Software: The Early Years. A Brief Memoir of My Time in Pre-Internet Tech.
If you haven’t read the excerpts or interviews or actually read the book, Dan Lyons’ Disrupted tells the story of an ancient 50-something tech editor who loses his job at Newsweek and finds another as a ‘marketing fellow’ at HubSpot. That’s the money-losing startup with a billion-dollar valuation where employees have a free candy wall, the founder has written a Powerpoint manifesto, and everyone is on a revolutionary mission. After arriving, he quickly learns that HubSpot is hiring a certain type — 20-something white kids molded by the same New England colleges. Lyons tries to learn the rituals of this new and awesome culture. Awkwardness and unintentional hilarity ensues. Lyons is eventually fired. And writes this book. Fin.
I also entered the (pre-Internet) software world as something of an outsider. I was the tech person who knew computers but also could write and explain, back in the day when this was a unique intersection of skills. Not anymore. Now my outsider status comes from, like Lyons, having been around too long, and being aware of ancient tech history: if you can remember some Unix operating system feature from 10 or 15 years ago you’re considered a curiosity at best.
Unlike Lyons, I’ve inhabited many roles in the software world — Unix hacker, software engineer, IT drone, tech writer, children’s computer instructor, tech marketer, and more recently digital content creator (blogger). So I congratulate Lyons, who was the former tech editor for Newsweek, for getting so much of the strangeness of software companies, and its latest mutation, Web startup software company, exactly right after such a brief sojourn at HubSpot.
Some of what he writes about has been covered over the years by other intrepid explorers. Computers as religion? There’s Soul of a New Machine. Writer facing work challenges in modern office environment? That would be Sloan Wilson’s 1950s era Man in the Gray Flannel Suit — still worth reading. Heartless corporate Caesars? Patterns, Rod Serling’s x-ray of the executive suite. Meaningless office work? There’s so much to pick from! But Joshua Ferris’s Then We Came to an End will give you a quick lesson in modern office nothingness.
Financial types sell shares in a business that loses money as a way to make money? Meet Max Bialystock and Leo Bloom from Mel Brooks’ “The Producers”. Thanks Mel for your prophetic vision into high-tech finance!
Why has this book resonated with so many, I’m guessing, techy males in their late 40s and 50s? I think that Disrupted captures the daily frustrations of working in a business that has always been hard to explain to anyone from a non-digital occupation.
Practically from when I started programming in the last century, there was a giant cultural gap between techies and the general public. That has since lessened of course. I assume people outside Silicon Valley are watching the show of the same title. I’m not sure a TV series entitled “Redmond” would have gotten very far in the late 1990s.
For older workers, I think Lyons brief experience at a software company mirrors their own precarious positions. He was confused (as we all were) by meandering meetings, convoluted management hierarchies, clueless marketers, bullying managers, and underlying it all, a technology which didn’t seem to work very well and was almost besides the point.
Sure my generation had Dilbert, but that was a cartoon. Lyons describes a real start-up world, that makes Dilbert’s company look like a great place to work. If you think free candy, ping pong tables, and drum sets are great perks, then forget that last sentence. In dealing with his own frustrations and anxieties during his short stay at HubSpot, he channels for me and my cohorts a lifetime’s worth of bewilderment at what we were all witnessing in the tech grind.
There’s Something Weird (and Childish) About Software
Lyons first shock is that all his coworkers are in their 20s. It’s not really that unusual for a small tech company to be very young. By the time Lyons arrived, though, HubSpot has over 700 employees. Later in the book, he learns from a co-worker that only a handful are over the age of 50.
Based on my journeys through Tech-istan, that is unusual.
This is called, in management-speak, hiring by design. It’s not enough that you’re more than qualified to do the work, you also have to live and really enjoy the corporate culture, or more exactly the cult rule. Lyons implies that younger less-experienced workers are inclined to be followers of what at HubSpot looks like a corporate version of Scientology. The alert reader will want to know then why they hired, the very un-Hubspokey Dan “the fake steve jobs” Lyons. I’ll get to that a little later.
Some — not all — of Lyons’ observations of HubSpot’s corporate culture track my own experiences in software and other tech companies.
