How many people remember "PayPal mafia"?
The early members of the PayPal, including Peter Thiel, Reid Hoffman, and even Elon Musk, had a long, gang-like camaraderie that reached out to each other whenever a member needed financial and technical help. "If someone needs funding or company development advice, just call the other members."
Or quite a few people have seen the famous photo: Paul Graham, the founder of Y Combinator, sits in the center of a long table surrounded by his young founders who have built Companies like Airbnb and Dropbox that later became giants. Some people jokingly call this the YC version of the famous painting "The Last Supper", and the founders are all YC believers who support each other.
In addition, there are the older "Fairchild Faction", or the more hidden "Sequoia Series", "A16Z Series"... The existence of this factional culture has helped startups grow rapidly to a large extent, and has helped Silicon Valley innovation prosper.
However, as the former waves of Silicon Valley gradually become deeply rooted in Silicon Valley, some large companies, venture capital institutions, and incubators have begun to grasp more and more powerful discourse, and the network of relationships they have built has become more and more large, and they have also begun to show the dark side of this factional culture: supporting their own people, suppressing outsiders, collectively maintaining old forces, and then working together to encircle and suppress challengers...
The innovation environment in Silicon Valley, surrounded by this factional culture, is no longer as free and open as before, and this has also caused many entrepreneurs who dare to be angry and dare not speak out.
Until recently, some people have begun to openly "fire" at this prevailing factional culture.
| "Xingu people" angrily rebuked the "old valley people": rejecting dissidents and not talking about martial arts
At the end of last month, Ryan Breslow, the founder of the financial payment company Bolt, suddenly posted a long article on Twitter, naming and accusing Stripe, the world's third-largest valuation startup, YC, the most famous startup incubator in Silicon Valley, and Sequoia Capital, one of the largest venture capitals, taking the lead in ganging up in Silicon Valley and suppressing non-factional companies, and angrily denouncing them for fully playing the role of "gangster boss" in Silicon Valley, controlling the public opinion field and cooperation channels, and seriously endangering the entrepreneurial ecology of Silicon Valley.
After the release of this article, it received a positive response from many entrepreneurs and once appeared on the Twitter hot list. The gang culture, which has been criticized by many small entrepreneurs for a long time, has been put on the table.
Ryan Breslow, 27, founded bolt, an e-commerce payment technology platform, from Stanford University at the age of 19. Last month, Bolt just completed its Series E funding round, and its latest valuation has reached $11 billion. From an entrepreneurial point of view, Ryan Breslow is definitely a leader in the new generation of Silicon Valley startups.
But according to Ryan Breslow's own account, in the past 8 years, his entrepreneurial road in Silicon Valley has been very difficult.
Before entering Stanford, he had been living and studying in Miami, and only two years after joining Stanford, he dropped out of school to start founding Bolt. But obviously, for this fledgling 19-year-old boy from out of town, it is difficult to quickly integrate into the venture capital circle of Silicon Valley.
Bolt founder Ryan Breslow, image from refreshmiami
Ryan Breslow believes that Bolt can be said to be a "potential stock" in startups from all angles of project intention, technical level, team members and development prospects at that time, but he has suffered one blow after another in Silicon Valley, such as failure to enter YC, lack of media attention, lack of financing and on the verge of bankruptcy.
So, isn't Bolt's project good enough? Judging by the results, it may not be. When Ryan finally set his sights on the east, raising funds from several well-known venture capital institutions in New York, including BlackRock and General Atlantic, Bolt quickly grew and grew, with a market value of more than $10 billion in just a few years.
Ryan Breslow believes that Bolt's difficulties in Silicon Valley in those years were largely caused by the "one hand covering the sky" in the industry by YC and Bolt's direct competitor Strip.
Breslow believes that as one of YC's most successful projects in recent years, Stripe has used its first-mover advantage in the payment industry to join forces with YC to control the industry's relevant resources and deliberately suppress other competitors of the same type. He then goes on to enumerate in detail the "evil deeds" of the two in the following respects:
First, the use of YC's accumulated resource network over the years to aggressively attract customers to squeeze the market space. YC focused on promoting Stripe to companies in its network and suggested that they use Stripe for payment, which directly led to Bolt, which had similar businesses to Stripe, being rejected by many companies and unable to become their partners.
Second, teaming up with Silicon Valley's top VCs is deliberately exacerbating inequality in industry competition. Stripe has received significant investment over the years as YC's "darling", with Sequoia Capital joining forces with YC to become Stripe's super-majority shareholder, and now owns Stripe worth 20-30 billion shares. With incubators and venture capital at the top of its game, Stripe has quickly become the industry's dominant player.
