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Silicon Valley loves mafias and you should, too

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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.

— Owen Thomas (email | twitter)

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Thoughts, questions, tips? Send them to, or our tips line, Enjoy your day, see you tomorrow.

Correction: Making Moves was updated Feb. 1, 2022, to more accurately reflect that the decision to sell Diem was not made by Meta itself.

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