He notes an environment where not only is everyone thought to be above average, but they are all awesome rock stars and software warriors on a mission. I worked in a marketing group at one dare-to-be-great software place where the culture required you to practically run through the halls and have brief meaningless conversations with workers. It was all about being energized and hyper-positive. We were also repeatedly told we’re part of a “world-class” team.
And tech companies have always had an appetite for newly graduated engineers, software developers, and managers who were more adventurous and “flexible” when it came to trying new technologies and ideas — and weren’t as expensive as older workers.
HubSpot reengineered familiar business templates for a new type of software business. Lyons was a stranger in a strange software land of Internet-era startups that value clicks, page views, and coolness above all else.
Back when I was in school, required reading in sociology class was William Whtye’s The Organization Man, which took a look at large mid-century modern American companies. At the time, General Electric, General Motors, AT&T and others were business marvels. They were run by technicians, used scientific principles, and churned out zillions of consumer widgets. I took another look at the book before writing this and — surprise, surprise — a few things haven’t changed at all, especially aspects of emphasizing and re-enforcing corporate culture.
Software startups may all want to disrupt the market, but some of their internal practices look familiar to us old-timers.
The founders and their inner circle have simply taken corporate boosterism and rebranded it. Lyons describes the founders’ fondness for silly slogans, manifestos, and new visions of the ways things should be — thankfully, they’re focused on software, not reorganizing society. And like Dilbert-era managers, they would issue arbitrary (and petty) decisions directed often at lower-level employees.
I’m convinced that the stranger aspects of HubSpot and other software companies’ cultures have to do with the product being sold. These aren’t William Whyte’s factories making real-world stuff.
Software is weird.
Over the years, I’ve had more than one successful software business owner tell me just that. One time this happened during an interview. By the way, I didn’t take that job.
I once heard Joseph Weizenbaum, the developer of Eliza and a grumpy computer prophet, give a lecture at my college. He told a story in which he asked a computer science graduate student about a program he had worked on. The student couldn’t explain it, and that launched Weizenbaum into a rant about software’s disconnect from the humanities, which was a major theme of his work.
Weizenbaum, who was a professor of computer science at MIT, captured his anti-computer thoughts in his Computer Power and Human Reason. It was a much-discussed (and controversial) book in its day. In looking at it again, I found it to be hard going as he worked out his computer anxieties. However, there are more than a few gems buried in the text. Here’s one that reached out to me:
… programming is a relatively easy craft to learn. Almost anyone with a reasonably orderly mind can become a fairly good programmer … And because programming is almost immediately rewarding, that is, because a computer very quickly begins to behave somewhat in the way the programmer intends it to, programming is very seductive, especially for beginners. Moreover, it appeals most to precisely those who do not yet have a sufficient maturity to tolerate long delays between an effort to achieve something and the appearance of concrete evidence of success.
When I was first taking college-level programming classes somewhere in the later part of the last century, there was a story about a comp sci student who had to be escorted out of the computer room because he was trying to smash the computer terminal screen. I mean after all, the computer was not doing what he told it to, so he had to thrash this disloyal digital servant.
Software produces instant results and so will of course have great attraction to someone who’s very young. To master other sciences and applied sciences — chemistry, engineering, biology — normally takes a long apprenticeship period with direct instruction from older mentors.
And then after your training, it takes years to achieve something of importance. Maybe there are stories about experimental physicists smashing mass spectrometers, but my sense of them is that they’re not expecting the universe to reveal its secrets before Q3 of this year.
Computers attracts the opposite personality. It’s not to say that there aren’t gifted and patient programmers, but there’s something else going on with this new strain of startups.
We have a generation of software entrepreneurs — do I even have to say in their early 20s — who within a few years of writing their web code are heading billion-dollar companies. Helping in their high-velocity ride to the top are a second group of instant gratification seekers, the angle investors, VCs, and Wall Street bankers, all of whom expect every quarter to be twice better than the last. It’s a cohort that likes to sprinkle their conversations with the words “exponential” and “hockey-stick” growth.
One older software executive I once knew, who took exponentially longer — 20 or so years — to achieve his millions, was very excited to tell me why software is such a great business. Waving a CD he had in his hand, he said all he had to do was sell more of these — those cheap legacy plastic discs that were used once upon a time to store software.
