Disrupted: My Misadventure in the Start-Up Bubble (2016)
Dan Lyons (1960)
259 pages
Since the days of the first dot-com bubble in the late 1990’s, working for Silicon Valley start-ups has occupied a special place in the popular imagination: young, passionate workers in their 20’s or perhaps 30’s; a loose, apparently extremely flexible work environment; rooms for exercise and recreation; kitchens with free food and drinks. In short, the kind of workplace those employed in older, more traditional companies dreamily imagine would make their working life more fun --- and with the anticipated bonus of a huge payoff when it goes public.
But does this popular image reflect reality?
Just as the end of the 1990’s saw the bursting of the dot-com financial bubble, journalist Dan Lyons, in Distrupted: My Misadventure in the Start-Up Bubble, bursts the image bubble that has grown up around tech start-ups. Taken from his experiences working for a year and a half at one such company in Boston, an inbound marketing software start-up called Hubspot, his book skewers both Hubspot and the broader start-up culture. (As he points out early on, although the expression Silicon Valley start-up was originally tied to the San Francisco Bay area, it has come to refer to a type of a tech start-up company that could be located anywhere in the country.)
Lyons joined Hubspot in 2013 at age 51, after having spent his entire career in journalism, most of it reporting on technology topics. He realized from day-one that his background as a journalist --- a profession apparently not inaccurately portrayed as filled with stubborn, independent-minded, lone-wolf types --- would not necessarily be the best background for fitting into a business environment, whether at a traditional firm or a tech start-up. As anyone working in a company environment can attest, most workplaces have their quirks and hang-ups, as well as policies and practices that can sometimes seem truly bizarre from the outside. Given that Scott Adams continues some 30 years on to find fresh material for his Dilbert cartoon, it is safe to say that Lyons could likely have found plenty to satirize at almost any company he had moved to.
That said, however, Lyons’ descriptions of Hubspot in particular, and the new world of tech start-ups in general, makes evident just how truly different such workplaces are, compared to traditional companies.
Given his career spent reporting on tech companies, Lyons assumed he had a good idea what he was getting into at Hubspot, including not only the chance for a big pay-out in the event of a successful initial public stock offering, but also the youthful atmosphere that he realized he might find challenging at his age. On his first day at work Lyons indeed discovered many of the stereotypical, tech start-up elements he expected to see: a wall of containers with free candy and nuts; free beer; a game room; 20-somethings engaged in Nerf gun battles. As he summarized it: “[a] fun-loving culture …a young place, with lots of energy.” (5) Within days of starting work at Hubspot, however, he began discovering the hidden truths behind the tech start-up glitter.
Although Lyons structures the book around his often strange, and sometimes comical, experiences at Hubspot, the deeper story lies in the understanding he developed about the broader tech start-up industry. Beyond the young and energetic team of people mixing work and play at companies they apparently passionately believe in, he discovered that there can often lie a darker reality. Not surprisingly the path to his understanding involved following the money.
He comes to realize that the venture capitalists, along with the founders and highest levels of management at these start-ups, make the big dollars when a start-up succeeds, and that even in the case of failures, they generally have their money well-protected. The rest of the workforce, it turns out, not so much. New employees hire in for low pay in exchange for receiving stock options, with the promise of a big pay-out later; Lyons learns, however, that those stock options are generally worth less the later one joins the company. And, even beyond that simple disadvantage, the system is rigged against employees in so many other ways.
For example, the stock options are often distributed over a number of years, so a worker loses options if they don’t last several years at a company. But turnover is nearly built into the structure of many of these companies, which focus on paying only the least amount possible to someone who can do the job, and readily fire an employee if someone cheaper can be found. And the recently hyped benefit of unlimited vacation time? With workers at constant risk of losing their jobs if they don’t perform, the amount of vacation that an employee can actually risk taking is limited, and, since no vacation time is accrued, fired workers are owed nothing when they are sent packing.
But how then, Lyons wonders, do these tech start-ups attract workers? The answer, fundamentally, is that they create psychologically shrewd work environments, cleverly targeted to attract recent (and so low-cost) college graduates.
They begin by creating the fabled party atmosphere --- which is cheap to do, compared to paying out higher salaries. What graduating student wouldn’t love to continue their college life-style into the work place?
