I am author of the bestselling Silicon Valley memoir 'Chaos Monkeys', the only honest insider tell-all on Facebook and Twitter you'll ever read.
I've been an adviser to Twitter, a product manager for Facebook, the CEO-founder of AdGrok (a venture-backed startup acquired by Twitter), and a strategist for Goldman Sachs. I've also gotten two women I barely know pregnant, raced borrowed sports cars on public roads, once blew up the plumbing at Facebook and flooded Zuckerberg's desk, and otherwise behaved like an overpaid Silicon Valley Wastrel.
'A brilliant jerk.' -AMZN reviewer
Currently, residing on a forty-foot sailboat on the San Francisco Bay. I'm not nearly as unlikable as the book made me seem.
When the opportunity cost of staying there, in terms of missed opportunities, surpasses the financial and career value of being a Facebook employee. I suspect that crossover point happens sooner than most people think, but wariness of risk means they opt for the status quo.
Why did you write this book?
It will sound horribly pompous, but I wrote it to document what I think is an exceptional time in human history. All of human knowledge lives inside a slim device in our pockets, and our social world is now mediated by algorithms and no longer limited by geography. People will look back at our present the way we look at the invention of the printing press, or the Industrial Revolution. It seemed to me nobody was documenting that reality. So I decided to. Also, there's so much misinformation about the Valley, I thought it was time to lift the veil of well-manicured bullshit that tech PR and media layer on top of what's often an ugly reality.
As someone who is not up to speed about the Valley, can you expand more on the biggest BS about the Valley that you're talking about?
I think the biggest lie about the Valley is the presumption of a meritocracy. What's not captured in the glossy mags and engineered public images of people and companies is the influence of happenstance (the most successful products were at least semi-accidental), as well as personal connections (lots of companies saved via self-interested VCs and friendly favors).
Is this lie spread intentionally?
Yes. It's there to dupe investors, Wall Street equity analysts, and potential new hires.
The weird thing, every long-time insider knows it's a lie. Everyone. Nothing in CM is particularly novel or daring...in fact, it's all completely ordinary insider knowledge. Just nobody has the self-destructive nerve to publish it or say it publicly.
Fan of your book,
1) Do you think the book will make it hard for you to find another job? (I imagine nobody wants to be part of the Chaos Monkeys sequel)
2) What do you think help you most in silicon valley, the analytical skills to work out a problem and find a solution, or your superb language skills?
1) I did worry about that when I started writing the book. The reaction from the Valley (even if not certain individuals) has been remarkably positive. So I don't think I ended my career, quite as much as I imagined (and other might imagine). Thank God, the book has done relatively well, and (as I state in CM) 'Success forgives all sins'.
2) The ability to tell a compelling story is important in any industry. Humans live their lives through collections of stories. Of course, reality matters...tech matters. If you're going after a real technical problem (e.g. putting a man on the moon), I think the value of bullshit is far lower. One of the unique things about technology is that relatively uncharismatic people can be hugely successful (Is Larry Page charming? Does it matter?). I'm not so sure you could get away with that in other industries.
In retrospect, what do you think would've happened if you had gone with your co-founders to Twitter? Given what happened with FBX & Twitter buying Mopub, it seemed they were much more receptive & supportive of real time ad exchanges than FB.
Could you clarify your motivations on choosing FB over Twitter?
Thanks, overall loved the book which I finished yesterday. Your personal story made it a very compelling read.
Grass is always greener, etc., but in hindsight I think going to FB was probably a mistake. My co-founders are still at Twitter (and are fully vested out). While they had their ups and downs there, frustrations with management, etc., they're walking away worth what's probably a good amount. Also, Twitter doesn't seem to quite be meat grinder that FB was (at least to me, and at that time).
You're right to note that TWTR was more receptive to programmatic. That said, not sure how many people would call the MoPub integration a resounding success. Though, it's certainly still there and not going away anytime soon.
That said, the only reason FBX happened is because of the chaos of the IPO. I doubt programmatic would have occurred to me as a thing to do had I not been at FB right then.
Basically, it's really hard to say. I used to regret past decisions a lot, and engage in a perpetual concert of mental "what if?", but I think age mellows you out somewhat.
Hey Antonio, loved your book! I also work in SV, and also came from finance, so I agreed with most of the points you made.
My question - when you founded AdGrok, it seemed like one of your biggest keys to success were the contacts you had in the valley already. If I were to start a startup today (I've been here ~2 years), I don't think I'd have that kind of support system in place. How did you create that kind of social network in the entrepreneurial space during your pre-AdGrok days?
I might have given the impression of more contacts than I really had.
The reality was that none of the AdGrok co-founders had much of a network at all. Much of it came from Y Combinator, and then from whatever we hustled during AdGrok itself. In my limited experience, while it might seem hard to start a network in the Valley, people are far more open to meeting new people and paying it forward than other industries. Get an intro, make a good impression, and before you know it, you've got two more, and on it goes. Just get the ball rolling by showing some promise...be the guy people think might be a big deal later, and they'll bet on you with their time.
What is the most intresting piece of info you discovered while researching/writing your book?
What I found most interesting was in reconstructing past events, how fallible human memory can be. I of course had old emails, messages, FB events, etc. to rely on, but I had remembered events in order A, B, C (for example), and it turned out it was B, A, and C never happened. I'll never trust eyewitness testimony again. Our pasts are really mostly fictional.
Antonio, in your book you briefly mentioned the housing problem in the Bay Area, since those days it has gotten significantly worse and I think every other talented engineer I talk to is considering to leave or already has moved. How do you think this will impact the Valley over the next 5 years and where would you move to?