He was positively glowing when he said he didn’t need to buy more equipment or hire extra staff to stamp out additional plastic discs. All he really needed was more phone calls from customers.
That is the essence of the software business model. Get people to know about your great software, convince potential customers they need your product, and then wait for the cash to come in. As this executive was suggesting, the hard and expensive part was not so much making the product, but marketing and selling it.
Sure, gifted programmers and executives that I’ve known over the years have done pretty well for themselves. But it used to take more than a few milliseconds to achieve fame and some fortune.
It’s All Marketing (and Movies)
Then came the Internet and Google, and the goal was to market your software so your company name showed up on page one of a relevant search result. The marketing part became much easier. You still needed to bring in cash, but counter-intuitively with the new generation of software startups like HubSpot, the profit part has become less important. I’ll get to that as well.
For the types of business-oriented software products I’ve been involved with, the marketing was good at reaching some harried IT person with a budget, and who needed a “solution” — by the way, that’s the official buzzword for describing business-grade software — to his problem. Software marketing is about taking a solution that handles maybe 60% of what the buyer wants and explaining that the other 40% is not that important.
I’ve heard more than one softwarepreneur tell me that their business is all about marketing.
It’s not that their products were market-ware — products or solutions that didn’t really exist. All or some important parts of it worked, but none of it was ever all that good, and it often created more problems than it solved.
After years of using it and working at companies that made software apps, I can say that business software has always been, um, very far from perfect. I mean at The Mythical Man Month level of imperfection.
For those bugs and other quirks that customers continue complaining about, a software company always releases new software to take care of it.
You have to string them along. Softwarepreneurs want to sell you software, solving problems are secondary.
And the truth is that many (not all, of course) software business solutions are essentially commodities — using the same underlying widgets — but branded to make it appear unique.
Even business software can now be downloaded from the company’s web site, the same way we regular consumers load apps on our devices. Further adding to the transient feeling of a software company’s business-ware, is that the web service they offer can also hosted by a third-party “cloud provider”, say Amazon Web Services. So a startup today doesn’t even have to own it servers or house too much in the way of backend hardware — at least in the beginning. And many don’t.
The business app is then wrapped in a slick web-based graphic user interface or GUI — pronounced gooey. It usually includes a “dashboard” with digital dials, graphs, and controls that would put a 787’s cockpit to shame. These virtual command centers are a ploy to woo managers who will try to use this information — good luck with that — to make decisions.
For the developers and admins, there’s always a dense application programmer interface, or API, explained in an online reference manual, and a “tutorial” with ridiculously simple examples worked out.
And then the sales people provide some loose arguments about R-O-I or return-on-investment, which is how long it will take for the product to pay for itself in reduced costs.
So there’s just enough teaser to get buy-in from all the relevant areas in IT.
But that’s still not enough. You have to make it appear that the company’s software is more popular and accepted than it really is. Is has to be part of a larger movement that has the same importance as nuclear disarmament or civil rights. I mean if you want this company to go public — the goal of all the HubSpots out there.
Dan Lyons explains how HubSpot’s software — really a business app for analyzing web statistics and blasting out emails — is marketed. To get the low down, Lyons talks to one of his banker friends.
He confirms something I had intuited about how these Potemkin villages are put together: the investors run the show.
And it is a show.
They talk about “making a movie” with the right actors and the right story. They founders have to be young, have no social life, and pitch their startup using the right creation myth. According to Lyons, the origin story is an important part of both the pitch to investors and the way company is presented and marketed to the public.
Over the years, I’ve heard more than one corporate origin myth that starts out with “We sketched the idea on a napkin while having dinner at our favorite …” Besides a napkin genre, there’s the interesting location one, where the founder has his or her aha moment in some place exotic locale: “While doing my laundry in Thailand, I suddenly realized …”
Why are origin myths important?
It’s because some of the tech mega-hits — Apple, Microsoft, and Google — really did have interesting early histories. Tapping into my inner Max Bialystock and thinking out loud, “Well, for our company to be the next Apple or Google, it must also have an interesting creation story and culture! It will be great box office!”
Great creation myths implies great company. More recently, a cafeteria serving quinoa porridge for breakfast also signals great. And if a CEO wears black turtle necks it can help convince the public they’re the next Steve Jobs or some other cool person.
