Virtuous mafia

When discussing Facebook, many things can be called impressive, even by Silicon Valley standards.



No one else gathered people at such a speed. You can count on the fingers of the company, which seriously considered the causes of the revolution, as well as other social and political unrest. We know by heart the names of people who from their young years head multi-million corporations. We will not find any other company, except Facebook, about which the full-length film nominated for all possible types of Oscars would be shot.



Therefore, there is nothing surprising in the fact that Facebook's intellectual mafia has created a portfolio of such high-profile startups like Quora , Cloudera , Jumo , Asana , Path , as well as many others. All of them were born and reached maturity very quickly, in fact - even earlier than the “most important” thing happened for Facebook. Like most things that make Facebook a unique place on the Internet, the above-mentioned startups owe much to not only Zuckerberg with his creation, but also the time in which they grew up.

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Before we go into the story it is important to keep in mind that not all companies give birth to the so-called. "Intellectual bona fide mafias". A real, assembled, able to quickly respond to changes in the environment “mafia” usually begins with a community of co-founders, early employees and top engineers, each of whom has been “tested in combat” and has the resources and enthusiasm to to finance someone else's business.



In addition, most technology companies love to invest "in their". This co-investment and support of each other allows you to leave all the wealth "in the family." And despite the fact that a huge number of smart people, entrepreneurs and angel investors came out of Google, Yahoo, eBay, Amazon and Microsoft, their gigantic business doesn’t allow the “mafia” we are talking about to arise inside, which can catalyze at once and bring the world is a lot of new, different and cool.





In fact, the situation is such that only a few large and successful companies that exist to this day brought up the "mafioso". The main problem here is, oddly enough, in growth. As soon as the office DNA grows to enormous size, it is no longer possible to maintain the original culture inside. For financial reasons, those who work in such companies from the beginning are usually tied to them and “to the end” - that is, until the first months after the IPO. For this reason, all those who remained sitting in their glass offices did not have time for the next big wave of startups.



Mafia structures, which we are talking about, most often originate in those companies that could achieve more, but for some reason this did not happen. Such a development makes a person feel the frustrated feeling that “you need to get things done.” As Peter Thiel said about PayPal's mafia: “There were a lot of smart, competitive people, each of whom had to do something.”



Here are examples of several of the most visible "mafia groups" of Silicon Valley.



It all started with the legendary company Fairchild Semiconductor , which left the core of highly qualified specialists, two of whom founded Intel. The next was Netsape - the largest and most profitable transaction after the sale of AOL. By the way, Netscape in general was a landmark company, and then they said about it "they will change the world." Conditionally it happened, because people from this office have generated a huge number of new companies, businesses and jobs. These people simply could not imagine themselves sitting in the workplace: Quincy Smith, Ram Sriram, David Wayden, and many other well-known names in narrow circles.



However, the most ambitious result of the work of the Netscape mafia was the angel investment portfolio of Mark Andressen and Ben Horowitz , who founded Opsware and sold it to HP for $ 1.6 billion. But what is even more interesting is their investment.



For the uninitiated: both former netskapepovtsa began to look closely at Web 2.0 projects when we only discussed this dainty phrase, coming from overseas. What projects ended up under their wing? Not weak: Digg, Delicious, Twitter. Subsequently, this portfolio became the basis for the creation of the Andreessen Horowitz fund, which invested in everything: from Zynga and Foursquare, to Skype.



Another mafia emerged from the depths of Excite @ Home . For those who don’t remember, Excite was a portal whose total value was determined at $ 6.7 billion before the sale, just before the dotcom crash. Excite flew very high and dropped everyone who was under it, except for those who understood what was going on: Joe Kraus founded JotSpot and is a member of the boards of directors of many companies in the Valley, as well as a partner of Google Ventures. Craig Donato created Oodle , David She was an early investor in Facebook and LinkedIn, and since 2000 has been part of the Greylock Foundation (where he does his own business).



Summarizing - the mafia Excite @ Home may not have spawned the next billion-dollar company, but it gave a start to several such. And, as usual, the mutual responsibility and joint affairs there is in the order of things. Donato, She and Ballington do business together, go to conferences together and joke about old times together. Looking at them it is possible to say with confidence that such a mafia does not begin with those who have a line in the resume that means something completely new. It starts where people who have the same psychology, the desire to do something together meet, and this makes their company unique, turning it into a real, bloody, fraternity.



However, the most famous and most mentioned Mafia of the Valley was the PayPal mafia. The three founders of the company themselves made a lot of noise. Max Levshin founded Slide, which later sold to Google for $ 228 million and incubated Yelp, which is already on the path of a company worth $ 1 billion.



