Away with the Abuse

It's time to stop justifying abusive founders in Silicon Valley

Another day, another startup exposed as abusive. It’s just another day in Silicon Valley.

This week, The Verge published an exposé on Away, a luxury luggage startup, that showed abusive treatment of employees by the company’s CEO. I don’t know anyone at the company so can’t comment on what’s going on inside. The screenshots of Slack messages from the CEO look brutal and, even if they are taken out of context, they show a work environment that needs fixing.

To me, more important than the story at Away itself is the reaction to the story. Twitter lit up in reaction to the article. My favorite read on the topic was collected by @vcstarterkit who reposted anonymous comments from founders and VCs:

It’s a great read (as is his follow up in his newsletter) that helps provide insight into the minds of founders and VCs in today’s startup universe. While some reacted negatively to the CEO’s actions, far too many, in my mind, defended her with arguments along the lines of these:

  • This CEO is driving her company to be its best. This is the kind of founder I want to invest behind.

  • Why are employees complaining about $40k salaries? They likely got options so they’ll get more money later once they can sell.

  • This is just a hit piece and the journalists should be held accountable.

Let me go through each of these.

First: Abusing employees doesn’t work and isn’t ok.

I am very familiar with working in abusive work environments. For instance, check out this clip from an article in The New Yorker from 1999:

When I arrived at Meeker’s office one day, I found her issuing a tongue-lashing to one of her assistants, who was late with a report she had requested. She let him have it in public, in front of an elevator, her eyes blazing. At the end of the dressing down, the unfortunate young man crept away like a scolded puppy, and Meeker came over to me and cheerfully said hello.

That’s me, the scolded puppy. Did getting yelled at improve my performance? Did Mary’s behavior of “screaming, throwing a tantrum” (quote from Chuck Phillips in the same article) make me a better employee? No! It made me want to quit. What made me a good employee was that Mary was also inspiring and caring. Mary was a brilliant Wall Street analyst — one of the all-time greats — and I found it inspiring to work through the intellectual challenges with her. And she was remarkably caring of her team too. She looked after us in what was one of the most stressful environments of all times.

I also survived abuse at Apple. I wasn’t part of Steve’s inner circle but I was close enough to know him. And close enough to get yelled at. One member of his inner circle said that one time Steve yelled at me was the worst moment of abuse he’d ever seen. Did that make me a better employee? Did calling me a “f-ing idiot” make me do a better job? No! What made me a better employee was everything else about Steve. I learned more about building great products from my time at Apple than I could have anywhere else. Steve also cared more for the people at Apple than the legend acknowledges.

Far too many people in Silicon Valley justify the abuse in startups because of the legend of Steve. Ironically, I don’t think any of the VCs or founders who use Steve as excuse for abusive founders ever worked for him.

Abusing isn’t ok and it doesn’t make people better employees. Steve and Mary were a great leaders in so many other ways that they got away with it — they weren’t good leaders because of it.

Second: Justifying paying people $40k because of options isn’t ok.

$40k is less than half of what is defined as the low income limit in San Francisco. That means it’s really hard to get by with $40k per year. Justifying paying people that little because they have options is absurd. To paraphrase one VC on Twitter, “if you add in the options, these employees are paid better than McKinsey consultants.” I don’t know about you but I can’t pay my bills with options. The presumption from this VC that a low-level employee can and will go into debt to maybe get a payout in options is insulting and shows how much of a bubble some VCs live in.

Third: Investigative journalism isn’t the enemy.

Given our current political dialog, it’s far too easy for people to attack the messenger, in this case the journalist. Saying “this is just a hit piece” deflects the blame from the abuser to the messenger. I bet that none of the apologists for this CEO have ever worked with journalists. I have. None of the journalists I worked with at Quartz were out to get someone. They were out to uncover the truth and to stand up for those who are oppressed. The plutocrats of Silicon Valley may think it’s ok for abuse to run rampant through some of their companies. I bet those who are abused don’t think so. And I’m glad there are journalists who can uncover these stories and give people voice.

Take-away: Pick your investors carefully

My favorite comment from VC Starter Kit’s newsletter is from a founder:

“I wish Crunchbase would tag VC profiles with their reaction to this story so I could filter out the ones I would never, ever, want on my board.”

Whenever I’m helping a startup identify new investors, I always say, “You’ll be working with these people for many years. Their values will be more important than their money over the long term so choose wisely.” The reaction to the Away story (again, I’m more interested in the reaction than the story itself) emphasizes my point. It seems all too common for VCs to applaud abusive founders in pursuit of the almighty unicorn designation. If you take money from one of them, you’ll be encouraged to treat your team like the founders of Away, WeWork and Theranos to hopefully make your investors their next billion.

If that is the legacy you want to leave, that's your choice. But, if it isn’t, choose your investors wisely. And if you’re looking for help finding investors who will help you build a great culture, let me know.

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