These pseudo creation myths tell us all we need to know about how the founders and their early investor enablers view the gullibility of the public.
Ok, so it’s a movie where founders and ideas meet cute. You’re ahead of me, right? The crowd scene in this picture comes from asking Central Casting for employees with just the right mix of nerds, jocks, and edgy types.
Lyons notes that the employee cast is now an important part of the marketing to customers. In my own writing about software startups for a very modest blog I started, I kept coming across a similar roster of character actors. Executive and staff bios on the web sites seem to read like an ideal date: quirky types who have advanced degrees and also on the side, are avid surfers or artisanal beer makers.
Here’s the end of one employee bio on the “about page” from a startup that I had picked at random: “He loves a good beer with friends, sailing and long walks.” Investors and presumably customers who buy the software like to see this kind of thing.
The overall impression is that we’re cool upperclassmen (or at least someone you want to hang with), we’ll take care of everything, and don’t worry about the product. It’s the last thing you need to be concerned about because our coolness will rub off on you and you’ll be cool too! As Lyons describes it, the customers who become enlightened then become part of the show as advocates.
The VCs and others — the movie producers and moguls — may deny they’re creating the startup version of The Ten Commandments, but over the years, I kept seeing the same themes that Lyons noticed. In software companies I’ve been involved with, the marketing and culture are like a Hollywood blockbuster: there are certain elements and plot points that have to be in the scripts.
I was a freelancer at a startup in the late 1990s — the NYC office of a successful Silicon Valley company — that had a napkin origin myth, a cool corporate culture, and the CEO took everyone to the Hawaii for meeting a revenue goal.
At another more recent software startup I worked at, there were contests to see who could up come up with the best Christmas decorations. Wandering around the office floor, I saw an elaborate model train installation surrounding someone’s cube that looked more at home behind a Macy’s holiday window.
I don’t want to be a complete Scrooge — giving the employees some personal freedom does have advantages. And the new breed of softwarepreneurs are far better business people than the old school.
In one startup I was briefly associated with during the computing Bronze Age somewhere in 1980s, the PhD founders with their superior intellects would disparagingly talk about investors and customers, claiming what they were doing was really very hard and you were an idiot if you didn’t get it.
And that was their approach to marketing as well. The funny thing was that with all their superior intellect, the software thing they came up with never really worked. At that company, we would occasionally play frisbee in the parking lot. It was considered edgy at the time.
Today, you have a super confident brogrammer in charge, leading his pack of beta wolves, and they are all about solving problems and providing a great customer experience and having an awesome day on the job.
In my early computing employment, they didn’t really care about the customer or giving employees much personal space. At least this next-generation tries to, which in my book counts as progress.
Cynical Wall Street and Upperclassmen From Hell
In more recent employment and consulting post-dot com bust, I began to first notice the scripted reality that Lyons talks about in Disrupted. The clue that I was in a movie was when a higher-level executive would break character, and let drop a neutron bomb of cynicism. It’s the same language — usually frat-house bathroom humor — that someone in the know would use. It’s the humor of the master, not of the workers.
And often times it was directed at the workers.
“Why are employees in a startup or company about to be bought like mushrooms?”, said one CEO to me after he just sold his company.
“Because they’re kept in the dark, fed shit, and then canned!”
LOL.
I’ve since heard variations of this “in joke”, and there’s a variant of it mentioned in Lyons book. He learned about it from his banker friend.
I happened to be thumbing through a Mad Men-era paperback on big business I recently found in the stacks of a used-book store, called Welcome to Our Conglomerate — You’re Fired”, and discovered … the same joke told by executives and bankers. It’s a classic.
Then there’s a whole pig genre — “we’re perfuming the pig”, “putting lipstick on the pig ” , or “putting a dress on it” — to describe how their Springtime for Hitler production is going to be presented to the public
So Lyons confirms what I already had suspected: it’s the bankers and other impatient money men who are really running the show in software companies and especially in these new web-based startups. These alpha-males, as we’ve learned from the dot com era, have a deep affinity for excrement.
Lyons is great on the subject of how little the employees mean to management and investors. Yes, most business types I’ve met are amoral, but the startup software founders at HubSpot (and their investors) take their cues from Attila the Hun. One inside joke aimed at the VCs I’ve often heard is that “some of them even use forks and knives”. We’re talking about a horde of rampaging Visigoths.