My running FB comment joke right now is that every CA techie I know eventually graduates to life in either WA or CO (lots of friends have recently moved to either Seattle or Boulder).
I do think it's a problem, and I don't really know what should be done about it, other than 'build more'. I note that Seattle is building like mad (way more than SF), and their rental prices have held relatively steady.
Personally, I love the PNW and would vote for Seattle as a post-SF scenario.
Solid answer. Looking at an international Level, I know you had spent some time in Berlin. Would be interested to hear what that experience was like and if it's a valid competitor (on a smaller scale) to SF. Brexit also puts an interesting opportunity into Berlin's lap.
I loved Berlin. It's a great city. Seems like a real center of gravity for Europe right now. I could see myself living there (save for the winters maybe).
Seems to me the issue with Berlin is the same as with all Valley copies: you can import the startup aesthetic and aeron chairs, you can attract young technical talent via lifestyle, you can copy all the trendy terminology you want...but what you can't instantiate is the VC ecosystem that invests in companies, makes money, and re-invests, in that iterated cycle of wealth creation that's standard in the Valley. You also don't have the M&A at the top-end from large companies providing the liquidity and exits for startups. That seems to be the case for most Euro startup hubs (except maybe London...I've not spent time there).
Seattle apparently doesn't have a lot of startups, only big companies. What startups there are tend to be self-funded Microsoft or Amazon spinoffs. Portland's tech scene might be smaller overall, but has more startups.
It's a bit maddening as it sounds like two of your actions together cost you an entire Bay area house or more (weirdly insisting to go to FB, and then pushing against your superiors at FB). But I can respect somebody who doesn't do things for the money!
At this point, would rather not consider the price of my mistakes....;)
Is Alex Rodriguez a True Yankee?
LOL. I might have to look up Alex Rodriguez. I had to look up Lady Gaga once, as I detail in the book.
How well did you expect the book to do? How far apart was that from reality, and what does that mean for you?
Well, the advance was respectable, so the publisher had really high hopes. It was supposed to be their trendy, "thinking person's" beach read for 2016. And they certainly went all out on the media front.
So far the book has done well...some would say very well (certainly compared to how well most books do....2000 books are published every week in the US....only 15 make it to the NYT bestseller list).
Sales are holding strong, so the hope now is that it becomes something like Liar's Poker, the sort of go-to Silicon Valley book, for several years.
In the book, you didn't speak much about your efforts with Adgrok (aside from the rain-making and deal-making.) Not to understate those tasks, which were of course the most important, but what did you do day-to-day at Adgrok?
Excellent question. At first we were all coding more or less equally. Then I blew up the codebase too many times, so my co-founders took away my commit key. That's when I really became CEO. ;)
Mostly, the life of a CEO is similar to a PM in a large organization. You do everything from the hands on keyboard coding. Biz Dev, user support, helping set the long-term product direction, face off any threats to the product (political in the case of a large company, lawsuits and bad PR in a startup), etc. And then of course, mundane stuff like payroll, keeping the fridge stocked, going to tech conferences and meetups to increase the company's profile. Etc. Lots of random bullshit really, while the tech side coded away...
Why do you say Nassim Taleb is a pseudo-intellectual? This was a footnote after bringing up the concept of the narrative fallacy.
He seems to have a similar background -- he was an options trader turned author. He is generalizing option theory to one's choices in life, as you do somewhat frequently in the book.
Isn't it just competitiveness? You both have a penchant for insightful criticism as well as petty insults. I liked your book and I also like his books.
I guess all authors like to pick fights with each other. I ran across a big argument between Steven Pinker, Nassim Taleb, and Malcolm Gladwell. Maybe you are trying to enter that realm by picking a fight?
I can't claim to be anything like a scholar about him. I read him early on, including his early blog posts and 'Black Swan'. I tuned him out when I saw him speak at GS (where he came off like a polemical blowhard). My view might be dated.
But...I've never read anything of his that seemed deeply insightful in some way. Sure....'black swans'....the normal distribution isn't a great proxy for reality, and reality can have more extreme values than usually thought. Is there anything else? Is that anything that any serious applied statistician would disagree with? I have trouble reading people who's only goal in life seems to be demolishing orthodoxies, without offering replacements. In science, theories are judged by their ability to predict the outcome of experiments. What predictive power do any of his ideas have? On the contrary...all he claims is that experiments are fundamentally unpredictable. Well, that's not very helpful (nor seemingly true).
Huh? But you quote the narrative fallacy in your book and here in this thread. According to Google he coined that, and it is indeed a very insightful concept. It's worth a lot of real money to people who understand it.
His books to tend to tread over the same concepts over and over, but I think it's partly because the concepts have lots of applications. People disregard them in every area of life.
They are fundamentally opposed to the heuristics developed in your reptile brain, so you have to CONVINCE yourself of them over and over, very explicitly. It's the equivalent of convincing yourself not to find a pair of beautiful breasts attractive.
As for offering solutions, I think his prescription is basically "small local truths" rather than "grand overarching theories". Anything more would be dishonest. I think his ideas have predictive power in the sense that people who ignore them are subject to predictable mistakes. They act based on fallacies of equal probability distributions, the narrative fallacy and the like.
To me, there should be a high bar to insult someone in print. Murthy apparently meets that bar! But someone being a little annoying when you saw him 10 years ago doesn't seem like a great reason. Ironically, Taleb and you are like, because he also insults people in print for no reason.
