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Chaos Monkeys: Inside the Silicon Valley Money Machine

"Here’s the lesson: when the company’s employee retention strategy is cultivating Stockholm syndrome, you’re in the wrong company."


"What is writing? It’s me, the author, taking the state inside my mind and, via the gift of language, grafting it onto yours. But man invented language in order to better deceive, not inform. That state I’m transmitting is often a false one, but you judge it not by the depth of its emotion in my mind, but by the beauty and pungency of the thought in yours. Thus the best deceivers are called articulate, as they make listeners and readers fall in love with the thoughts projected into their heads. It’s the essential step in getting men to write you large checks, women to take off their clothes, and the crowd to read and repeat what you’ve thought. All with mere words: memes of meaning strung together according to grammar and good taste. Astonishing when you think about it."


"If you jump into the abyss, jump headlong."


"Jessica had conducted a comprehensive series of interviews of the world’s most successful entrepreneurs for her book Founders at Work, which was a startup anarchist’s cookbook of personal memoir and advice. I had devoured it, and so should you if you want to play in this pond."


"small people always belittle your ambitions, while the great make you feel that you too can be great."


"The American immigrant visa system amounts to indentured servitude, a type of peonage."


"If Argyris was to join our as-yet-unnamed company, he’d need a work visa. In fact, forget working: he couldn’t even legally stay in the United States once Adchemy terminated him. Immigration law stipulates a former H-1 holder must leave the country within days. Thanks for building our tech industry, you dirty foreigner, now beat it."


"People go into startups thinking that the technical problems are the challenges. In practice, the technical stuff is easy, unless you’re incompetent or really at the hairy edge of human knowledge—for example, putting a man on Mars. No, every real problem in startups is a people problem, and as such they’re the hardest to solve, as they often don’t have a real solution, much less a ready software fix."


"This was a bad idea. In general, either the CEO or the smooth-tongued founder designated for the purpose should be involved in the fund-raising, and that person alone. Fund-raising is an operatic drama on the order of a Latin American telenovela. Avoid the company-wide noise, and contain the pointless din of the begathon to yourself (or someone) at all costs."


"The lifelong Machiavelli fan in me remembered that memorable line from The Prince: war is never avoided; it’s only postponed to someone’s advantage."


"As Sun Tzu informs us, no matter how cowardly by nature, anyone fights to the death when his back is against the wall. A wise combatant always allows his opponent a way out,"


"the reality is that larger companies often have much more to fear from you than you from them."


"For starters, their will to fight is less than yours. Their employees are mercenaries who don’t deeply care, and suffer from the diffuse responsibility and weak emotional investment of a larger organization. What’s an existential struggle to you is merely one more set of tasks to a tuned-out engineer bored of his own product, or another legal hassle to an already overworked legal counsel thinking more about her next stock-vesting date than your suit."


"Also, large companies have valuable public brands they must delicately preserve, and which can be assailed by even small companies such as yours, particularly in a tight-knit, appearances-conscious ecosystem like that of Silicon Valley."


"Cash, as always, is the poor man’s credit. It would actually have been more expensive to go with the cheaper lawyer, as that bill would be paid in crisp, green benjamins, rather than equity funny money."


"I told the lawyers that we had raised money and were on the fast track to success, and wouldn’t they want to participate by accepting payment in shares? Then I told the investors that they could invest without fear, as the legal costs were minimal, and in any case the lawyers were accepting shares in lieu of cash."


"To quote Balzac, “The secret of great fortunes without apparent cause is a forgotten crime, as the crime was properly done.” Never was a crime better concealed."


"Steve Jobs was all smoldering ambition, ruthless will to power, and narcissistic amour propre; by all accounts of people who actually worked with him, he was a mediocre engineer who had good taste and knew how to recognize in others talents he didn’t possess, and got them to work like hell for him, while fending off competitors in the meantime. In that sense, he was the absolute exemplar of your successful startup CEO, even if not in the way people commonly think."


"The tech startup scene, for all its pretensions of transparency, principled innovation, and a counterculture renouncement of pressed shirts and staid social convention, is actually a surprisingly reactionary crowd. Its members preen and puff and protect their public image, like a Victorian lady powdering her nose, and refuse to acknowledge anything contrary to their well-marketed exteriors. Sure, it’s no worse than traditional industry or politics, but certainly no better either."


