Confessions of a Startup Mole in a Dumb Big Company
On September 21st 2015, I walked past the smell of weed and cigarettes at 1455 Market in SF to my new job at Square, an organization that by this time was already over 15X the headcount of my largest previous employer. After a decade of toiling at startups, including the better part of 5 years at one that I had co-founded, an M&A transaction had resulted in me accepting employment at Square along with several members of my team. For the first time, I was going to work at what startup types have derisively referred to as “dumb big companies”.
I felt like a mole on behalf of my startup brethren because I knew nothing but that. Not “unicorns” or “decacorns” or “donkeys” — just old school, high risk early stage startups. I repeatedly turned down opportunities at bigger companies simply because they were big, only to then watch them get 100 times as big and merrily mint millionaires in their wake. I watched this unfold over the decade with a cocktail of attitudes that included by turns stoicism, arrogance, pride, faith and naivete. With a level of conviction normally found amongst the pious and the cranks, I wore my startup bona fides like a tribal badge of honor. “We” were risk takers and pioneers; “they” — the people that joined Google in 2007 and then patted themselves on the back — were simply smart, risk-averse followers without our courage. We were willing to crush the marshmallow test every day and incur pain for delayed gratification; they were gobbling up the damn things so quickly they were risking early onset diabetes. When we said we were doing a startup, we meant it; when they said they were doing “a startup within a big company” we admired their chutzpah for uttering oxymorons with a straight face. We steeped ourselves in the teachings of Ben Horowitz, Paul Graham, Fred Wilson and Steve Blank; they probably attended yet another mindless 30-person meeting. When one of our tribe joined FAANG, we sometimes called them a sellout.
This essay offers the first five confessions that contrast the stories “we” tell ourselves and the reality of the grass on the other side after 2+ years of observation. Since this is just one person’s story, I make no claim to objective truth — but what this “startup mole” saw inside the “dumb big company” either validated or challenged some long-held assumptions.
Access and visibility is surprisingly good: Before Square, I naively assumed that the scale and cultural dictates of a large company would result in an executive team ensconced in their ivory tower, fed curated information in well-manicured Powerpoints, sucked up to and bullshitted just the right amount by everyone. I also assumed that information and decisions from on high would be parceled out in neat spoonfuls that the hoi polloi could consume without exercising their brain too much.
I was wrong on both counts. My boss (who is on the CEO’s team) has a surprisingly wide range of organic interactions with ICs and managers of all seniority levels across Engineering, Product, Design and Account Management. She prods for details in presentations irrespective of who is in the room and is happy to take unvarnished feedback too. She reads just about everything put in front of her, most of which is produced by ICs in the org. She writes her own SQL queries for goodness sake. Similarly — Gokul, Square’s Head of Caviar (also on the CEO’s team) told me he doesn’t have a fixed desk and simply hangs out in open spaces in the Caviar area meeting with people and working through problems. It’s hard to be BS’ed by the courtiers if anyone can walk up to you and give you the straight dope.
And as far as Jack is concerned, he may be a celebrity outside the building but inside the company he is in the mix with the team at large, helping to set an example. I’ve seen him get tough questions in large meetings and give answers with zero coats of sugar. I’ve seen him wade screen by screen into a product experience and give good feedback. I’ve repeatedly seen him push for more candor in presentations.
If you’ve worked at enough startups, you’ve seen or heard of pointy-heads with far less at stake desperately trying to inflate their fragile egos while avoiding inconvenient information that could puncture it. You’ve seen imperious founders and managers who are tough to talk to directly. You’ve seen children masquerading as adults. It may have happened here in the past but I haven’t seen it in 2+ years.
Young startups, young public companies — different investors, similar considerations: As a founder, I spent way too many brain cells trying to understand VC mentality. I learned early on the importance of storytelling to fundraising. I learned the ugly power of social proof — herd mentality if you want to be unkind — as a key element of a successful financing. I learned about the value of team as a key reason VC bets are placed. I assumed a lot of this was unique to early stage startups given the nascent markets, ideas that look stupid at birth yet go on to change the world in youth and given the uniquely clubby nature of Sand Hill Road.
And then I watched the runup to Square’s IPO 3 months after I joined and what institutional investors and analysts said about it before, during and after the IPO. I was shocked at some of the similarities.
Most startup founders have screamed into the void as yet another investor didn’t get the “story” at all and sugar-coated their lack of conviction with an ask for “traction” — if you’ve got enough traction, who gives a shit about story? I was similarly shocked to see how Square’s “story” felt misunderstood before and even after the IPO. I cringed every time some talking head on teevee droned on about how Square was acquiring the “worst” kinds of customers. I couldn’t believe the supposedly smart takes that stupidly identified everyone from Apple Pay to Amazon as looming competitors instead of a true sorting of complements and competitors.
But I also watched with satisfaction as the company used “traction” quarter after quarter to help explain the story and create conviction — and I thought about the sweet vindication founders feel when their ugly duckling startup, rejected by everyone at $5M post, goes on to raise at $500M post. I also watched the team work hard over 2 years to tell a more compelling story that would communicate the essence of the business to the broadest audience of analysts, investors and press. I watched them learn and iterate on how to outline upcoming initiatives and showcase opportunities for patient, long-term investors — all things founders of 2-person startups must also learn through the fundraising process.
