When Mark Zuckerberg decided to move to Silicon Valley for the summer to see how the start-up Mecca could help his fledgling company, Dustin Moskovitz came with him, Eduardo Saverin did not.
As Facebook continued to grow, Moskovitz stayed a part of the company; Saverin did not.
And next week when Facebook finally goes public, Moskovitz will become a very rich man because he spent every waking moment of those years helping build Facebook. Saverin will become a very rich man because he spent years in a court room.
Saverin was a major character in the “Accidental Billionaires” — the highly fictionalized book that “The Social Network” was based on — because he went and complained to Ben Mezrich about his perceived injustice at the hands of Zuckerberg. Moskovitz was depicted as the nondescript guy coding in the background of the whole story, because he did not.
And now that the big payoff is finally here, you appropriately see a different attitude towards what to do with that money. Saverin has decided to renounce his US citizenship to avoid taxes, which our ace contributor Farhad Manjoo took issue with earlier today calling it ungrateful.
The people who disagree (and there are many) argue that Saverin is merely making a savvy business move, and he doesn’t “owe” America anything. I can see that logic. But let’s take away the issue of what’s “owed” to anyone. The telling thing to me is what it says about what drives Saverin. It’s just more evidence that he isn’t an entrepreneur at heart.
It’s the same reason he wanted to shove in interstitial ads in users’ faces once Facebook had some success, the same reason he didn’t drop out and move to Silicon Valley with the rest of the team, and the same reason he didn’t shut up and build something great afterwards. He’s not a creator or a builder. He’s a financial manager. A shrewd and successful opportunist.
This is why people obsess about character when it comes to entrepreneurship. Character in our context doesn’t mean they go to church or help old ladies across the street. It doesn’t even mean they’re great friends or great spouses. Plenty of entrepreneurs we hold up as role models are ruthless, selfish, and dangerous in their personal lives.
What matters in the Valley context of character is what motivates them. Saverin is a person who is motivated by saving every penny on taxes or extracting every penny he feels he was owed by a company through lawsuits — even though he made the decision not to relocate and work at it along with the other co-founders.
Contrast that to Moskovitz. As coincidence would have it, someone asked him at last month’s PandoMonthly why he doesn’t just relocate to Nevada and avoid taxes. Frankly, most people in the room looked puzzled at the question. Of course he wouldn’t leave the Valley just for taxes. If that were the prevailing logic, Tony Hsieh wouldn’t have to invest $350 million of his own money attracting talent and startups to downtown Vegas. It was unremarkable enough of a question and answer that we didn’t write it up and no one else did either. But in contrast to Saverin, it takes on new meaning. His answer is below:
Ultimately it comes down to what you want to do with the money. Moskovitz obviously wants to build another company. And as he says above, the talent pool in the Valley is too good to move for taxes. As he says earlier in the video, he worries more about how to give away all of his money to charity in his lifetime than he is about saving $600 million. Saverin on the other hand is telegraphing that this was his ship, it came in and he’s not giving Uncle Sam a joy ride.
You may disagree that Saverin is doing something unseemly with his dodgy citizenship move, and I can see that argument. But there’s a reason other arch libertarians in the Valley don’t do this. They may applaud the move in spirit. I mean, who likes taxes? But at the end of the day avoiding taxes just isn’t important enough to actually do it. It’s more of the same mindset as to why Saverin will likely never actually build a multi-billion dollar company.