"In the startup game, there are no real rules, only laws, and weakly enforced ones at that."


"Shipping new product is one thing, but deals are where the startup rubber hits the revenue road. If the product is enterprise software, as it was for Adchemy, that meant a handful of deals a year was the company’s entire commercial livelihood."


"The harsh reality is this: to have influence in the world, you need to be willing and able to reward your friends and punish your enemies."


"Whenever you face some stressful, time-consuming, and risky challenge, firewall the rest of the company away from the mess. They’ll likely add no value, and the attendant uncertainty will corrode their productivity when you likely need it most. No matter what happens in the outside world—lawsuit, money issues, the fucking zombie apocalypse—do not let it infect the company’s headspace and become the top item in the internal narrative."


"In a nutshell: YC would anathematize Adchemy’s VCs, and declare that they’d never do business with YC again unless they straightened this out. Knowing PG, not only would they be disinvited from Demo Day, but PG would probably also steer companies to take money from other funds instead."


"What’s it take to do startups? It certainly isn’t intelligence. I was in the lower third of my PhD class in physics at Berkeley, and I had to take my preliminary exams three times before I passed. Most of the founders I know are certainly crafty and quick-witted, but compared with some of the certified geniuses I met in academia, they aren’t going to win any Fields Medals or Nobels. It certainly isn’t technical skill. I’m a crappy programmer, and I can hack crude prototypes of finished products at best. Some founders are technical virtuosos, but I suspect most weren’t the top students in their respective computer science classes (assuming they even had a formal education). It’s not unique product or market vision. Anyone who used Google’s ads-buying tool for all of five minutes, and then registered that that piece of shit was a $70 billion per year money-maker, could see the need for AdGrok. Some startup ideas were visionary, like Airbnb, but many, like Dropbox, were merely extremely well executed versions of existing technologies. In my limited experience, there are two traits that distinguish successful startup founders at whatever level of the game, from the forgettably minuscule (e.g., AdGrok) to the epoch changing (e.g., SpaceX). First, the ability to monomaniacally and obsessively focus on one thing and one thing only, at the expense of everything else in life. I lived, breathed, and shat AdGrok. Thanks to focusing on AdGrok, I watched my daughter grow up through the frame of a Skype window while I was in AdGrok’s Mountain View shit hole. I had no social life outside of schmooze-and-booze tech events, at which I would wear my AdGrok T-shirt and engage in techno small talk with people I didn’t really care about. I had no hobbies or outside activities of any kind, except very occasional trips to the gym. My sailboat, into which I had poured two years of money and weekends to restore, slowly rotted in the sun. I never read anything except the tech press. Movies were out of the question. The ladies? While I was nominally still in a relationship with British Trader, my penis was anatomically equivalent to my coccyx: a purposeless vestige of a bygone era. Second, the ability to take and endure endless amounts of shit. I was raised under the sadistic care of a sister ten years my senior who delighted in unleashing endless taunts and abuses. My father was a domineering man, in every way. I spent years in an all-boys Catholic school filled with brutish bullies and cold, aloof priests. We did nothing but beat each other up and jerk off. I scraped by on nothing for six years as a penniless grad student in an expensive city, and then survived three years on Wall Street’s most competitive trading floor during its biggest market catastrophe. Long story short: within the limited purview of white-collar travails, there’s nothing I can’t take for an extended period of time."


"The tech press, even more so than the regular press, willingly covered only births, deaths, weddings, and bloody accidents: that is, a new funding round, a startup’s collapse (the messier the better), acquisitions, or a nasty scandal, like a founder conflict or a sexual harassment claim."


"Fortunately, the iteration cycle in a software business is fast (we don’t need to retool milling machines here), and from some approximately correct starting point we can converge on a final product, almost like successive guesses at the solution to an equation. The quicker we iterate, the more steps we can take in the direction of this mythical point of perfect fit. Each such step costs money in wages, server costs, and lost time. When that cash balance goes to zero, the game is over and we’ve lost. If, however, we get close enough to that perfect product-market fit, in which users pay more money for the product than it costs to operate (and than it cost to acquire those users to begin with), we’ve escaped the financial free fall."


