ADC 2017 Lightning talk: narcissism meets venture capital

This is the transcript I spoke from last night. I might have skipped some of the bits at the end. As a result of last night’s road test, the answers to the personal questions are: 1. definitely; 2. something more irresponsible, like posting the transcript on my blog.

I’m going to read this very quickly from my screen which isn’t my usual style but there are good reasons why. Although this talk is put together at very short notice it concerns ideas that I’ve been researching somewhat longer. I call it simply: narcissism meets venture capital.

My central thesis is this: much of the world of venture funding is useful and prosaic. But what’s new — a kind of disease brought about by a bizarre gold rush — is:

  • That poorly-formed tech companies with grandiose visions,
    are backed by abundant capital with insufficient diligence.
  • This attracts the wrong kind of founders,
    who are encouraged to build the wrong kind of organisations,
    and whether you’re part of them or not, but particularly if you are,
    these companies are bad for the world around you, for your livelihood, and your mental health.

One thing I need to make clear: this is not about my experience at ROLI and it’s not an indictment of anybody I’ve met here. But, working at a new company brings you into the orbit of others, and can expose you to some of that world.

I suggest a need for vigilance: I believe that these dangers are intrinsic in the current climate and can be felt widely.

My personal reason for giving this talk is to answer two questions:

  1. If I were to write a book about this, would you read it?
  2. What would it take to get me fired?

Let’s look back at ancient history. Before the world went mad, Google took eight years to reach a billion-dollar IPO; Apple took five; they had investment rounds that were fairly modest by today’s standards. $25m in Google’s case; Apple’s was in the Seventies so it doesn’t make sense in today’s money.

Today an eight-year timescale to a public offering would barely make Google newsworthy. Last month, a pair of founders obtained VC based on a nine-figure valuation of their company. They’re not old enough to shave and their company, a graduate project, didn’t seem exceptional to me; it will scale only with tremendous luck and exceptional talent. The anecdote can remain anonymous while we still recognise the story. We know what usually happens next.

I started talking about the money, but that’s just the food; narcissism is the organ it sustains.

Beyond name-calling, what actually is narcissism? There is a narcissistic spectrum where a dark personality disorder lies at the extreme right-hand end, but the continuum is more interesting than the endpoint.

Sandy Hotchkiss in her book, ‘Why is it Always about You?’ lists a number of narcissistic traits, including:

  • Shamelessness, and an unwillingness to engage with feelings of shame;
  • Use of other people in order to maintain self-image: reflected glory, obsession with celebrity, diffusion of shame by finger-pointing. Steve Jobs’s legendary hair-trigger dichotomy of his staff into assholes and gods is an archetypical example.
  • A belief that one is exceptional, so that reward is predicated on entitlement rather than merit and hard work;
  • Grandiosity and magical thinking, where the belief in something makes it real;
  • Poor personal boundaries, so expecting people to be on call all hours of the day to buff your halo and heal your wounds.

Narcissists are constantly shopping for the opportunity to exercise power, and this is one thing that attracts them to the startup world.

(While we’re discoursing on personal narcissism, here’s a health warning. Although it’s inferred that narcissism is undesirable here, you can and should possess a healthy amount: the ‘zero end’ of the scale is also dangerous. You need, for example, to look after yourself to avoid being rejected or exploited by others. An acknowledgement of your own gifts is an essential part of the urge to create. And a prerequisite of being self-aware, which is good, is being somewhat self-regarding.)

That’s the background matter.

Thing one: the tech startup culture is like crack to narcissists.

Globalisation of software distribution and social network effects mean that companies can get big user bases fast. A wide reach and a lot of engagement usually results in an exaggerated sense of importance.

The ‘Get Big Fast’ mentality emphasises big gambles: maximising risk-to-return at the extreme high end of both. If you’re a VC with a portfolio comprising many companies, it can be a responsible gamble. For those affected, though, it can over-inflate the ego.

Founders, selected principally by charisma and confidence, can practise their pitch a hundred times in a big market. They have many chances to access a lot of power and a lot of money quickly.