FWIW I will also mention that I found Paul Graham to be a blowhard after reading his essays online. Then I saw him give a talk in person in 2005, around when he started YC, and my opinion totally changed. There is something about human psychology where people with strong opinions leave you feeling antagonized. But I think it's better to take it as a sign you are learning something from them.
I think Taleb pissed me off (and every other quant in the room) when in the middle of his GS spiel, he stated that all of statistics is wrong.
Well, everyone in that room was using statistics to make lots and lots of money (on most days). Unless he offered something else for them to use, I think everyone just tuned out at that point.
Again, I understand he's a sort of popular philosopher of empiricism, and not a practicing probabilist, or anything, so it's not like he has to cook up a new stochastic calculus or anything. But to me he kind of lives in the Gladwell bucket: fun to read, weaves a great story, but often wrongheaded or unverifiable if interesting conclusions.
OK thanks for the answer. That's understandable, and I can certainly imagine that he overstated his case, as is his style. He's a provocateur, but then again so are you.
But I think you are missing his point. Your "(on most days)" aside is EXACTLY the issue at hand. It's the tail that can't be ignored if you are intellectually honest. It can perhaps be ignored if all you care about is making money in a certain context.
I believe Taleb is right that quants were using bad statistics to lie -- to make money in a way that gives them the rewards, but pushes the losses onto the company and onto taxpayers.
In other words, there's the question of whether they were wrong because they were ignorant, or wrong because it didn't matter for their their purposes. It sounds like from your response it was the latter -- that this issue wasn't really thought about.
To illustrate, here's an honest question for you. It sounds like you have some money, but not an FU sum, and you would like that. Given your background as a quant, why don't you use it to turn $200K into $2M or $20M? If as you say, mathematics can make predictions, why don't you do that?
I think at least part of the answer is because your methods don't really work. They work in the sense that you can push the tail risk onto the entire company failing, or onto taxpayers. But they don't work when you have skin in the game, as you do when investing your own money. Even when you work for GS, you're not playing with your own money. If the company goes bankrupt, you don't lose the salary you were paid.
And of course, this is not theoretical -- it HAPPENED, with alarming frequency.
I'm not a quant, but I'm a software engineer who works with quants at a big Internet company, many of them with similar backgrounds -- Ph.D.'s in applied sciences from MIT, Stanford, etc. (We're not in ads; we're more on the user side).
And I have observed first hand how quantative skills do NOT lead to better returns in trading. The quants ask ME for advice about trading. I happen to have a certain contrarian temperament which goes well with the market. It's nothing much more than dip buying (plus a little info from being in the industry), but most people CANNOT stomach dip buying. Even people with Ph.D.s who work as quants. It's an emotional thing, and not a mathematical thing.
They also don't understand Taleb's convex vs. concave distinction. I watched a new hire quant risk a large fraction of his savings for a meager return -- $20,000 for a $2,000 return. At the same time I bought GRPN when it was being savaged in the media, and made an additional $2K while risking $2K in a few weeks.
Taleb calls this "picking up pennies in front of bulldozers", which I think is insightful. We both made $2K in the end -- does it matter? I think it matters a lot. It's easy to ignore this distinction when you don't actually have skin in the game.
Also, Taleb IS a practictioner -- he was a trader, and arguably a quant before the term "quant" was coined -- he has written somewhat mathematical books like "Dynamic Hedging". His IS offering a replacement for quants to use, but it's just politically untenable in a finance organization: lose money every year, except 2 out of 20 years, but come out vastly ahead (convex bets). He claims to have made a lot of money in the 1987 and 2007 crashes, and earned enough political clout so that he could execute his strategies. And he also started his own hedge fund I believe.
So it's not fair to say he's not practicing. One of his major points is not to believe people without skin in the game, like academics, or people who work at banks and can leave for a startup without consequence :)
If you haven't read any Taleb since 10 years ago, I would recommend it... if you can stomach his tone, there is a lot of insight. I think you can make more money with philosophy than with mathematics. (Paul Graham is a good example of that)
Well, if we're talking concrete results, why isn't Taleb a hedge fund trader anymore? Why isn't he a Jim Simons with a RennTech that just has 80% returns year after year? He had a fund. By all reports, it didn't do exceptionally well.
You mention my using what (little) knowledge I have of the markets to make money. The use for math at GS wasn't to make money directly, it was to calculate risk in various future scenarios, one of which a trader was betting on as the one that would happen (vs. some other one that we were betting wasn't happening). Perhaps in those HFT shops the math is actually some sort of algorithmic recipe for free money (or 'alpha' as they'd call it). But in most market-making establishments like GS, they're really not.
You might be right in that they're privatizing gains, and simply socializing losses by not trying to account for doomsday scenarios. But even that's not totally true. We had 'stress test' analyses on the desk, imagining if the world really too a nose-dive, how much we'd lose. They were looked at and acknowledged. Often, it would cause a conflict between the trader and the desk's MD, for example, and now we're dealing with politics, which is its own can of irrational worms.
Wall Street is a necessary evil, and given the very real risks they run, and how absolutely balanced this chaotic arbitrage is, it's amazing how well they do (GS borrows at 50 bps over LIBOR, and then levers up 20:1, and somehow returns a profit almost every year).
It blows up occasionally, sure. Maybe they should have left some of the banks fail (though it's worth noting the Feds made money off TARP). But I don't see what more they could do to predict the unpredictable. Sure...black swans. Now tell me what that swan weighs, what it looks like, and its exact behavior. Lot harder to answer isn't it, and Taleb doesn't seem to say anything about it.
