Was 2013 a “lost year” for technology? Not necessarily.

The verdict seems to be in. According to the press, 2013 was just a god-awful, embarrassing, downright shameful year for the technology industry, and especially Silicon Valley.

Christopher Mims voices the prevailing sentiment here:

All in, 2013 was an embarrassment for the entire tech industry and the engine that powers it—Silicon Valley. Innovation was replaced by financial engineering, mergers and acquisitions, and evasion of regulations. Not a single breakthrough product was unveiled—and for reasons outlined below, Google Glass doesn’t count.

He continues to point out the poor performance of high-profile product launches, the abysmal behavior of the industry’s “ruling class”– venture capitalists and leading executives– and the fallout from revelations like the NSA’s Prism program. Yes, 2013 brought forth a general miasma of bad faith, shitty ideas, and creepy, neoreactionary bubble zeitgeists: Uber’s exploitative airline-style pricing and BitTulip mania are just two prominent examples.

He didn’t cover everything; presumably for space, he gave no coverage to Sean Parker’s environmental catastrophe of a wedding (and the 10,000-word rant he penned while off his meds) and its continuing environmental effects. Nor did he cover the growing social unrest in California, culminating in the blockades against “Google buses”. Nor did he mention the rash of unqualified founders and mediocre companies like Summly, Snapchat, Knewton, and Clinkle and all the bizarre work (behind the scenes, by the increasingly country-club-like cadre of leading VCs) that went into engineering successes for these otherwise nonviable firms. In Mims’s tear-down of technology for its sins, he didn’t even scratch the surface, and even with the slight coverage given, 2013 in tech looks terrible. 

So, was 2013 just a toilet of a year, utterly devoid of value? Should we be ashamed to have lived through it?

No. Because technology doesn’t fucking work that way. Even when the news is full of pissers, there’s great work being done, much of which won’t come to fruition until 2014, 2015, or even 2030. Technology, done right, is about the long game and getting rich– no, making everyone rich– slowly. (Making everyone rich is, of course, not something that will be achieved in one quarter or even one decade.) “Viral” marketing and “hockey stick” obsessions are embarrassments to us. We don’t have the interest in engineering that sort of thing, and don’t believe we have the talent to reliably make it happen– because we’re pretty sure that no one does. But we’re very good, in technology, at making things 10, or 20, or 50 percent more efficient year-on-year. Those small gains and occasional big wins amount, in the aggregate, to world economic growth at a 5% annual rate– nearly the highest that it has ever achieved.

Sure, tech’s big stories of 2013 were mostly bad. Wearing Google Glass, it turns out, makes a person look like a gigantic fucking douchebag. I don’t think that such a fact damns an entire year, though. Isn’t technology supposed to embrace risk and failure? Good-faith failure is a sign of a good thing– experimentation. (I’m still disgusted by all the bad-faith failure out there, but that should surprise no one.) The good-faith failures that occur are signs of a process that works. What about the bad-faith ones? Let’s just hope they will inspire people to fix a few problems, or just one big problem: our leadership.

On that, late 2013 seems to have been the critical point in which we, as a technical community, lost faith in the leaders of our ecosystem: the venture capitalists and corporate executives who’ve claimed for decades to be an antidote to the centuries-old tension between capitalist and laborer, and who’ve proven no better (and, in so many ways, worse) than the old-style industrialists of yore. Silicon Valley exceptionalism is disappearing as an intellectually defensible position. The Silicon Valley secessionists and Sand Hill Road neofeudalists no longer look like visionaries to us; they look like sad, out-of-touch, privileged men abusing a temporary relevance, and losing it quickly through horrendous public behavior. The sad truth about this is that it will hurt the rest of us– those who are still coming up in technology– far more than it hurts them.

This loss of faith in our gods is, however, a good thing in the long run. Individually, none of us among the top 50,000 or so technologists in the U.S. has substantial power. If one of us objects to the state of things, there are 49,999 others who can replace us. As a group, though, we set the patterns. Who made Silicon Valley? We did, forty years ago, when it was a place where no one else wanted to live. We make and, when we lose faith, we unmake.

Progress is incremental and often silent. The people who do most of the work do least of the shouting. The celebrity culture that grows up around “tech” whenever there is a bubble has, in truth, little to do with whether our society can meet the technology challenges that the 2010s, ’20s, and onward will throw at us.

None of this nonsense will matter, ten years from now. Evan Spiegel, Sean Parker, Greg Gopman, and Adria Richards are names we will not have cause to remember by December 26, 2023. The current crop of VC-funded cool kids will be a bunch of sad, middle-aged wankers drinking to remember their short bursts of relevance. But the people who’ve spent the ten years between now and then continually building will, most likely, be better off then than now. Incremental progress. Hard work. True experimentation and innovation. That’s how technology is supposed to work. Very little of this will be covered by whatever succeeds TechCrunch.

Everything that happened in technology in 2013, and much of it was distasteful, is just part of a longer-running process. It was not a wasted year. It was a hard one for morale, but sometimes a morale problem is necessary to make things better. Perhaps we will wake up to the uselessness of the corporatists who have declared themselves our leaders, and do something about that problem.

So, I say, as always: long live technology.

VC-istan 7: solving the wrong problem

I’ve written at length about VC-istan, its poor performance and its bigotries. What, however, is VC-istan’s “original sin”? Why is it so dysfunctional? Is there a foundational reason for its pattern of across-the-board moral and financial failure? I think the answer is obviously, “yes”. There’s a simple root cause: it’s solving the wrong problem. This requires two investigations: what problem should venture capital be solving, and what is it actually doing?

What’s the purpose of venture capital?

This is an easy one. The purpose of venture capital is to finance endeavors that require substantial backing in an all-or-nothing transaction. A biotechnology firm that requires $100 million to develop, and put into clinical trial, a new drug or device would be one example of this. With $10 million, it produces nothing salable; with ten times that, it has a chance. Others exist around infrastructure and in more deeply industrial pursuits like clean energy. Venture capitalists do invest in these spaces, and that’s outside of what I’d call “VC-istan”. Not everything that venture capitalists do is ugly, of course, and not all of it is VC-istan.

Venture capital, in a way, was originally intended as the “capital of last resort” for high-risk, capital-intensive businesses that would never qualify for more traditional financing. Why? Because when the proper way to invest is all-or-nothing, that has (unavoidable) negative consequences for all sides. It means that most people won’t get funded, and it’ll be extremely competitive to get capital, and dilution of founder equity will be severe. It’s not ideal, but if all you have is an idea, your product is 3 years away from the market in the best-case scenario, and you’re asking for $125 million to get started, those are the terms you have to take. It is, of course, quite a noisy process. The best ideas might not get funded, because there is literally no one able to assess what the best ideas are.