Thing one point five: as well as attracting narcissists, this world protects their delusions.

It is built into to the VC model that you outdo incumbents because you don’t compete authentically. Uber offers cheap taxi rides because it’s bankrolled by Californian investors. It’s called extinction pricing. You can ride a wave of early success because you’re cheating. This lets you extinguish the competition. Then you put the prices up.

Endemic poor handling of negative publicity (and frequent denial that it’s actually happening) is seen as typical and sometimes even endearing. People look at Trump’s pronouncements and say ‘that’s just Trump’; people see misconduct in our industry and say ‘that’s just tech’.

There’s a poor public understanding of risk in capital, so the more irresponsibly you borrow, the more uncritical attention you attract. Listen to John Humphrys on the Today programme interviewing a founder of Improbable after its half-billion-dollar valuation. He is severe with politicians, but is out of his depth when confronted with the ludicrousness beyond this sphere.

The limited company model and bubble mentality means that founders generally walk away without a scratch and start again if it all goes wrong.

Let’s zoom out. We live in a world where shamelessness and grandiosity are feted, everyone’s gambling with someone else’s cash, and accountability is minimised. If you don’t do the same then you can’t keep playing. The messages that are radiated influence us.

Thing two: this is routinely screwing with people’s heads.

Jeannie Yang’s talk yesterday provided an interesting illustration, in Smule’s redefinition of the way they measured their software’s success.

In the early-stage model, the goals were about personal joy: software was plotted on a graph of sounds-good versus easy-to-play. Then the goals became about effective self-promotion: connecting people versus expressivity, and the product took off. Narcissism leverages the network effect. The pretext is ‘I am special, and people have to know’.

Consumers can be creators. We can debate finer points, but this is true. Most people will be rubbish though: taste and talent are things that are part learnable, part innate, and both rare. Not all people who watch football on television want to play it; very few of those who do will end up being good. Football playing, like music creation, is a pyramid scheme when to do it for a living is not a healthy aspiration for the vast majority of people; of those who do, only the top 1% are wealthy, and the top 0.1% are super-wealthy.

Jean Twenge [prounounced ‘Twengy’], author of ‘The Narcissism Epidemic’, suggests that there are four pillars on which our narcissistic society rests. Think about these first in a personal capacity:

  1. Obsession with fame;
  2. Social media, where attention-seeking behaviour is rewarded;
  3. An unhealthy ‘win at all costs’ view of competition engendered by poor parenting;
  4. Easy credit so you can live a fantasy world.

Run through that list again and think of the tech sector, with the venture funder as the parent.

In conclusion

As with any bubble, when the sun is shining, a capitalist will lend you an umbrella, and when it rains, they’ll have it back. Meanwhile money is traded for control, so you’ll have to convince colleagues to work in conditions they didn’t sign up to, and shut them out of conversations.

If you can structure your start-up in the old-fashioned way, staying within a magnitude of your ability to repay until you’re ready to go to market, and otherwise pursue a nice quiet life, then you totally should.

Supper’s Digests: Grand Theft Audio

In much the same way that a distinction exists between somebody who likes to go to the cinema and a cineaste, there is a distinction between people who play computer games and those who consider themselves ‘gamers’. It’s a question of degree of attention, dedication, and discernment. Aficionados in any realm form a relationship with their subject. They cultivate a critical appreciation of the craft: a curiosity that leads them behind the shiny facade of a finished product, informing and rarifying their tastes.

I never considered myself a computer gamer. What held me back was the realisation, when games had achieved a certain level of sophistication, that they were mocking me. Several years ago I completed Grand Theft Auto IV. I conducted its unmemorable Serbian protagonist through the tortuous stations of a biblically violent morality tale. In a handful of simulated weeks, he transformed himself from a penniless immigrant with a blood-soaked past into a dead-eyed, materially successful, violent mercenary.