Btw, I read his dynamic hedging book back in the day. It was a decent book, and admirably combined theory with practice, but it wasn't some revolution in options pricing or hedging. It contains all the tricks any decent vol trader knows about properly hedging gamma, theta, etc. I used it to prep for job interviews, it's that conventional.
He wants to answer a real question? How about answering this one. Here was the weirdest trade we did at GS. We once sold credit protection against the US government failing. Spread? 1 basis point. Payable in Euros (of course).
How do you price that, according to Taleb, since it's only in black swan land that it will ever matter?
More broadly, what does the bond yield curve look like when highway gangs have taken over the Long Island Expressway? Is the options volatility skew maintained when shotguns shells replace the US dollar as currency? What's the 'crack spread' between Crisco and bio-diesel when the only functioning engines are ones ripped out of old Volvo 270s? These are the sort of questions you'd ask in true black swan scenarios. Nobody has an answer for any of it, least of all Taleb. That's why I find him kind of useless. I'd bet anything his thinking hasn't contributed to any trading strategy or fund. And it's not due to some global conspiracy...his theories just have no predictive power, not even in some high-level metaphorical way.
What's more important to you, the Twitter checkmark or the Facebook checkmark?
I wonder how long Twitter will be around in its current form. I do hope I'm wrong to worry.
Also, I'm sentimental. Old loyalties die hard.
If you were to redo the whole thing (AdGrok, FB, Twitter, your career) over, what would you do differently?
I'd have not gone to FB, and gone to Twitter instead, vested out my four years, have been done with tech forever.
I'd have gone to FB, but not placed such an all-in bet on the FBX side of things, not have pissed off all of management, and lived to fight another day. Four years of vesting, and FB at $125, I'd have been sitting pretty indeed.
My real life regret of course is ever having gotten into science/tech at all. I went to a modest state school for undergrad, for reasons due to my cluelessness and parental stupidity. I felt science was my way out of the mediocre track I was on. In some ways, it was. In other ways, I wasted the best years of my life on something I wasn't particularly gifted at. My first paying job was as a journalist and scribbler. I should never have left it.
But don't you think having studied science made you have no fear in science which gave you the feistyness and multi-layer way of thinking most journalists won't have...
Yeah, maybe. I do think science education is great training for thinking, even if you don't become a scientist. I just know the one thing I'm actually good at though...
What do you think of this latest Ad-Blocking tit for tat going on with FB and Adblock Plus? http://adage.com/article/digital/adblock-claims-beat-facebook-s-ad-block-force-field/305420/
This is kind of interesting, and part of a bigger trend around ad-blocking. Historically, adoption of blockers was so low (single digit percentages) that nobody cared. Ad networks and publishers just considered it like the 'shrinkage' (i.e. shoplifting) of retail commerce, and just baked that blocking rate into their estimates and finances. But with ad blocker adoption up to a quarter of users, things have changed.
Publishers have gotten way, way smarter about ad blocking, and if you try to use an ad blocker on publishers like The Atlantic, you get pop-ups that block content. VCs recently backed a company called SourcePoint, founded by a ad tech veteran, to build more and better ad blocker blocker technology.
FB benefits from the fact it serves its own ads, therefore it's relatively harder for blockers to figure out what's an ad vs. organic content. Basically, it can wage this arms race better than most. It's somewhat interesting that FB is basically forcing the ads down users' throats, and even Boz reading from a PR script can't say much more than 'shut up and take it'. Of course ad blocker blocker blockers can't be far behind, and the arms race will continue.
That would about be my take on it.
What are your feelings towards ad blockers as a user? Arguably no one wants to deal with ads due to the possibility of malware, but at the same time those ads are in part funding these sites.
I'll come off like an ad tech defending fool, but I think ad blocking is a minor form of theft. Of course, it's semi-justified when uncaring publishers jam their sites and apps full of annoying popups. Other than FB, TWTR, and other native ad platforms, publishers typically don't care about the user experience. So it's to pick one side or the other, when both are kind of right (but it's still theft).
Most annoying error in the book that you wish you could go back and fix?
There's an error in the epigraph TO THE PROLOGUE, THE VERY FIRST WORDS A READER READS. The one by Alphonso X. I can't imagine how it got through. Every epigraph was checked against canonical sources by the copy editor.
On the plus side, when I put out a call for errors, nobody seemed to flag it. Oddly, it somehow went unnoticed.
how unlikable are you then?
Depends. If I don't like you, then I'm very unlikable. But if I do, then I'm as likable as the next guy. :)
Are you happy where you are now? Was it worth it?
Oh, I think it was worth it. I don't regret writing the book. That said, the book hasn't been the life-changing experience I thought it might be.
Well I bought the book and I am loving it. I am being entertained. Thanks!
It seems like the story would have been less interesting without all the conflict during your time at Facebook, or if you had played along and joined Twitter, but achieved the bigger payoff like your former AdGrok partners. Given the success of the book, are you happy with the way things turned out (so far) or do you have any regrets about the decisions you made along the way?
In my darker moments, huge regrets. Since I have no illusions of having been good rather than lucky, I probably missed my personal lightning strike of wealth for this tech bubble. Very likely, I won't have a similar opportunity in the future. That's it. I missed it.
Much of my circle is busy buying or building expensive houses, engaging in the long-term financial planning the affluent can afford (trusts, college funds, tax planning).
I'm building a cabin on a beautiful but remote island, mostly because I have to. I'm keeping enough cash on hand for my big sail (and hopefully have enough cash to really disappear for 2-3 years).
Big difference in life there.
Sure...the book, posterity, history. A century from now, if anything will be remembered from the Valley carnival, it'll be a handful of companies and names, and (maybe) a couple of books. Hopefully Chaos Monkeys is one of them.
