Virtuous Mafia

Discussing Facebook, many things can be called impressive, even by Silicon Valley standards.

No one else gathered people at that speed. You can count on the fingers of the company, which seriously considered the causes of revolutions, as well as other socio-political unrest. We know by heart the names of people who, from their young years, have led multimillion-dollar corporations. We will not find any other company, except Facebook, about which a full-length film nominated for all possible types of Oscars would be shot.

Therefore, it is not surprising that the intellectual mafia of Facebook created a portfolio of such high-profile startups as Quora , Cloudera , Jumo , Asana , Path, as well as many others. All of them were born and reached maturity very quickly, in fact - even before the “most important” thing happened for Facebook. Like most of the things that make Facebook a unique place on the Internet, the above startups owe much not only to Zuckerberg with his creation, but also to the time in which they grew up.

Before we embark on a narrative, it is important to keep in mind that not all companies give birth to the so-called. "Intellectual conscientious mafia." A real, assembled, capable of quickly responding to environmental changes, the “mafia” usually begins with a community of co-founders, early employees and top engineers, each of whom has passed “combat tests” and has the resources and enthusiasm to finance someone else's business.

In addition, most technology companies are very fond of investing in their own. This co-investment and support of each other allows you to leave all the wealth "in the family." And despite the fact that a huge number of smart people, entrepreneurs and angel investors came out of Google, Yahoo, eBay, Amazon and Microsoft, their giant business does not allow the “mafia” that we are talking about inside, capable of catalyzing at once and bringing to the world is a lot of new, different and cool.


In fact, the situation is such that only a few large and successful companies that exist to this day have raised the Mafioso. The main problem here is, oddly enough, in growth. Once the office’s DNA grows to enormous size, it’s already impossible to maintain the original culture inside. And for financial reasons, those who work in such companies from the beginning are usually attached to them “to the end” - that is, until the first months after an IPO. For this reason, all those who remained sitting in their glass offices did not keep pace with the next big wave of startups.

The mafia structures that we are talking about most often arise in those companies that could achieve more, but for some reason this did not happen. Such a development of events makes a person feel a frustrated feeling that "you need to finish the job." As Peter Thiel said about the PayPal mafia: “There were a huge number of smart, competitive people, each of whom needed to do something.”

Here are examples of some of the most notable "mafia groups" of Silicon Valley.

It all started with the legendary company Fairchild Semiconductor, which left the core of highly qualified specialists, two of whom founded Intel. Next was Netscape, the largest and most profitable deal after the sale of AOL. By the way, Netscape was generally a landmark company, and then they said about it, "they will change the world." This happened conditionally, because immigrants from this office generated a huge number of new companies, businesses and jobs. These people simply could not imagine themselves sitting in the workplace: Quincy Smith, Ram Sriram, David Wayden and many others, well-known in narrow circles of names.

However, the most grandiose result of the Netscape Mafia was the angelic investment portfolio of Marc Andressen and Ben Horowitz , who founded Opswareand those who sold it to HP for $ 1.6 billion. But what’s even more interesting is their investment.

For the uninitiated: both former Netscape players began to take a closer look at Web 2.0 projects when you and I were just discussing this tidy phrase flying overseas. What projects ended up under their wing? Weak: Digg, Delicious, Twitter. Subsequently, this portfolio became the basis for the creation of the Andreessen Horowitz fund , which invested in everything: from Zynga and Foursquare to Skype.

Another mafia emerged from the bowels of Excite @ Home . For those who do not remember - Excitewas a portal whose total value was determined at $ 6.7 billion before the sale, almost before the collapse of the dotcoms. Excite flew very high and falling nailed everyone who was under it, except for those who had a good understanding of what was happening: Joe Kraus founded JotSpot and is a member of the board of directors of many companies in the Valley, as well as a partner of Google Ventures. Craig Donato created Oodle , David Sche was an early investor in Facebook and LinkedIn, and since 2000 has been a member of the Greylock Foundation (where he does his business).

Summarizing - the mafia Excite @ Home may not have spawned the next billionth company, but it launched several of these. And, as usual, mutual responsibility and joint business there - in the order of things. Donato, Sche and Ballington do business together, travel to conferences together and joke around the old days together. Looking at them, we can confidently say that such a mafia does not begin with those who have a line in the resume meaning something completely new. It begins where people with the same psychology, the desire to do something together meet, and this makes their company unique, turning it into a real, vital, fraternity.

However, the most famous and most mentioned Valley Mafia was PayPal. The three founders of the company themselves made a lot of noise. Max Levshin founded Slide, which he later sold to Google for $ 228 million and incubated Yelp, which had already embarked on a $ 1 billion company path.

