The Dark Side of Silicon Valley (Part 1) — Echo Chambers
This is Part 1 in a series of learnings from working as a “fixer” consultant with startups in Silicon Valley.
For the past few years, I’ve worked as a consultant on what I like to call the Dark Side of Silicon Valley. My clients were startups who were months away from shutting down — despite having Millions in funding, the best employees, and traction on their products.
It was my mission, if I chose to accept it, to fix the issues without the investors or media learning that the issues ever existed. Aside from being a “fixer” for these issues I also became a mentor, confidant, mediator, trainer, and the guy that all too often had to remind founders that some thoughts are better left unsaid.
After helping save over a dozen startups, I noticed a disturbing trend in the way these founders thought and how they reinforced those thoughts when they spoke to others. They created Echo Chambers.
“I started this sh*t so I could be a f*cking Unicorn!” (Valuation Echo Chamber)
If you are launching a startup with a goal to become a Unicorn, you are not a startup founder. You are an investment banker in a hoodie.
The “strategy” to become a Unicorn is vastly different from the strategy to build a sustainable company. Unicorn “strategy” relies on feeding the Valuation Echo Chamber to promote the hype around the startup. Many of the well-known Unicorns in the valley (e.g. Uber) have no path to profitability and rely solely on their investors to keep appearances up until the investors can cash out when the company issues an IPO. In my opinion, that makes it an investment, not a company.
Investors sell founders on being a Unicorn much like the Greeks sold Troy on the Trojan Horse. It’s massive and spectacular, looks impressive from the outside, everyone talks about it, but in reality it’s an empty shell filled with the horrors of bad leadership and broken dreams.
Startup founders have enough to worry about without chasing after valuation, they should work on a strategy that helps them make profit and an impact.
In the Portland startup ecosystem, they call a company that uses this “black and white” profit & impact strategy a “Zebra.” There’s really no downside to this approach. There should be more founders striving to become Zebras. If you are interested, there is a conference called DazzleCon in Portland which is all about helping founders learn this mindset.
“I need to get into accelerators to teach me how to run my startup” (Accelerator Echo Chamber)
Founders. You keep using that word (accelerator). I don’t think it means what you think it means.
I could probably do a whole post with Princess Bride quotes and how they apply to startup founders, but I’ll spare you...for now.
I found it interesting that startups actually want to go through multiple accelerators. The sheer effort and time (and sometimes equity) that most accelerators require is staggering. The startups I worked with had gone through two — and some were planning on more!
Keep in mind, these companies had to hire me to save them from shutting down. They were attempting to “accelerate” themselves past poor management.
Not only that, but they began listing the accelerators logos on their websites as if they were credentials. Welcome to the Accelerator Echo Chamber.
I understand the validation aspect of it. Founders work hard on their idea and are eager to have it validated. Being accepted into an accelerator shows that someone thinks your startup idea has potential.
Unfortunately, somewhere along the line, “accelerators” became the unquestioned next step for anyone who has an idea to build a startup.
I’m not saying that accelerators are inherently bad, but founders should find out why accelerators are beneficial for their startup idea. It’s not an accelerator’s purpose to give you a 5-step plan to become a successful startup. Also, going through an accelerator does not guarantee that your startup will be viable.
Since moving to Portland, I’ve encountered Portland Incubator Experiment’s (PIE) well-written, ever-evolving guide on creating an Accelerator. There’s a section titled “Want to Start an Accelerator? Don’t Start an Accelerator.” — Most founders need to take a similar approach in questioning accelerators.
“I’m the founder, I don’t need to focus on culture” (Culture Echo Chamber)
One of the most interesting causes for failure in a startup is that the positive, inclusive, and supporting culture that is touted on their website is actually vaporware — it doesn’t exist. It was created by the founding team to attract applicants and investors. Silicon Valley is all about branding culture as a marketing tactic to attract candidates and funding. I call this the Culture Echo Chamber, and it’s extremely dangerous.
These founders are adept at creating the illusion of an inclusive workplace, but don’t focus on building teams for long-term growth and performance. They get people really excited about buzzwords and a fancy office, but they don’t invest in imbuing those words with actionable business goals. This leads to conflict, unstable leadership dynamics, and really horrible people operations.
As a founder, if you don’t focus on your people, your people won’t be focused on your startup. No fancy marketing campaign or new rounds of funding will fix that.
Founders need to learn how to build, guide, and maintain a company culture that promotes business goals. I don’t care if you are the technical co-founder. You can’t ignore this and you can’t rely on your employees. Sorry. You have to at least learn the basics to be successful.
It’s not easy, in fact, it’s the hardest part building a startup. It requires training, patience, empathy, emotional intelligence and defying our reptile brain. A good place to start is with Tara Horn’s post on the 5 Stages of Culture.
“Startups would be easy if we didn’t have to deal with any people.” — Every Startup Founder in the World.
“I can’t hire that candidate because she is too old, we have an image to uphold” (Age Echo Chamber)
The candidate was perfect for the role. She was brilliant, had a variety of experience, and crushed the interviews. But, the founders deemed the candidate “way too old.” She was 34.
The Age Echo Chamber is one of the many discrimination trends that Silicon Valley ignores because most founders are young and want to have similar ages in their startup.
To combat this echo chamber, I brought her in for another interview to answer a test of technical questions I created based on the trajectory of the product. Unbeknownst to the founders, I also had their senior programmers, who were “less experienced, but fit the image” answer the same questions.
I presented the founders with a blind “taste test” of the answers, to see who they would hire based only on the results. They outright rejected the answers of their own senior developers!! Guess whose answers they liked and wanted to hire? Unfortunately it was still an uphill battle once I revealed who the candidate was. But, after I educated the founders on the state’s anti-discrimination laws, they hired her as a Senior Developer II / Team Lead.
Founders. Your job is to build the best company to execute your vision. Don’t let image get in the way. Experience eats image, every day of the week. Treehouse’s CEO Ryan Carson wrote an excellent post on why age is an advantage. I suggest you check it out.
more to come soon…
Hi. I’m Slade Sundar. I’m an entrepreneur, speaker, and mentor with a passion for startup ecosystems, travel, and people ops.
I’ve recently moved from the Silicon Valley to the Silicon Forest, and I’m looking to collaborate with differently-minded weirdos. ;)
**Also, did you know you can clap up to 50 times easily by holding down the “clapper” — If you’d like to test it out on any of my posts I’m happy to be your guinea pig ;)