Sure, we’re in an age of “at will” contracts and competitive corporate culture, and unlike Whyte’s Organization Man, there’s no social contract and anything like long-term employment. But the newer software startups take this even further.
Dan Lyons quotes Reid Hoffman, co-founder of Linkedin, in presenting the new law of worker relationships. Your work at at a tech company is really a “tour of duty”. You know, like the Army, but without any of the after-service benefits.
Lyons describes an environment at HubSpot in which the company can do whatever it wants. Arbitrary firings, harassment, petty humiliation, and bullying. HubSpot, like many other companies, files the official paperwork telling workers to not be too rough on their fellow carbon-based life forms and report incidents of harassment, but it’s never enforced — trust me on this.
By the way, when you’re fired at HubSpot, they say you’ve “graduated”. Ugh.
Why does this all remind me of a bad freshman year experience?
These startup kids are basically recreating a culture they’re familiar with. Those on the top are acting as out of control upperclassmen. And as Lyons banker friends tell him, the investors don’t care — in fact, it just makes the movie more interesting.
As someone who’s observed the software tribe during my IT days, I couldn’t help eavesdrop on stories about binge drinking, dates that ended successfully, or watching a certain amount of bullying, insults, and other chest beating. Some of this has always been part of tech work culture, but in this new crop of Internet-era software startups predominately staffed by young males, everything is at Ludicrous mode.
Because it’s software technology, where the underlying foundation is always shifting, there’s also more than a little core anxiety and uncertainty fueling some of the behaviors. On top of all your worries about whether your code worked, there was always some honcho who knew about better software and better ways to do what you’re doing.
The software experience is summed up by Mark Zuckerberg’s “younger people are basically smarter”.
If you need someone who knows the latest, coolest programming language for whatever disruptive product you as a founder have in mind, you’ll hire a kid who spent the last year holed up in a dorm room learning it. We’re talking college age or younger. It’s far easier approach than dealing with existing staff who have spent their time mastering the “legacy” code base. And these younger employees are much easier to manipulate.
Experienced technical employees know their knowledge has a limited shelf life, and there’s always a steady supply of new programmers ready to replace them. In my day, it wasn’t unusual to see piles of new programming manuals on desks as older employees (in their 30s) were struggling to keep up with latest APIs and languages, as well as working on their existing projects.
Today’s tech management realizes, thankfully, that it’s a good idea to release some of the anxiety and craziness inherent in the software business by bringing the frat party inside the company. I think Lyons — sorry Dan, you’re a bit cranky on this point — overreacted on seeing some of HubSpot’s office amenities — the candy wall, well-stocked kitchens, pets running loose in the halls, comfy couches, etc.
When I was briefly working at the prehistoric startup with the PhD founders, there was one beer party for some special occasion. And then it was back to work. The idea of having beer-filled fridges and regular parties as Lyons describes would have been very strange to this older generation of computer pioneers.
In Disrupted, Lyons clearly puts these 80s-era pioneers on a pedestal. Some deserved it. The group I was with, though, were a tad too serious about their overall worth, along with having far less marketing and sales chops than the current generation of startups. It was a disastrous combination, and the startup vaporized a year or two after I left.
The Disorganized Man and Woman
At HubSpot, there’s something called Fearless Fridays, which is their unique contribution to team building. You and others in your group come up with something awesome for the company — like sending thank you notes to customers and painting inspirational posters.
Not sure how awesome this is, but it’s certainly a good way to reduce work tensions. And with HubSpot’s ambitions for world domination, these kids need this kind of thing to blow off steam.
The outward aspects — manifestos, candy walls, chain-less command structures — of these newer startup companies would be unrecognizable to the middle managers of the 1950s as depicted in The Organization Man.
Whyte has an entire chapter on what makes a well-rounded lower-level manager at mid-century companies, such as GM, GE, and the rest. It’s the opposite of a disrupter: these companies were looking “to keep things going”. It’s also one where managers solicit ideas from the group. And the role of creativity? He notes one employee saying that “I would sacrifice brilliance for human understanding every time.”