Venture capital for biotechnology and infrastructure has its own rules and culture. I’m not an expert on that, but it’s not what I consider “VC-istan”. From my perspective, which may be limited, venture capitalists in that space are trying to act in good faith and invest in viable businesses. To be blunt, I don’t think the “cool kids” nonsense (see: TechCrunch) matters so much in those sectors, because the science has to be sound. If you’re trying to turn algae into diesel fuel, Mike Arrington’s half-baked opinion of you matters a billion times less than the chemistry inside your lab.

What problem is VC-istan solving?

VC-istan is a subset of “all venture capital”, and focused on the “hip” stuff that can be likened to “reality TV”. To explain this analogy, ask this question: why are “reality TV” shows so prolific? It’s not about their quality. Cheap production is often cited, but it’s not just amount the numbers in the accounting ledger. The reality show formula is one that admits perfect commoditization. Writers and actors, at high levels of talent, resist commoditization. They won’t work on shows that are bad for their careers, and they have agents whose full-time job is to represent their interests. This makes them non-fungible. At the highest level of talent, labor may be able to push back against commoditization of itself, because there are few enough people at the highest levels to make the market discrete rather than continuous– or, in other words, illiquid. Reality TV does away with those “prima donna” creatives and celebrities: the writing demands are minimal and can be fulfilled with a mediocre staff, and the actors are nonentities. This enables the production studio to iterate quickly with half-baked concepts without needing to concern itself with the career needs of the parties involved.

VC-istan loves social media, and consumer-web marketing experiments, which are like reality television in that they can be produced with mediocre, “commodity-grade” inputs. To launch a biotech firm, one actually needs to have a strong grounding in science. Assessing founders for scientific literacy is hard, and private equity people are rarely up to the task. But any idiot can come up with, and hire someone good enough to implement, a Snapchat or a Clinkle. In the soft space of marketing experiments using technology, as opposed to the much harder sector that is technology proper, commodity founders and engineers suffice, and because the space is a gigantic bike shed, every investor feels entitled to have strong opinions. If genuine technical talent is needed for “scaling” down the road, it can be hired once the company has been covered by TechCrunch and appears legitimate.

Ultimately, the purpose of VC-istan’s “tech” companies is not to innovate or to solve hard problems. It’s to flip teams that have been validated by three to six rounds of venture funding, and possibly by success in the market (but that’s optional). Occasionally there’s an IPO, but those are about as common as big-company spinoffs. More typical is the “acqui-hire”, whose purpose can only be understood in the broader context of corporate dysfunction.

M&A has replaced R&D

A company’s need for top talent tends to be intermittent or subtle, and most often both. An example of the first (intermittent need) is around a short-term crisis that only a small percentage of people will have the insight, creativity, experience, or work ethic that is necessary to surmount it. The second pertains to the long-term existential need for innovation; if the company doesn’t have some engine that produces an occasional positive-impact black swan, it will be torn to shreds by the bad kind: crises that no amount of talent or effort can resolve. While every company pays lip service to its need for top talent, the truth is that most companies don’t need top talent for their day-to-day operations. If they did, that would be irresponsible design: a dependency on something that is somewhere between a highly volatile commodity and an outright non-commodity. The need for top talent tends to be a long-term issue.

Top talent is difficult to truly employ; one merely sponsors it. Old-style corporations understood that and invested in R&D. When the rare crisis that was truly existential would emerge, talent could be borrowed from the R&D pool. Additionally, while R&D could focus on basic research that was of general benefit to the world, and not necessarily in the firm’s immediate, parochial interests, the proximity to that research the corporation enjoyed gave it such an edge in practical innovation to pay for itself several times over.

Unfortunately, basic research was one of the first casualties of the private equity invasion that began in the 1980s. The old R&D labs that built C, Unix, Smalltalk and the internet weren’t scrapped outright, but reduced to a fraction of their former size, and forced to take a next-quarter focus. Conditions weren’t actually made so bad as to flush existing talent out, but positions became scarce enough that new talent couldn’t get in. The executives of those companies weren’t all short-sighted idiots, though. They knew that the high-autonomy, R&D-oriented work was the only thing keeping top talent in place. With corporate R&D near obliteration, that was threatened. So they knew they needed a solution that talent-intake problem. What did private iniquity propose as a solution? More private equity.

Enter venture capital, formerly a subsector of private equity that was generally avoided by those with other career options, due to its infuriatingly intermittent performance. What would it mean, however, if venture capital could be made less “venture”, by filling a need created by the disintegration of another part of the economy? Companies shutting down the blue-sky, high-autonomy R&D work had to get talent somehow. Explicitly paying for it proved to be too expensive, except in investment banking, due to hedonic adaptation– people who are performing at a high level, if their needs for autonomy are not met, require 25-50% per year raises to be content. Tapping high-talent people for managerial ranks proved fruitless as well, because many of these people (while exceptional as individual contributors) had neither the desire nor the ability to manage (and, additionally, middle-management positions were also cut during the private equity invasion). The remaining solution to the talent problem became one that private equity men found extremely attractive, given the premium they collect on deals– companies must buy it.

I don’t intend to insult the low-level employees of the Googles and Yahoos of the world by saying that those companies have “no talent” at the bottom. That’s clearly untrue. Companies don’t acqui-hire (which is far more expensive than internal promotion) because they have no top talent in their ranks. They have plenty, but they acqui-hire because they have lost the ability to discover what they have. It’s a malfunction of the middle-management layer. These companies are like hoarders that buy new coats every winter not for a lack of coats, but because their houses are so out of order that a new purchase is preferable to sorting the old place out.

Moreover, a company cannot, in general, adequately commoditize its highest levels of talent. The best will always seek their own career goals foremost, and perform at their highest only when there is coherency between their long-term personal goals and the work assigned to them. There are also, to put it bluntly, not enough such people to merit any explicit managerial correction to this problem. An executive focused on the career-coherency issues coming out of the most talented 5% is ignoring the day-to-day work completed by the other 95%. Two (problematic) solutions end up emerging. The first is for the company to ignore the high-talent problem and treat its top 5% like everyone else: closed allocation, low autonomy, etc. Then it loses them, plain and simple, and becomes dysfunctional after a few years of brain drain. The second is to leave them alone and effectively let them work on whatever they want. That’s great, in the short term, but it can be politically messy; others (who may belong in the top 5%, but haven’t been recognized) may resent them for their higher level of autonomy, or that set of people may lose sight of their need to continually market themselves and justify their favorable conditions, and then be crushed (not for a lack of value to the organization, but because it fails to market itself) when there is a management or market change.

So what is the “problem” that VC-istan exists to solve? It’s there to commoditize top talent. Although a specific company cannot commoditize its top 5%, the conceit is that an army of dedicated specialists– a mix of investors, corporate biz-dev executives, and “tech press”– can do so. In the consumer web space, venture capitalists have become a sort of high-end headhunter, but one that follows different rules.