For hours I watched this Faustian avatar tearing up a miniature New York: stealing and driving sports cars, earning money through organised crime, at once befriending and then executing gangsters, and acquiring piles of possessions. He achieved all this, even had some simulated fun, but failed to locate his soul. The on-screen existence clanged with the emptiness it was supposed to. Here’s the actual moral, though: to make this investment in the story required my real-world time and my real-world money. The game entertained and delighted enough to keep it fresh, but after fifteen hours of pillage, the protagonist had become a millionaire who had extricated himself from his past with all the freedom that this entailed. All I’d achieved was a few mouse miles and a stiff back. I didn’t play the sequel.

What rankled is that my working life at that point was a microcosm of the experience I had just played. At work, too, I was stabbing at a keyboard and pushing a mouse all day while my boss rolled between the office and a country estate in a fleet of huge cars, wining and dining his successful friends. A self-made man, he was absolutely entitled this success, and for his part was as magnanimous as any businessman I’ve known. Nevertheless, it was hard for me to distinguish life from Grand Theft Auto IV. I co-piloted a CEO to measurable achievements, to greater wealth, and to bigger and bigger projects. The better I worked, the larger and shinier his car. I realised that I’d invest my time far better if I worked out how to ‘+1′ my own story.

Fixing this is the tricky part. Life is famously and lamentably short: at most, we get about three attempts at a big change of course before the game’s up. It’s also very hard to measure success, so it’s not always clear if a particular course is the right one. Steve Jobs picked over this dilemma in a talk he gave to Stanford students, in which he covered the problem of not being the protagonist in your own story or, as he put it, ‘living somebody else’s life’. While his conclusions might inspire us, we might not be happy to imitate him. He became a multimillionaire at the age of 26, but his biography portrays him as a psychopath. Those of us who want to take a more conventional orbit nevertheless face similar difficulties. It is hard and often tedious to work on oneself.

Most cultures create a dichotomy between a person’s obligations to the world, and those to themselves. In the East, they place the fulcrum between being and doing; in the West, we balance rest (or ‘life’with work. The idea is expressed just differently enough to convey that our two cultures tend to create different kinds of screw-ups. Westerners like to make leisure feel like work, by turning it into something measurable. Success can be quantified in wealth or children or Twitter followers, and validation pursued through a frenzy of acquisition and consumption. In the East, the line between being and doing is so intractable that some people cannot survive if they separate themselves from their duty. The Japanese language contains the words salaryman, a person who devotes their life to the corporation, and karoshi, a single word that means death through overwork.

Social networks abound with promised shortcuts to any goal you might have, and they’re not very good. Every professed ‘life hack’ I’ve seen falls into one of four categories:

  1. Transparent scams;
  2. Vacuous platitudes;
  3. How to use a privilege of birth to steal a temporary advantage, before leaving others to clean up the mess;
  4. Tips for turning up your treadmill.

A hack might truly accelerate your life, but nobody can tell you with certainty whether you’ve pointed it in a decent direction. Just as there is no quick path to enlightenment, and no single book can turn you into an instant expert, you cannot be told what to do with your time. In any case, passage of time and investment of labour is not an inconvenience: we’ve made it the entire point. People can trap themselves into believing that some poor life choice was all the more noble because it hurt. This is called the ‘sunk cost fallacy’, and books about business psychology contain warnings to detach yourself from it.

This just emphasises that, in some way, humans need a narrative. It feels better to struggle for what you desire than to be handed it for free. It isn’t sufficient to just learn and understand something: you have to grok it.

Being; doing; balancing the needs of the self against an obligation to serve the wider world. These are old problems with old answers, and here’s one of the best. Rabbi Hillel’s response has continued to resonate with poetic simplicity since the Talmud was written twenty-two centuries ago. ‘If I am not for myself, who will be for me? If I am only for myself, what am I for? If not now, when?’

The greatest of teachers, when faced with such an important question, answers it with three more. And, in doing so, reveals his contempt for shortcuts.

Supper’s Digests: An outsider’s outsider

It’s time for a musical interlude. Not knowing what to expect, and at the behest of friends whose obsessions, like mine, intersect literature, nerdiness and everything musical, Michelle and I attended the UK filk convention last month.