Nobody will know or care who the VP of BD was for Pinterest, or who the eng manager was for FB Newsfeed.
So if you could travel back in time, would you tell 2012 Antonio to shut up, suck up to Gokul and Boz and just stay on the payroll until all your stocks vested? Or would that be too high of a price to pay, even for F-U money?
If I could go back and address my 2012 self, and show evidence of how life would unfold, then yes, I think 2012 Me would have changed his behavior. What value did the good fight have in the end?
Good thing? Bad thing? Who knows? (old Sufi woo woo)
Maybe if you'd accepted the price of the golden handcuffs, you'd be stuck in an overpriced east bay suburb with a soul-destroying commute, hefty mortgage, and never have written the book, which was clearly fueled by a touch of outrage. Obviously you've found your true calling. Being a little hungry (or angry) never hurt anyone's motivation levels.
True. Hard to imagine the counterfactual, particularly when it concerns your life.
I doubt I'd have ended up in the suburban nightmare. I do agree the book probably wouldn't exist without the FB drama.
Is it worth it? Not sure. Ideally, I'd like to have been born a nice European bourgeois, into a family with an ancestral country house somewhere, a flat in the capital, and the perception the universe had arranged itself to keep me in food, wine, women and status for all time.
Lol. Well sure, that is the dream.
More common than one might think. I've met many of them.
You're a fan of Paul Graham, and he has made explicit arguments for good behavior as an element of success in business:
You seem relatively unconcerned with bad behavior, justifying a lot of lying and zero-sum behavior in this book. You seemed relatively blase about the fact that Goldman doesn't act in its clients' interests (which is well known by now, and one wonders why it hasn't let to their demise)
Don't you think this attitude affects your outcomes? You have had a ton of good contacts, and instead of making enemies, you could have been their angel investors and made money passively. Seems like that's what Gokul's strategy is.
I think the biggest philosophical difference is that you are coming from a zero-sum world and mindset, whereas Silicon Valley is not zero sum. Things do get created out of nowhere, in astonishingly short times.
Although perhaps the ad tech segment industry is more secretive and transactional, whereas other parts of the industry are open and creative. I've worked in Silicon Valley for 15 years, and I fully believe everything you say. However, recognize that your perspective is skewed, and that there are creative parts of Silicon Valley, and creative people do get rewarded.
Yes. You're right.
As I state somewhere else here, I think the very transactional, zero-sum and mercenary attitude of Wall Street is actually maladaptive in the SV ecosystem. You might do locally well (it did save AdGrok from a lawsuit, after all), but it's globally sub-optimal.
Among my many mistakes, if I had simply been less of an uncompromising asshole when pushing the programmatic vision at FB, I might have kept my job, and vested out in peace, and now be worth FU money. Or at the very least, I would have preserved some relationships and lived to fight another day (even if not at FB).
Of course, if the programmatic vision had succeeded, I'd have been hailed as a hero for my uncompromising commitment to the vision...;)
If an unconnected nobody 20 year old with a great idea and no connections told you they were moving to SV to be the next big innovator - would you advise them to go for it?
What's his or her alternative?
By default though, I'd say yes.
Buy the ticket. Take the ride. But no crying at the end (unless you've got a book deal).
After being in research/academia, wall street and the SV/VC environment, can you give some on the pros and cons of each? what you liked and disliked and what made you made the jump from one to the other and in hindsight, what would you have done knowing what you know now if you were to do it all again?
Abit loaded but also... how did that change your world view and the things you are interested then and now
Perhaps the best way to answer the question is in the form of what I miss (or don't miss from each):
Academia | Miss: Pursuit of knowledge for knowledge's sake. Being surrounded by cerebral people who take the life of the mind seriously. Don't miss: Terrible management. Kind of wanky and inward-looking. Your entire life occurs inside the monastery, and you mostly don't know how the world really works.
Wall Street | Miss: The energy and excitement. The no-bullshit attitude (if it's not in a P&L report, it doesn't matter) Don't miss: The greed for greed's sake. The fact you're really the engine room of the economy (not the captain's bridge that everyone seems to think it is). It's a necessary evil, but it sure seems pointless after a while.
SV | Miss: The relative openness of the industry. The willingness to believe any goddamned silly thing, and actually invest time and money into it. Don't miss: The willingness to believe any goddamned silly thing....
At what point is an idea worth something to a VC?
When there's an impressive user or revenue graph that accompanies that idea.
For a sailboating enthusiast, you are quite pale. How do you not have a deepwater tan?
I haven't been out sailing in ages...not since summer 2015, and not really since late 2014, when I sailed from Seattle to SF.
I've got to get back out there, but now I've got almost two years of deferred maintenance on the boat to get through....
How does something like a Theranos just grow and grow, despite logic? How do companies get people to believe they are innovating and disrupting when they are not?
Internal mythologies are powerful. To the extent you live in a cultural echo chamber, what's really a mass delusion becomes truth.
Happens in nations as well. The US is itself a startup of a country, with myths around 'rags to riches' and social mobility (even though most stats show less mobility than many European countries). But we have to sort of believe in it.
Of course, like democracy or religion, if everyone believes in it, it sort of becomes true (at least in cherry-picked examples, such as today's successful bootstrapped entrepreneur).
What was the biggest smoke and mirrors show in the valley?
I can't say I was witness to one. At least nothing beyond the baseline duplicity of the Valley.
There were a couple of YC companies in the batch that I knew were falling apart (like, founders quitting the day before demo day), and yet which raised on the assumption that nothing had happened. Some managed to pull off still creating a company. Some didn't. Was it deceptive? Too much wishful thinking? Hard to say. Savvy investors know what they're getting into, and just factor their burn rate into their business model.
