Review of Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley by Antonio Garcia Martinez
We've been consistently skeptical of Facebook, a view which has been wrong so far, although the stock price increase has brought the valuation to almost 100x net income. (Meanwhile, the cumulative profits of the company are about half of what they spent to buy "WhatsApp" in 2014.)
Since we're also skeptical of the Techbubble 2.0 more generally, it seemed like it would be worth reading the new Chaos Monkeys, about some lame startup whose author was acqui-hired by Facebook.
I won't rehash the author, Martinez's, story, because who cares? The only thing I thought was interesting about the book was what happened to him after he landed at Facebook.
He did an odd deal where he and his two co-founders sold their startup to Twitter, but he went to work for Facebook instead of joining Twitter with the other two. He got a signing bonus which was a multi-million dollar amount of stock that would vest monthly over four years. (Note: if you have to work to get the money, it's a salary not a signing bonus.)
When Martinez joined FB, they had yet to figure out an ads strategy. The ads team ended up dividing into two camps regarding the details of how to target ads. A "friend of Zuck" in upper management was brought in to settle the dispute, and decided against whatever Martinez was advocating.
The very next day, Martinez was sacked (he says he was going to quit anyway) and lost half of his unvested stock "signing bonus".
Remember Tinker Tailor? If you work in a big organization, your real enemies are inside the organization. I observed the same principle at work in my review of Innovator's Dilemma:
Companies fail to innovate because "they are focused on maximizing the present value of their salaries, which means making sure Bob's division doesn't try to get you fired" for "disrupting" the product that Bob's division makes.That's why people start startups. But if you start one, and get acqui-hired and negotiate for stock that will take time to vest, keep your head down. Be like Bighead at Hooli.