Bear Stearns, Facebook escapee set to inflate open-source bubble

Owen Thomas · 10/14/08 01:20PM

A quartet of Valley veterans has started Cloudera. They're pitching it as "Red Hat for Hadoop." Hadoop is an open-source implementation of Google's MapReduce infrastructure software, supposedly useful for Internet-computing projects. Cloudera plans to offer technical support for Hadoop. And yet here I thought the whole point of cloud computing was that someone else ran Hadoop so you didn't have to. Whatever! I'm confident that the founders of Cloudera will make tons of money, if only for this reason: Its data guru, Jeff Hammerbacher, worked on credit derivatives at Bear Stearns before he left and joined Facebook. He joined the social network in time for its notional value to soar to $15 billion. Cloudera's business looks questionable, but I trust Hammerbacher's ability to convince someone else that he's built something so vast and complicated that they buy it before they figure out what it's really worth. (Photo by jakob)

Why Facebook is foundering

Owen Thomas · 10/07/08 02:00PM

The great hope of the Valley, the startup everyone thought was the next Google, the company whose IPO might restart the stock-market gold rush for everyone, is not well. Why? Look to its founder. Mark Zuckerberg is mismanaging his creation's transition to greatness. In Facebook's own parlance, the company's plight is "complicated." It will take in $300 million to $350 million in revenue this year, thanks in part to a lucrative ad deal with Microsoft. But its $15 billion valuation is premised on a far brighter future — a future that may never materialize. The biggest symptom of Facebook's ailment is the flight of technical talent. In the Valley, success attracts smart people, who attract other smart people. Yes, they're after money, too, but having brilliant coworkers counts for a lot. These great minds bond and form, yes, a sort of social network of their own. When they leave, the network frays, weakening the company's ability to attract new talent.That's why, for days before it was announced, top executives at Facebook desperately hid technical lead Dustin Moskovitz's plans to leave. They dithered as Mark Zuckerberg tried to persuade his cofounder and college roommate to stay, and others, led by COO Sheryl Sandberg, concocted a plan to spin his departure. That spin has now been dutifully printed in the pages of the Wall Street Journal: Facebook's changes are the "type of evolution you see among young growing companies and specifically young growing companies in Silicon Valley," company flack Larry Yu told the paper. Sandberg, who closely directs the company's PR, would have us think that the uproar that has taken place at the social network since her arrival is a healthy evolution. It is not. The internal politicking she has introduced to the company is destructive, and has sent many of the company's best and brightest fleeing. The list of the departed includes data guru Jeff Hammerbacher, product VP Matt Cohler, platform director Ben Ling, and most recently, Justin Rosenstein, a top engineer who's leaving with Moskovitz. Operations VP Jonathan Heiliger may be next. The defections all hurt. But most of the blame lies with Zuckerberg himself. Zuckerberg has always styled himself as the company's "founder," relegating the likes of Moskovitz and Chris Hughes, now Barack Obama's Web campaign director, to "cofounder" status. Never mind that this distinction doesn't exist in English; those who start a company are all equally founders. Zuckerberg clearly considers himself first among equals; he once referred to Moskovitz as "disposable" and a "soldier." The former Harvard roommates patched over those insults, and Zuckerberg said he will rely on Moskovitz's counsel even after his departure. If Moskovitz really thought he could guide Facebook's evolution, he would have stayed at the company, right? Zuckerberg has a history of churning through confidants. Napster cofounder Sean Parker helped establish Facebook in Silicon Valley as its president, only to be disappeared from the company. Former COO Owen Van Natta was in favor, then out. Sandberg had his ear for a while, but may be losing it. Lately, I hear he favors Christopher Cox, the twentysomething recent Stanford grad he recently tapped as the company's director of product. We'll see how long he stays by Zuckerberg's side. This fickleness may be predictable from a 24-year-old. But it's fundamentally bad for the company. Yahoo thrived, in its early days, on the partnership between CEO Tim Koogle and founders Jerry Yang and Dave Filo. Google's triumvirate of its cofounders and CEO Eric Schmidt improved on that management form; the troika lends the company some stability by making sure decisions at the top are never unilateral. Zuckerberg's insistence on the "founder" title suggests that he always planned to rule the company alone. It's a bad plan. His instincts on what kind of website will attract a 100 million users have been spot-on. But he has no business sense. At one point during the Facebook redesign process, he suggested getting rid of advertising altogether, having grown disillusioned with both old-style banner ads and the company's experiments with targeting ads to users' behavior. Will Zuck ever find an equal partner, a sounding board who can help him turn Facebook into the large, ongoing concern he envisions? Dustin Moskovitz may not have been the right person. Nor, it seems, is Sheryl Sandberg. Yet to staunch the bleeding of Facebook's technical talent, Zuckerberg will have to find someone to ground him — someone for whom he has enduring respect, who can moderate his worst impulses. Without it, there will be one word describing what's going to happen to Facebook: "founder."

Yet another hoodie-wearing Harvard kid drops out of Facebook

Nicholas Carlson · 07/11/08 10:20AM

We know Zuck was close to Adam D'Angelo. They went to High School together and even built the digital music software that first igniting Zuckerberg's entrepreneurial imagination back in his teens. Cohler was employee number five at Facebook — there when the company was one room big. Zuck recruited Hammerbacher, whom he knew from Harvard, to join the company from a presumably well-paying gig at Bear Stearns. With all his friends leaving, oon Zuckerberg won't have any Woz- or Allen-like buddy at the company.

Data analysis indicates you should go out tonight

Owen Thomas · 01/16/08 01:50PM

Want to hear from one of the geniuses who worked on pricing subprime mortgages? Facebook's Jeff Hammerbacher speaks at Yahoo Brickhouse today at noon. While you're there, ask Brickhouse manager Salim Ismail about his trouble with the taxman. If that doesn't exhaust you, there are six, count them, six Macworld parties to choose from tonight — plus Pownce's pre-launch event, if you want to hoist a PBR with Kevin Rose.

Facebook's data guru worked on mortgage mess

Owen Thomas · 01/16/08 10:00AM

Jeff Hammerbacher, a research scientist at Facebook, is giving a presentation at Yahoo today about large-scale data analysis. The Harvard grad's prior experience before coming to Facebook? Developing price models for mortgage-backed securities at Bear Stearns — the same kind of securities that led Bear to write off $1.9 billion in December. Does this explain why Facebook is sending him to give a talk at a competitor? Take note, Yahoos. (Photo by jakob)

Lotus Vodka offers release from the tech scene

Megan McCarthy · 08/24/07 06:45PM

A tip for those of you trying to mingle with successful entrepreneurs and VCs: Attend more than just the standard tech meet-and-greets. The people who are really in a position to help you with your startup never go to them anyway. So where to go instead? Check out events like last night's Lotus Vodka release party at SoMa's Euro-inspired restaurant Supperclub. You'll find founders and the moneymen behind them willing to chat and unable to prejudge you based on your nametag. Refreshing. Bonus: The nontech people who attend these things make for a far better-looking crowd. Far better-looking. The full report, and a gallery of photos, follows.