For one major difference between the old corporate ladder and the acqui-hire system, employers are not allowed to explicitly discriminate on age, pregnancy status, health issues, race or gender. Investors can. Middle managers are too busy to conduct invasive “back channel” reference checks that, in truth, constitute civil harassment and would admit blacklisting charges if they ever interfered with employment (thus, risk-averse companies prefer not to do so). Investors can do so, and in such a way as to work through people who will keep their secrets (preventing lawsuits). This is a wet dream of the new right wing, an Uberization of executive hiring. The old system, with decades of regulation thrown into it because those rules were actually necessary, has been supplanted by a premium, rule-breaking, and vicious new one. The people who need the regulations imposed by the old system (i.e. women, minorities, people with health problems, people over 40, people with kids) are simply judged unfit to compete.

Here’s a question: how well is VC-istan actually doing, on its own terms? The first question is: what does it mean to “commoditize top talent”? While that sounds like something I might be against, I can’t actually say it’s a bad thing– not even for top-talent people. When something is commoditized, a fair price (that may fluctuate, but is fair relative to published market conditions) is established and it’s very easy to buy or sell it near that price. Currently, the compensation for top (2.0-level) engineering talent swings between about $75,000 and $10+ million per year– there is a clear uncertainty about what it is worth– with a median around $150,000. If that level of talent were adequately and fairly commoditized, that range would be more like $300,000 to $500,000– which would give most of them a hefty pay bump. The truth about the commoditization of labor is that labor generally finds it unobjectionable when the terms are fair. In fact, one effect of labor unions is to explicitly commoditize labor while attempting to ensure fairness (while professions, in general, oppose the commoditization regardless of terms). The murky issue in technology is that “top talent” is very hard to detect, because the people with the requisite skill have better things to do. Those who can, do; those who can’t, evaluate others’ work.

VC-istan, then, is built on the record-company model. Founders and engineers are treated as commodities (and generally, for reasons I won’t get into here, don’t get fair terms) but there is a hope that, thanks to the law of large numbers, top talent will be detected and validated by the outside market.

Where VC-istan went wrong is that it never figured out what top talent might look like, so the resources were thrown behind those who were either best at self-promotion or (increasingly, over time) those who could pull inherited connections. As a mechanism for detecting the rising generation’s top marketing talent, it might not be doing so bad. For picking out the best technical talent, especially as pertains to long-term R&D, it’s worse than abysmal. It’s doubtful that it’s picking up any signal at all. Companies that have a genuine need for R&D talent will be poorly served if they source it through acqui-hires.

VC-istan exists to commoditize top talent, but it has also erected a feudalistic reputation economy in which investors hold the cards. Founders hold few, engineers hold none. The highest levels of technical talent have been rendered, by this new economy, effectively irrelevant, depriving it of any leverage whatsoever. So, the terms are made bad– so bad that top engineering talent is rarely delivered. Whether this will strip VC-istan of credibility in the long run is something that remains to be seen.

The point I’ve made here is that it’s “solving” an ugly problem in a bad way.

What can venture capital do for technology?

Venture capital’s purpose is to build companies that, if successful, will become massive corporate behemoths. On a fundamental level, it’s stuck in the 20th-century mentality where a gigantic organization is the only acceptable prize for winning. Startup life is sold (by founders, and rarely by investors directly) to talented, usually clueless, engineers as an antidote to the ills of “MegaCorp” when, in truth, the explicit purpose of the VC-funded startup is to become exactly that: a new MegaCorp, but usually with crappier health benefits, longer hours, and faster firing.

What the best engineers actually tend to want is high autonomy so they can deliver exceptional work. They’d prefer ownership over it, all else being equal, but as long as they’re fairly compensated, they’re generally happy whether they work for a 20,000-person company or for themselves. When corporate R&D was sold for parts, venture-funded startups were proposed as the solution, the new way forward. Don’t like what happened to your old job? Create a new job for yourself! The lie here is that founding a VC-funded company provides the autonomy associated with true ownership. In truth, venture capitalists become full owners (de facto, if not de jure, due to the power afforded them by VC’s feudal reputation economy) of the company even when they hold a minority stake. Working for VCs is not fundamentally better than working for a boss; in many ways, it’s worse because the social distance is greater. Most bosses don’t consider themselves inherently superior based on favorable birth;

There are several critical misses that have become evident as venture capital has attempted to replace more traditional venues for innovation. One is that it has proven not to be a valid replacement for internal R&D. Nothing that VC-istan has coughed up is anywhere near the order of magnitude of Bell Labs or Microsoft Research. The second is that it has failed to be an engine of small-business generation, which is necessary for economic growth. It hasn’t connected top talent with the autonomy that comes from ownership. Rather, it has abandoned top talent in the pursuit of commodity startups run by commodity founders and commodity engineers. Over time, one might hope top talent to abandon it. That trend seems to be emerging, but I have no idea when or how (or, even at this stage, if) it will mature.

There is a fundamental technical flaw with VC-istan, additionally. That I’ll focus on, because it might lead us in the direction of a solution. If we consider the risk/reward profile of businesses, we see an underserved middle of the spectrum. Low-risk businesses can take bank loans, but those require personal liability, so it’s not wise to use them for anything that might actually fail. High-risk gambits with above-90% chances of failure, but that are capable of returning 20-50x on success, are what VCs love. The mid-risk/mid-growth space– targeting 15 to 50% annual growth, with a low but nonzero chance of business failure– is inappropriate for bank loans (too risky) but unpalatable to venture capitalists (not risky enough). Unfortunately, I don’t see an easy fix for that. Venture capital could become very profitable by funding the 15-50% range, but investment decisions aren’t driven by profits so much as the career needs of the investors. Returning a steady profit (say, 25% per year, with a bit of variance) by investing in a number of solid but moderately-sized businesses is not career-making; having been in on Facebook (even as a minor and late investor) is. The name-dropping world of Sand Hill Road cannot be expected to change, and if it does not, the focus will be less on building quality businesses and more on taking insane risks in the hope of hitting a career-making blockbuster.

This is problematic because the mid-growth/mid-risk space is exactly where true technologists live. They do not become machine learning experts or compiler gurus in an overnight episode of “virality”, and whether Mike Arrington or Paul Graham owes them a favor is irrelevant to whether they can actually code. They get good (and, if possible, rich) slowly. In terms of abstract value-added capacity, 15 to 50% per year seems to be about the natural rate (although most engineers would be thrilled to have salary increases at even half that rate). Technologists are extremely good at delivering these 20 and 40 percent per year improvements. What lies outside their interest (and, usually, their ability) is engineering the social conditions that admit 100x “viral” growth (or, far more often, abysmal failure). It’s just not where they live; they weren’t born in casinos.