"Walking into any meeting, you should know every goddamn thing there is to know about the other person; if you don’t, you’re failing."


"Quoth Emerson and the intro screen to Mortal Kombat 3: “There is no knowledge that is not power,”"


"Leaving at precisely four years means they’re plodders, punching the equivalent of the white-collar Silicon Valley clock until the next shift."


"Did they trudge along on the upper-class tour bus from the Ivy League to consulting and/or finance and burn out, or did they fight their way out of some backwater, earning their seat at the table based only on chutzpah and/or blitzkrieg-style success? The latter are fearsome, the former … not so much."


"If you must know, she was evidently dating a Twitter engineer who would wind up (spoiler alert!) interviewing me."


"If you have any tech career at all, you’ll one day don a corporate-branded lanyard and name tag and stroll into the tightly choreographed spectacle of capitalism that is a tech conference, complete with staged product announcements, “fire-side chats,” and a makeshift favela of promotional booths."


"Startup entrepreneur, you are David before Goliath, the nascent state of Israel during the ’48 war, Crockett at the Alamo, the Spartans at Thermopylae. Choose your favorite metaphor of hopelessly mismatched odds: that’s you. By any rational reckoning, startups should be dead before they even start. So if some disaffected insider at the acquiring company accosts you in a bar and starts spilling the beans, you buy him another beer and lean in close. You’ll need every advantage you can get."


"The risk expectations of founders and investors can often be severely misaligned. I hate sports analogies, but here’s one to explain this vital point: most VCs are playing a version of baseball in which the only way to score is to hit a home run when you’re at bat. They don’t care if you disgrace or impoverish yourself and strike out, and they don’t care if you get a solid line drive that lands you on second. To them, strikeouts and getting on base are equally pointless, and so they’ll push to proverbially “swing for the fences” no matter the count or the team you’re up against."


"Truth in the world resides only in mathematical proofs and physics labs. Everywhere else, it’s really a matter of opinion, and if it manages to become group opinion, it’s undeservedly crowned as capital-T Truth. And so you need to determine whatever the local version of truth is you’re inhabiting."


"Doing advanced studies in any quantitative field is like surviving Marine boot camp while the rest of the world is channel surfing and inhaling Oreos; you don’t exactly need to fear the push-up test. Even when the intellectual test is being doled out as filter to the elite ranks of a globe-spanning tech company, you won’t be out of your league if you understand the problem space. So if nothing else, aspiring physicist or mathematician, rest comfortable knowing you’ll come out of that long academic tunnel thinking circles around most people."


"Cultural fit, like the Holy Spirit in the Catholic Trinity, is that mysterious intangible, hard enough to conceive of, much less define, but critical to a job at a tech company."


"A female candidate who will buzzkill your weekly happy hour? “Cultural fit.” A soft-spoken Indian or Chinese engineer, quietly competent but incapable of the hard-charging egotism that Americans almost universally wear like they do blue jeans? “Cultural fit.” Self-taught kid from some crappy college you’ve never heard of, without that glib sheen of effortless superiority you get out of Harvard or Stanford? “Cultural fit.” And so it goes."


"MRM and Argyris weren’t exactly rousing in their reviews of the experience. In fact, it was clear that the fascist vibe the company gave off had very much rubbed them the wrong way. They had never really liked Facebook, as either product or company, going back to our visits to their developer events. The day long hazing had done nothing to charm them."


"anyone who claims the Valley is meritocratic is someone who has profited vastly from it via nonmeritocratic means like happenstance, membership in a privileged cohort, or some concealed act of absolute skulduggery. Since fortune had never been on my side, and I had no privileged cohort to fall back on, skulduggery it would have to be."


"As every new arrival in California comes to learn, that superficially sunny “Hi!” they get from everybody is really, “Fuck you, I don’t care.” It cuts both ways, though. They won’t hold it against you if you’re a no-show at their wedding, and they’ll step right over a homeless person on their way to a mindfulness yoga class."


"It’s a society in which all men and women live in their own self-contained bubble, unattached to traditional anchors like family or religion, and largely unperturbed by outside social forces like income inequality or the Syrian Civil War."