These large profitable industrial companies had a stake in not rocking the boat. What’s interesting to me is how some of their group-think thing is still very much with us. If I only had a share of semi-worthless stock for every time I heard team or team player in my software journeys or been on a team-building activity. I used to dread the group lunches, the off-sites, pizza parties, and the trips to the bowling ally during my days in both large and small corporate organizations.
In one memorable team building exercise at an offsite and run by a professional team building company — they exist! — our marketing group was asked to give a weather report based on our current corporate news. It was as painful to perform as you might imagine.
In Whyte’s day the socialization process was really done in the surrounding suburbs, which were company towns where everyone looked and acted the same — driving the same cars, wearing the same clothes, and living in new development houses that sprung up after World War II.
Corporate team building became more popular when companies had to deal with a baby boomer workforce that was shaped more by the dreaded “counter culture” and other evil hippy ideas.
So HubSpot’s you’re-part-of-an-awesome-team philosophy is just an exaggerated version of modern corporate life, circa 1980s-1990s.
What has changed is the definition of a team. The bankers, the founders and executives view the employee team as more like a professional baseball club, say the New York Yankees, where you can be traded away or “graduated” if your latest key performance metrics or KPIs are not growing exponentially.
Do I even have to say that worker bees, project managers, and sub-VPs are not making millions or even $100k per year?
We owe this conceptual breakthrough to the people behind Netflix, the online video streaming service, who brought down from the mountain a new culture code whose first bullet-pointed commandment was “we’re a team, not a family”.
Now of course that’s always been true. I have, though, been lucky to have worked at a few companies — smaller, always — that were closer to families. And this idea makes sense if by team we mean a group working together in that golden era mid-century company where you had an implicit social contract with the employer. But that ain’t what this means.
For me, the real-disruption in this new wave of startups is not the technology or the mission statements or the cool offices but their jettisoning of legacy worker-management relationships — they basically sent it to the transporter room and beamed it into a black hole.
I don’t want to paint a nostalgic picture of the large industrial companies of yesteryear. Rod Serling has a different view of this era than Whyte, which he explores in the movie Patterns.
Supposedly based on his experiences working at CBS (for William Paley), the movie has up-and-coming executive Van Heflin — yes the same Hollywood actor from Shane — confronting the CEO of a manufacturing company, the great Everett Sloane, in a epic final showdown. Sloan explains to him the Darwinian fight-to-death reality of the corporate suite (see below).
By the way, Patterns shows old-fashioned bullying and harassment directed by Sloane against Heflin’s C-level friend (and the executive he’s been hired to replace) Ed Begley.
During my time in IT and tech I saw pretty amazing levels of dirty tricks, harassment, and dysfunction. I also experienced one or two nut-job tech executives up close — cynical, manipulative, and bullying. Would you be surprised if I told you there were more than a few functioning alcoholics running around these places?
We can now thank Hoffman and other tech executives for exporting this aspect of C-level life to low-level employees — the people actually doing the work and who are, you know, not management with golden parachutes and substantial stock allocations.
Now it’s all a feature of the company culture not a bug. Yeah, I’m talking to you Amazon and all your corporate fans. You have conformity but without the benefit of predictability.
Welcome to disrupted employment life in tech companies!
Lyons also makes a point that these startups are incredibly disorganized, on top of all their other pathologies. This is partly a function of his coming from the magazine world with its saner and more profitable business models — no more! — and longer histories and practices. Most of my experience in the tech world, both in large and small places, has shown me that they’re not very well organized — kind of controlled chaos, at best. It’s not the case in former giant publishing companies like Newsweek.
As someone who had a stint in tech and trade publications, there were well established work patterns as articles were written and then reviewed by a series of editors, visuals added, and the magazine was layed out for production.
And the whole thing was repeated the following month. With its ancient work patterns, it was kind of a corporate version of agrarian life.
That was Lyon’s world, and mine for a few years. For me, it was a healthy change after so many years of having lived in Dilbert-ville.
Contrary to popular perception, software and software-related jobs have never been, er, emotionally rewarding. Once you get over the childish thrill of “they’re paying me to code”, it’s a lonely and soul-nullifying career.