Peter Thiel (perhaps the most famous of the whole trio today) founded Clarium Capital and the Founders Fund, which invested in companies withdrew from PayPal. But he became known to the whole world because of the fact that he gave Zuckerberg his first money, when no one would go for it, and for a while was the only mentor of Facebook.



Elon Max invested in the Solar City project and founded Tesla , as well as SpaceX . Tesla has already completed a successful issue of securities, two other companies are awaiting access to the stock exchange this year. Each of the three mentioned founders of PayPal, among other things, produced films :)



And let's not forget about the PayPal Mafia’s most successful project to date - selling Google YouTube a fantastic $ 1.65 billion. It was this deal that cemented the then-new reputation at Sequoia Capital by the name of Roelof Botha. He was once a CFO PayPal.



Their second largest deal was made over IronPort, a company built by Scott Banister and sold to Cisco for $ 830 million.



However, another, no less important event will soon happen: LinkedIn's IPO, which was created by former PayPal employee Reid Hoffman. By the way, he has great experience in investing and mentoring young companies, doing this side by side with the main work.



Do not forget about other promising companies coming from PayPal, like Yammer. Let me remind you that it was founded by David Sachs, whose idea was viral marketing based on issuing cash for inviting friends - then he was COO PayPal.



Kate Rabois, in turn, is one of Square 's board of directors, a company that has already dealt a blow to the entire financial and payment industry with a completely new business model.



EBay executives often like to repeat that PayPal takeover was almost the best deal in their history. But those who came out of PayPal today earned a lot more money and changed the world in which we live.



The author of this publication once asked Peter Thiel if he considers such an early sale of PayPal a mistake. Thiel replied that it was a difficult decision for him, especially in the light of the fact that PayPal had become a huge company inside eBay, and would have been many times more if he had been left alone. But oddly enough, he noted, looking back and seeing everything done as a result of the work of an intellectual team, internationally, the sale of PayPal definitely seems to be a mistake today.



However, as he himself notes, if all these people and money remained mothballed inside PayPal, what is happening today could not have happened.



Almost all the same questions can be asked about Facebook.

Hundreds of millions of dollars are spinning up right now in the secondary securities market. They are the ones who make Facebook the company of this generation, and getting these funds was a serious challenge for Zuckerberg and the whole world of technology and the Internet.



When there is a lot of money, it becomes more and more difficult to retain the first workers who are already milloners, and in fact are still young and full of energy. Facebook continues to grow, and the end of this development is not visible yet. And the more such an apple tree - the farther from it the seeds are scattered.



So what does the Facebook mafia look like and what is its fundamental difference from similar ones? I want to understand this for three reasons: Quora continues to gain audience and popularity, Path “wraps up” Google’s offer to buy for $ 120 million, Asana, after two years of closed development, showed only one finger of the claimed collaboration mechanisms.



Let us try to look inside the community, which reacts so sharply to changes and continues to bring into the world so many different ideas, growing from one place.

Not for sale

Almost everyone who worked on Facebook until the summer of 2006 will tell you that in July there was a really crucial moment inside the company that cannot be overestimated.



The rejection of a $ 1 billion offer from Yahoo literally changed the way people thought inside the company. Everyone began to think like an entrepreneur.



And although this act can be interpreted differently, the current cost of Facebook unobtrusively hints that the act was correct, even if it divided the company into two camps.



Dustin Moskowitz recalls how colleagues asked Zuckerberg: “If you knew that you were not selling, why do we need to lead all of us so deep into this cave? Because it is very painful to climb to the top in order to fly down. " This was the last time that Mark allowed himself such a mistake - to act as if you were alone and no one was behind you.



Moskowitz also rejects all offers to buy, just like Quora.



Well, there is also Path - a site for distributing mobile content, which rejected an offer to buy more than 100 million. Maureen (CEO) is said to have been tormented for a long time with the adoption of this decision, but Moskowitz, his biggest angel investor, helped with advice: to deny Google such a generous offer.



All of the above companies are building their culture around an engineering cult. Their investors and competitors always talk about how good the team is. Each of them with a painstaking, meticulous approach to the recruitment of new specialists, and is ready to pay them almost as much as they ask. For reference, Asana gives $ 10,000 to each programmer.



Zuckerberg himself spoke of Adam D'Angelo (co-founder of Quora) as the best computer engineer whom he had ever met. And according to rumors, Google offered 120 million not at all for the Path service, but for its brilliant team.