Filk music eludes accurate description. It’s more of a mindset than a genre. Over a weekend steeped in its world, trying to identify what it is and why it exists, we were hurtled through a fairground of musical styles, and pondered the nature of people who keep filk alive.

Originally a misspelling of ‘folk’, filk assimilates as many interests and personalities as it’s able to touch. Practitioners are united by common loves that include music, beer and wordplay. An outsider art, performed by people who know they’re outsiders and don’t care, filk music was once rooted in English and American folk idioms, but today it ventures farther.

Fundamental to filk culture is the concept of the circle, a gathering where anything from four to thirty people elect just to listen, or to take it in turns to play music to one another. A democracy of nominating and volunteering evolves; listeners at once become backing singers or instrumentalists, trading songs and sharing harmonies. Fresh material is revealed, and shy newcomers are heard and honed. These circles sustain themselves through the night, pouring forth music and holding court until breakfast.

Starting in 1987, the annual convention now resembles a family reunion, but its atmosphere remains one of unconditional support and appreciation. Music is treated seriously enough for huge stores of material to be composed and practised over the year, but personal eccentricities are taken for granted. The quality of songwriting and professionalism varies hugely. A few hesitant bars of ukulele scraped from a chord chart by a novice may introduce a song performed by a professional chorister.

No matter what its influences, though, this remains folk art simply because it is not mainstream. Filk is weird, but the longer you stare at a subculture, the weirder it always seems. There are plenty of examples from the recent past: modern opera; psychedelic rock; disco; the New Romantics of the Eighties. As soon as they enter the mainstream, they seem less barmy. Rap music is a pertinent example. The self-aggrandising misogyny, violence and materialism that characterises much of rap is at once a billboard and a sticking plaster. Regardless of the salary earned, nothing is masculine about improvising rhyming couplets against a recorded drumbeat. For all the firearms and swagger, The Notorious B.I.G. was basically Percy Shelley, but with less privileged parents.

Where was I? Yes, filkers are absurd, but no more so than anybody else. Knowing this, they lovingly poke fun at most of the things they embrace. Songwriters may be science-fiction and fantasy enthusiasts, or irascible folkies belting out nasal renditions of protest songs in the Dorian mode. They may just as easily draw influence from the news, musical theatre, the Great American Songbook, or a trashy video box-set. Nothing is too cherished or too tacky for assimilation.

Much of the craft is in the performance, so filk music is best caught live. We beheld, for example, a marvellous arrangement of a Tweet about the theft of a Catholic relic, rendered as a doleful sea shanty. It was strongly reminiscent of Ivor Cutler. Another group shoehorned the theme of raising an adolescent boy into a Pete Seeger song (‘Where has all the Kleenex gone? Gone into the teenager’s room.’)

A novelty song about a German immigrant struggling to learn the delicate art of English understatement won a prize, as did a poignant ballad about what becomes of superheroes when they age. Given a room and time slot of her own, someone set the back-story of a computer game to a Gilbert and Sullivan operetta. There’s a lot of effort in arranging, rehearsing and performing such a work, but considerable patience is demanded of an audience to bear the hour-long punchline. The jokes are not always apparent to a newcomer: with many hours of such programming, one can overdose on filk.

Would I recommend it? Only to some. Subcultures are subcultures because they don’t set out to please everybody. You have to be a geek, a good musician, or a collector of cultural curios to be a filker: preferably all three. Would I go back to the convention? Yes. I admire it for the same reason I enjoy my walks through Hackney: there’s so much of the Earth’s flavour crammed into such a small space, bumping together, that sparks of inspiration are cast in all directions. Most of these sparks do nothing useful, but occasionally there’s a glimpse of something transcendental.

I have been left with strong but abstract inspiration. Art always plunders art, and artists fall into spirals of self-regard in a frenzy for inspiration. Filk can do this too, but that doesn’t diminish it. What I’m trying to say is that it doesn’t matter what you’re into. Hang around and listen. No matter how impoverished or dirty or incomplete your contribution, add it to the world. Catch enough sparks and you’ll make some of your own. Who knows: you too could be Percy Shelley, but with less privileged parents.