The Trump campaign is actually a Silicon Valley startup

The real ‘October Surprise’ of this presidential election

Courtesy of Aurnik Islam

A new startup just hit the scene. It’s bootstrapped, controversial, hyped by the media, and acquired millions of customers in under 18 months. The founder doesn’t sleep — and he’s a little crazy.

Nope, it’s not Uber. It’s Donald J. Trump for President.

For a moment let’s suspend judgment on Mr. Trump’s racist, sexist, fascist, and just-about-every-bad-ist ways. I’m not a fan of the man but we have something to learn from his strategy.

An ‘un-presidented’ launch

Like many budding Silicon Valley entrepreneurs, Trump launched his venture with little backing by The Establishment. The incumbent players in the market had written him off like his failed Atlantic City casinos. Although this new entrant wasn’t taken seriously in the crowded field of Republican presidential hopefuls, he disrupted everyone and seemed to have won.

Until recently his campaign ran on a shoe-string budget, C-team staff, little ground game, and nearly no paid advertising. This was done on purpose. You can’t use legacy tactics to disrupt legacy competitors; the incumbents will always win.

Trump’s secret sauce* was that he displaced traditional political strategy: big-money donors, top-tier consultants, robust campaign infrastructure, and huuuge ad buys. Instead he listened to his followers and re-tweeted them too. Trump discovered what other Republicans didn’t: Product Market Fit.

As recent social science research confirms, the base of the Republican Party is more authoritarian, white, scared, and angry than ever before. Trump tapped into the base and dived deep into what other Republicans only dabbled in: white nationalist hysteria and economic populism.

It’s the Mexicans! China! Death Panels! Solar Panels! Suddenly, it all makes sense!

It’s like Trump went on one bigly Burning Man bonanza with all his supporters and they realized the Truth was in The Donald We Trust. This is how he essentially hacked his way to the top of the Republican ticket, amassing a record-breaking 14 million votes in the Republican primaries.

Failure to scale

(Un)fortunately after his farfetched victory, Trump didn’t fare well under new market conditions; the general election. Although his bluster garnered media attention and emboldened his base, he had done little to acquire voters beyond it. Even worse, he disenfranchised independents and turned off reliably Republican voters to please his early adopters — a common startup failure.

In the startup world, many folks tend to follow the adage: “fail fast, fail often.” Generally, we assume that failing leads to some learning. In this respect, Trump is a remedial student. Since the beginning of the general election his campaign has become a perennial disaster since he couldn’t adapt to the market.

The US presidential election is an example of what economists call “winner-take-all” markets. There is no second place in these markets; just a single winner and a lot of losers. You’re either a monopolist or you’re out of business. There is no Lyft to Hillary Clinton’s Uber.

Mrs. Clinton is virtually guaranteed to win the presidency. Without delving into the details, it has been all but proven that Trumpian hate doesn’t scale in the ‘general election’ market. But somehow Donald Trump may just pull off the most lucrative pivot in presidential politics.

The art of the pivot

Trump has suffered a precipitous decline in national polls after his first lead against Clinton in late July. The post-Republic National Convention bump didn’t deliver a lasting lead. Weeks later he recruited top conservative operatives: a political spinster, Kellyanne Conway (from The Polling Company); a television titan, Roger Ailes (from Fox News); and a digital media guru, Steve Bannon (from Breitbart).

After the A-team was deputized to Make Trump’s Campaign Great Again, the operatives stopped the bleeding and the poll numbers stabilized. Ultimately, they cemented a floor of about 40 percent of likely voters who will support Trump. To be clear, 40 percent won’t land Trump the coveted real estate on Pennsylvania Avenue but it does build a following of 50 million voters.**

The “October Surprise” is a common refrain in American presidential politics. Wikipedia defines it as “a news event deliberately created or timed (or sometimes occurring spontaneously) to influence the outcome of an election… for the U.S. presidency.”

Many pundits believe that this year’s October Surprise was Trump’s Access Hollywood tape. To others, it was the WikiLeaks email archive of the Clinton campaign. Instead of litigating these events ad nauseam, we should look at the bigger picture: prior to these revelations, Trump has all but lost the election. These “surprises” don’t significantly move the needle.

The real surprise is that Trump may be pivoting his campaign into a media company.

Pitching it softly

Earlier this week the New York Times reported that Jared Kushner, a key advisor and son-in-law of The Donald, secretly floated a Trump TV network with media dealmaker Aryeh Bourkoff of LionTree, a boutique investment bank. While the pitch to Mr. Bourkoff seems to have been a dud — he doesn’t plan to finance the deal — it hasn’t discouraged the Trump campaign.

On the day of the final presidential debate his campaign launched its own Facebook Live broadcast replete with cable news-style commentary and analysis. This broadcast could be an MVP (minimal viable product, in startup parlance) — a barebones product launched to gauge the market’s interest.

Not surprisingly, Trump’s potential customers (his voting base) and potential investors (his donors) have responded. The Facebook Live broadcast grabbed 200,000 live viewers and venture capitalist Peter Thiel, a board member of Facebook, has committed to donating $1.25 million to his sinking presidential campaign.

Why would Mr. Thiel, one of the most successful entrepreneurs and investors in Silicon Valley, write a check so bigly to a losing campaign? After all, he could have funded an early-stage startup it.

Granted, this is pure speculation but he could be playing the long game.

Given Thiel’s business acumen, the opportunity of supporting Trump’s campaign as means to invest in a subsequent media venture wouldn’t be lost on him. With an A-team like Conway, Ailes, and Bannon — who have collectively generated billions of dollars in revenue in the media space — Trump may have found his rocket ship passed the election.

Thiel’s motive is anybody’s guess. But perhaps when others see a failing presidential campaign, Thiel sees the birth of a media unicorn.

Nonetheless when responding to reports of a future Trump TV network, Bannon, the campaign’s CEO, simply smiled.

“Trump is an entrepreneur,” he said.


Footnotes:
*Not found in Trump Steaks.
**If voter turnout for the 2016 election is at least as much as the 2012 election.

Special thanks to Patrick Chao, Ramsey Elhadary, Aurnik Islam, Emmanuel Lopez, and Safeena Mecklai, for their helpful suggestions and thoughts.

About The Author

Aninda Chowdhury is a Product Manager at Doctible. You can connect with him on Twitter, Facebook, Instagram, and LinkedIn.