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LISA CHOW: From Gimlet Media, I’m Lisa Chow. This is Startup, the show about what it’s really like to start a business. On this episode, we’re going to hear a conversation between a founder and an executive coach.
JERRY COLONNA: What what would feel comfortable talking about and useful.
DIANA LOVETT :Yeah.
JERRY: Because that’s the key.
DIANA: I mean, I think the biggest thing is for me personally, um you know— I’m like getting teary even talking about it. I find it very challenging to navigate being a mom and being an entrepreneur and you know really feeling so um… really guilty about,missing out on so much stuff at home. And then when I do you know leave work, about all the things I’ve left undone. So that although it’s very personal and very vulnerable, you know, feels like something it would be super helpful to address.
LISA: This is DIANA Lovett. She started a company called Cisse Cocoa, which makes baking mixes, hot chocolate, and other cocoa products. She’s talking to JERRY Colonna, who will be familiar to longtime listeners. He was the CEO whisperer from Season 2. He’s also the executive coach to Gimlet’s founders, Alex and Matt. He used to be a venture capitalist and has a lot of experience working with entrepreneurs. A few weeks ago, we did a call-out to our listeners. We were looking for entrepreneurs facing some kind of problem connected to their business … and that’s how we met DIANA. She started her career working for international NGOs — but she got disillusioned after seeing donors’ priorities shift. So she began thinking about other ways to have a positive impact. She wondered: what if I took this thing that I love, chocolate, and built a business on it that supports small growers around the world.
DIANA: Our cocoa is grown in the Dominican Republic. It’s grown by a cooperative called Fundopo and // they’ve put in some clean drinking water wells. They’ve renovated schools they’ve built a community center. And that model really appealed to me, it was locally needs driven.
LISA: Cisse Cocoa is growing. DIANA’s products are on shelves in more than 4,000 stores, including at Whole Foods, Target, and Stop & Shop. She has visions of building out a brand as recognizable as Annie’s Organic. But the thing that she struggles with most, day to day, is balancing being a CEO and being a parent to two young kids. And so when DIANA sat down with JERRY, the executive coach, that’s what they talked about. It’s a conversation that a lot of working parents will probably relate to. I know I did. DIANA’s session with JERRY lasted an hour and a half. We’re going to play you a shortened version of their conversation.
DIANA: I mean it feels kind of relentless, you know what I mean, like from the minute I wake up in the morning I’m baking brownies for a meeting, trying to have a little bit of time to connect with my kids, running off to work — you know like, I get home we make dinner. It’s… there’s… I don’t have a place to be calm and present until like 9:30 p.m. and then I’m exhausted.
DIANA: I feel like I can get hacks from other people I can get like advice but the like, how I face this as a person is so hard.
JERRY: Yeah.
JERRY: We’re going to be calm and present.
DIANA: Ok.
JERRY: So that your brain and your body can experience some of that and we’re going to talk about the challenges associated with that.
DIANA: OK.
JERRY: And we may or may not end up with a life hack or two.
DIANA: Ok.
JERRY: But life hacking doesn’t really get us the answers.
DIANA: Yeah. No I think it’s like emotion hacking or something so that you’re.
JERRY: It’s hacking being human.
DIANA: Yeah.
JERRY: So I have a couple of questions just to help give some context to this.
DIANA: Yeah.
JERRY: How old is the company.
DIANA: It’s five and a half years old.
JERRY: And tell me you’re married.
DIANA: Yeah. I have a husband.
JERRY: And what’s his first name.
DIANA: Matt.
JERRY: Matt. And how long have you been together.
DIANA: We’ve been married for seven years.
JERRY: And how old are your children.
DIANA: Basically five and two. Like they’re about to have birthdays.
JERRY: Gotcha. And what are their names.
DIANA: Noam and Tali. A boy and a girl.
JERRY: And Noam is the older.
DIANA: Yup.
JERRY: So both of them have only known mom as an entrepreneur.
DIANA: Um hm, yeah.
JERRY: And that landed for you just now.
DIANA: Yeah.
JERRY: What’s up?
DIANA: I mean it’s a lot of guilt. You know I didn’t take a maternity leave with either of my kids. And I feel like that sort of I don’t know paradigm or example of like I feel like I’ve prioritized work over my kids. And they never—
JERRY: Slow down. When I tell you to do that it’s not that you’ve done something wrong.
JERRY: It’s because our impulse when we touch really painful stuff is to speed through it but it’s like hitting a speed bump and speeding up and all that’s going to happen is we’re going to wreck the undercarriage of the car. So we actually want to go slow over those tough spots. You feel like you prioritized work over your children.
DIANA: Yeah.
JERRY: That’s a big statement.
DIANA: Yeah.
JERRY: And I’m staring into your eyes and I’m seeing someone who can’t believe she just said that.
DIANA: Umhm.
JERRY: Yeah, yeah.
DIANA: Cognitively I know that they are deriving benefit from seeing me you know chase my dreams and…
JERRY: Bla bla bla.
DIANA: Exactly. Exactly. Exactly. Yeah. So.
JERRY: But emotionally.