The disparity in perks is terrifying: My first day at Square, someone explained that there were several “micro” kitchens on each floor. Micro, eh? Sounds like a glorified vending machine sitting next to a warmed-over pot of coffee in a tiny space, right?
Nope. Several of the darn things are nearly the size of my first startup office, that one I was so proud to lease despite its uneven two-toned hardwood floors, prison-style single small window and gross gas station-style bathroom key on a hook. But I digress. These “micro” kitchens, they serve Stumptown. A dozen Naturebox snacks. Every La Croix. And in a sign that the Office team wasn’t satisfied with being excellent at their jobs and wanted to get into a dunking contest with themselves, at some point they even installed spa water stations.
I did not realize that the arms race had made its way down from the true outliers like Google to the decacorns, unicorns and even the donkeys. In fact, the micro-kitchen is just one example of the quality of the office experience — hair and makeup popup! Boba Wednesdays! — and this in fact worries me. I worry for my post-Square career in the real world outside these fancy walls. I worry that just like humans have always turned luxuries into necessities, privileges into entitlements, I’ve gone from appreciating the perks to needing the perks.
Seven years ago, on a Friday night, I spent an hour breaking down boxes in the aforementioned prison-style office. We had no janitorial service so boxes needed to be broken down and taken to the dumpster. Exhausted mid-way through, I took a photo as a future reminder of the way we lived. Another time, our $20 plastic broom that we used to sweep the floors (we all took turns! Welcome to seed-stage!) broke in the handle. We taped it up, took a photo and kept on brooming. I kept the broom as a reminder for five years.
Will I be able to live that way again in the future? Will I be able to hire people for my next startup with the kind of conviction I had then? I confess I don’t know.
What David doesn’t know about Goliath: I remember getting the calls from investors and well-wishers on a day that was already rainy IRL — one of our public company competitors had just launched a near-replica of our core value proposition. Mustering my standard chutzpah, I swatted away their concerns but the inside voice screamed “OMG ARE WE SCREWED AND DO I HAVE TO GET A DAMN REAL JOB?” all day.
Having been at a place that’s large by most startup measures, I know I’ll have little fear next time. People say that startups die from suicide more often than murder. That may well be true but if you’re a first-time founder you’re naturally going to fear both.
My advice, which I know will fall on deaf ears? Don’t. Unless the large company is turning the battleship in toto and barreling down at you for real, there’s little to fear.
This is obvious but not viscerally understood by many founders steeped in nothing but startup experience — big companies have their own constraints. Despite the cool stock chart, there are never enough Engineers on the team. If there is available headcount, it’s hard to fill at scale. Even if you solve both of these, you have to — correctly! — work somewhat within the box of company strategy and existing customer base. And even if all of this magically aligns, your Engineers have to operate with fewer degrees of freedom than a startup with 5 Engineers. Your Product Managers have to coordinate dependencies with a far larger peer set.
The intellectually lazy hypothesis that I’ve heard tossed around is that big-company people are dumb or lazy or both. The honest answer, and I can say this after 2 years at a competent, well-run company — there are exceptions but as a rule we just can’t go as fast as a 10 person startup even if we have well over 10 people on the case. Truly moving at startup speed would necessitate changes in strategy and, sometimes, changes in culture. You can only do those every once in awhile.
Waste: To say it directly — yes, there is more waste compared to well-run startups. But it’s not for the contrived reasons I always had in mind. I haven’t (yet) seen anyone drawing a paycheck for hiding out in the basement with a Red Stapler.
The waste, as it were, occurs because larger organizations trend towards specialization while scrappy startups trend towards generalization. This is, ahem, a generalization but bear with me for a moment.
So despite everyone’s best intentions, this optimizes the system for resources it already has vs. the bracing clarity of having to figure out how to get things done when there are basically no resources at all. For example — I work with 2 amazing Finance partners — they’re a blessing since I had no such help during my startup and frequently built Revenue forecasts (God help me) myself. With my new-found abundance, I get a ton of value — but I confess that once in a while I’ll review the results of a project they worked on at my request and think to myself — I didn’t truly, actually, desperately need this and could have done without. I’m not trying to be a crappy steward of company time, of course, but just like overwhelming abundance of food causes obesity in people, so too does a tiny bit of abundance in this case cause a tiny amount of waste. But when that tiny amount of waste is multiplied across thousands of people and millions of hours, you wind up with a system that is high-functioning but has unavoidable waste in it.
So, that’s my list. It’s not comprehensive — politics, culture and tools were left out so we can adhere to word count limits for smartphone-distracted brains. Nor is it objective. But it is my list and it comes from the heart.
Where do I go from here? Just like every starry-eyed 22 year old learns to go from black-and-white to technicolor by the age of 35, I’ve reconciled myself to the fact that the militancy of my youth was in fact naive. I’ve reconciled myself to the fact that I may in fact work at other large companies in the future and that that need not be a matter of severe identity crisis. I still miss the sheer velocity, the occasional gut-wrench, the gallows humor and the foxhole feel of early stage startups. I hope I have a few more of those in my future too, this time with more perspective and, I daresay, more hard-won knowledge. In the meanwhile, I’ll be working hard, sipping La Croix and thanking my lucky stars along the way.
Disclaimer: Opinions my own, so too are errors.