"The on-boarding experience was designed precisely as the sort of citizenship oath that new Americans took in front of a flag and a public official. It was almost religious, and taken absolutely sincerely and at face value. Even in a culture brimming with irreverent disdain, I never heard anyone utter a word of cynical trollery about Facebook and its values, either at on-boarding or during my years of work there."


"A more illustrative description is “shit umbrella.” If you imagine a bursting monsoon of clumpy diarrhea pouring down like God’s own biblical vengeance, that is more or less where you find yourself in either a startup or a large, high-profile, and complex organization like Facebook. You, my dear product manager, are the communal manservant to your engineering team, holding a large, cumbersome paramerde above their heads bent over keyboards on which they furiously type."


"Any culture able to shut itself off from the outside world goes insane in its own unique way, and Facebook had essentially done that with its Ads team. But as on Wall Street, where even someone who knew the correct price of a security couldn’t go against the will of the market, you couldn’t question the reigning insanity. And so one went along."


"Companies are like countries: the populations really vote only with their feet, either coming or going. Google instituted a policy whereby any desirable Googler who got a Facebook offer would have it beaten instantly by a heaping Google counteroffer."


"As with all police or spy agencies, the failures of the Facebook security teams were widely trumpeted, but successes rarely heralded."


"The principal reason for you to be technical is not to help technically design the system under development; if you’re doing that, then you’re PMing wrong. No, you’re technical so you can tell when engineers are bullshitting you, which will be often."


"the first rule of startups is also true of any fast-paced, competitive workplace like Facebook: act like you belong there, even if you don’t."


"If we don’t create the thing that kills Facebook, someone else will. “Embracing change” isn’t enough. It has to be so hardwired into who we are that even talking about it seems redundant. The Internet is not a friendly place. Things that don’t stay relevant don’t even get the luxury of leaving ruins. They disappear."


"In a thousand small ways, the company was forever reminding its people of the cost of failure. Facebook had the death awareness of the person planning on living forever."


"Like most employees, I had a vesting calendar that determined the speed and cadence of my equity being awarded. And as with most employees, my equity compensation vested over four years, with one-fourth coming after exactly one year, and then 1/16th coming every financial quarter after that. Your net worth (particularly if you, like me, had most of it in the stock of the company you were at) resembled a stair-step plot of gradual but swiftly accumulating value. Despite the deal drama, I had a boilerplate employment contract, except my numbers were larger due to my acqui-hire leverage and brinksmanship in playing Gokul against Twitter. Nonetheless, I’d have to patiently wait out my vesting schedule; the joke term for doing so in less spirited companies than Facebook was being a “VIP”—that is, “vesting in peace.”"


"To measure progress, I put a countdown clock app on my MacBook’s dashboard, measuring the time until my first vesting, beyond which I already couldn’t imagine staying. The clock counted in minutes, hours, and days, and I referred to it often, especially after a particularly challenging meeting that reeked of corporate cant and catatonia."


"Mark started by announcing that the company was officially filing to go public. A spontaneous cheer erupted and he was forced to pause. Then, in one of his more rambling speeches, he warned how going public would also bring the distracting eye of public scrutiny, including no small amount of ridicule. That was something that Facebookers, in their sheltered amour propre, had never been forced to endure."


"As the child of Cuban exiles, I was reminded by this scene of a piece of collective cultural memory: Castro giving a photogenic victory speech on a flag-draped podium surrounded by his olive-green-clad coterie, during the early days of the revolution. The swirling immediacy of the moment, that spark of history being made before your eyes,"


"Among what were surely many such groups, there was one called NR250, which was more or less a collaborative how-to on being affluent. The title came from “New Rich,” and the 250 from its originally involving the first 250 or so employees, or so the story goes (and at this point it’s more than just early Facebookers). Yes, they were literally nouveaux riches in all senses of the term, and from all reports (more than one member has dished to me) they acted like it. How to buy land under an LLC to hide the fact you’re amassing a compound, the best resort on Maui, how to book or lease private jets, the best high-end credit cards to use, and so forth. But not a word of it while on campus."