DIANA: Yeah.
JERRY: –it feels like crap.
DIANA: Yeah. No I feel t– I mean you know my son… Noam asked me this morning, “Mama can you take me the aquarium today?” And I was like, well that’s a good question. You know I said well I can take you over the weekend. And he was like well… I want to go with you today.
JERRY: Right.
DIANA: So you know it was 7:15 this morning. And you know like he’s really happy he’s well adjusted you know he’s great. So I don’t think he’s living in a world of deprivation. But I am missing that. And I think it elevates my stress level at work because I try and be home for family dinner so I have that internal cut-off like have to be there at 7. So I feel like it’s like sort of negative at home because I’m not there enough.
JERRY: And negative at work–
DIANA: And negative at work because I’m so aggressive on like —no I can’t take that on too, you know I mean like… I feel like it’s putting all sorts of boxes around it that’s making it harder everywhere.
JERRY: Yeah.
DIANA: So that’s what–
JERRY: So you feel like you’re failing on both ends.
DIANA: Yeah I don’t think it– I don’t think it’s helpful. Yeah.
JERRY: Boy howdy you’ve got a lot of guilt. You feel guilty because you’re not a good enough leader.
DIANA: Yeah.
JERRY: And you feel guilty because you’re not a good enough mother.
DIANA: Yeah. You know for me it’s the, it’s the time I just I don’t know how you’re supposed to you know spend every minute with your kids and spend every minute at work.
JERRY: Where did you get the impression that you’re supposed to spend every minute with the kids at work.
DIANA: Yeah. That’s a good question. I’m not… I don’t want to have… you know I wouldn’t want to have no profession. But I think the you know the challenge for me is just you know making more time.
JERRY: Making more time.
DIANA: Or making better–I don’t know. You know I don’t know what the answer is. You know making better time. You know just like getting into that mental space where I feel happy and present at home and I feel happy and present at work. And I’m not.
JERRY: Sorry. Yeah.
DIANA: You know feeling tethered or guilty about the other one when I’m you know what I mean.
JERRY: Yes.
DIANA: Like, I do this when I get home from work. I zip my phone into my backpack and I hang it in our mudroom so.
JERRY: Nicely done.
DIANA: It’s like not present. You know, so that this family dinner and putting the kids to bed is separate from that.
JERRY: Yes.
DIANA: But even during that time, you know if you have a bad day. It’s sort of like dour cloud. You know it affects you. I can’t I can’t zip the way I feel about work into my bag. It’s — I may not be checking my email or you know transacting business at the dinner table but sometimes it’s occupying my attention even when I’m sitting with my family.
JERRY: OK. So let’s stay with this so. I love your I’m going to zip my phone in my bag. But that’s a hack.
DIANA: Right.
JERRY: And what you notice is it actually doesn’t alleviate the anxiety that you’re carrying from work and so then you’re fee– And this is what you’re doing. You’re feeling guilty because you’re feeling anxious and then you’re feeling anxious because you’re feeling guilty. And the only question, the only choices that you seem to be holding onto is make more time or make better use of the time that I have.
DIANA: Yeah.
JERRY: How about not feeling guilty.
DIANA: I know! How?
JERRY: OK. I want to read you something. And um…one of my teachers is a Buddhist teacher named Sharon Salzberg. And this is from a book she’s written called loving kindness
JERRY: “Buddhist psychology makes an interesting distinction between guilt and remorse. The feeling of guilt, or hatred directed towards one’s self, lacerates. When we experience a strong feeling of guilt in the mind, we have little or no energy available for transformation or transcendence. We are defeated by the guilt itself because it depletes us. We also feel very alone. Our thoughts focus on our worthlessness. I’m the worst person in the world. Only I do terrible things. However, such an attitude is actually very quote self promoting. We become obsessed with self in the egotistical sense. Remorse by contrast is a state of recognition. We realize that we have at some point done something or said something unskillful that caused pain and we feel the pain of recognition. But crucially remorse frees us to let go of the past. It leaves us with some energy to move on. Now it’s a long quote but it’s an important quote I think for you to work with because, I get moving back and forth between feeling like I’m doing a crappy job at the office and a crappy job at home. And you’re too sophisticated to fall into the trap of thinking you’re supposed to have it perfectly figured out aren’t you?
DIANA: Right.
JERRY: Thinking about your children for a moment– what what do you believe about the world that you would like them to know. What is value would you like to have?
DIANA: Yeah I mean I think I I want them to be conscious. I.
JERRY: Empathetic perhaps?
DIANA: I want them to be empathetic. I want them to have a sense of empowerment that when
they see an injustice that they’re empowered to be change makers.
JERRY: What if they fail.
DIANA: I would be proud of them for trying.
JERRY: Yeah. What creates the pride in trying even if you fail.
DIANA: I mean it’s better than doing nothing you know or… so I did this you human rights fellowship after I graduated from college. And we used the Holocaust as a framework for understanding contemporary issues of human rights. And in that framework. There was people who were bystanders. There was people who are collaborators. And then there were people who were part of the resistance. And you know, I want them to be part of the resistance.