The future

VC-istan is not about to die, any more than recording labels have ceased to exist. As a method of shaving 15 years off a rich kid’s corporate-ladder climb via “acqui-hire”, it will persist. As a machine that produces commodity startups run by commodity entrepreneurs, it will persist and probably be profitable for quite some time. As a way of enabling companies to discriminate on age, health, pregnancy status, and other illegal factors at upper levels (filled through acqui-hires, while rendering internal promotion rare) while keeping the discrimination off their books, it will hold that niche quite well. How relevant will VC-istan remain to true top talent? On that one, VC-istan’s lifespan may be limited. In that territory, it’s “ripe for disruption”.

So what shall be built to bring the disruption?

An alternate theory of shark-jumping

I’ve watched a fair amount of TV in my life, seen quite a few movies, read a large number of books. A theme that becomes common in creative endeavor is “jumping the shark”, or the decline in creative quality that occurs when a series (of TV seasons, or sequential movies) seems to run out of creative steam and begins “grasping” desperately at new ideas– often, ideas that are not necessarily bad but completely incoherent with the flavor of the series– as it tries to stay relevant. I’m going to address shark-jumping: why it happens, and if there is a way to prevent it.

In the abstract

There are a number of reasons why a series might decline in quality with age, a phenomenon most prominently seen in TV series with undefined length. Why does it happen? The most common explanation given is that the show’s originators “run out of ideas”, as if there were a finite supply of them that each person gets for one lifetime. I don’t think this is adequate, for two reasons. The first is that not all creative people “jump”. Some novelists run out of ideas and peak early; others keep getting better into old age. It doesn’t seem to be that common for a person to actually “run out of ideas”; some creative people become complacent once they’re lifted into upper-middle-class social acceptance (which is hard to attain for a creative person!) but that’s a change of context rather than a natural decline, and it doesn’t happen to everyone. The second is that it’s not a sufficient explanation, in light of the first point. Specific creative people can remain fresh for 15 years, no problem. But almost no fictional TV series, no matter how skilled its people, can stay fresh for that long. Most don’t keep quality for a third of that time.

In fact, the more people and money involved in a creative production, the faster the shark-jumping process– which is the opposite of what you’d expect if it were merely a problem of people running out of ideas. Novelists can stay fresh for a lifetime, while TV series tend to jump the shark after 3-6 years on average. Movies tend to jump even more quickly than that– in the first sequel, except in planned series (e.g. those that were designed to be trilogies from the outset). Magic: the Gathering (which requires a large design team) jumped, in terms of thematic quality, when I was half my current age, but Richard Garfield’s new games are still good.

This suggests strongly that shark-jumping is about teams, not individuals. That makes sense. The “idea person” might remain brilliant, but if her team is full of hacks, she’ll be inclined to stick to the tried-and-true. That’s one pattern of shark-jumping, but probably not the most common. Equally or more common is the taking of more risks, but with the new creativity feeling gimmicky and forced. When The Office jumped, it began taking more risks, but was incoherent and haphazard in doing so. When House jumped, the characters’ personal lives became more unusual. Whether more risks or fewer risks are taken, a decline in quality happens either way.

If shark-jumping is about teams, then why not fire the old team and start with an entirely fresh set of people? Most often, that will only make things worse. Even if the people on the new team are paid four times as well, and even if they’re individually quite creative, I maintain that their output will (on average) be worse than if the old team had stayed (in which case decline would still occur). As a TV or movie series matures, the set of constraints laid down upon future creativity increases. That isn’t always bad. More rigid poetic forms like the sonnet (as opposed to free verse) often encourage creativity because the poet has to spend a lot more time thinking about words, and how they sound and flow together, than in typical prose. The same, I think, goes with serial creative work. The increasing constraint load, for some time, actually improves the product. In TV, Season 2 is typically better than Season 1. There is a point, however, when those constraints become a burden. Reasonable avenues of exploration become fewer as the story moves along. That’s not unnatural. In drama, we see that in the tragic arc: eventually, the protagonist reaches a point where the only remaining option is to surrender to the forces that have multiplied against him; the mortal dies, the gods win. In a television series intent on prolonging its life, however, this results in increasingly ridiculous ploys to get the main characters out of whatever final state– whether a positive one like marriage for a lothario, or a negative one like imprisonment or terminal illness– they’ve arrived at. This should also explain why series designed with a finite life in mind (such as Breaking Bad) rarely jump the shark. They’re programmed to end before that would happen.

As much as shark-jumping is about the increasing constraint load and the inverted-U shape of its effect on creative output, it’s also about people. Would the same calibre of people sign up to work on Inception II as worked on the original? I doubt it. It’d be possible to get good people, yes, but the best people would prefer to work on something more original than a sequel. You’d get more people who are there to burnish their resumes and fewer who are there to do the best creative work of their lives. Mature brands tend to draw people in with careerist rather than creative impulses: ability to lead a large group, attach one’s name to a known entity, etc. The average credibility (in terms of on-paper accomplishment and social status) goes up as the brand matures, and this might also improve the mean output, but it reduces variance. Thus, peak creative output is almost always lower in the brand’s later phases.

Therefore, a “fire the old team” strategy is likely to accelerate the shark-jumping problem, which is about the type of team that a series will attract more than the individuals themselves. The old-timers who had the vision are gone, and they’ve been replaced by people who are on the job for careerist reasons. In general, I’d say there’s nothing wrong with this– most people take most jobs for careerist reasons– but it’s not conducive to the highest levels of creative output. If there are still a couple of clever ways, for a series, out of no-credible-options-left shark-jump territory, a fresh team of mercenaries is not likely to find it. They’re likely to barge through walls, strain credibility, and make shark-jumping palpable in the final product.

It’s not that people “run out of ideas”. They don’t. Teams, however, lose members and gain new ones constantly. That’s inevitable. And if there’s one thing I’ll say confidently about creative people as an entire set, it’s that we’re intermittent. Something like a TV series requiring 600 minutes of show time (using the industry-standard 100:1 multiplier, that’s 1000 hours of production time) requires a creative team, because even the best individuals can’t hit every note right over that duration without some help. So, at least in television, even the best of visionary creators needs the support of (and challenges from) a strong team to keep going. And no matter what, that team will evolve in a direction that’s likely to be sharkward. The new team might be paid four times as much as the old one but, by Season 7, almost no one’s focus is on the work in front of them. Rather, they’re more interested in Season 1 of their next project, where they’ll have more input and opportunity to shine. This career incoherency (disparity between what’s good for their jobs vs. their careers) doesn’t actually cause them to “run out of ideas”. More often, it’s the reverse. They (probably subconsciously, for the most part) take risks that may confer personal career benefits, but that go against the grain of what the series is really about.

In software

That this applies to software, also, should not surprise anyone. Like a television series, software is designed with an indefinite lifespan in mind. There is somewhat of a difference, which is that software doesn’t always jump the shark. In the open-source world, it’s far less likely to do so. However, I think that commercial software obeys the same principle of shark gravity. After a certain point, a corporate software module will be in maintenance mode and struggle to attract a high calibre of people.

