Disrupted: My Misadventure in the Start-Up Bubble by Dan Lyons (Hachette Books)
By Jim O’Shea
I love how Bernie Sanders stumps across America lashing out at Wall Street even though he’s often a bit over the top. In Bernie’s world, hedge fund managers, private equity investors, or bankers are as evil as, well, Ted Cruz.
But there’s another insidious force in American business that merits a tongue lashing just as withering as Bernie’s – Silicon Valley, that bastion of innovative destruction just south of San Francisco. Hardly anyone ever calls out the Valley boys for their sexism, age discrimination, and callous disregard for what they ruin. That’s way I so enjoyed Disrupted: My Misadventures in the Start-up Bubble by Dan Lyons.
From the outset of this sprightly read, Lyons, a journalist, novelist and screenwriter, is funny. With wit and humor, he spins a great yarn about his experience as a 50-something journalist trying to reinvent himself in a world of “awesome” 20-somethings at a start-up long on marketing hype and short on product.
But Lyons’ book also has some revealing observations about the Valley, not the sixty-nine mile peninsula between San Francisco and San Jose, California but the metaphorical name for a technology industry that exists from Los Angeles to New York, Seattle to Boston and points beyond. In his view, Silicon Valley not only creates bubbles but lives within them.
“The term bubble, as I use it,” he writes, “refers not only to the economic bubble in which the valuation of some tech start ups go crazy but also to the mindset of the people working inside technology companies, the true believers and the Kool Aid drinkers, the people who live inside their own filter bubble brimming with self confidence and self regard, impervious to criticism, immunized against reality, unaware of how ridiculous they appear to the outside world.”
Lyons’ story starts with a ritual all too familiar at newspaper and magazine offices around the world. He’s the 51-year-old technology editor at Newsweek when he gets a call at home from his boss, just after his wife quit her job because of health issues.
“I figure she wants to give me an update on the tech blog we’re launching.” Sorry Dan, that’s not the case. Without warning, Lyons gets the news that “they” are making some cuts and his job has been eliminated. His last day will be in two weeks. He gets no severance, just what he’s owed in vacation pay. His health insurance is kaput. “I think they just want to hire younger people,” his boss tells him. “They can take your salary and hire five kids out of college.” Nice. He’s got two kids, no income, no health insurance and no prospects.
Shell-shocked and worried that he’ll never work again, Lyons suffers the normal indignities of the aging unemployed journalist. He gets a contract-writing job offer from Forbes magazine for $32,000 a year with no health benefits and a rejection from a public relations executive who tells him he doesn’t like to hire journalists, after making him wait an hour for an interview. He was more than a little familiar with Silicon Valley, having once written a blog called “The Secret Dairy of Steve Jobs” under the persona called Fake Steve Jobs until he got caught. So he explored some possibilities out west and jumped at a lousy job on a struggling technology news site, ReadWrite, even though he had to commute from a Boston suburb.
One day while waiting for a plane to carry him back to Boston for the weekend, he has a drink with an investment banker friend that turns into an epiphany. “Do you have any idea of how big this [next tech bubble] is going to be,” his friend asks. “This is going to be huge. It’s going to be way bigger than the last bubble.” A trillion dollars will change hands. Instead of covering the tech world, Lyons’ friend advises him to get a real job-- one at a tech company where he can get some stock, wait for the company to go public and sell it to some sap who thinks he just bought into the next Google. Enter HubSpot.
In the tech world Lyons is about to enter, former journalists are “content creators,” the job he applied for (on LinkedIn, of course) at a software start-up he’s never heard of in Cambridge, Mass., six miles from his home. After a little digging, he learns that HubSpot makes marketing software used to create all of those annoying emails that clutter up your mailbox. He also learns that the company hopes to do a stock offering to the public in the near future. Bingo.
Soon Lyons finds himself in an interview with HubSpot’s co-founders, Brian Halligan, a blustery extroverted salesman, and Dharmesh Shah, an introvert who told Lyons he could go weeks without speaking to anyone on the phone. They all hit it off and Lyons likes what he sees: Both Halligan and Shah, who met in grad school at MIT, are north of 40, easing his fears that he’d be working for someone who was 25. And they all agree that Lyons is the guy to fix HubSpot’s blog, which sucks. He gets hired even though he knows next to nothing about marketing.
His first day at HubSpot is hilarious. He shows up expecting to be greeted with open arms. Instead no one seems to know who he is and why he’s there. The receptionist offers him a seat in the lobby while she calls around to see if anyone knows what she should do with this old man with gray hair sitting on the couch in the lobby.
Lyons notices orange is everywhere, on the walls, the ductwork, desks: “Hubspotters wear orange shoes, orange T-shirts and goofy orange sunglasses. They carry orange journals and write in them with orange pens. HubSpot’s logo is an orange sprocket, a circle with three little arms sticking out, each with a knob on the end. . . . I have no idea what the sprocket is meant to convey, nor do I know if anyone realizes that the three arms with bulbous tips look like three little orange dicks.” Orange, it turns out, is the company color.
Hubspotters, most in their 20s, flow through the doors. The guys wear shorts, flip-flops, un-tucked button down oxford shirts and backward-facing baseball caps while the women favor the New England college girl look – jeans, boots and sweaters. The receptionist finally locates someone who takes the frumpy old man off her hands: Zack, a young guy in his 20s with gelled hair who takes Lyons on a tour ofHubSpot’s headquarters – a renovated red-brick building with exposed beams, frosted glass, a big atrium, and modern art on the walls.