According to insiders in the venture capital community, Stripe has "said hello" to the first-line VCs in Silicon Valley, asking them not to invest in companies of the same type as Stripe, which has also led to Bolt's difficult financing in Silicon Valley in the past few years.
Third, Hacker News, a social news site run by YC, manipulates public opinion and suppresses favorable news about Bolt. As the most well-known media platform in Silicon Valley, Hacker News is almost a must-see site for those working in the field of technology venture capital every day. But Breslow said hacker news doesn't maintain objectivity in news coverage, and every time Stripe has a little technical progress, it must be on the front page of Hacker News, and news about Bolt achieving a major breakthrough is quickly drowned out.
For example, on Hacker News, Bolt's technology about its platform's zero fraud guarantee and one-click settlement once appeared, and at the beginning of the release, it received a lot of attention and ranked first in the hot spot, but within an hour, Stripe's news replaced Bolt on the top of the hot spot, and their reports disappeared.
Breslow writes that despite all of the above "exclusions" from Stripe and YC, Bolt survived and was on the right track. But he later discovered that Stripe had even begun to train henchmen to curb Bolt's development. Breslow discovered early last year that Stripe had invested $100 million in Fast, a previously unknown brand new payments company that intersected very much with Bolt's business.
Almost overnight, Bolt added a competitor with a similar valuation and ample cash flow. Breslow believes that this is entirely because Fast recognized Stripe as a big brother and voluntarily paid a high "protection fee" to Stripe.
Breslow concludes that he calls YC and Stripe "gang bosses" because they behave like gangsters, controlling a region's resources and collecting "entrance fees" everywhere. Want to mix silicon valley venture capital circles? Then you have to go to their bai pier first.
The practice of YC and Stripe has undoubtedly greatly disrupted the entrepreneurial ecology of Silicon Valley, making the entire Silicon Valley full of the taste of being monopolized by capital and power.
| entrepreneurs have joined the anti-"bullying" army, and Silicon Valley venture capital has fought back collectively
Ryan Breslow's long article, which pointed directly at YC, Stripe and VCs, immediately set off a "bloody storm" in the Silicon Valley venture capital circle.
Many entrepreneurs poured into Ryan's comment area to express support, and some praised his courage, saying that finally someone dared to stand up and make this matter public, after all, compared with the big institutions in Silicon Valley, ordinary entrepreneurs often can only eat dumb losses, dare to be angry and dare not speak.
Some people also talked about their own personal experiences, saying that similar encounters did not only happen to the Bolt family, YC controlled too much power in the field of entrepreneurship in Silicon Valley, which has long been a long-standing fact.
In fact, the object of Ryan's attack this time is only talking about YC and Stripe from a small age, and from a larger point of view, it is attacking the circle culture that can be seen everywhere in Silicon Valley today. Today's Silicon Valley does not look at every entrepreneur as an equal, but will label them with different labels - whether they are out of YC, whether they have a first-line venture capital investment, whether they have a background in technology giants, whether they are white Chinese or Indians...
The existence of these circles has also directly led to some chaos in Silicon Valley in recent years. For example, the Theranos fraud case that shocked the world before, Elizabeth, who also dropped out of Stanford at the age of 19 to start a business, is through her own circle, so that countless top silicon valley investors believe in a false story, business, politics, media tycoons have stood for her, making her a Silicon Valley "female Jobs", but behind it is a shocking scam.
Similar Silicon Valley scams have also appeared in Silicon Valley in recent years. For example, uBiome, which we reported before, has also been favored by top Silicon Valley VCs and incubators such as A16Z and YC. The logic of these scam companies being invested is often very simple – because "there has been a top institution or big guy who has invested before."
On the one hand, there are entrepreneurial scammers in the mixed circle, and on the other hand, ordinary entrepreneurs with real materials are struggling.
Ryan Breslow said he knows that many entrepreneurs are afraid and have no chance to say how they really feel, and he himself has the courage to say the resentment accumulated over the years after Bolt has recently accumulated nearly $1 billion in investment and a valuation of more than 10 billion. Since he posted, there have been a lot of entrepreneurs who have had similar experiences privately written to him, "Which makes me think we really don't need them." Obviously, they can't stop us. ”
Of course, in response to such public and targeted accusations, the Silicon Valley venture capital circle has also issued some different voices.
Sam Altman, former head of YC and CEO of Open AI, said in response to Ryan Breslow, "I like to read fan fiction on lazy Saturday mornings as much as anyone else, but please: either YC isn't worth it or it's the most powerful thing in Silicon Valley." You have to choose one, right? The irony between the words is that Ryan has an unbalanced mentality because he once could not enter YC.
