In-Depth
Developer Startups Can Be Pure Comedy
It's time to take a break. Have you seen Silicon Valley? It's a comedy, but the depiction of a developer startup hits very close to the bone.
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The HBO series, Silicon Valley, should be on the viewing list of everyone involved in technology. There is lots of discussion around it, and some of those who live in the geographical region of the Silicon Valley take issue with the series, claiming it's inaccurate.
As someone who has lived there and was involved in startups there, Silicon Valley is an accurate representation. Silicon Valley goes beyond just showing the geographic region as a background character – the show offers a fairly accurate depiction of the the life, times, and hassles of doing a startup. Show creator Mike Judge pokes fun at the geographical Silicon Valley, but also some of the more realistic and ridiculous things that can happen to a Silicon Valley startup. In this article, I'll take a break from the usual startup strategy talk and look at some of the parallels the show and reality sync up as we look at what's happened so far in seasons one and two.
(If you've yet to see the show, in the U.S. you can binge-watch the show through HBO Go at http://www.hbo.com/silicon-valley or order the first two seasons on DVD through delivery services like Amazon.com. Season 3 premieres on HBO April 24.)
The Players
Richard Hendricks and the rest of the folks at the Erlich Bachmann Hacker Hostel are the classic set of entrepreneurs. Richard is a technologist. He's the creator of a file type to hold music. What he did was create a great compression container that was much better than Zip, 7zip, Arc, or other compression formats and he didn't even know it. The first thing that makes him different from typical technologists is that he listens to what others say about his invention, something that most technologists don't do. Aside from that, he is a classic technologist. He thinks that success is about the technology. But the technology is the starting point. We'll see if Richard understands that you have to have marketing and and a whole slew of other considerations to make a technology succeed.
Who doesn't love Erlich Bachman? Erlich is the Yin to Richard's Yang; some might refer to Erlich as the anti-hero of the series. Erlich is the pot smoker. He runs his mouth and mostly says the wrong thing, and once in a while he says the right thing. Erlich is mostly here for comic relief. Everyone has a friend like this.
Nelson Bighetti, aka "Big Head", is the dumb friend; think, Forrest Gump. This guy lucks into everything. He was hired away by the evil, soulless Hooli corporation.
Martin Starr and Kumail Nanjiani play Bertram Gilfoyle and Dinesh Chugtai. They are two talented developers and system architects. They have a cruel sense of humor and play games on each other. Who doesn't have friends like these two?
"Jared" Dunn is Richard's head of business development. He came from the Hooli and tries to help Richard build a company and understand the issues that he is running into.
Russ Hanneman is an investor who made it rich at least a decade earlier in Silicon Valley by putting radio on the internet. While this character is a shot at Mark Cuban, this character embodies more about the excesses of the 1990s and the implosion of the 2000/2001 stock market crash.
Gavin Belson is the founder of Hooli. Hooli is supposed to represent Google. Richard sees Hooli as a soulless corporation. Richard views the people that work for Hooli as cult followers and many of the ideas as crazy. Example: In Episode 1 of the first season, one character says that the 10 minutes he spent with Gavin listening to him were amazing and changed his life.
A Mirror of Startups in Real Life?
There have been lots of discussions online about whether or not Silicon Valley is based on any type of reality or not (start here to read them). Any television show has added material to make the show attractive to the viewer. However, I have found that many shows are based at least loosely on some type of fact. Silicon Valley is no different, and show creator Mike Judge has stated as such in interviews. Judge worked in Silicon Valley for at least a few months, so he has some experience. I would like to highlight a few of the items and their accuracies as I see them.
The bidding war for Richard's algorithm. I have not seen a direct bidding war like the one between Peter Gregory and Gavin Nelson, but I can imagine something like this happening. What happen is that a bidding war can drive up the value of a company to the point that more than one group will get interested in a company. It is possible to see bids to go up by 10 to 20 percent with a single opportunity. If you can get multiple bidders into an opportunity, the bid price can go up much higher. The lesson here is that having multiple bidders tends to be a good thing.
People come out of the woodwork to help. Just like in real-life startups, I noticed in the series that characters you least expect will offer to help. Monica, Peter Gregory's assistant, provides clandestine help to Richard and his group; naturally, she'd get fired if she was discovered. Erlich is motivated by money and weed, but he helps out Richard and his group a lot. Jared was one of Gavin's right hand men, and while he can make a lot more money at Hooli, but he chooses to work with the Pied Piper team to help build something. As I have been working hard on a recent startup, I've found that others help much more than I have ever found in the consulting word. It has been a complete shock to me.
Peter Gregory vs. Gavin Belson rivalry. There are rivalries all around that are not obvious. Sometimes you will run into them in strange situations. Be aware of them as best you can.
Many of the jokes that compare people at Silicon Valley startups to cult followers are true. Startups are hard, and you must be a bit crazy to be involved in one. Many times people search for meaning in life and work. They'll easily find it in the startup world. It's funny, but lots of people believe that they are making the world a better place through their startup. A better reality is to talk to actual customers and verify that something actually improves the lives of customers. For example, Facebook makes it easier to communicate with far-flung family as well as people around the world. However, it is hard to see where every program out there makes the world a better place.
That Mexican restaurant scene in Season 2, Episode 1. In this scene, Gavin gives a speech where he threatens to destroy Pied Piper unless Richard sells PP to Hooli. These speeches happen; I know because I have had to sit through one of those. People think that they can threaten you and some are fairly blatant about it. The thing that amazes me is that people think that threats of this level work. But threats often make most people buckle down and work harder to succeed.
The Herd. Venture capitalists have a herd mentality. Their interested is often based on whether someone else is interested. Pied Piper gets a lot of interest from VCs when other entities express their intereste. When Pied Piper gets sued by Hooli, all of the VCs then drop their offers to Pied Piper. While I do not believe that the herd is as strong as this show depicts, it does exist in some form.
Russ Hanneman is a great addition to Season 2. We learn that he made his money in the 1990s in the dotcom era and his thinking is hobbled by events of that time. I remember a cofounder for a startup I worked at back in 2007 had the same problems. I thought the silliness of the dotcom era was gone, but there are still people who continue to think in dotcom terms. You need to watch out for them.
The Hooli lawsuit against Pied Piper demonstrates the importance of contracts and that the specifics be followed. Be careful with the contracts you sign and the ownership of intellectual property.
The culmination of Season 2 is the live streaming of the camera guy getting trapped removing the camera. The key thing to recognize is that you don't necessarily know what will be the tipping point to your success. Apple thought that Mac would be a corporate device. Instead, its success had more to do with graphics, design, and desktop publishing. VC and former Apple marketer Guy Kawaski has a great line about planting one hundred flowers and seeing what blooms. You should then feed and cultivate the flowers that bloom. Pied Piper's first choice in getting users and recognition would not be an injured guy who can only talk into the camera, yet that is where they have gotten a large number of users. You get users where you can, and you move on.
Starting Up Again
There is a lot to love about Silicon Valley, but even more important, there's a lot to learn. I've already explained quite a bit about the reality of startups, and I'll be covering more in the months to come. Meanwhile, take a small break – I definitely am -- from reality and watch new episodes starting this weekend, when the third season premieres.
About the Author
Wallace (Wally) B. McClure has authored books on iPhone programming with Mono/Monotouch, Android programming with Mono for Android, application architecture, ADO.NET, SQL Server and AJAX. He's a Microsoft MVP, an ASPInsider and a partner at Scalable Development Inc. He maintains a blog, and can be followed on Twitter.