The emperor and his clothes
Twitter, and the story of Silicon Valley's very smart boys.
In an hour, Harvard Business School changed perspective on the world.
I’ve never been affiliated with Harvard, or with any business school. But a good friend of mine went to HBS, and invited me to drop in to a few of his classes while he was there. To Harvard’s credit, they welcome periodic interlopers like this, albeit with one weird ritual: At the start of each class, I was asked to stand up, my friend introduced me, and the rest of the class applauded. I was never sure if it was meant to honor guests or haze them.
During my visit, I was particularly interested in a session on Dropbox. As was typical for every class, students had been given a case study that introduced some strategic business problem that needed to be solved. In this instance, the case told a familiar story in Silicon Valley. A team of engineers and designers created an explosively popular product. As the company grew, it faced a choice: Continue to be a product-led organization and protect its “unique” culture that scoffed at traditional sales tactics, advertising programs, and quota-base compensation plans, or hire experienced enterprise leaders who could execute on tried-and-true sales and marketing playbooks. Some factions thought it was time to grow up; others said that Dropbox was different and could blaze a new trail to enduring success.
All of this was quickly outlined in a case study that breezed through a remarkable amount of material in only 22 pages. It briefed us on the story of Dropbox's founding, the history of SaaS, the basics of enterprise software, a description of the product Dropbox sold, its benefits, its shortcomings, its viral mechanics and growth strategy, a few equations that explained the economic model of the business, the differences between inbound and outbound sales motions, a survey of the competitive landscape, notes about the company culture, and arguments from different executives about what the company should do next.
With this—a paragraph on Dropbox’s org structure, three paragraphs on what the cloud is, a sentence on Box, and dozens of other compressed explainers—as our complete preamble, we arrived to class and were immediately asked one question: If you were in charge, what would you do?
The students, who were graded on how frequently they spoke in class, unloaded from the hip. They rattled off idea after impulsive idea, some plausible, some with potential, some puzzling and some preposterous. But every answer—from the good ones to the ghastly—was proposed with the kind of confidence that's only available to a junior investment banker who's spent his entire life being reassured by his parents and private school teachers that he’s a very smart boy.
None of this was that surprising. I've also been a smug 25-year-old guy with a resume that I thought had a lot more glitter than it did.1 What was surprising, however, was the professor's reaction. After every answer—good, bad, and incoherent—he would nod, furrow his brow a bit, and turn back to the peanut gallery of former McKinsey analysts and associate product managers to ask what they thought of the plan Misters Graham and Murray had just uncorked. In an escalating series of “yes, and…”’s, the class hurled its way toward some harebrained catastrophe.
And then, with our bad ideas still lingering in the air…we left. The future leaders of government and industry were never told which recommendations of theirs were good or bad, what Dropbox actually did, or which ideas might’ve worked out.2 They were never told that they were wrong, only that they were interesting. They were never tested, only reaffirmed. They were never challenged, only applauded for just showing up—and they walked out confident that they were ready to run companies and countries alike. Society, it seemed, had deemed them smart; Harvard told them they should expect to be treated that way.
Have you tried…?
In Silicon Valley, we would never.
We would never LARP as entrepreneurs; we are entrepreneurs. We wouldn’t be fooled by an MBA; the only degree we care about is a GSD. We build real things, solve real problems, and reward the best ideas over the longest resumes.
Or do we? For all the disdain we have for business school, my class visit felt eerily similar to one of Silicon Valley’s most iconic rites: The investor pitch. For early- and mid-stage companies, most pitches follow the same arc. Founders present a problem. They show a few slides or screens of a product that they think will address it. They put forward a vision for what’s next. VCs then scratch their chins, and shotgun feedback back at the founders. Have you tried branding your product in this way? Don’t you think you’d be more successful selling to another market? Have you thought of building this feature? Shouldn’t you partner with that service? Wouldn’t a different pricing model be better?
Most of these suggestions are naked copies of industry fads or the VC's latest successes. When we were raising money for Mode, an investor who led a successful social product told us that we should consider adding chat heads into a BI tool. Another person said that Mode would only work if we built an in-memory database, just as his company had. A VC who made a lot of money investing in New Relic wondered why we weren’t building a query language like NRQL. An associate that led a growth team for a consumer app tried to convince us we should spend most of our time optimizing our product’s viral activation loops.
Like the ideas that fell out of the heads of Harvard’s students, these suggestions weren’t necessarily wrong.3 But they weren’t insightful or clever either. They were the recommendations of someone who’d seen other companies succeed and fail, and was blindly extrapolating those outcomes4 onto a new company they knew next to nothing about.5
But no matter how inane and infeasible the idea—to say nothing of how insulting it is that someone who’s been familiar with a company for an hour has the gall to think they cracked a code that its leaders and employees couldn’t after years of work—founders practically have a fiduciary duty to play along. They have to nod, indulge, and say, “That’s definitely interesting; we’ll give it some thought,” even though it isn’t, and they shouldn’t.