Peter Thiel (perhaps the most famous of the whole trinity today) founded Clarium Capital and the Founders Fund, which invested in companies that left PayPal. But he became known to the whole world because it was he who gave Zuckerberg his first money, when no one would have done it, and for some time he was the only Facebook mentor.

Elon Max invested in the Solar City project and founded Tesla , as well as SpaceX. Tesla has already completed a successful issuance of securities, two other companies are awaiting listing on the stock exchange this year. Each of the three mentioned founders of PayPal, among other things, produced films :)

And let's not forget about the most successful PayPal-mafia project for today - selling Google’s YouTube portal for a fantastic $ 1.65 billion. It was this deal that cemented the reputation of the then "new" in Sequoia Capital by the name of Roelof Botha. He was once a CFO PayPal.

Their second largest deal was over IronPort, a company built by Scott Banister and sold to Cisco for $ 830 million.

However, another, no less important event will soon happen: LinkedIn IPO, which was created by former PayPal employee Reid Hoffman. Incidentally, he has vast experience in investing and mentoring young companies, doing this side by side with his main job.

Don't forget about other promising PayPal companies like Yammer. Let me remind you that it was founded by David Sachs, whose idea was viral marketing based on the payment of cash for inviting friends - then it was COO PayPal.

Kate Raboys, in turn, is one of the board directors of Square , a company that has already hit the entire financial and payment industry with a completely new business model.

EBay executives often like to reiterate that the takeover of PayPal was almost the best deal in their history. But those who left PayPal today have earned much more money and changed the world in which we live.

The author of this publication once asked Peter Thiel if he considered such an early sale of PayPal a mistake. Til replied that it was a difficult decision for him, especially in light of the fact that PayPal became a huge company inside eBay, and would have been many times more if left alone. But oddly enough, he noted, looking back and seeing everything done as a result of the work of an intellectual team, internationally selling PayPal definitely seems like a mistake today.

However, as he himself notes, if all these people and money remained canned inside PayPal - what was happening today might not have happened.

Almost all of the same questions can be asked about Facebook.
Hundreds of millions of dollars are being promoted right now in the secondary securities market. It is they who make Facebook the company of this generation, and the receipt of these funds was a serious test for Zuckerberg and the entire world of technology and the Internet.

When there is a lot of money, it becomes more and more difficult to keep the first workers who are already millionaires, but in fact they are still young and full of energy. Facebook continues to grow, and so far the end and edge of this development are not visible. And the larger the apple tree is, the farther the seeds scatter from it.

So what does the Facebook mafia look like and what is its fundamental difference from its like? There are three reasons to understand this: Quora continues to gain audience and popularity, Path “wraps up” Google’s offer to buy for $ 120 million, Asana, after two years of closed development, showed only one finger of the announced collaboration mechanisms.

Let's try to look inside a community that reacts so sharply to changes and continues to bring so different ideas to the world that grow from one place.

Not for sale

Almost everyone who worked on Facebook before the summer of 2006 will tell you that in July there was a truly turning point within the company that cannot be overestimated.

Rejecting a $ 1 billion offer from Yahoo has literally changed the way we think inside the company. Everyone began to think like an entrepreneur.

And although this act can be interpreted in different ways, the current cost of Facebook gently hints that the act was correct, even if it divided the company into two camps.

Dustin Moskowitz recalls how colleagues asked Zuckerberg: “If you knew you weren’t selling, why do you need to lead us all so deep into this cave? Because it is very painful to climb to the top in order to fly down. " This was the last time Mark allowed himself such an oversight - to act as if you were alone and no one was standing behind your back.

Moskovitsa also rejects all offers to buy, just like Quora.

Well, there’s also Path - a site for the distribution of mobile content, which rejected the offer to purchase for more than 100 million. They say that Maureen (CEO) was tormented for a long time with this decision, but Moskowitz, his largest angel investor, helped with advice: refuse Google such a generous offer.

All of the above companies are building their culture around an engineering cult. Their investors and competitors always talk about how good a team is. Each of them with painstaking meticulousness approaches the recruitment of new specialists, and is ready to pay them almost as much as they ask. For reference - Asana gives $ 10,000 to each programmer.

Zuckerberg himself spoke of Adam D'Angelo (co-founder of Quora) as the best computer engineer he had ever met. And according to rumors, Google did not offer 120 million for the Path service, but for its brilliant team.

