“It’s all fun and games until you raise a series B.” So reads the title of an unpublished blog post written by super angel investor Chris Sacca. The title could apply to Twitter, a company Sacca is very familiar with. But it also extends to nearly everyone going through the hell and elation of company building.
Sacca was an early investor in Twitter and saw firsthand the politics and backstabbing that envelop startups when they reach these later stages.
“We all like to pretend that it’s a great love fest and that the greatest investors buddy up with entrepreneurs,” Sacca told an audience at last night’s PandoMonthly Los Angeles. “It’s not all love. It’s not all hugs all the time. It’s real business. The betrayal that you’ll feel in Silicon Valley cuts deeper than that feeling of being rejected at the seventh grade dance.”
Sacca quickly related this sentiment to the game of CEO musical chairs that has been played at Twitter and the contentious ouster of the company’s founders, as the company apparently outgrew their skills as CEO.
“I don’t think the way [co-founder] Jack [Dorsey] was fired was fair,” he says. “I was there. I was an advisor to the company. I was consulted on it.”
The original plan was just to send Dorsey away, unceremoniously, according to Sacca. Eventual replacement CEO Dick Costolo (then an investor only), who Sacca says he respects and admires, was reportedly the the strongest voice of reason at the time, saying essentially, the company could not send the inventor of the product packing. It was Costolo who decided to make Dorsey the company’s chairman.
Sacca agreed that Dorsey may not have been the right guy for the job at the time, but was equally concerned with removing him without a soft landing. He recalls insisting that Jack be well compensated and also well advised (by legal counsel) along the way so that he didn’t “feel screwed.”
The way Evan (“Ev”) Williams left the company was less straightforward but resulted from the same sort of politics.
“The way shit went down around Ev…ultimately Ev just chose to leave,” Sacca said from stage.
Sacca explained after the event that while Williams wasn’t fired, he was essentially left with no choice. The environment at Twitter became so toxic toward him that he had to leave. His only consolation prize is that he owns more of the company than anyone to this day and retains his seat on the board.
The worst part of Twitter’s internal struggle from Sacca’s perspective is the press coverage of it. There was a lot of power on the line and things get extremely personal in situations like this, he said. The deciding factor in which version of the story gets out is often which individual is able to contact the press first. He said it was as if everyone was “putting a lipstick on the pig of these HR events.”
“I think anyone that tells you [it’s not brutal and political running a late stage venture-backed company] either hasn’t been in the game long enough or doesn’t know his shit,” Sacca said. “I think you need to have the thickest skin in the world to play in startups.”
“I think even calling it a game underestimates it,” he said. “I think it makes it sound more fun than it actually is – it’s fucking grueling. You’ll lose years of your life.”
[Image source, Farmwars]