But unlike companies like Google or Amazon, hiring college and university graduates, based on tests and a standardized approach, Facebook "and the company" prefer a much more crude, clean and ingenious approach to recruiting new staff. This is what creates business structures within the company. Justin Rosenstein, who was a Google employee, then Facebook before going to co-found Asana with Moskowitz, says that “Google’s work is often compared to a wonderful country for academics, while Facebook looks more like a labyrinth with a huge number of doors to the dormitory rooms, which were full of programmers working all night and sleeping during the day. ”



One thing that distinguishes today's Facebook from what it was in the days of Web 2.0 is how fast it grew and how much it attracted all the new tools. After the collapse of the dotcoms in the Valley, it was the fear that “one should not take too much money” and “one should not do something that could be outsourced”. Mark missed the dot-coms and the boom that was in front of them, and therefore just picked up and built a company that he himself considers acceptable.



It is for this reason that those startups that were born as a result of the activities of the mafia, have small teams. Not for the reason that being small is cheap, but because they do not need extra money and do not need a reason to attract these funds. They also have no problem with the recruitment of highly qualified specialists - they themselves want to join them.



Success story of these projects? It is built on the basis of their effectiveness in solving problems, and not the creation of random communities supporting the growth of users. Quora is looking for a way to organize information to satisfy the person who answers the question, and not the one who asks it.



Path offers a convenient way to view photo tapes of friends. As with Facebook, the emphasis is on implicitly engaging you in using the application throughout the day, instead of taking you several hours at a time.



Asana, in turn, offers control of work and commands through a core resembling the newsfeed, to which we are accustomed. And again, the attention is attracted by the application with which you want to interact all the time, and not cope with the accumulated problems.



This is the difference that Mark Zuckerberg spoke about in the early days of Facebook - the difference between the “tool” and the “media”.



Stimulation instead of virality is what distinguishes the companies mentioned from many others that exist in the Valley. Most of them want to increase only to increase, and are ready to go for any dirty trick in order to attract more users to "this game." Let in the end this means a low percentage of users who have understood what is happening and who have ever visited the site. Over the past few years, the concept of "unique visitor" has lost its meaning, but it has not reached many.



At the same time, the Facebook experience shows controlled growth, motivated by several conditions at once. We saw how from Harvard only the social network went further - to the schools of the Ivy League, then universities around the world, then large companies around the world, and finally ... you understood. No one was in a hurry and everyone knew about it perfectly, and it was this that made it possible to keep a huge mass of users from erosion, which could happen on Facebook to master the masses in a short period of time.



By analogy, the cost of Quora, its influence and the amount of information on the pages has long exceeded the subscriber base.



Path has a small bunch of Instagram users.



Asana has a list of 5,000 companies awaiting product release. All of these companies can become very large once, but this is definitely not their priority today.



I think it is not necessary to explain that in order to leave a company like Facebook, a person should have a powerful incentive and motivation, as well as opportunities. Or maybe all these founders are completely idealists who believe that it is possible to change the world?



It is important that in each of these companies there is a very strong sense of a common mission. None of them started with writing a “cool site for me and friends,” but with solving a big and important sociological problem. And more importantly, none of these problems is new. It is for this reason that these startups have the most vociferous haters who say that Quora is Yahoo Answers, and Instagram will have time to eat the Path before it hatch from the germ, and seeing Asana just another toy of devouring working time.



But the bottom line is that the key problems remain unresolved despite the billions of dollars invested. Everyone can say: “These companies will not succeed”, because we have seen so many companies that have really failed. You can call this fact as you please - insanity, excessive self-confidence or just nonsense, but each of the founders of these companies is sure that he knows where the key is, where the lock is, and which way to turn.



It's easy to compare all this with Facebook itself, which enabled all these people and companies. The most significant reason for which no one wanted to give money to Zuckerberg despite the obviousness of his idea was that Friendster was in sight. After the start was MySpace and the second wave of skeptics surged with the words that now, so nobody and never catch up with them. Where are all these people today?



Like Facebook, companies like Asana, Path, Quora and many others solve problems that are social in nature. Not social in the sense of "social media", but social in the sense that when a person tries to interact on the Internet with other people - he carries all the incomprehensible and subtle aspects of communication and relationships along with him. Subsequently, trying to figure them out.



There is no such problem on the modern Internet that only a car, or only a man could solve. Each of these startups uses both to achieve their goal. Because there are as many solutions to these problems as there are people on the planet.Everyone is busy getting closer and closer to them.



As Moskovits noted: “These are not different paths, this is one big, huge, deconstructed company operating throughout the Valley.”



This is a pedigree. Mafia coming out of the mafia, out of the mafia. Its development took tens of years and involved thousands, tens of thousands, smart people who wanted to do business.



In the wake of TechCrunch