Just as MBA students can walk out of classrooms convinced of their own savvy, the dynamic in these pitch meetings—in which VCs’ ideas get proposed, applauded, and never tried or tested—perpetuates a core myth in Silicon Valley: That the successful entrepreneur, which many VCs are, possess a singular genius that’s always worth listening to. That people who can start and run a company, as genuinely hard and impressive as that is, are more than business executives, but modern-day Kings Midas,6 uniquely capable of turning banal platitudes and “first principles” into the solutions to all of society’s ills, experience be damned. That their ideas aren’t pedestrian and obvious, but brave and visionary. That Silicon Valley’s ruling class are all very smart boys,7 and we should expect to be treated that way.
Naked and famous
If you’ve never had the good fortune of cringing through a meeting like this, now you can, courtesy of Elon Musk:
This ninety-second clip has it all: A very smart boy, pitching a tired and unworkable idea to a sycophantic audience that’s affirming his ingenuity the whole way through. Nobody tells him that it’s been tried numerous times before. Nobody looks up why it didn’t work. They just clap, as Twitter burns itself to the ground.
All of this feels particularly salient today, as Elon Musk and his sidekicks nuke Twitter from the inside out. The rationale for this action, and for the wild product pivots, is that the company and product are broken, and only a visionary like Elon Musk can fix them. And not just the technology, as Twitter isn’t a company with technical problems but with political ones. It takes a man like Elon Musk, we’re told, to stand up to woke mobs, to censorious governments, and to Nazis;8 to make Twitter a public good; to make Twitter a better place; to make the world a better place.
It’s possible, of course, that the train wreck happening at Twitter works out. Twitter Blue may work; Twitter OnlyFans may work; Twitter for enterprise may work; the Vine reboot may work. Twitter Battle Pass, Twitter Achievements, Twitter Happy Hour, Twitter Streaks may work. Twitter for Tesla may work.9
But if it tears itself down—if Twitter ferments into another toxic backwater, overrun with misinformation, frothing violence, and scams and scammy ads, as so many are warning it will—Silicon Valley’s reputation should go with it.
The ugly experiment at Twitter is becoming the ultimate test of tech industry dogma, and of entrepreneurs’ supposed golden touch. Because as of last week, Twitter is being run by Silicon Valley’s unchecked id. Move fast and break things? Check—Elon Musk and his sidekicks are making it up as they go. Reject expertise and authority? Check—they’re doing product development via impulsive Twitter survey, and their engineering leadership appears to have been replaced by yes-men from Tesla.10 Follow first principles? Check—they’ve thrown out every playbook and every piece of advice. Get out of the way of the visionary entrepreneur? Check—Elon Musk asked to review Twitter’s code himself. It’s the tech industry’s pithy corporate canon, distilled into a caricature of itself, and applied—unlike the ideas of business school students and venture capitalists who pop off from the sidelines—to the very real world at a very perilous political moment.
If they succeed, fair enough—credit where credit is due.11 But if they fail, there shouldn’t be any participation trophies, or pathetic fawning over their “common sense” brilliance. There should be hell to pay, starting with a serious questioning of the ideas Silicon Valley promotes and the people it elevates.12 Our emperors have no shortage of confidence; now we’ll find out if they have any clothes. And if they don’t—and throw society to the wolves while proving it—they should expect to be treated that way.
In some classes, people who were involved in the case—e.g., the executive who had to make the actual decisions—attended the class and explained what happened next in the case. But even then, they didn't challenge others’ ideas.
We thought the suggestion to build an in-memory database was particularly ridiculous—until, seven years later, we actually did it. So maybe chat heads would’ve worked after all.
In the spirit of the season, VCs are like baseball pitchers who fall in love with a pitch. Sometimes, the pitch is that good, and it works every time you throw it. Other times, you get lazy, throw too many in a row, and it gets cranked.
This should probably be King Midases, but Kings Midas is more fun.
Ok, it’s not all boys. Just 97.7 percent boys.
In that order, apparently.
They’re coming for every free moment, including the moments you should be looking at the road.
There’s a whiff of bigotry in this too, where Tesla engineers—people who work on physical things, true shape rotators and not posturing tweener codecels—are seen as inherently smarter than software engineers.
For Twitter to succeed, however, it needs to do more than improve its finances; it needs to be, by Elon Musk’s own admission, a public square that doesn’t “undermine democracy.” Twitter makes less money than Sketchers; nobody, including Elon Musk, is interested in it for its balance sheet.
What an article, so much is hidden here!
I respectfully disagree about the myth of Silicon Valley though. As a seasoned analyst raised on these "promoted" ideas, I keep seeing how they work, and, yes, how they change analytics and product perspectives. Adapting can be a challenge.
As always, bold and interesting.
Well, there’s at least one reader that was willing to sit through the entire McCullers/Harper clip.