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HubSpot’s leaders were not heroes, but rather a pack of sales and marketing charlatans who spun a good story about magical transformational technology and got rich by selling shares in a company that still has never turned a profit.
The office-as-playground trend started at Google but now has spread like an infection across the tech industry. Work can’t just be work; work has to be fun.
Dogs roam HubSpot’s hallways, because like the kindergarten décor, dogs have become de rigueur for tech start-ups.
Everyone works in vast, open spaces, crammed next to one another like seamstresses in Bangladeshi shirt factories, only instead of being hunched over sewing machines they are hunched over laptops.
They’re all women, they’re all white, and they’re all wearing jeans and sporting the same straight, shoulder-length hair.
This new bubble contains the same kind of magical thinking, but with an added twist, courtesy of the Federal Reserve. This time around the problem isn’t just that investors have gone a little bit crazy, but also that money is cheap.
Magical thinking
Some investors are just spreading money around everywhere—“spray and pray,” they call it—hoping that somehow, if only through dumb luck, some of their money will land on the next Facebook, and the payoff from that one hit will more than make up for the duds. The biggest risk for venture capitalists is not that they will make a bad bet but that they will miss out on one of the good ones.
Walking around San Francisco, it strikes me that this cannot end well, that the combination of magical thinking, easy money, greedy investors, and amoral founders represents a recipe for disaster.
Online marketing is not quite as sleazy as Internet porn, but it’s not much better, either.
Marketing conferences are filled with wannabe gurus and thought leaders who work themselves up into a revival-show lather about connecting with customers and engaging in holistic, heart-based marketing, which sounds like something I made up but is actually a real thing that really exists and is taken seriously by actual adult human beings, which makes me want to cry.
Leads are defined as people who fill out a form and hand over their name and email address. The blog gets leads by putting a little box at the end of every blog post inviting the reader to download a free e-book and “learn more.” To get the e-book, people need to fill out a form. Hardly anyone goes to all that trouble.
Apple CEO Steve Jobs used to talk about a phenomenon called a “bozo explosion,” by which a company’s mediocre early hires rise up through the ranks and end up running departments.
Shrinks call this the Dunning-Kruger effect, named after two researchers from Cornell University whose studies found that incompetent people fail to recognize their own lack of skill, grossly overestimate their abilities, and are unable to recognize talent in other people who actually are competent.
“You know what the big secret of all these start-ups is?” he tells me. “The big secret is that nobody knows what they’re doing. When it comes to management, it’s amateur hour. They just make it up as they go along.”
HubSpot is not a software company so much as it is a financial instrument, a vehicle by which money can be moved from one set of hands to another.
“You don’t get rewarded for creating great technology, not anymore,” says a friend of mine who has worked in tech since the 1980s, a former investment banker who now advises start-ups. “It’s all about the business model. The market pays you to have a company that scales quickly. It’s all about getting big fast. Don’t be profitable, just get big.”
As former secretary of labor Robert Reich put it in a June 2015 Facebook post: “The ‘share economy’ is bunk; it’s becoming a ‘share the scraps’ economy.”
The Netscape IPO set off the dotcom frenzy. In Silicon Valley it was as if someone had flipped a switch. Suddenly there was a new business model: Grow fast, lose money, go public.
The old W. C. Fields line “If you can’t dazzle them with brilliance, baffle them with bullshit”
These glorified car salesmen, these people whose jobs involve coercion and manipulation, whose lives revolve around making their numbers. Every month, every quarter, every year: sell, sell, sell! These are the people who took the Internet, one of the most wonderful and profound inventions of all time, and polluted it with advertising and turned it into a way to sell stuff.
Kinsley gaffe, named after the journalist Michael Kinsley, who defined gaffes as those moments when politicians slip up and reveal what they truly believe: “A gaffe is when a politician tells the truth.”
So that’s the good news—they can’t fire me. The bad news is that they can do what companies often do when there’s someone they want to get rid of—which is they can abuse me and make my life a living hell, so that I’ll leave on my own.
script—the “corporate narrative.” You have the origin myth, the eureka moment, and the hero’s journey, with obstacles to overcome, dragons to slay, markets to disrupt and transform. You invest millions to build the company—like shooting the movie—and then millions more to promote it and acquire customers.
“college dropouts with insane ideas going after tiny markets with no idea how to monetize,” as venture capitalist Ben Horowitz of Andreessen Horowitz once put it.
In 2009 Andreessen and his friend and former business partner Ben Horowitz launched Andreessen Horowitz, or a16z, as it is known. (The name is a “numeronym,” a way of shortening a word or phrase by using a number to represent the number of letters that have been left out. A, then sixteen letters, then Z. Tech geeks love stuff like this.)
I had a different experience. Where others saw a fun place to work, I saw a place where “old people”—those over forty, and certainly people over fifty—were largely unwanted, and the company made no secret of it. I saw astonishing uniformity and groupthink, and an incredible lack of diversity, based not just on age but also on race, euphemized as “culture fit.” I saw poorly trained managers, haphazard oversight, and an organization that was out of control.
