Apr 5, 2016

Millennials are being dot.conned by cult-like tech companies

Kyle Smith
NY Post
April 3, 2016

HubSpot employees work at their standing desks.Photo: Getty Images
Tech startups love millennials. Tasty, tasty millennials who get underpaid, overworked, churned up and turned into nourishment for venture capitalists. Millennials are the Soylent Green of the tech world.

As each batch gets mashed up, there’s a long line of new hires eager to be made into the next meal for the execs and their billionaire backers, as tech survivor Dan Lyons shows in a scathingly funny new book, “Disrupted: My Misadventure in the Start-Up Bubble” (Hachette Books).

Lyons became a strange kind of celebrity a decade ago when he began posting nutty but funny insights as “Fake Steve Jobs.” Today he’s a writer for HBO’s brilliant tech comedy “Silicon Valley,” but in between he blogged for a Boston tech company called HubSpot and wrote this book about it.

How worried was HubSpot about what secrets would emerge in the book? Very. At the company, three top execs were implicated in a scheme to suppress the book, which led to an FBI investigation of alleged extortion and ­email hacking. The FBI closed its investigation with no charges filed. But two lost their jobs and a third, the CEO, was reprimanded. In a press release, HubSpot said the personnel actions were taken “in connection with attempts to procure a draft manuscript of a book involving the company.”

HubSpot comes across as a kind of kindergarten cult that plies its young charges with parties, toys, naps, playtime — and not much pay. A huge chunk of potential compensation at tech startups comes in the form of stock options, which could turn out to be worth nothing but are certainly worth nothing if employees get so burned out that they leave before the options vest.

This is part of the plan. Tech firms basically operate like South African gold-mining operations, with confident young Tame Impala fans being the bodies thrown into the pit to break their backs digging up nuggets. All of the IPO gold, though, goes straight into the pockets of their masters topside.

At HubSpot, every time another bedraggled would-be “world changer” hauled his dejected remains out the door, or got fired, the company would say he or she “graduated.”

“Team, just letting you know that Derek has graduated from HubSpot, and we’re excited to see how he uses his superpowers in his next big adventure!” a typical email would read. You know, kind of like how L. Ron Hubbard didn’t die, he simply “discarded the body he had used in this lifetime.”

‘What is the difference between a loyal employee and a brainwashed cultist?’

- Dan Lyons

“HubSpot’s leaders were not heroes,” says Lyons, “but rather sales and marketing charlatans who spun a good story about magical transformational technology and got rich by selling shares in a company that has still never turned a profit.”

Inside HubSpot’s colorful offices — orange, the official color, is everywhere, as is the company logo, which to Lyons looks like a sprocket with three phalluses sticking out of it — fun is mandatory. Workers, many in shorts and flip-flops, are inordinately proud of the “candy wall” where they can fill up on free snacks. Dogs roam the halls. Occasionally, amid a slave-ship galley of workers hunched over laptops, a Nerf-ball war breaks out. Conference rooms contain beanbag chairs.

For bike commuters, there are showers upstairs, but too many staffers were using them as sex cabins, so a memo went out to discourage that. Oh, and there’s unlimited vacation.

Which turns out to be one of the many traps of HubSpot: Fired employees have no accrued vacation time, which saves the company payouts to its “graduates.” Firms with vacation plans are also required to set aside cash ­reserves to cover the cost. HubSpot dodged this cost.

Like the show “Silicon Valley,” “Disrupted” nails the workings of spastic, hypocritical, delusional tech culture, notably:

• Ridiculously grandiose claims. “We’re not just selling a product here,” Lyons was told in training. “HubSpot is leading a revolution. A movement. HubSpot is changing the world. This software doesn’t just help companies sell products. This product changes people’s lives.”

An exec claims that the biggest companies in Silicon Valley are jealous and that HubSpot has the best marketing team in the world. Lyons notes, “I’ve spent years covering Silicon Valley, and before coming to HubSpot I’d never heard of the company.” Cheerleaders inside the company keep calling its products “magical.”

The product, Lyons says, is a chunk of buggy marketing software for businesses that HubSpot has yet to turn a profit selling. “Our customers,” Lyons notes dryly, “include people who make a living bombarding people with email offers.”

Every month, he notes, HubSpot’s customers send out more than 1 billion email pitches. More spam = changing the world! Join the spamolution! At HubSpot conferences, attendees are taught tricks like using misleading subject lines in spam to trick people into opening the message — lines like, “fwd: your holiday plans.”

• Relentless self-congratulation. HubSpammers — sorry, HubSpotters — are told it’s really special to work there. A favorite line is that “it’s harder to get hired at HubSpot than it is to get accepted at Harvard.”

Except every place gets way more applications than it has slots to fill. Harvard’s acceptance rate is around 6 percent — but at times both McDonald’s and Walmart have hired less than 6 percent of applicants. Looking around him, Lyons says the hires are mostly “Mormon-level white” kids straight out of college who played sports or joined fraternities or sororities.