There are people who will hack the Linux Kernel or Postgres or Clojure because they use those products and care about them deeply. Open-source software is, in truth, a brilliant solution to the career-coherency problem: people can benefit their careers and add value to the world. Such software can jump the shark, but I don’t think it’s guaranteed to do so, and the best software products seem never to jump. There are career benefits to maintaining a respected open-source product, and the fact that the maintainer is also typically a user (and, therefore, aware of existing context) prevents the bad creative risks for which post-shark teams are known.

In-house or commercial software, on the other hand, seems always to jump. Within most companies, however, the career payoff of maintenance work is almost invariably inferior to that of new invention. Open-source software solves the career coherency problem, but internal products almost never become respected enough for that to happen. Software’s shark-jumping dynamic is, in many ways, actually more severe than that of a TV series. In television, the people who join a mature series aren’t necessarily less qualified or worse at their jobs– they have different objectives that are less conducive to doing their best work, but they’re not across-the-board less qualified people. In closed-allocation software companies, however, maintenance usually becomes the ghetto for people who can’t fight their way to something meatier, and very few people who are any good will stay with it for very long.

Rarely, if ever, is a closed-allocation software company able to solve this problem. When the company recognizes that a legacy module is important, it will commit resources to its upkeep, usually in two ways. The first is to increase headcount, and the second is to increase salaries of the people doing the work. On the first, that tends to attract less capable people for two reasons. The incompetent like larger teams because they can “hide within the herd”. But this applies to middle managers as well as front-line workers. Mediocre managers also prefer large teams because it inflates their headcount statistics; they’re more likely to make Director if they can say they had ten reports than if they had three. Good managers generally want to lead teams of high average competence and achieve something tangible; mediocre and bad managers usually want to lead large teams (with minimal concern over whether they get good reports or bad) to improve their stats. So that first solution fails to have the desired effect. What about the second, which is increasing the pay of the maintenance staff? That rarely works, either. The truth is that a savvy, capable software engineer can’t be motivated to do career-incoherent work with a one-time 20 percent– or even 50 percent– bonus. The opportunity cost for her (in not doing work that will advance her career) is too great. She might be appeased with a permanent 30% salary bump, for a year or two, but then that will become “the new normal” for her compensation and she’ll need another bump. But HR is not about to let the salary for a lowly “Software Engineer III” to go that far out of band, and promoting her (to compensate for unpleasant work, regardless of whether she meets the typical criteria for promotion) will often annoy engineers who will (accurately) perceive the promotion as “political”. Even if engineers abstractly agree that undesirable work deserves a reward, they’ll usually oppose a promotion (especially if it is over them) that appears to be given for doing grunt work that is (and because it is) unpleasant rather than technically impressive. So that’s untenable, too. How does the typical closed-allocation software company solve that maintenance problem? The rewards generally all go to the “heroic” middle manager (who usually takes the project on for a second or third chance, after failing at new invention) for “rescuing” the ailing legacy module. In the large closed-allocation software titans, these awards (again, to the managers of the maintenance projects, and rarely to the teams) can reach six or seven figures. The peons get nothing; they’re just doing their jobs and, in the typical closed-allocation hellhole, their managers can easily prevent them from having other options.

That the above doesn’t work, at all, shouldn’t surprise anyone. I’ve already said a lot about that topic here and here, so I won’t lengthen this particular essay by reviewing it.

In sum, shark-jumping (whether in television, or in software) occurs because of two reasons, neither of which requires an individual to “run out of ideas” (we know that that doesn’t always happen). The first pertains to the constraints imposed by the project’s history. At first, constraint is conducive to superior creativity– that’s why most poets are better in rigid forms than in free verse– but, at some point, the complexity load gets to a point where high-quality options have been exhausted. The second, and probably more inexorable, factor is the change in team dynamics. As a brand matures or a software module goes into maintenance mode, the evolution in the motivational profile (that is, why the team is there) is enough to bring on the shark.

What is the solution? For television, the best solution seems to be to let the narrative arc tend toward its natural close– and not to senselessly prolong the life of the series. Breaking Bad did that and never jumped, but with another season, it probably wouldn’t have been as good. Software doesn’t have that option, because it’s designed to be infrastructural in nature. It should mature to a point where it “just works” from the perspective of 99+ percent of those who interact with it. The issue is that someone will have to maintain it. In software, the only incentive system that seems to work– i.e. the only one that can solve the otherwise-crippling career-coherency issues of maintenance work– is the open-source economy.

VC-istan 6: The Isms of venture-funded technology

Assessing VC-istan in full requires looking into the “Isms” of which it’s accused: racism, sexism, ageism, and classism. I’ll address each of these, the extent to which they seem to exist, and their sources. They all kind of blend together, difficult to separate the one from the other, but I’ll try. This analysis is, of course, based on limited experience, and I’ll only speak on what I’ve directly observed, or have from a credible source. This will bias my error, if there is any, in the direction of underreporting the degree to which VC-istan is racist, sexist, and classist, etc. Therefore, my failing to mention something does not mean that it does not exist, but only that I’m not aware of it.


Is technology racist? Are venture capitalists racist? For the first, I’d say “no”. Software engineers are one of the less racist professional groups out there. For the second, it’s harder to say. I don’t believe that the leading VCs would turn down a qualified founder because of his race. If a black or Latino or Asian founder did manage to convince Sand Hill Road that he was a “rock star”, he’d have no problem getting funding. So what’s the problem? Getting there in the first place.

Ultimately, the goal of the leading VC firms is, foremost, to exploit emerging natural monopolies that technology (temporarily) creates. Between inception and commoditization of a new thing (e.g. social networking) there is a period of time in which a lot of money can be made (because of these transient monopolies, and the fact that no one knows how to value new kinds of assets) and branding matters a lot during that period. Facebook and Twitter are obvious examples of such natural (but non-permanent) monopolies. Clearly, that has nothing to do with race, quite clearly, nor especially with the founders. That is, except for this: there is a perception that the percentage of people who can execute these sorts of red-ocean, high-risk strategies is very small– that it takes a right type of “founder material” people that only VCs can detect. When a person manages to convince a critical mass of influential people that he is in that set, he goes (almost instantaneously) from being a cipher to being incredibly highly valued (see: Sean Parker, Jack Dorsey) far beyond his actual competence. Such is the effect of social proof. But getting there requires wining the auspices of a sufficient quorum. This is an area where the biases and perceptual defects of the few can dictate the perceived “will” of the many.

I’d also argue that this is not a healthy way to run an industry, because it encourages people to chase celebrity rather than improve their competence gradually (which is the only way to do it). Robust businesses are built slowly, growing confidently but intelligently. Competence is attained over years. “Hockey sticks” and overnight successes are much more intermittent, highly unpredictable, and generally fruitless for an individual to chase (ask most people who spend hundreds of dollars each year on the lottery). If the U.S. is going to get back to making things that matter, then “get rich slowly” will have to become cool again. Yet, when it comes to a VC-istani’s reputation, he goes from being viewed as human garbage to being a highly-sought property, instantaneously and with no middle ground.