Do you think the 'wild west' is over? People still talk about the 20 year old 'information revolution' as being new and cutting age and figuring itself out, I think it gives them a lot of cover for mistakes or lacking understanding. At this point the information revolution is about as new as TV was when All In The Family debuted.
True. But I think mobile changes things in a big way. It allows for splicing in computer logic and all the world's data into your real lived experience, not just what's going on at your desk. I don't think we've seen the end of that. Arguably, with things like AR, we're only seeing the beginning (e.g. Pokemon).
I am more and more a believer that there is nothing new under the sun, that we forget most of the details of the past and we can pretend everything is revolutionary instead of just a standard evolution.
Do you think 'big data' is anywhere near a point where it is really useful? When I see targeted ads for stuff I just bought, or suggestions for videos I have just watched - the fact that that is a big part of their core business makes me think that the idea is still sci-fi.
I think the DB technology is there, but the data integration across the complicated ad tech landscape isn't. Right now, I can't stop targeting people who've bought my book on Amazon, because Amazon doesn't share conversion data. Like I said in CM, most 'tech' problems are really people problems. And here we have competitors with very different agendas trying to collaborate to improve a consumer experience, and mostly it's kind of sucking. I think the marketing utopia is really waiting on that to change (or there to be one all-powerful incumbent).
Really loved the book! Could you talk about some of the unexpected difficulties you ran across living in a house boat? How do you get wifi?
To be clear, I live on a sailboat, not a houseboat. The thing does move, at least on good days.
Houseboats are effectively floating mobile homes, and hence have most of the niceties of land life. Sailboats though are usually far simpler and more basic. It's actually not very romantic or luxurious at all, and most people would hate it.
Consider my FB post on the matter: https://www.facebook.com/antonio.f.garcia.martinez/posts/10105573280882243
As for Wifi, the marina does have wifi, but it's kind of fickle at best. Land and boat life don't intermingle well. In general, I think keeping up a corporate land life while living on a boat would be really hard.
Sorry, I totally get it, my uncle had a daysailer too and hated the comparison.
Interesting about the wifi. If you end up on the open ocean for weeks or months, are you going to try to get satellite internet to stay up to date with social media?
I have a sat phone, but the data connection is horrible. The only offshore connectivity that ever worked has been SSB radio (basically, shortwave), or the DeLorme Inreach device that lets me message from offshore in short bursts.
Loved the book. During the read, I felt multiple times that you may be a pessimist. Could that be true?
I'm the guy sitting with arms folded in the middle of the pep rally.
The same Wee Admin from Twitter. Hope I'm not too late!
I have noticed (and enjoy) the numerous jabs at religion/believers. You even go so far as to call believers delusional, yet you never explicitly use the word atheism. Of course it's possible to write about non belief without also writing a treatise on atheism (as unlikely as that may seem to the average user of r/atheism), but I wonder: did you intentionally leave out the word because of the knee jerk negative reaction it so often gets?
Love the book. Felt a particular twinge of embarrassment when you talk about the real, often unspoken (and rather manipulative) power of good writing to win people over. Thanks for the awesome read!
Didn't see that one coming. I use religious imagery to reflect the evangelical zeal of techies, and also a play on my own Catholicism ('cultural fit' as the holy spirt in the Trinity, etc.). I suppose you could call non-believers atheists. But seems infidels is more accurate here, as atheists don't believe even in the idea of a deity, while non-techies just don't worship the techie gods (presumably they have other all-consuming beliefs or religions).
Does anyone believe the long tail?
You mean selling to them? Or the DDH thing about the Fortune 50,000, of long-tail startups that we never hear about but manage to be profitable?
If I wanted to learn more about ad networks and exchange processes, can you point me in the right direction?
There's a real lack of them.
Ad Exchange often has some good stuff, though it will seem very jargon-y at first:
Favorite place to eat around FB campus?
EDIT: Off campus. The amazing free food on campus doesn't count!
There isn't much around campus....it's on a pile of fill, poking into the swampy part of the bay. You have to drive anywhere.
I don't like the posh parts of the Peninsula much (PA, MP, etc.). I can't recall a single memorable meal down there.
Only exception is Oren's Hummus Shop on University in PA. Lived off their kebabs the few times I'd go home for dinner.
I'm fascinated with the story about how Mark Zuckerberg allowed employees to create "art" in the new FB headquarters. Can you expand exactly how people took advantage of that?
I work for a large insurance company. I can't stop laughing when I think about how that would go there.
Well, like I say in CM, they basically just shipped in spray-paint, markers, and art supplies to every common area of every building, and Zuck sent out an email saying 'Create Art!', and everyone went nuts.
Some of it was good. Most of it was terrible. It really did feel like a gang suddenly vandalizing the place, which is what spurred the chastising to-all email from Zuck.
Pandemonium. But hey, better trust too much, and do too many experiments, than too little of either.
Now that the book is done and the promo phase is heading for an end. What's next for you?
Sailing! The only other bucket list item I have.
Also, spending some time putting a cabin on this land I have up in WA. Also, the 3-month-old child I just had.
Any ideas percolating for book #2?
I've been joking with people that I'm working on a male version of 'Eat, Pray, Love' where I sail across the pacific, find love and adventure along the way, and deal with a life of trauma and abuse. Then return and become more of a father, and generally have a happy ending where Gosling kisses the estranged mother to his children.
The more I think about it, the better it sounds.
Back to the trader or Katia?