But unlike companies such as Google or Amazon, which hire college and university graduates, based on tests and a standardized approach, Facebook “and the company” prefer a much more crude, clean and ingenious approach to recruiting new staff. This is what creates entrepreneurial structures within the company. Justin Rosenstein, who was a Google employee, then Facebook before setting off to co-found Asana with Moskowitz, said: “Google’s work is often compared to a wonderful country for academics, while Facebook is more like a maze with lots of doors to dorm rooms, crammed with programmers working all night and sleeping during the day. ”

One thing that makes Facebook so different from what it used to be in the days of Web 2.0 is how fast it grew and how much new funds were attracted. After the collapse of the dotcoms, there was a fear in the Valley that "you cannot take too much money" and "you cannot do what you can outsource." Mark missed the dotcoms and the boom that was in front of them, and therefore simply took and built a company that he himself considers acceptable.

For this reason, those startups that were born as a result of the activities of the mafia have small teams. Not for the reason that being small is cheap, but because they don’t need extra money and don’t need a reason to attract these funds. They also do not have a problem with the recruitment of highly qualified specialists - they themselves want to join them.

The success story of these projects? It is built on the basis of their effectiveness in solving problems, rather than spawning random communities that support user growth. Quora is looking for a way to organize information to satisfy the person who answers the question, not the person who asks it.

Path offers a convenient way to view friends' tapes. Like Facebook, the emphasis is on invisibly engaging you in using the app throughout the day, instead of taking you a few hours at once.

Asana, in turn, offers control of work and teams through a core reminiscent of the news feed we are used to. And again, the application attracts attention, with which I want to interact constantly, and not "roll" to cope with accumulated problems.

This is the difference Mark Zuckerberg talked about in the early days of Facebook — the difference between a “tool” and a “media”.

Stimulation instead of virality is what distinguishes these companies from many others that exist in the Valley. Most of them want to increase only to increase, and are ready to go for any dirty trick in order to attract more users to “this game”. Suppose that in the end this means a low percentage of users who have figured out what's what and have ever visited a site. Over the past few years, the concept of “unique visitor” has lost its meaning, but this has not yet reached many.

At the same time, the experience of Facebook shows controlled growth, motivated by several conditions at once. We saw how the Harvard social network went further - to Ivy League schools, then universities around the world, then large companies around the world, and finally ... you understand. No one was in a hurry and everyone knew about it very well, and it was this that made it possible to keep a huge mass of users from erosion that could happen; wish Facebook took control of the masses in a short time.

By analogy, the cost of Quora, its impact and the amount of information on the pages has long exceeded the subscriber base.

Path has a handful of Instagram users.

Asana has a list of 5,000 companies awaiting product release. All of these companies can become very large one day, but definitely this is not their priority today.

I think there is no need to explain that in order to leave a company such as Facebook, a person must have a powerful incentive, and motivation, as well as opportunities. Or maybe all these founders are entirely idealists who believe that it is possible to change the world?

The important thing is that in each of these companies there is a very strong sense of common mission. None of them began with writing a “cool site for me and friends”, but with solving a big and important sociological problem. And more importantly, none of these problems is new. It is for this reason that these startups have the most vocal haters, saying that Quora is Yahoo Answers, and Instagram will have time to eat Path before it hatches from the embryo, and seeing Asana is just another toy devouring working time.

But the bottom line is that key issues remain unresolved despite billions of dollars invested. Everyone can say: “These companies will not succeed”, because we saw a lot of companies that really did not succeed. You can call this fact as you like - insanity, excessive self-confidence or just nonsense, but each of the founders of these companies is sure that he knows where the key is, where the lock is, and which direction to turn.

It’s easy to compare all this with Facebook itself, which made it possible for all these people and companies. The most significant reason why no one wanted to give money to Zuckerberg despite the obviousness of his idea was that Friendster was in sight. After was the start of MySpace and the second wave of skeptics surged with the words that now it’s now no one and never catch them. Where are all these people today?

Like Facebook, companies like Asana, Path, Quora and many others solve problems that are social in nature. Not social in the sense of “social media”, but social in the sense that when a person tries to interact with other people on the Internet, he transfers all the obscure and subtle aspects of communication and relationships with himself. Subsequently, trying to figure them out.

There is no such problem on the modern Internet that only a machine, or only a person, could solve. Each of the mentioned startups uses both one and the other to achieve its goal. Because there are as many solutions to these problems as there are people on the planet. Everyone is busy getting closer and closer to them.

As Moskowitz observed: “These are not different paths, this is one large, huge, deconstructed company operating throughout the Valley”

This is a pedigree. Mafia coming out of the mafia coming out of the mafia. Its development took tens of years and involved thousands, tens of thousands, smart people who wanted to do business.

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