All of the “cool kids” in VC-istan are, of course, “produced” by more powerful entities (something I’ll return to, later) and a competent “producer” will create such an obsession around the person being produced. For these VC darlings, reputations are not earned but managed (that is the definition of being “produced”) by their backers from that point. Funding, acquisitions, soft landings, and EIR sinecures in the event of utter disaster, are all worked out from there on.

None of that has a thing to do with race. Yet. I’ll get there.

In business plans, venture capitalists attempt to detect emerging natural monopolies; but in the early stages, they claim that their job is to assess (and, I will add, to produce) people, because there’s still too much fluidity and uncertainty in the business plan to grab on to anything else. What they are trying to figure out is: who can be produced with the least effort? A person who looks like other people the VCs have funded is, simply put, easier to produce. There’s less resistance. VC-istan is built on the commoditization of things that the rest of the country (in its middle-class earnestness) refuses to consider a commodity at all: innovation, high-end technical talent, and reputation (the most important commodity in the feudal, relationship-oriented economy of the Valley). I’ve harped on VC-istan for treating software engineers like a fungible commodity, but so are founders to them. They crank out commodity startups run by commodity founders using well-known formulae in the hope that one will become something more in spite of itself. If founders are commodities, it shouldn’t be surprising that production thereof is a worn industrial process. Now, producing someone requires getting a large number of powerful people to trust a stranger. Anyone who does not suspect that race would be a huge variable in this process is extremely naive.

Investors, acting alone, would be more willing to invest in minority founders were it not for the culture of co-funding, note-sharing, and social proof that exists in the Valley. Plenty of investors are forward-thinking, non-racist people; but they must also be aware (at least subconsciously) that, when convincing a significant number of other people (most of whom make overconfident judgments about other people very quickly, since that is a consequence of high status to the mind) to trust someone with millions of dollars, race will have an impact.

Are all venture capitalists racist? Of course not. Most? Probably not. A few probably are, but I’m not interested in getting into that. I’m arguing that even without explicit VC racism, racist results can occur. Why? Venture capital is a relationship-driven business: a who-you-know world rather than a what-you-know world. First introductions and producers are found through social rather than professional circles, and a good number of those social circuits just don’t belong in this century. Even if the VCs aren’t racist, many of the the social intermediaries and clubs one must navigate in order to get to them are. Furthermore, when you are deciding whether to produce someone, you don’t know how much social access that person has. You have to guess. And, although it’s incredibly wrong that this is so, physical variables will play a role, for most, in that estimation process.

It’s wrong and horrible, but there it is.

When it comes to the marquee funds in the Valley, my guess would be that for a black or Latino or Asian founder to get VC funding and become one of the “cool kids”, he’d have to make his race part of his “personal brand” (just as Marissa Mayer has, with being female) in order for it not to be a disadvantage. An engineer is an engineer is an engineer (not “a black engineer” or “a white engineer” or “a female engineer” or “a male engineer”). Yet for founders, under the scrutiny that VCs apply when deciding whether to produce someone, I don’t think they have that luxury. They don’t get to be “a founder” without adjectives, unless they’re young, white, overprivileged and male. Others have to prove that they are already in social access. This is made especially tricky by the fact that explicitly proving social access (as with intelligence) is usually socially harmful, making it better for a person to just have it presumed. There are plenty of non-white UCLA students who are way sharper than most Stanford kids, and they can easily prove it to be so. But to prove intelligence invariably puts social grace at risk, and the Stanford kid doesn’t have to take that risk on; he’s assumed to be intelligent from the start, and can focus 100% of his energy on being liked.

I would guess, not based on evidence but supposition, that this racial effect is significantly smaller for biotechnology, scientific computing, and “clean tech”. Why? Those fields require skill, experience, and actual talent, making social access less likely to be a major deciding factor. But this venture-funded light tech (e.g. Clinkle, Snapchat) is stuff that any fuckhead idiot could do, which makes it profitable (at least, quickest) to bet on the fuckhead idiot with the low-resistance image,  and who’s probably already packing heat in terms of family connections.


As I said, I think the racism of VC-istan is an emergent, second-order property. I don’t think VCs are especially racist, aside from their need to select founders who are easy to “produce” and likely to bring inherited social access with them. Sexism, on the other hand, is much more entrenched. It’s well known that the leading technology companies have significant pay disparities and do a bad job of promoting women. This is even worse in the VC-funded world than in the (disparaged, but generally not as bad) large corporations. Banks and law firms, despite their reputation for being stodgy and conservative, are actually a lot more fair, when it comes to gender, than any slice of the VC-funded world.

For a woman to be promoted to partnership in a venture capital firm is extraordinarily rare– far more rare than for her to rise in a traditional corporation. While venture capital presents itself as morally superior to the disliked, macho world of private equity, that distinction is an artifact of PR. Venture capital is private equity. The admissions criteria, cultures, and dominating personalities are the same. This also makes venture capital an extremely inappropriate fit for true technology, which probably explains most of why VC-istan has drifted into consumer-web light tech, often more akin to marketing using technology than technology itself. (However, since the top positions are mostly filled by men, it’s not called marketing but “growth hacking”.)

If the culture within VC firms is hostile to women, it shouldn’t be surprising that the funding climate is harsh for them as well. But there’s another factor that really keeps women out, and that is probably designed in part to do just that. Fairly common for a venture capitalist is not only to check listed references, but to poke around and find “back channel” references that the candidate didn’t volunteer. That’s not far from stalking, and I think the reasons are obvious why women would be more hesitant to submit themselves to that (but even well-adjusted men find it creepy). Such reference checks are also, I would guess, more likely to deliver negative inaccuracies about a woman or a person from a disadvantaged minority. Until the benighted and morally offensive institution of back-channel reference checking is extinguished from technology altogether, I don’t think we’ll get anywhere near gender parity. When you perform back-channel reference checks, you’re allowing (in fact, encouraging) whackjobs to ruin another person’s career. Whackjobs and stalkers hurt everyone (I’m a white male and have been hit a few times) but they seem, at least in technology, to target women disproportionately.

There is one group of people who enjoy back-channel reference checks, enough not to object but rather to relish the intensive process and attention: narcissists. A true narcissist loves attention of any kind, positive or negative, and the more detail there is in the inspection, the better. Most people fear back-channel reference checks for risk of misinformation: a rumor about them denies them a job. (For successful women, the probability of such negative rumors emerging is very high.) Narcissists, on the other hand, love for misinformation to exist about them, even if its direct consequences are negative. Narcissists are not especially driven by financial desire or professional ambition, but they love gaining extreme reputations, positive or negative, and moreover enjoy exploiting reputation’s tendency to perpetuate itself. Just to put their names in others’ minds, for any cause whatsoever, is victory. The VC-istan game is like crack, for them. I don’t think I’m going out that far when I say that complete narcissists (the only people who would gleefully submit themselves to that sort of invasive, back-channel reference check) are somewhat more likely to be men.