Katia? Who's Katia?
mom of the 3 mo old?
I'm wondering how her cover got blown.
Haha, so it's her rather than the trader then;)
That's hardly hard to guess, given the dates at work here.
I like it, but it's been done. I see you more Paul Theroux-ish, in the grand old tradition of the rugged inconoclast. Looking forward to it. ;)
Oh, yeah. Love Theroux. But who is that writer for the sub-40 yo reader? Maybe we just don't have that sort of writer anymore. Like we don't have a Clancy either.
Ka-ching, niche found. ;)
Fav Theroux? After reading The Happy Isles of Oceania, I suspiciously wondered if the title was meant to be sarcastic.
I've only read The Great Railway Bazaar, and loved it.
Do you see another massive bubble coming for Silicon Valley a la the dot-com bubble?
I've been calling the top of this bubble since 2010, and here we are. Clearly, I'm not more clairvoyant than anyone else. :)
Things do seem particularly bubbly, and some of the unicorn markdowns are a bad sign. So is the minor stumble in the SF real estate market.
When did you learn to code, you say you're not a great programmer in the book, but when and how did you learn and what languages?
Couple things: as either a blessing or a curse, I had a five-year doctoral fellowship from the Defense Department in grad school. Which meant that while I pursued (or went through the motions of pursuing) a PhD, I could take any courses I wanted to, and mostly not depend on the favors of a thesis advisor. Somewhere in there (mostly due to a live-in girlfriend doing a PhD in theoretical computer science) I started taking lots of grad level CS courses (for which I was very poorly prepared, but somehow muddled through). That was my 'formal' CS training. Then, as part of that, I switched thesis topic from experimental condensed matter physics to bioinformatics (the genome project was still going on at the time, and Berkeley was a big sequencing center), and so I became a Perl hacker for biologists (Perl was the standard language, mostly due to the ease of regexes and string handling). Along the way, I learned OOP through Java and some C++. After leaving grad school though, I never touched Perl again, and became a moderately capable Python hacker, which is what we used at Adchemy for its stats packages. At Goldman (my first real production programming) they had their own proprietary language called SLANG (Securities Language), that was kind of Python-y, but useless after GS. But again, I'm a particularly ungifted programmer...
What's your favorite restaurant between Redwood City and SF?
Wow. That's the hardest question on here.
Probably The Refuge in San Carlos. NYC-quality pastrami and a selection of Belgian ales. Hard to beat.
What about all the San Mateo ramen joints ohhhhhh my
Love me some good ramen.
You mentioned the Ph.D. in physics -- what did you study in your undergraduate degree?
Fantastic book BTW. I have been telling my friends it is the best book about Silicon Valley written so far, and I've read quite a few. (The worst book was probably the Circle, which was fiction.)
I was confused as an undergrad, and went to a not particularly prestigious or exclusive institution. As a result, there was lots of flailing about, and doing relatively well due to lack of competition.
Officially, I graduated with a BS in Physics, a BS in Chemistry, and a BA in Anthropology. Three degrees in five years.
The Circle was terrible. But hey! Being made into a film...coming out in 2017. With Tom Hanks no less....
I think you should take the time play self in your movie, if not, Mark Ruffalo should play you before he gets too old...
That's very flattering.
I've actually been asked the question of who I'd have play me. My pick would be Edgar Ramirez.
I could barely act like myself in a radio interview. I can't imagine acting some role on camera. I'm actually shy and retiring, and hate attention.
What's dishonest about other books on the topic?
As I do in the book, I'll quote Taleb on the 'narrative fallacy':
“The narrative fallacy addresses our limited ability to look at sequences of facts without weaving an explanation into them, or, equivalently, forcing a logical link, an arrow of relationship upon them. Where this propensity can go wrong is when it increases our impression of understanding.”
The entire outside impression of Silicon Valley, as appears on the cover of 'Fortune', is based on this narrative fallacy.
Your book was full of little insights like these which made it a really enjoyable read for me. I'll probably read it again for these if not anything else. Thanks for documenting all you did.
Thanks for reading!
I agree that most people underestimate the role that luck and randomness play their careers in tech or other industries. On the other hand, some people manage to transcend that seemingly through sheer force of will, e.g., Zuck, Steve Jobs. I wonder if you had any thoughts on how to reconcile those two extreme views of success?
This is something I often think about. One of my fears in highlighting that the Valley is highly random was that people would think it was a 'sore loser' coping strategy. As you highlight, there are some people who seem to succeed greatly, often through terrible odds, consistently again and again. Probably the sanest view is that of Machiavelli in the Prince, who said something along the lines: half of human life is chance and circumstance, but that still leaves half for human effort and will. I'd probably agree with that.
I think maybe why the Valley seems particularly like a lottery is the completely outsized returns to being in the right place at the right time. Is engineer #3 at Uber (to take a random example) really worth 100 million times as much as an engineer somewhere (given his likely centi-million dollar outcome)? If so, then why doesn't every company that person works at turn into a comparable success? In the past, short of high birth, there was no way to earn that much in a lifetime, no matter how lucky. But now, things have changed. It's hard to construct a morality around that payoff diagram.
Right. It's eye opening to realize how much luck has to do with success, and frankly a little off putting when the lucky few begin to believe their own press and buy into a personal superiority narrative. Silicon Valley, like every other place, is not a meritocracy. Oh the stories I could tell. But I don't have to - you already did. Thanks 👍😊
Giving a voice to the voiceless! ;)
I guess the truer measure of an individual's quality is achieving success repeatedly in different instances. But the payoff may not be as great as simply being in the right place at the right time as you point out. Weighted by the payoff, the old baseball adage is true - it's better to be lucky than good!
