Silicon Valley loves mafias and you should, too
Good morning! This Tuesday, want to start a Silicon Valley mafia? Good news: You can. And maybe you should! Hi, I’m Owen Thomas, and the mafia you should worry about is Ramona the Love Terrier’s legions of adoring fans.
You must be new around here, kid
It began, as so many things do in these times, with a tweetstorm.
Ryan Breslow, sorely aggrieved that it took eight long years of struggle and strife for his online-checkout startup, Bolt, to become worth $11 billion, accused Stripe and its early backer Y Combinator of acting like “mob bosses.”
His proof? Stripe’s investors favored it over competitors. Y Combinator helped Stripe get customers. And Hacker News, Y Combinator’s Reddit-like house organ, didn’t feature a link to a story about Bolt as prominently as a link to a story about Stripe.
Thin broth, but still spicy! And it raised a question: How do we feel about Silicon Valley “mafias” — the kind that spoil your party rounds, whisper about your technical debt and downvote your links, not real gangsters?
Silicon Valley was built on mafias. If by “mafia” you mean “a group of people that worked together and decided to keep working together.”
- The first mafia was probably the Traitorous Eight, the employees who left Shockley Semiconductor to found Fairchild Semiconductor in 1957. Two of that group, Gordon “Moore’s Law” Moore and Bob Noyce, then left to start Intel.
- So many mafias ensued! The Netscape mafia seeded companies from the wreckage of the web browser maker. Among them were employees crucial to Google, like supersalesman Omid Kordestani. There was a Facebook mafia of Zuckerberg refugees before his joint even made it to an IPO. And most famously in recent years, the PayPal mafia, which spans companies from Affirm to Yelp.
- These networks of ex-colleagues provided employees, investors, customers and partners, helping boost the startups that spun out of them.
But what if you don’t have a network? Silicon Valley has had various answers for that.
- In the '90s, Kleiner Perkins famously advanced the idea that its portfolio companies formed a keiretsu, a Japanese term for an interlocking set of companies. The Kleiner keiretsu looked fearsome for a few years, until Netscape, the centerpiece of it all, started to struggle.
- Other VCs have tried to use successful companies as anchors, like when Accel and Facebook started fbFund, an effort that produced Lyft but petered out after a couple of years.
- Y Combinator is probably the best example of a working startup incubator: Take founders and maybe an idea, add money, a network and a brand and … Airbnb, Dropbox, you know the rest.
So is any of this that terrible? Not really, unless you have a problem with capitalism, maybe?
- Breslow accused Stripe of lining up all of the Valley’s biggest investors, who then declined to invest in a direct competitor to one of their portfolio companies. (Bolt started three years after Stripe.)
- Not backing a rival is generally considered good manners among investors — and it’s in their long-term interest, because founders tend to talk up that kind of betrayal to their peers for years.
- He also said Stripe, after it had gotten large enough to make investments on its own, backed a Bolt competitor, Fast.
- There are lines you shouldn’t cross in business, of course. One can think of Facebook’s use of data about startups to identify rivals to buy or crush. Or Microsoft’s use of its hold over PC makers to edge out Netscape. But nothing Breslow described was anywhere near there. It was just business.
- Breslow just stepped down as Bolt’s CEO following another tweetstorm about Y Combinator over the weekend. It may well be that he felt more freed up to unload on his enemies, knowing that he’d soon be sticking his successor with any mop-up.
The good news is you can make your own mafia. People are doing it all the time. Silicon Valley’s restless work culture and abundant capital all but guarantee that someone will back your escapade. Bolt is reportedly raising fresh capital at a $14 billion valuation. If Stripe and Y Combinator really are mob bosses, they must be remarkably inept at it.
On the calendar
How tech is making sure shopping will never be the same
The future of shopping isn’t happening on Amazon.com, and it isn’t just happening in a Walmart or mom-and-pop shop near you. It’s merging the online and offline worlds to build a ruthlessly efficient, totally social world of commerce where everything is for sale and available any way you want it.