Yes, such people exist in both genders, for sure, but the sense I get is that the top-0.01% level of narcissism– which is ubiquitous among those who tend to make it into the VC darling in-crowd, but relatively rare (by definition) in the general population– is more common among men. Combine this with the fact that nearly all the powerful venture capitalists are men, and the sexist climate is not surprising. It’s exactly what you’d predict.


Much deeper and more pervasive than VC-istan’s racism and sexism is its classism. As a who-you-know reputation economy, VC-istan the antithesis of the traditionally middle-class values of earnestness, hard work, and fairness. There is an irresolvable animosity between the earnest, pervasively middle-class, “maker” ethos of the traditional engineer or designer, and the wheeler-dealer realpolitick that dominates the VC-funded world. The middle-class attitude teaches an aversion toward “being political”– that is, trying to exploit or create a corrupt political environment for personal gain– preferring hard work and get-rich-slowly strategies over political will and extreme personal ambition. The upper classes, by contrast, are generally bred for political success. They relish “getting political”; it is what they have been designed, over generations, to do; and they’re very good at it. In terms of total social ability, I do not think there is a substantial difference. In 2013, people of upper-class origin have no more (nor necessarily less) refinement, consideration of others, or general couth than the average middle-class person. There is one difference, which is that people from upper-class backgrounds have superior tactical social skill. They learn, about ten years earlier than their quickest-learning middle-class counterparts, how to win organizational games.

Consider that getting funded (and staying in position once funded) requires a lot of manipulation behind the scenes: lining up introductions, managing credit and blame in the obvious directions, and flat-out social proof arbitrage (read: dishonesty about how much influential people like you in order to make influential people like you). People who have those skills at the required level by age 25 tend to fall into one of two (not mutually exclusive categories): psychopaths, and people who’ve been bred to win at such games not only by their parents but by their entire environments since childhood. People in the latter category tend to come from the upper classes. In sociopolitical combat, you are just not equipped to go toe-to-toe with a venture capitalist, as a prospective founder must, at age 25– that would be like a first-semester law student suing a lawyer– unless you’ve had that political nature baked into you. The middle classes breed their children to be smart, to work hard, to be honest, to be happy, or to be self-actualized. The upper class breeds its offspring to win in social and political combat; the rest is entirely optional.

Finally, the most overt dimension of classism (and probably the only intentional one) is derived from something I’ve already discussed, which is that venture capitalists aren’t only in the business of funding and managing founders. They also produce them. An upper-class background makes one far more “producible”. That’s pretty obvious, so I won’t dwell on it.

Classism has been on the rise in Silicon Valley of late. Why? I don’t think it’s intentional. VCs are classist, but not becoming moreso over time. What they are becoming is more ageist. Most of Silicon Valley’s classism is a derived feature of its ageism. If people have less time to prove themselves before they are written off as permanently second-rate, then early advantages matter more. This is especially true in Silicon Valley where even conventional success is considered failure; unless you’ve joined Those Who Have Completed An Exit by 35, you’re “not founder material” in the eyes of most VCs. Manufacturing this level of outlier success requires either extreme luck (which happens, even for people of humbler origins) or access to a rigged game: parentally arranged funding or acqui-hires (see: Summly, Snapchat).

As the age window in which a first success in VC-istan is possible constricts, the sexism and racism problems, but especially the classism problem, are only going to get worse. Let’s attack that, because it gets us directly into the soul of the VC-funded culture.


This is the fun one. Age awaits all of us. It’s universal, except for the unlucky (?) few who die young. Before confronting it, let’s take a detour.

Traditional Buddhism believes in six realms of existence. Hells are the worst, followed by the world of the pretas, or hungry ghosts. Those are horrible places, representing the karmic consequences of wrath and of lust. Next up, hedonically, is the animal world (ignorance) followed by the realm of humans (desire). Above us, in simple hedonic terms. are the realm of the ashuras (envy) and devas (arrogance); often transliterated as “demigods” and “gods”. (These terms are not correct. They are not theological gods, and Buddhism is deeply theologically agnostic.) Ashuras have existences we’d consider charmed, but are tortured by their envy of the devas; in this way, they are like upper-class outsiders. Devas have existences we’d consider heavenly. (In truth, to be a deva is not considered enviable; their conditions hinder enlightenment.) Their lives are long, but not infinite and, as they age and begin to die, they are socially ostracized by those around them, who refuse to look upon decay for it offends their severe narcissism. The devas live in a karmic bubble of extreme privilege, but the moment they show the first signs of being drawn out of it, and toward death, they become repulsive to the social world around them.

Devas or ashuras may or may not exist in literal form; I have no way of knowing if such things exist in other universes, and that’s not my concern here. Buddhism also maintains that all realms exist to some extent within the other, which seems evidently true in the human experience. As social commentary, the worlds of devas (kings, CEOs, venture capitalists) and ashuras (courtiers, VPs, founders) do exist. The world of the devas (at least, the devas of the human world) is one that strives to attain perfection and succumbs to its own self-defeating narcissism. It’s a realm in which even age, which is the most natural thing in the world, is seen as ugly.

Part of it is regional. Silicon Valley is in suburban California, and includes places like Atherton and Mountain View where people are so soft that even normal aging becomes abhorrent. That may change as VC-istan’s center of gravity moves to San Francisco, because urban locations can demolish that kind of softness. But I wouldn’t bet on it. There are much more severe and continuing causes of the ageism problem.

At the heart of it is chickenhawking. The word “chickenhawk” has two (unrelated) derogatory meanings, and both apply so well to Silicon Valley’s age discrimination that I will discuss them both. The first came out of the gay community, referring to an older man who hits on men who are significantly younger, and often underage. Business chickenhawking, however, seems to be almost entirely devoid of any openly gay context; it tends to involve “mancrushing” among two men who both identify as heterosexual. I’ll get to it in a bit, don’t worry. Chickenhawking is the crown jewel of VC-land cultural criticism, so there is no way I will neglect to discuss it. The second meaning of chickenhawking refers to one who supports war but avoids personal sacrifice. Erich Maria Remarque commented that wars were for the benefit of the old and rich, but that all the suffering and dying was for the young and poor. I would extend the notion to cover any who would glorify sacrifice for others while avoiding it for themselves.

Read this classic article by Jamie Zawinski. Let me just snip from it:

[Mike Arrington is] trying to make the point that the only path to success in the software industry is to work insane hours, sleep under your desk, and give up your one and only youth, and if you don’t do that, you’re a pussy. He’s using my words to try and back up that thesis.