“He reminds me of the interns at Newsweek, recent college graduates who did background research for the writers. I figure he must be someone’s assistant,” Lyons says. When the tour ends in the content team office where Lyons is to work, Zack shows him an organization chart for all that he has just seen.
“I notice something. On the chart, Zack’s name is located above the content team. I’m no expert in corporate organization, but based on the arrangement of this chart, I think, or rather I fear, that this guy who I thought was some kind of administrative assistant might actually be by boss: “Zack,” I say, “what do you do here? What’s your job?
“Oh,” he says, “I run the content team.
“So if you run the content team,” I say in a halting voice, “does that mean that you’re my boss? Do I work for you?” Zack responds that he doesn’t know if he would call himself Lyon’s boss, but on a day to day basis, yes, Lyons will work on the team that Zack manages.” Lyons writes:
“'Fuuuuuuuck,' is what I say to myself. 'Okay, cool' is what I say out loud.”
Disrupted veers from the absurd to the ridiculous as Lyons relates dozens of other anecdotes, some terribly funny and some sad and many indicative of wider problems in the technology industry. He soon realizes he’s in for a rough ride. His newsroom sense of humor clearly doesn’t fit in; the place is horribly politically correct; almost everyone is young, white and preppy; they all speak in acronyms and euphemisms. He reviews the company’s 128 Power Point slide deck outlining its culture code and learns that when someone quits or gets fired, Hubspotters should say they “graduated.”
Lyons also soon realizes that he’s become part of an industry that bombards people with misleading email offers or tries to game Google search algorithms to get them to open a message. “Online marketing,” he says, “is not quite as sleazy as Internet porn, but its not much better, either.” Although HubSpot says the company loathes spam, Lyons realizes he is indeed creating spam.
My favorite anecdote occurs when Lyons comes to work one day and the preppy, pony-tailed PR person he calls Spinner tells everyone that Dharmesh, the introverted co-founder, has just posted an awesome article on LinkedIn. She wants everyone to use his Twitter and Facebook accounts to promote the piece so it can go viral and blow up the Internet.
“I’m willing to help but before I post any tweets, I take a few minutes to read the article and what Dharmesh has written nearly knocks me off my chair,” Lyons writes. “Our company thought leader claims he has made an innovative breakthrough in management science. He now brings a teddy bear to meetings, and he recommends that everyone else do the same. That’s right. A teddy bear. Dharmesh argues that a company should always be solving for the customer (or SFTC in HubSpot speak) and in everything you do you should be putting the needs of your customer ahead of everything else. To remind his HubSpot colleagues of that, he sits his teddy bear at the table during meetings as a stand in for the customer. Her name is Molly.”
Although Lyons’ book contains some good insights about Silicon Valley and the mindset it has unleashed on corporate America, Disrupted is not an authoritative account of the pros and cons of the Valley and its contributions to society. Actually, I would like to know more about why people who pat themselves on the back for “disrupting” a business or industry don’t take more responsibility for restoring the social values that often disappear with the institutions they destroy. Lyons also could have improved the book by providing a little balance. He portrays the youngsters at HubSpot as idiots. Surely some of them did good work. His portrayal just doesn’t ring true and makes one wonder if Lyons didn’t have a problem, too.
Overall, though, I’d have to say that Lyons acknowledges that he didn’t set out to write an authoritative book. From the outset, he said he was telling his story about his experience with one company in a short time span when he too lost a little sanity. In that goal, he delivers.
One other thing bothered me. Lyons gave many of his characters nicknames instead of using real names. I believe in naming names. It gives a story more credibility. However, I will admit that he used clever pseudonyms or nicknames. He calls the chief marketing officer Cranium; his sidekick Wingman, and one of his bosses Trotsky. In the Epilogue, he tells us that Cranium’s real name is Mike Volpe and Trotsky is Joe Chernov. That’s because the company publicly identified both men when they left HubSpot under dubious circumstances. The circumstances? An internal investigation into violations of the company code of ethics involving attempts to procure a manuscript of a book about HubSpot. Although the company didn’t name the book, everyone speculated it was Disrupted.
By the way, Lyons did achieve part of his original dream. He got some stock options, but he only cleared $60,000 after he exercised them. Some of the other insiders at HubSpot did much better. By the end of 2015, the company was valued at $2 billion. But Lyons reports that most of that money ended up in a small number of hands. After HubSpot’s stock offering in October 2014, five venture capital firms and three insiders – Halligan and Shah and the company’s chief operating officer – owned about 80 percent of the stock, according to records Lyons cites from the Securities and Exchange Commission. By the end of 2015, Halligan and Shah had sold shares worth about $6 million each and had holdings valued at $63 million and $120 million respectively.
HubSpot itself has never turned a profit.
James O’Shea, the Howard R. Marsh Visiting Professor of Journalism at the University of Michigan for the 2013/2014 academic year, is the former editor of the Los Angeles Times and managing editor of the Chicago Tribune. He is the author of three books and was the co-founder and editor of the Chicago News Cooperative, a journalistic start-up that produced Chicago copy for the New York Times.