"This study would lay the groundwork for Festinger’s theory of “cognitive dissonance”: the mental stress people suffer when presented with realities contrary to their deeply held beliefs. The key takeaway is that humans naturally avoid this discomfort, skirting situations that aggravate it, or ignoring data that make their mental contradiction more apparent."


"Sponsored Stories was the classic indefensible two-miracle startup idea. Miracle one was all the companies in the world doing work to integrate with Facebook and give away their data, at dubious benefit to themselves. Miracle two was those companies’ marketers abandoning their old workflows and success myths for some newfangled paradigm, one with unproved and unprovable efficacy, just because Facebook said so. And so, like any two-miracle startup idea, it was almost certain to fail."


"The only solid marketers in all of Facebook were to be found not in Ads, but on the Growth team. Guys like Alex Schultz, a big, beefy, loudmouthed Brit with a shaved head and a mean glare. Or Brian Piepgrass, a soft-spoken, ever-smiling Canadian who had never graduated from college, but who managed over a hundred million in annual marketing spend. These guys knew all the tricks. Before anyone on the Ads team even knew what real-time ad exchanges were (despite their having been around for years), the Growth team used them to retarget users who had almost registered for Facebook, but then through some fluke of Internet distraction decided to click away elsewhere."


"Growth exploited every piece of psychological gimcrackery, every tool of visual legerdemain, to turn a pair of eyeballs into a Facebook user ID. Like the best direct-response marketers, they calculated statistics like clickthrough and conversion rates out to three decimals, and maintained comprehensive databases of user data. Whether via Skinnerian or Pavlovian psychology, they’d figure out the optimal rate to send reminder emails about in-Facebook events (like mentions or new posts from friends) for optimal response. They’d cut deals with mobile carriers to facilitate the Facebook user experience in dodgy countries with slow data service."


"At this stage, the only countries Growth had not managed to tip were either weird, dictatorial, or corrupt (or all three): Russia, Burma, Vietnam, and Iran.fn1 Growth people were daily involved in the feverish crusade to turn those countries Facebook blue. One by one, every country fell to their relentless ministrations, and the also-rans in the social network space (Hi5, Orkut, MySpace) disappeared like some exotic and forgotten species of seabird."


"All ambitious men want either to please their fathers or to punch them in the goddamned face."


"There are only two inflection points in personal wealth, two points where your life really changes. One is the aforementioned fuck-you money, the other is the even loftier fuck-the-world money."


"there are those who write headlines about money for a living, and then there are those who make money."


"Here is your lesson from the Facebook IPO: whenever you see the headline “Stock X Pops on First Day of Trading and Declared a Success,” instead think “Founders and employees just got completely screwed, and the bankers and their wealthy clients made fortunes.” Because that’s what happened, and didn’t happen, in the case of Facebook."


"droit du seigneur"


"Within Facebook, Vic assumed the role of Emmanuel Goldstein from Orwell’s 1984, and many were the rips and jibes that he suffered in internal Facebook groups, a socially mediated Two Minutes’ Hate, whenever someone posted a link to one of his pro-Google bloviations. This had gone beyond mere corporate rivalry and had become a personal struggle to many Facebookers who saw their identities wrapped up in the company, Facebook as an expression of themselves (or was it vice versa?)"


"In the rapidly ossifying Facebook culture, one could get along simply by going along."


"I had two children, whose mother’s nine-to-five corporate job provided for them, though just barely. Her London trader heyday was long gone, and now her salary was that of your standard-issue MBA inside the corporate machine. I contributed a slab of cash every month, per California support guidelines, but it would be my Facebook stock vesting yet to come that would pay for private high schools and Stanford, so Zoë and Noah wouldn’t have to sneak into this country’s elite through the back door from cattle class, as I had to do."


"Facebook itself served as the society pages to its own courtly intrigue: the quasimaniacal Facebook usage among employees meant every debutante’s coming out with Zuck, or every kingly banquet at In-N-Out Burger, was there for all to see. Like a Brit on a bar stool scanning tabloids for news of the royal family, the Facebook hoi polloi friended or followed whomever they could among the Facebook nobility, and watched, nose pressed against the glass, the regal extravaganza unfold."