[…] He’s telling you the story of, “If you bust your ass and don’t sleep, you’ll get rich” because the only way that people in his line of work get richer is if young, poorly-socialized, naive geniuses believe that story! Without those coat-tails to ride, VCs might have to work for a living. Once that kid burns out, they’ll just slot a new one in.

Engineers and founders in VC-funded startups endure long hours and personal financial risk. There are also long-term career risks, because VC-funded startups tend to prefer phony “performance-related” firings (which entail no severance and a damaged reputation) over honest layoffs. (If a company of significant size claims never to have had a layoff, that’s a warning sign.) However, if the startup wins its little war and pays out, engineers get mostly “glory” in the sense of being able to say that they were on the battlefield; the financial windfall is usually quite mediocre (tiny compared to a half-decent quant’s bonus) and the long-term career benefits are only substantial for people who can whore themselves out to the parasitic rash of “tech” press that emerges during every bubble. Most get the useless asset of being able to say they were there.

The battles are fought, the long hours are worked, and the stress-related health problems are suffered, and the sudden no-severance, career-damaging firings are endured, by the young and mostly poor. The gains all go to the old and rich investors, most of whom aren’t even investing their own money. (Founders are a middle category. They’re young and mostly rich, because of the generally inherited social connections it takes to raise funding. They suffer with the young but also eat with the old.) Would any VC work for 0.05 percent equity in an uncertain startup? Of course not. I’ll also point out that their kids never take engineering roles in VC-funded companies either. VCs tell their kids to stay away from that scene, which is probably the most telling thing of all about it.

The top kingpins of VC-istan are chickenhawks in both senses of the word. The pervy sense of it explains their attraction to young hipster founders who don’t look like they’re fully men yet. The warlike meaning of it explains their aversion to personal and career risk, while glamorizing it for the young and clueless.

What if one wants to exploit chickenhawking? I don’t think it’s enough to be white, overprivileged, young and male. Those help, but I think it requires being a bit psychopathic. In order to explain that, it helps to get into what chickenhawking is.

An archetypical case of chickenhawking occurs in The Office, wherein the clueless middle manager Michael Scott develops a (one-sided) mancrush on sociopathic temp worker, Ryan Howard. Ryan is visibly creeped out by Michael’s intense interest in his personal life, but uses Michael’s support and devotion to launch his career, catapulting far beyond him. Michael is, of course, oblivious to Ryan’s character flaws, but it’s actually those defects that enable him to have the juicy personal life. The chickenhawk’s protege needs to be psychopathic to do many of the despicable things for which the chickenhawk himself lacked the courage when he was young.

One thing that business chickenhawking is not, I’ll note, is gay. It seems to be an entirely heterosexual phenomenon that originated in the red-meat-for-breakfast, three-martini-lunch, dinner-at-a-strip-club MBA-culture crowd (that now dominates the Valley, through VC). The hawks tend to be middle-aged and married with children, or at least outwardly heterosexual. The chickens tend to be young “Game”-spitting psychopaths who, while insubstantial without money, would (once produced) be able to tear through party girls like a late-April tornado.

The motivation of the “hawk” is clear: it’s a midlife crisis phenomenon. Most of the marquee venture capitalists came up not through technology, but rather, through the MBA culture. They were aiming to be working on billion-dollar deals and crashing third-world currencies. Instead, they’re hawking techie cantrips out in California. There’s nothing wrong with that, but it’s not what they wanted. In addition, they sacrificed their 20s to get there. Instead of partying and drugging and whoring, they were working 90-hour weeks, and too overweight to run “Game” thanks to all the takeout they ate. In middle age, they panic about having done their 20s all wrong, and look to cling to a young psychopath through whom they can live vicariously. The trade is this: the hawk ensures the chicken’s career and lines him up with an enormous income that he doesn’t have to work hard to get. In exchange, the chicken tosses back stories about weekend debauchery. 

There are plenty of VC-funded founders who are obvious beneficiaries of chickenhawking, but I won’t give names.

Is there gay chickenhawking, or female chickenhawking? I have no idea. All of the examples that I have seen involve heterosexual men. However, I tend to doubt that it exists among gays or women. Chickenhawking is, to a large degree, based on the objectification of women– the idea that reckless, high-frequency sexuality (in addition to heavy drug use) in a man’s 20s is a “rite of passage” and that “tricking” women by pumping money (and “Game” advice) into some otherwise uninteresting loser, in order to prove that “women” are “whores”, is a worthy use of investors’ money. Chickenhawking is what you get when the corporate patriarchy of the 1950s meets the crass, status-obsessed, casual sex meat market of the 2010s.

Chickenhawking is a somewhat fascinating topic, although an ugly one. There’s a lot more I could say about it and its sociological ramifications, but it’s fundamentally depressing and I don’t see it worth it to double this article’s already large word count. I bring it up because it’s the Achilles’ heel of VC-istan. It’s massively embarrassing to the established players, and it’s one of the most powerful cultural variables in determining whether a young VC-istani’s career will succeed or fail.

I don’t think there’s a huge epidemic of chickenhawking in Silicon Valley. It’s there, but I don’t think most people (or even most VCs) participate. The problem is that it’s potent enough to be a driving cultural force, if not the biggest one, in determining who’s “cool” and who’s avoided. I discussed above that, even though most venture capitalists aren’t racist, they’re going to be more reluctant to throw their time into producing a non-white founder. When you have a culture of co-funding and note-sharing, where individual risk-taking is rare, the biases of the few will influence the many. For racism, there’s a countervailing force, which is that it’s extremely socially unacceptable, among educated people anywhere, to be racist. For chickenhawking and ageism in the VC-funded ecosystem, there’s no such counterweight; it’s taken as axiomatic (even if visibly untrue) that older people (with bias starting around 35) are incapable. The truth is that, even if the investors aren’t chickenhawks themselves, they’re going to be most inclined to throw their time into producing founders who are “chickenhawk compliant”: not just white, young, and male (a common combination) but arrogant and psychopathic enough to create drama that the backers (if they wish) can enjoy.

Age discrimination creates an extremely unhealthy culture, but it’s to the advantage of venture capitalists, because it puts unreasonable (and, I would argue, extreme) time pressure on the careers of founders and engineers. If such people were allowed to have typical 40-year careers, they probably wouldn’t treat specific startups as their sole shots at success, and they’d be less inclined to work 90-hour weeks for a comparably small slice of the pie.

While the age-discrimination culture begins with a small number of creepy middle-aged, rich men trying to redo their 20s through young sociopaths, it’s perpetuated because the time pressure it creates is beneficial to investors and startup executives– and harmful to everyone else.

Take a deep breath. You now understand VC-istan. Disgusted? Exhausted? Ill at ease? Good. That’s a sign that you really get it.

In future essays, I’ll discuss what to do about it.