This week I finished Disrupted, a business/memoir book by Dan Lyons, who now writes for the television show Silicon Valley, and formerly covered technology business for Forbes and Newsweek. Lyons, who, like me, is in his middle 50’s, spent slightly more than a year worked for HubSpot, a dot-com that makes tools to help business persons to market their firms and products by blogging. This practice has several names such as Customer Relationship Marketing (CRM), “Inbound Marketing,” and “Content Marketing.”
Disrupted caught my attention at the bookstore because it is about the corporate culture of a young firm that relies quite heavily on entry-level and limited-experience workers, usually very recent college graduates, to engineer their software platform and do “boiler room” sales. Leads are generated using free e-books and lavish conferences that appear to come out of Las Vegas. Forced to accept a public relations/marketing position with HubSpot between his time at Newsweek and his current job, Lyons was much like the embedded anthropologists who accompanied U.S troops in Iraq. In both cases the employer deemed the experiment a failure and worked to abruptly dismiss the employee. The lack of fit as well as cynicism, did the employee in.
As someone who advises on college admissions, Disrupted left me concerned for the college-bound and current college students who hear and read only of the “glamour” of workplaces like HubSpot’s, which are a combination of fraternity house, sports bar and sweat shop (for the sales force). An employee who survives this culture, a combination of Greek life and a cult follower-ship is considered a veteran after 18 months. Most are dismissed far earlier, or in company-speak they have “graduated.” Women do not fare as well in this corporate culture as men, unless they pick up the less desirable male traits that a more traditional corporate environment, like a consumer products company or a commercial bank, would never tolerate. But in the end, according to Lyons, most end up in lousy jobs with little security, let alone hope of cashing out after a public offering.
When an admission advisor works with high school students, s/he not only wants them to be admitted to college. The advisor also wants them to succeed, to have a rewarding career, earning opportunities towards further education, if necessary. That same advisor would not like to see their students end up working at a company such as HubSpot. The start-up culture at a firm like this might sound fun from a distance. But when it is led by people who believe that their brilliance at coding, sales or marketing makes them an evangelist or management guru, and those people had never led a growth company, a college student should look elsewhere.
I could relate to Lyon’s story. I am a former senior executive, and one of the original professionals in a technology business, who did not enter the start-up world until his late 30’s. Fortunately, I worked with partners who were also adults who put the work first. As partners, we also held the majority of the equity in our company. We did not have a Silicon Valley venture capitalist to deem us the “next new thing” and risk their millions. We knew of larger competitors who had created entry-level jobs as well as a workplace setting much like HubSpot. Their investors told them to come out with a big splash. Big promotions would make them look bigger and more stable than they actually were. As the person responsible for business development for our company, I would hear prospects ask: “Why can’t you give us (item) or take us to (fancy place for user’s conference) like they do?” My answer was: “I come directly to see you and I’m an owner.” That was enough to retain over 90 percent, sometimes more than 95 percent of our customer base while we continued to earn new business. The business has done fine without me for the past ten years. I was there for the first eleven. Most firms that embrace a start-up culture similar to HubSpot’s do not survive as long. They run out of money well before then.
Which takes me to last point about the start-up culture. It’s fun if you are an owner and your know your business. You use your position to take care of your company first, then let any other “good” happen later. It’s not much fun if you are an underling who is being used and abused while being delivered a mantra of “love for company” combined with “value over replacement employee.”
Companies that have a start-up culture such as HubSpot’s need to learn to master the “Four T’s,” Training, Technology, Turnover and Taxes. Read Disrupted and you will be led to believe that HubSpot did not come close to mastering a single one. Worse, despite giving its founders an obscenely high net worth, HubSpot has never turned a profit. Nor has it appeared to earn the trust of most of its customers. A start-up culture where young people constantly come and go while the business loses money is not an appropriate place for a recent college graduate to work at their first or second or third job after graduation.
I hope that prospective young entrepreneurs who are still in high school or early in their college education will read Disrupted. It should give them ideas for the business they should not attempt to create and instruct them about the management styles that are unprofessional or totally irresponsible. This book is an appropriate supplement to an undergraduate business education.