Silicon Insider: Google Haters

In Silicon Valley, nothing makes enemies like success. Now it's Google's turn.

Years ago, I was riding in a car with one of Silicon Valley's best-known venture capitalists, when we happened to drive by the headquarters of a chip company run by an outspoken and cocky CEO.

"You know him don't you?" he asked.

"Yeah," I replied, "Just did a TV show with him."

"Well," said the Valley veteran, "Next time you talk with him, tell him to shut up. All of his talk about how great his company is doing, and how much smarter he is than anybody else, is going to get him into trouble. He's making a lot of enemies -- and the moment he stumbles, they are going to be all over him."

As it happens, the company did soon get into trouble -- though I suspect that was sheer coincidence. However, the CEO did in fact quiet down, staying below the radar for almost five years before re-emerging on the scene, just as opinionated but a lot less cocky. During those quiet years, my request for interviews with him were almost always met with, "You know, I really just want to focus on my business right now. Let's talk after things turn back around."

Did someone with authority, say a board member or a major customer, have a little conversation with the CEO? Did they tell him that he might be able to get away with this stuff when times were good, but the instant they turned bad company shareholders might not look kindly on a guy who motivated competitors and scared customers, suppliers and strategic partners? And did they add, as they were leaving, that the day might come when he and the company might part ways -- and that he might have a little trouble sitting down with same venture capitalists and private investors he had once characterized as idiots?

Most Start-Ups End in Failure

Silicon Valley embodies a strange contradiction. It is a place defined by success, but built upon failure. Being the world's greatest high tech entrepreneurial incubator, it naturally deals with a company mortality rate between 80 and 90 percent. Almost every one of those new start-ups you read about dies within four years. The lucky ones limp along long enough to get bought. Only a handful -- say, 5 percent -- ever go public, reward their founders with great riches and become true corporations. (Obviously, that number increases during a bubble, like the dot-com boom, but that merely shifts the bloodletting until after the IPO.)

So, the Valley knows failure. It breathes failure. And, in its greatest stroke of genius, the Valley has even learned to reward failure: if you have run a solid, well-managed company that happens to die for reasons outside your control, venture capitalists will come to you with money for your next venture. Living in an environment suffused with failure creates some interesting secondary phenomena. One is enormous egos -- after your last company failed and lost millions, and you've been unemployed for six months, it takes supreme self-confidence to walk into a room full of investors and casually ask for $15 million. The great secret of Silicon Valley is that everybody is out of their depth. Even David Packard played above his game.

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