So I can completely understand Lyons’ shock when coming to a tech company for the first time from publishing, let alone entering a software startup of recent vintage. I give Lyons great credit for quickly grokking the situation and seeing the abyss just behind the candy wall.
So why was Dan Lyons hired for marketing?
As someone with over 100,000 Facebook followers (based on his Steve Jobs blog), Lyons in theory would have been very useful for their marketing — more clicks, more mentions in the tech and in media would help the “movie”. A positive Facebook update from him about HubSpot would have been free advertising and lots of clicks and page views, which trumps actual money for these money-losing companies.
However, Dan being Dan Lyons launched a few sarcastic barbs about HubSpot from his Facebook page, which then started his downward spiral after management got wind of it and eventually led to the end of his short career there.
How Do You Feel About Everything Old is New Again?
Another trend noticed by Lyons is the return of personality testing. Interestingly, Whyte has a whole section on the misuse of personality testing in The Organization Man. That this relic of corporate conformity has made a comeback is, perhaps, not completely surprising.
Whyte makes clear that the whole idea of personality testing (as opposed to aptitude testing ) is to enforce conformity. It’s the way these large companies from a different era hired-by-design to get employees who would “keep things going” and “wouldn’t question authority”.
In the appendix of the book, Whyte provides an hilarious strategy for cheating on these tests. The best answers are based on these truisms: you love your father and mother, but your father a little more; you like things the way they are; you never worry; you don’t care for books or music; and you like people, but you won’t let family get in the way of your work.
The testers from that era were looking for people who were outgoing and positive, and not the least bit thoughtful or reflective. The tests that Whyte described would measure a few areas that were obsessions to companies then and now: introversion-extroversion, sociability, dominance-submission, worries, neuroses, etc.
Whyte makes the point that testers were on the lookout for “abnormals” and filtering them out. In the end, these older companies found some characteristic of those who did well on the job (the conformists), at the expense of removing those who didn’t score well (the abnormals) but who could also in theory do the work.
It was harder to get a corporate job back in the golden-age of American companies, but once in it was easier to keep it. Nowadays, I hear a “we hire quickly, and fire just as quickly” approach — just the opposite of the older practices.
Lyons ends up getting tested after he was hired. HubSpot uses Myers-Briggs to classify its employees on the DISC scale — D for dominant, I for influential, S for steady, and C for conscientious. At HubSpot, it was claimed the test would help the management work out group dynamics and make people more productive. Ds are supposed to work better with Cs.
Whyte’s ideas on this subject still hold: personality tests are a way to ensure conformity. It’s probably not a good idea, as it was in his day, to be too much of anything, and certainly not to be too reflective.
But in the crazy startup world, the focus is on a zany level of optimism. It’s not a personality trait you generally associate with anyone involved with technology and especially engineers. Having been around programmers (and been one myself), I would generally describe them as introspective but that doesn’t mean they weren’t directly snarky to management and subversive.
As I recall during a team building exercise at the software company where everyone was very energized, it was noted by one of the energized employees that I was too quiet — i.e., introspective — and then I was told that another executive, who was standing right next to me, used to be my like me, but now he’s one of them.
Reminds me of that Star Trek episode, Return of the Archons, supposedly based on Gene Roddenbury’s experiences in college. That’s the show where Kirk and crew beam down to a planet where the inhabitants have “become part of the body” and lose their free will to a powerful leader — Landru, who as I recall was actually a computer. The Trek plot now sounds so familiar: it’s a realistic depiction of software company culture. I guess I was not part of the startup body at that company.
My own views after reading about Lyons experiences with personality testing is that Silicon Valley had to make concessions for the geeks. Up until recently the introspective, reflective personality would have been filtered out of higher management. I think it’s still the case, except at the most techy of companies. I’m glad that introverts and non-traditional leaders have been rewarded far more than they have in the past. In the old days I saw a few geniuses slaving away anonymously in the back-office IT departments of large companies.
However, to move up or even keep your job in this new software world, you need closer to traditional corporate personality qualities: Be a little more, well a lot more, on the extroverted scale, drink the cool aid, and don’t think too much about the people around you or below you.
I recently finishing watched a documentary, Print the Legend, about the 3D printer startup Makerbot. It’s on Netflix and worth an hour of your time. It’s the tale of a charismatic startup founder who’s totally focused on making the big score — selling out to a huge 3D printer company. This get-ahead-at-any-cost philosophy ends up — surprise — alienating the underlings. Even the former head of sales concludes that “the means can’t possible justify the ends”.
