm smiles, said: “No longer will you be at the whim of these large corporate networks, who want to tell you that sharing and privacy are mutually exclusive. Because it will be your node.” No one uttered the word “Facebook” in the video. Ilya’s comment was the closest they came.