Once hired in, a passionate sense of mission is created, catering to the idealism of college grads eager to change the world. As the leader of the training class Lyons and his fellow new hires attend exclaims:
We’re not just selling a product here …. Hubspot is leading a revolution. A movement. Hubspot is changing the world. This software doesn’t just help companies sell products. This product changes people’s lives. We are changing people’s lives. (41)That such a statement can be made with a straight face about developing a software tool to help companies market their product is perhaps not surprising in itself --- it is hardly rare for companies to propagate vision statements that can verge on the grandiose. That Lyons observes his fellow new hires lapping it up as a glorious and obvious truth is admittedly a bit scary to read.
Add to the fun-time atmosphere and the fervent belief in the life-change importance of their work the supposed promise of a big potential pay-off when the start-up goes public, and, as Lyons discovers, young college grads are eager to join up. The long hours for little pay, the ridiculous expectations, and the ease with which their colleagues are fired when expectations are not met doesn’t seem to faze them. And why not? Such sacrifices have few long-term implications or importance for a 20-something; as the poet David Whyte pointed out in a recent interview: “one of the real signs of maturity is not only understanding that you’re a mortal human being and you are going to die, which usually happens in your mid 40s or 50s — ‘Oh, I am actually going to die. It’s not someone else I’m going to become’.” (On Being)
More stunning than that young employees fall for the mythology, however, are the cynical calculations of the founders who create it, and the venture capitalists who enable it, all in the pursuit of their millions (if not billions) as the tech start-up bubble grows. As Lyons begins to recognize the shaky financial status of many such companies --- viewing the larger industry through the lens of his experiences at Hubspot --- he wonders who will “get left holding the bag” (121) when the bubble bursts. Talking to a “well-known Silicon Valley serial entrepreneur” he knows from his days as a tech journalist, Lyons learns that when a start-up does not succeed as glowingly as planned, the system is generally set-up so that the investments of the venture capitalists and the founders remain safe --- both groups stand to earn a large pay-out. The employees on the other hand, often lose badly, in part because the naturally high turn-over rate encouraged by the start-ups’ policies can leave their stock options with little value, or even underwater.
Lyon’s asks, “don’t these guys feel guilty? … How do they [look their employees in the eye]?” The entrepreneur explains that:
As far as I can tell, nobody here ever feels guilty about anything they do. What I have observed from these guys is that they have a strong sense that they are moral actors. They believe very strongly that they operate with high integrity. They believe they are the most moral folks on the planet. But they are not. (127)This understanding turns Lyon’s disenchantment with the culture he finds at Hubspot into a broader disgust with the foundation of merciless greed upon which he finds the tech start-up world to be built.
Much of Disrupted deals with Lyons’ experiences working at Hubspot, where he encounters what seems to be a shockingly dysfunctional working environment. Some of what happens to him can be laugh-out-loud funny, though other events will certainly leave many a reader working at a more traditional company with the feeling that the grass really is not always greener at these start-ups. Clearly the journalist’s cynicism Lyons admits to throughout the book doesn’t allow him to fully enter into the culture at Hubspot --- to, as he puts it, drink the Kool-Aid; in fact, it seems clear that he contributes to some of the miss-understandings and miss-adventures at Hubspot that he turns here into satire.
The idiosyncrasies of the people and work Lyons encountered at Hubspot provide the spice, but ultimately the important contribution of the book lies in the story of his exploration into the world of the cynical investors and founders who create these kinds of environments at tech start-ups, pursuing their personal wealth at the expense of their employees. Perhaps the real answer to Lyon’s question of why “don’t these guys feel guilty?” is simply that they don’t because they have no conscience, no internal compass that tells them that what they are doing is wrong. Thus, they can convince themselves that it is all just fine. As Hannah Arendt put it, in admittedly a radically different context:
If [a person] is a thinking being, rooted in his thoughts and remembrances, and hence knowing that he has to live with himself, there will be limits to what he can permit himself to do, and these limits will not be imposed on him from the outside, but will be self-set.” (Responsibility and Judgment, 101)
Have you read this book, others by this author, or even similar ones by other authors? I’d enjoy hearing your thoughts.
Other of my book reviews: FICTION Bookshelf and NON-FICTION Bookshelf
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