Whaaat? For a sales executive to be saying that, well, in my book, it’s significant.
Towards the end of the documentary, the film makers interviewed former employees who had had enough. They were all, interestingly, nerdy introspective types — reflective and wise — and you really began to understand what was going on at Makerbot.
In the past, these folks would have been great technicians, engineers or lower-level managers in larger companies and with a far more predictable workday and career arc. You get the feeling that many of them won’t be working in small tech startups or tech at all in a few years. And I don’t think they’ll miss the cool workspaces.
The Chain of Fools
Software startups expand ever outward fueled by marketing hype, investor dollars, Fearless Fridays, overworked 20-somethings, and whatever they put into the avocado toast. Counteracting this are the basic principles of financial common sense — investor impatience with companies that aren’t making a penny — which in the past would have caused the reactor core to shut down.
HubSpot has never turned a profit. In 2015, the year the went public, they lost $10 million, and they’ve lost money every year going back to 2010 as a private company — you can see their balance sheet for yourself on their SEC S1 form.
I took a quick peek recently, and their stock price was a little over $46 , which gives them a market capitalization of a staggering $1.6 billion.
Lyons is very good at explaining the disconnect between profit and what public shareholders think these software and Internet companies — such as Twitter, Zynga, and Groupon — are worth. It’s all about revenue growth and buzz. Eventually, they’ll make a profit, so it’s said, and naysayers are just too narrow minded to see the enormous potential.
If you can’t quantify success using that old standby, moolah, then the crazy producers behind this flop can and do use whatever benchmark of value they want — mentions in the tech press, downloads, trending on Twitter, coolness. It starts sounding like a Nigerian email scam where if you wire them money, you’ll see an amazing fortune very soon.
In my own observations of the local startup scene here in the New York City area, I’ve watched startups come and go in the blink of an LED. The successful ones launch with a lot of buzz, and then capture enough attention and page views to be considered attractive to established media companies. Their web sites are usually based on pictures of food or things you want to sell or places you like to travel to, and they have a social component.
They’re not making money — they all offered a free or freemium service — and they probably would never make money. That’s not the goal. I remember talking to a founder of a web-based travel picture web site, and she was completely focused on getting close to one-million page views per month.
The buyers of these fleeting web experiences, who do have real money-making businesses, are in the end purchasing customer lists and other web behavioral data. The new owners could easily justify putting these startup purchases under marketing expenses or, in keeping with our movie theme, perhaps under “props”.
The only ones who make real money, as Lyons and his banker friends tell us in Disrupted, are the original investors and founders, as long as they can convince the next chump in the chain that there’s unlocked value and unlimited exponential growth in the future, they can sell their shares.
Where is all this heading?
Having observed the dot com bubble while working at a tech publication covering the telecom industry, I’ve seen the same patterns of craziness before.
I used to write about a technology called Voice Over Internet Protocol or VoIP. If you’ve Skyped to make a phone calls without getting a phone bill, you’ve used VoIP.
It’s a good idea, and many companies I was covering at the time would boast about their VoIP products. But it wasn’t enough to have this new feature. They would effectively say in their pitches, “we have VoIP and we’re cool.” Similar to what Lyons described in Disrupted, you really had to have an almost religious faith in this stuff — it was no longer a rational proposition — as you tried to make sense of founders telling their company stories.
It was my first experience watching commodity technology being marketed as a cool thing.
Does anyone now care about VoIP? Not likely.
It was the equivalent of a car-parts maker improving a shock absorber or tire or some other minor automobile feature, and then telling the world that it’s life changing. Oh wait, they did! But at least they were able to do this without financial engineering a new IPO and leaving the public holding the bag.
A better parallel to the new software business model is Hollywood and entertainment.
The bankers are really making a movie. Startups have a career arc like a Hollywood starlet, who has an undefinable ‘it’. They can give her new exciting roles (adding features) and pair her with other stars (mergers). Until one day, she no longer has ‘it’. The studio (the investors) find another new rising starlet, and people wonder what ever happened to Norma Desmond (HubSpot).
