HBO’s Silicon Valley is actually a reasonable representation of the real thing. Here’s how to get your master’s degree in startups by binge watching it.
Someone once told me that a year’s subscription to the The Wall Street Journal was a little bit like earning an MBA part-time. That may be so and I tried it and found it painfully dry.
Replace dry with quick-witted and funny, replace the MBA with human nature, venture capital, and computer science, and you have the recipe for HBO’s Silicon Valley. The show also adds a few fart jokes and a lot more vulgarity. Once you get past that, the touching story of a hero’s journey reminds me very much of my own three years at a Silicon Valley startup.
During the coronavirus pandemic, you might suddenly be able to stream it for no charge. As of May 11, 2020, all six seasons of Silicon Valley (which wrapped just last December) are available on Amazon Prime, Hulu Plus, and HBO GO, HBO NOW, and HBO. Given the COVID-19 situation, it may just be time to binge watch the entire series.
Here are four lessons learned in Silicon Valley that explain why watching it is worthwhile work–without any big spoilers.
SEE: Coronavirus: Critical IT policies and tools every business needs (TechRepublic Premium)
No one “gives” you money
During the dot-com boom, it was common to hear that investors gave a startup founder money to start a business. Nobody ever “gives” a founder money. Instead they tie that money to expectations.
In the 2014 episode The Cap Table, Richard Hendricks, the hero, has an offer for $200,000 for 5% of his “company”, which at this point isn’t even a product idea yet. Instead, it is a computer algorithm that compresses files. Peter Gregory, a venture capitalist, asks for a copy of the “cap table” (who owns what percentage of the company, called Pied Piper), investment deck, business plan, and other paperwork.
Richard doesn’t have any of those things.When asked, he says “I didn’t know that any of that stuff was due yet.”
The investor (modeled after Peter Thiel), gives a priceless reply. “Due? This is not college Richard. I’m not going to be giving you a course syllabus. You turned down ten million dollars to keep Pied Piper. What did you give up that money for? What is this company? What did I buy?”
To get venture capital, even an angel, which is an initial round to build a proof of concept, you’ll need to answer these questions. Not with big words like “integrated cloud messaging service,” which the show skewers, but with a real vision.
Learn to compensate for your weaknesses
While Richard Hendricks creates the compression algorithm the company is based on, he does not know how to turn that into a product people pay for. It is Erlich Bachmann, the sleazy startup incubator host, who has to provide that answer. As the show begins, Bachmann is giving programmers free rent in his home in trade for 10% of their “companies,” which are mostly half-baked ideas.
Hendricks, our hero, works at Hooli (a not-very-hidden version of Google), and accepts the incubator deal because the cost of rent in the Silicon Valley is so out of hand. That’s not unrealistic, as an actual one-bedroom apartment in San Francisco runs $3,600 a month, according to equityapartments.com—and that number is before utilities.
It is Bachmann, the incubator, who answers Peter Gregory’s question. In the 2014 episode, he says, “Today’s user wants access to all of their files, from all of their devices instantly. That’s why Dropbox is winning. But when it comes to audio and video files they might as well be called DripBox…we control the pipe, they just use it. That’s the vision in Richard Hendrick’s head.” Of course, Erlich just made it up. Peter Gregory is sold and Erlich becomes the third board member.
Independently, neither one of the two founders has what it takes to run a company. Their flaws are so obvious as to be actual comedy. One alternative to building up your weaknesses is to get help compensating for them.
Stop the “well, actuallys”
One of the recurring gags of the show is when someone makes a small verbal mistake. In The Cap Table, Bachman says, “a complete Teutonic shift,” which leads Richard to begin an argument about Teutonic–the ancient German tribe, versus tectonic, the Earth’s crust moving around. The awkwardness is entertaining, but I expect most readers who work in technology will be aware of a time or two that being right was more important to us than the relationship. The examples in the show, like this one, are good reminders of how things end up. Instead of winning social points, we look bad and the relationship may be damaged. Maybe next time, if it doesn’t matter–consider letting it go.
Avoid the big bad
Video games typically have a big bad character at the end of each map or level. In Silicon Valley, this is Gavin Belson, the selfish and self-important CEO of Hooli. In the 2015 White Hat/Black Hat episode, when Belson realizes that a project is going to fail, he tells his board “Nucleus is on board. You have my word that if it fails to be everything we need it to be, someone will be held responsible.”
The next scene has him talking to a senior director who is saying, “Me? You want me to come back to Hooli?” Belson convinces the director by saying that he will get, “the credit and the glory. The name Davis Bannercheck will be inextricably linked with Nucleus. There’s a chance no one will know I had anything to do with it at all.”
This is a classic narcissist play of getting someone else to take the fall. The opposite strategy is to take credit for others’ work, which Belson also does in the series. I was pleasantly surprised to see the show model the real world impact, as the company gets just a little weaker each time Belson plays one of his silly games.
People do act like this in real life, though the behavior is often harder to spot. Watch the show, learn the techniques, then watch for it at work, and you’ll never have to be Dr. Davis Bannercheck, the professor and former director of software engineering.
The most obvious way to not be Gavin Belson is to take a tiny bit of effort and care enough to learn and pronounce names properly. The simplest way to do this is to repeat the name during conversation just after you’ve learned it.
There’s four takeaways from Silicon Valley, most from the first year or two of the series.