Right. The reality is, lots of the early employees at many of these companies (ahem, Facebook) haven't been able to make lightning strike twice in the same place, so to speak. I think it's clear whether they were lucky or good (whether they admit it to themselves or not, and mostly they don't).
Did you ever feel your wall street background was a detriment to what you did -- either in raising funds or in getting acqui-hired?
Actually, maybe, yes. I think it made me kind of mercenary and transactional (e.g. negotiating the Fenwick deal that kept AdGrok afloat through the lawsuit). Those really aren't the rules that SV plays by. It's more of an iterated game, not a one-shot one. I think the Street mentality helps you understand markets and optionality, but I wonder if it should be a guide to daily behavior.
How do you feel about Murthy now?
Great question. I used to have a smoldering anger around him, that was partially sated with the lawsuit dismissal, and then completely sated with the publication of the book. At this point, I don't think about him at all. I think if I ran into him now, I'd feel indifference, or even a touch of pity. He's not doing much of anything now. Either his ego has deflated, or he's retreated into delusion about what happened with Adchemy. Either way, he seems like a pitiable or tragic figure to me now. $140MM down the drain....
Loved the book and glad to hear how well it's doing. Can you talk about your writing process a bit? Have you always kept a journal? How did you tackle sitting down to write a book? Was it a matter of pages per day? Did you diagram its structure in advance? What sorts of resources did you leverage for guidance?
I'm really not a disciplined writer at all. I did do some scribbling while the action was going on, but mostly it was being careful about keeping notes or archival stuff (texts, messages, emails, etc.) that I knew I'd need later. Mostly, I rented a small house on a remote island, and locked myself inside for six months. That's really how it happened. And then wrote (or tried to) all day every day. I also raged and drank and fumed way too much. But the book got done...
Have there been any other good books about ad tech written recently? The descriptions you give were very good, but left me wanting more detail.
I set my browser to delete cookies on close, and reject third party cookies. It seems like that is fairly rational.
I can't think of one. There aren't even great online resources around ad tech.
Another similarity with Wall Street there: also very few real-world, insider books written about it. I think the cost to a person's career of doing so is way too high.
http://adopsinsider.com is solid, but I'm fairly convinced by this point that most people working in ad tech don't even understand ad tech. If they do, it's usually local knowledge about their small part of the ecosystem. Broad understanding about adtech is rare to find and difficult to acquire.
That might be right. That said, I have met lots of people--usually people several years or roles into an ad tech career--who do have a global view. I don't think it's impossible, just hard to find outside the sort of person who's ad tech CV includes three startups, a public company, and some old-school marketing firm.
Why did you have unprotected sex with women you barely new?
Good question. British Trader was an older woman, professional, etc. Assumed (wrongly) she had her sexual life under control (more or less). Surprise, surprise....
Also, as you could maybe tell from other events in the book, at that time, I wasn't exactly risk averse, whether it was veering into DUIs, racing cars....or online dating hijinks. I think I temporarily lost any form of self-preservation or caution.
What was your role in the credit derivatives stuff at Goldman Sachs? Given that there were many books written about that time period, it seems like it could have been be worthy of some more treatment in the book, or maybe even in another book.
How surprised were you that it blew up? It seems like Goldman knew a bit ahead of time, so there must have been some internal consensus that it would blow up?
Did people at Goldman generally recover after the crash? Or I guess it's only the partners that do, and everyone else rotates. You mentioned a couple of them who were in jail.
I was an associate strategist (to use GS-speak) on the Investment Grade CDS desk. A fairly junior role, but in that flat way of the trading desk, or just GS, it meant you had some subset of the desk's risk as your responsibility. I went from having $800 in my bank account, to staring at screens with ten-figure numbers on them.
I think it was fairly clear what was going on. I'm no economist, and I could sense that the game was up. Mortgage lenders and insurers' credit spreads were blowing up, and banks were failing. Even Goldman's credit spreads were taking off.
Wall Street is an all-consuming world. People there can't imagine doing anything else, and they couldn't imagine the party ending. Most everyone I knew on the desk (at least on the quant side) is gone.
So, I have this Dell Latitude e6410, and it says "Battery Plugged In, Not Charging", so I figured it was a bad battery. I bought another one, and it's the same problem! I have to have it plugged in for it to work.
You sound smart with computers, can you please help me? My grandson tried, and he's good with Internet stuff, but I think it's time to ask a professional like yourself.
This is my flawless approach:
Are you afraid of burning bridges?
The fires from the burning bridge light the way to the next bridge, which will in turn be burned....
What makes your memoir the "only honest insider tell-all" other than the fact that wording this title like a clickbait article will increase clicks?
Read the book. Then name me another book with that level of disclosure.
There hasn't been a comparable book since Jerry Kaplan's 'Startup' (from 1995). Which is very good, but also very dated.
Has there been any fall out from all the "naming of names"?
Nope. The book was reviewed by lawyers. Turns out we still have freedom of speech in this country, and libel law is really weak. Truth is always a defense. You'll note, most every scene with a name occurs in a meeting, or an email exchange...all things that are knowable under subpoena or legal discovery.
I have to say my jaw dropped, then I silently cheered when I read you calling out your old boss (or colleague, whatevs) for changing your slides with his name (or pics, details escape me) in order to take credit. Who here has not had that experience? We used to call it "adding value" 😃
Right. If I had been less of an idiot. I'd have realized what I was dealing with, instead of continuing to believe in the posters and their slogans.
When should I quit Facebook?
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