• An all-pervading sinister air. Calling HubSpot a “startup cult” and comparing it to Scientology, Lyons notes that employees have to wear rubber bracelets containing transponders, which are needed to lock and unlock doors when moving around HQ. Which means, of course, that the Company is tracking you at all times. The Company also gives employees a lengthy, pseudoscientific, entirely scary-sounding personality test (devised by a crackpot whose claim to fame was creating the Wonder Woman comics). All of this sounds kinda like the bizarre questionnaire Scientologists take while grasping tin cans.

So eager are innocent young bunnies to comply with the unique language, rituals and culture of this happy-face corporate police state that “drinking the Kool-Aid,” while a trite phrase in Silicon Valley, is scarily apposite. “What is the difference between a loyal employee and a brainwashed cultist?” asks Lyons. “Perhaps by accident, or perhaps not, tech companies seem to employ techniques similar to those used by cults.”

Groovy young techies, you’ve been played. Tech startups are one gigantic millennial meat-grinder.

A 128-slide PowerPoint presentation that describes HubSpot culture (one slide says “team > individual”) describes “a kind of corporate utopia . . . where people don’t worry about work-life balance because work is their life.” No one, Lyons emphasizes, ever jokes about any of this stuff.

• Unyielding death-grip on childhood. The company’s chief technology officer announces he’s bringing a teddy bear to meetings and invites everyone else to do the same. On Halloween, everyone comes to work in a wacky costume so the company can do a group photo captioned, “We dare to be different.”

To convey the feeling that life means carrying on campus goofiness indefinitely, training sessions are held by “marketing professors” and “faculty” belong to “HubSpot Academy.” Beer taps are installed in the kitchen. The worst thing you can say is that “at my last company, we used to do it this way,” because that implies you’re a grownup with experience instead of a peppy little lamb seeing the world with fresh, dewy eyes.

After serving as technology editor for Newsweek, and with decades’ experience, Lyons finds his intern-age boss is a guy with only one previous job (an entry-level gig doing sales for Google). People constantly talk about imaginary friends such as “Mary,” a marketing person they think of as their typical customer. Mary has a detailed persona: She has an MBA from Babson; she’s 42, has two kids (10 and 6), etc. One Friday, Lyons discovers a group of employees sprawled out on the carpet making “ghastly” paintings on poster board. After a while, Lyons’ children send him off to work mornings with the words, “Have a good day at kindergarten, Daddy!”

• Chaos. The marketing department at HubSpot features so much personnel churn that it acquires the nickname “the French Revolution.” Employees disappear without warning. The human resources people have no clue how to discover talent, asking potential hires, “How weird are you, on a scale from 1 to 10?” Applicants with proven job skills get ignored because, Lyons says, they’re in their 50s and HubSpot prefers young know-nothings.

Due to what Steve Jobs called a “bozo explosion,” mediocrities hire even more mediocre people to work under them. All of these worker bees bustle around doing nonsense work such as creating would-be viral videos that vanish into the void. “Watching this video gave me cancer,” a viewer said in a comment on one such video, a parody of “What Does the Fox Say?”

A young blogger suggests guiding customers to more traffic by running ideas through a Blog Topic Generator. On the receiving end of this genius idea was a customer of HubSpot who worked for a hospital and was promoting cervical-cancer awareness. She complained that the BTG was spitting out ideas such as “Why We Love Cervical Cancer (And You Should, Too!)” and “Miley Cyrus and Cervical Cancer: 10 Things They Have in Common.” After that, notes Lyons, “The BTG is never spoken of again.”

For no apparent reason, staffers in Lyons’ department are asked to stay all night to work on ideas in a “hackathon,” as though fatigue is going to make dumb ideas any better. “Who’s in charge?” Lyons wonders. “Nobody. Everybody. One day, we are told the company will focus on big enterprise customers and that this decision has been etched in stone and will not change. Two weeks later, we’re going back to selling to small businesses.”

Yet HubSpot and many similar tech startups have certainly found a winning formula: a handful of founders and venture capitalists get rich — HubSpot, after its 2014 IPO, sports a value of $1.5 billion — without making a dime in profit.

What matters is “scale,” which you create by hiring people right out of college and making work seem fun. Give them foosball and beer, plus cultishly reinforced propaganda oozing with blather about how “you can make the world a better place” and you will secure, Lyons writes, “an endless supply of bros who will toil away in the spider-monkey room, under constant, tremendous, psychological pressure, for $35,000 a year. You can save even more money by packing these people into cavernous rooms, shoulder to shoulder, as densely as you can. You tell them you’re doing this not because you want to save on office space but because this is how their generation likes to work.”

Groovy young techies, you’ve been played. Tech startups are one gigantic millennial meat-grinder.


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