Join Protocol's David Pierce at 9 a.m. PT today as he and a panel of experts get into the details on how shopping works now, how the customer and seller experiences are changing and where there’s still room to innovate. RSVP here.
A MESSAGE FROM ENVOY
The concept of flex work isn’t new, but its widespread adoption is. Flex work helps all of us find some semblance of control in the middle of an uncontrollable pandemic. Giving options makes people happier and less stressed. This leads to a greater desire to participate, which helps us build our communities and culture.
People are talking
Nayib Bukele has some lofty expectations for the price of bitcoin:
- “A gigantic price increase is just a matter of time.”
On the other hand, Dmitry Medvedev doesn’t think banning crypto is the best idea:
- “When [Russia tries] to ban something, very often it leads to the opposite result.”
Even though leaders are listening, ThoughtExchange’s Dave MacLeod said workers are still leaving because they feel ignored:
- “Everybody's tripling down on listening tools right now, but nobody's tripling down on action tools.”
Sony is buying Bungie for $3.6 billion. Bungie was the original developer of Halo, which shot Microsoft to fame.
Wordle has a new owner. The New York Times bought Josh Wardle’s word game for a price in the “low seven figures.”
So does what’s left of a crypto project Meta backed. Diem sold its assets to Silvergate Capital for $182 million.
Vista Equity Partners and Evergreen Coast Capital bought Citrix for $16.5 billion. The two firms have a prior relationship with Citrix.
Sonos bought T2 Software, a Bluetooth audio company. The startup has been working on a new standard of Bluetooth audio.
Meta is now part of the Crypto Open Patent Alliance. By joining, Meta is pledging not to enforce its crypto patents.
Tobias Lütke is joining Coinbase’s board. The move might point to Shopify playing a significant role in the future of crypto.
Chris Suh is Electronic Arts’ new CFO. Suh is replacing Blake Jorgensen.
Accenture made a couple leadership changes: Manish Sharma is the company’s new COO, and Yusuf Tayob is the company’s new group chief executive — Operations.
Dominic Perella is leaving Snap as chief compliance officer. Perella has been with the company for seven years.
ByteDance eliminated members of its Talent Development team in December, sources told CNBC. The employees who lost their positions could apply elsewhere in the company.
In other news
Grindr is reportedly off app stores in China. The company said it had trouble keeping up with the country’s Personal Information Protection Law.
Black game developers aren’t seeing a ton of diversity progress, they told The Washington Post. Developers of color said the field continues to go through a cycle of promises, little progress, then no change after issues emerge.
A new Big Tech book is coming, this time written by Wall Street Journal reporter Tripp Mickle. It’s called “After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul,” and it’s about Tim Cook, Jony Ive and how the company changed after Jobs’ death. It’ll hit shelves May 3.
Subscribers come for the hit show, but many don’t stay. People flocked to Disney+, Apple and others following the release of popular shows, but they only retained some of those subscribers in the long term, The Wall Street Journal reported.
Why post a selfie when you can post your avatar? Meta is adding 3D avatars to Instagram stories and direct messages so your virtual self can show up in messages, Instagram Stories and more.
Pinterest has a new AR feature. The platform is rolling out a tool that allows customers to see how furniture would look in their homes.
More self-driving trouble at Tesla. The company is recalling more than 50,000 cars over a new "rolling stop" feature in its Full Self-Driving mode, which the NHTSA didn't like one bit.
Talking to your boss about race
ReadySet’s Y-Vonne Hutchinson addresses how to talk productively about racism and bias at work in the book “How to Talk to Your Boss About Race,” which is out today. It covers ways to think about race at work and how to effectively talk to powerful leaders, while navigating any backlash.
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Correction: Making Moves was updated Feb. 1, 2022, to more accurately reflect that the decision to sell Diem was not made by Meta itself.