Garry Tan, a former YC partner who personally managed Hacker News, also said Stripe had nothing to do with Hacker News' operations.
Sequoia partner Shaun MaGuire also posted that he had known Ryan for many years, so much of what he said in his long article was not true. The reason for Bolt's previous financing difficulties was that the indicators at that time were really not good enough.
In addition to YC and Sequoia, the head of A16Z, Marc Andreessen, also joined the "battle" with a meme. Not long ago, Bolt announced that the company would permanently implement the 4-day work system, and in the picture released by Marc Andreessen, two options were given: "five days of work" or "blame Stripe", which snuggled Ryan Breslow's series of attacks on Stripe.
After two weeks of fermentation, Ryan Breslow suddenly issued a statement a few days ago, saying that he would step down as Bolt's CEO and appointed Maju Kuruvilla, Bolt's chief operating officer and former vice president of Amazon, as the new CEO. This has led to speculation about whether Ryan Breslow has been subjected to huge investor pressure because the tweet content is too hot.
But Ryan Breslow then said it was a decision he made on his own and that he would continue to focus on building a culture and closing deals on Bolt. He personally does not care about the "counter-attack" of the venture capital circle, and firing at the "Silicon Valley gangsters" is doing the right thing.
| Silicon Valley's gang culture: from "honey" to "poison"?
Although the Silicon Valley venture capital circle denies the existence of "gangsters", in fact, for a long time, there is indeed a tradition of entrepreneurial factions in Silicon Valley.
Among them, the earliest and most famous faction is the well-known origin of Silicon Valley - "Fairy Child". Fairchild Semiconductor was the first company in Silicon Valley to be founded and successfully by venture capital, and then eight young people who fled from Fairchild opened a century of silicon valley. They have created a series of world-class companies such as Intel and AMD, and have continuously spawned hundreds of technology companies, gradually laying the foundation for the status of silicon valley as the world's science and technology center.
And these eight entrepreneurs have helped and supported each other all the way on the road to entrepreneurship. Some of them started businesses together, and some transformed as investors to fund friends. It is also from the "Fairchild system" that a venture capital mechanism for startups has been established. Even after saying goodbye to Fairchild, they still gather together at a fixed time each year to jointly promote the prosperity of the company within the lineage for decades.
Fairchild Development Atlas, picture from fairchildsemi website, copyright belongs to the original author
In Silicon Valley in recent years, similar to the "Fairchild family", there is also the famous "PayPal mafia" mentioned at the beginning of the article. Today, the tech companies founded and associated with former employees of PayPal also account for almost half of Silicon Valley.
For example, peter Thiel, the founder of PayPal, in addition to providing early investments in companies founded by former colleagues such as Linkedin and Yelp, will also actively help them promote and expand their business, and he has also helped SpaceX through the most difficult period of development.
PayPal mafia panorama, picture from low Down
It is undeniable that in Silicon Valley at that time, it was precisely this kind of mutual help between "gang" members that created the emergence of more excellent technology companies and promoted the innovation of Silicon Valley to prosper step by step. But the question is, decades later, does this factional culture still mean as much to Silicon Valley as it once did?
When the "Fairchild system" existed in Silicon Valley or a blank piece of paper, the "PayPal mafia" existed in the period of technological transition, and silicon valley in both periods was in a state of barbaric growth, and the existence of factions helped entrepreneurs at that time to find funds and find a growth path. Today, there are countless VCs, incubators, and big companies stationed in Silicon Valley, and when they come together in a "factional" state today, they create an irrational "Matthew effect."
A closer look at the response of YC executives to Ryan Breslow's long article shows that although it refutes the long article's claims about suppressing Bolt, no one denies the fact that YC has helped Stripe grow through the "alumni network".
This approach, although it was praised in the early days, is now erecting a high wall for the entrepreneurial ecology of Silicon Valley: companies within the faction can obtain more and more funds and resources, and the voice of companies outside the faction is getting weaker and weaker. And the emergence of this phenomenon is undoubtedly contrary to the Silicon Valley spirit that we think advocates freedom, equality, openness, and all possibilities.
The total valuation of the YC Incubator has exceeded $400 billion, image from the YC official website
Today, we may see a Bolt that has a certain volume and is still angry, but where we don't see, how many weaker entrepreneurs will fall in the same situation.
"Factional culture" has made Silicon Valley glorious, but when we talk more and more about the monopoly of large companies today, we should also be wary of the monopoly of Silicon Valley factions. After all, Silicon Valley's roots are its openness, and more and more people are building walls for it in the name of factional help.