Reid Hoffman
Published Jul 1, 2016
Spoiler Alert: Richard is the best manager on the show
(True spoiler alert: This essay contains spoilers about the Season 3 finale; you have been warned!)
While you might think that HBO's Silicon Valley is a hit comedy about startups, venture capital, programming, egos, sex (well, for Erlich and Jared, at least), friendship, mind-altering drugs (well, for Erlich at least), and vomiting, it is easy to overlook the serious lessons it can teach us about people management.
Okay, now that you've stopped laughing and rolling on the floor, let me explain.
While Richard Hendricks hardly seems like a poster child for good management because of his many flaws--including, but not limited to crippling insecurity, the tendency to become emotional and highly inarticulate, a bad habit of falling and/or faceplanting, bedwetting, and the aforementioned vomiting--the fact remains that of the principal managers that the show portrays, Richard is actually the most successful people manager.
Since the beginning of the show, the three CEOs we've seen the most are Richard, Gavin Belson, and “Action” Jack Barker. And while Gavin and Jack seem like more natural leaders (especially “Action” Jack), and both have been financially successful, they are constantly beset by employee defections during the course of the show. Over at Hooli, Gavin seems to fire or drive away an endless array of employees, including Richard himself, Donald “Jared” Dunn, the Nucleus team, and even Nelson “Big Head/Bag Head” Bighetti. Meanwhile, Jack's brief tenure at Pied Piper sees his entire core team rebel against his leadership.
These defections occur despite the fact that Gavin and Jack use many of the accepted principles of management on their teams. Gavin tries to motivate Hooli employees by articulating grand (or at least grand sounding) corporate missions. For example, he says, “Hooli isn't just another high tech company. Hooli isn't just about software. Hooli...Hooli is about people. Hooli is about innovative technology that makes a difference, transforming the world as we know it.” However, these grand statements ring hollow when they come up against the reality of the actual work for people like Big Head and the Nucleus team.
Jack takes a different approach than Gavin. Rather than appealing to employees through a corporate vision, he instead manipulates them by telling them what they want to hear, and by bribing them with lavish offices. Erlich comes into his first meeting with Jack intending to insult him with ageist jokes; in just a few sentences, Jack wins him over by flattering him and correctly pronouncing the name of his first startup, Aviato. But these external inducements mean little when Gilfoyle realizes that Jack's corporate strategy will force him to spend all his time sitting in a cavernous datacenter, and quickly resigns. (On a related note, I was pleased to see how well LinkedIn helped Gilfoyle to find other professional opportunities...and hoverboards.)
In contrast, despite his many, many flaws, Richard's core team of Jared, Dinesh Chugtai, and Bertram Gilfoyle stick with him through a seemingly endless string of setbacks and embarrassments. They also achieve significant things together, including winning TechCrunch Disrupt and scaling up a homemade datacenter to handle the massive traffic from the livestream of a trapped museum worker about to drink his own urine.
So if Richard lacks nearly all of the skills we look for in a leader or manager, what allows him to be the best manager on the show? It's not fancy corporate mission statements, or lavish perks and flattery. In his own hilarious, bumbling, inarticulate way, Richard actually employs many of the principles of The Alliance in his relationships with his employees.
Principle 1: Openness and Honesty
Openness and honesty are one area in which the Pied Piper team can't be faulted, at least with each other. Richard is so incapable of deception that even when he attempts to lie, as in this season's finale, his conscience forces him to come clean. Yet this lack of guile, while sometimes frustrating to his employees, is also one of the key things that helps them build such strong relationships. You can see this in the relationship Richard has with Jared, who got exactly the opposite from Gavin Belson. Gavin gave Jared rich financial rewards, but also mistreated him (and couldn't even remember his real name, Donald). As Jared memorably told Richard, “Hooli was like an abusive spouse to me. You know, like that guy who married Julia Roberts in "Sleeping With The Enemy"? It was dehumanizing. But then, you, Richard, you pulled me out of the life and you gave me hope and you gave me a sense of self-worth. Like Richard Gere did to Julia Roberts in "Pretty Woman". Every day here has been like that shopping-spree scene. I'm putting on hats.”
Principle 2: Mutually Beneficial Tours of Duty
While Pied Piper is much like many “Family”-stage startups (<10 employees), in that everyone has one overarching Tour of Duty, which is to keep the company from dying, each member of the core Pied Piper team has his own specific Tour of Duty, including a clear mission, an understanding of how the company benefits from that mission, and how he personally benefits. For example, while Dinesh and Gilfoyle both loudly assert their personal value to Pied Piper, both also realize that Pied Piper is the best way for them to leverage their talent to build kick-ass products, which in turn is what drives their career and place in the Valley. At the same time, it's clear that team members can't simply do whatever they find interesting, as Dinesh discovers when, jealous of Gilfoyle, he tries to “help” by building a server, and instead causes a power outage that affects the entire block. Even with the comedy and dysfunction, persistence and success works by alignment on the tours of duty.
Principle 3: Long-term Relationships Last Beyond the Current Tour of Duty
A final key to The Alliance is that the relationships managers build with employees can and should last beyond the current tour of duty, or even the employment relationship. Allies look out for each other, even if they no longer work for the same organization. When Richard is ousted as CEO, and is lying on the floor in heap of self-pity, Jared cheers him up by handing him a stack of job offers. Jared took it upon himself to find other companies that wanted Richard to be their CTO. While this is an extreme example, good managers work to align what's best for the business with what's best for the employee—especially in the long term and over the course of a career. That's what allies do.
Starting a company is like throwing yourself off a cliff and assembling a plane on the way down. Thanks to Richard's unwitting application of The Alliance, as Season 3 draws to a close, we find the Pied Piper team coming back together to once again try to accomplish just that feat. Erlich and Big Head use their money to outbid Gavin Belson for Pied Piper's assets; Gilfoyle uses his dark magic to keep Dinesh's new videochat application running, and once again, somehow, Richard is leading his merry band of allies into the unknown future (and Season 4).
A final note on the show: Entrepreneurship is frequently messy and sometimes absurd. Many efforts to create something from nothing are foolish. And, there are all kinds of people who succeed and fail at creation of new products, new technologies, new business models, and new companies. So, it’s great that the absurd, the dark, and the crazy parts are trotted out in a madcap parade of insanity and social dysfunction. I do sometimes worry that people tend to view the show as a letter-accurate documentary or commentary, and fail to appreciate what makes Silicon Valley (the place) great. What is truly amazing is that Silicon Valley creates so many great things, from search to social networks to electric cars to biotech, even though some of the ideas and people involved are absurd. I deeply respect both the generative power and impact of Silicon Valley, and the irony and comedy of HBO's Silicon Valley.