"Boz might have been a god at Facebook, but what he wasn’t was an ads man, as he knew nothing about the monetization space. This was no ding; most of Facebook, outside of the Ads team, had no clue how Facebook made money and the free food and shuttles got paid for. Most were quite content to stay that way, and blissfully outsourced this concern to the Ads teams and Sheryl and kept on working on whatever piece of the user-facing product was theirs."


"I had, of course, done a complete Facebook stalk going back through his time at Harvard and clear into babyhood."


"For my part, outside of physics textbooks, I found Truth to be a rather rare commodity, particularly in the tech world. I had also noticed that those who most made a big show of believing in Truth were unusually attached to whatever well-groomed pack of lies they held dear."


"Don’t be deceived by my withering treatment of Facebook in this book; inside every cynic lives a heartbroken idealist. If I’m now a mordant critic, it’s because at one point, like Lucifer once being the proudest angel before the fall, I too lived and breathed for Facebook, perhaps even more than most."


"Pause and think for a moment. What’s it like to be a Gokul or a Boland or a Fischer? You’ve seen excellent engineers and product people come and go, as your recruiters land the best new grads from every leading school. Your privileged position inside a powerful and market-leading organization exposes you to every industry trend and player, and pads your network with a roster of power and influence. Your ability to make any company’s senior management appear and deliver fawning and revealing product demos means you know everything that’s going on in your industry, down to the color of the clickable buttons in the products. And yet there you are, lips bolted like pipe flanges onto some bigwig’s ass, plodding along like an ox yoked to a grain mill, grinding the grist the big-company machine requires. Why is that? I’ll tell you why. It’s because you are without a doubt the least daring and least innovative person at your organization, because in the opportunity-rich environment in which you live, the ambitious and capable have left to pursue it. There’s a negative selection in which the cream (or whatever it is that initially rises) gets constantly skimmed off, and you are what’s left after years of continual skimming. Changing from big company A to big company B is cosmetic, as it’s of course at least a lateral move if not a step up."


"You learn that what matters in a big company is to avoid falling victim to firing or layoffs, and to appear important and critical to the company’s mission. You have mastered the art of “managing up”: namely, controlling the feelings and perceptions of the management layer above you."


"You take feedback well, and make sure to be seen speedily acting on that feedback. If you have reports, you champion their careers internally (make sure they know you’re doing that), and try to mold them into people like yourself, who are organizationally effective and recognized as such. In all but the most pathological organizations, your reports’ success will reflect well on you and create your own success. You make sure to form allegiances and friendships with your peer managers, particularly in organizations like sales or business development that you’ll need to push your business agenda forward."


"You’re middle management: you’re the necessary layer between the visionaries and risk-takers who created the organization, and the new acolytes of your religion for whom this is a job, and you are their first whiff of corporate culture and authority."


"Gokul), you’ll work at building your personal brand in a way that both augments your prestige and reflects well on the organization, all in a studiously self-effacing way that allays any concerns around thinking yourself a “star.” Failing that, the logo on your business card is your strongest asset, and you need to bank as much on that as you can, right up to the moment you trade it for another (hopefully better) one.fn4"


"You resent that guy, and one day, you are that guy, and you wonder how you got there. I"


"That’s the nature of Valley success, however: you try ten things, based mostly on random hunches, a few key product insights, and whatever internal mythologies your culture reveres. Seven of them fail miserably, are discontinued, and are soon quietly swept under the rug of “forever today” forgetfulness. Two do OK, for more or less the reasons you thought, but they don’t blow the doors off your success metric. And one, for reasons you discover only after the fact, becomes a huge, transformational success. The amnesiac tech press weaves the narrative fallacy around the proceedings, fabricating a make-believe dramatic arc from steely-eyed product ideation to flawless and unhesitating technical execution. What was an improbable bonanza at the hands of the flailing half-blind becomes the inevitable coup of the assured visionary. The world crowns you a genius, and you start acting like one."


"To quote Theodor Herzl, “If you will it, it is no dream; and if you do not will it, a dream it will remain.” Willing dreams into existence was what being an entrepreneur and a product manager was about; for once, finally, they’d be my dreams, rather than purely corporate or mercenary ones."