JERRY: Oh yeah, yeah. So is it possible that if they hold the understanding that mom was part of the resistance–yeah. And that sometimes we couldn’t go to the aquarium. But she loved us nonetheless.
DIANA: I think so, but I don’t know so. You know and… and I think even well-intentioned parents can do things that you know affect children later in life in different ways. And maybe I inspired them to be part of the resistance but all they wanted was for me to be at the lacrosse game, you know. And that’s like that’s my little agenda. That may not have been their little agenda.
JERRY: Well that’s the self-laceration.
DIANA: Yeah.
LISA: Coming up: How do you stop self-laceration and express remorse to a five-year-old … and what exactly does it mean to be a good parent. That’s after the break.
AD BREAK
Welcome back to Startup. When we left off, Diana was talking to Jerry about the conflict she feels … wanting to do the work that she’s passionate about … but also wanting to be there for her kids. Jerry continued the session by asking her about her expectations for herself.
JERRY: Can you forgive yourself for leaving home in the morning.
DIANA: Yes.
JERRY: Can you forgive yourself for leaving work.
DIANA: Yes.
JERRY: Can you forgive yourself for not taking your son to the aquarium today.
DIANA: No.
JERRY: If the shoe were on the other foot could you forgive. Noam for disappointing you.
DIANA: Yes.
JERRY: So you’re holding yourself to a standard that you don’t hold anybody else that you love to.
DIANA: Yeah but I think it’s different for parents.
JERRY: What are parents supposed to do.
DIANA: I mean, they’re supposed to be the people that are you know unconditional love, they’re supposed to nurture and support you. They’re supposed to, you know, that’s my framework right. Like you’re supposed to bring your own values and share those with your children. But then you’re also supposed to be like “but who are these tiny creatures and how do they express–” you know and then be supportive of that. OK. We know we took them to skating, they hated that let’s do painting, you know mean like, to constantly be taking the feedback of who they are, and incorporating that into how you raise them and constantly kind of reading the tea leaves of their faces. I think they just need a hug right now, you know what I mean, like to intuit their needs on all levels. And I think.
JERRY: What are the… what are the… what is the skill set or the way of being that’s most in service to them. There you are reading the tea leaves of their eyes, trying to gauge do they need a hug? Do they need a trip to the aquarium? Do they need a mom that they can believe in as a leader of the resistance? What do they need?
DIANA: Unconditional love.
JERRY: What would unconditional love give them about themselves.
DIANA: Self-empowerment.
JERRY: Yeah. So when you spend all this energy trying to anticipate and meet their needs, how does that help their self-empowerment? Look I’m going to respond to you, not even as
a coach but as a fellow parent. Only my children are adults now. I lacerated myself in the same ways.
DIANA: Yeah.
JERRY: So I really relate to where you’re coming from and the one salvation for me was the realization that, stumbling our way through, we gave our children the ability to speak to say this is what I need from you. Sometimes modeling for them what it means to be a participant in a larger more conscious world. My therapist once gave me a really powerful piece of parenting advice. You are going to screw it up. Get used to that. The issue is not how do I prevent that but how do I instill in my children the resiliency so that they can grow into their own adulthood.
DIANA: But why? Why do we have to accept that we’re going to screw it up?
JERRY: Because we are imperfect beings. And because learning to actually be with our imperfections as parents perhaps is their most important lesson. Do they love you regardless of your imperfections.
DIANA: Yes.
JERRY: That’s a powerful powerful lesson. Can they be loved despite their imperfections.
DIANA: Yes.
JERRY: Would you love them nonetheless. No matter what.
DIANA: Yes.
JERRY: That’s the lesson.
DIANA: Yeah.
JERRY: Teach them how to speak that they felt disappointed. Teach them how to think about responding to somebody knowing that unconditionally no matter what they say they will be met with love. And to say, mom, I was mad that you didn’t come to the game.
DIANA: Yeah.
JERRY: That hurts. But it’s a powerful lesson.
DIANA: Yeah.
JERRY: From where I sit, I think that’s as important if not more important than actually you being at the game. Learning at an early age, I am OK whether or not mom’s at the game. Sure, I want mom at the game.
DIANA: Yeah.
JERRY: But I am not annihilated and devastated because moms not at the game because I know mom loves me. And when I tell her that I’m mad she’s still going to love me.
DIANA: Yeah. Yeah.
JERRY: That’s a pretty powerful gift.
DIANA: Yeah. I mean maybe it’s hard because they can’t articulate that right now. You know what I mean.
JERRY: That’s right.
DIANA: They’re so little that they’re not really that’s why I was saying it’s like reading the tea leaves. You know your kids are older so and they can tell you they’re upset about it. And like I think my 5 year old kind of can because he’s like I want you to come to the aquarium and that I’m like I can’t because I have to work, but then if I tried to say you know and how does that make you feel, he’s be like, OK.
JERRY: No, but might say you might model.
DIANA: Yeah.
JERRY: And that makes me feel sad Noam. And so I want to spend time with you. And sometimes I can and sometimes I can’t and that makes me feel sad. That makes me feel sad too, Mommy. You see what I’m saying. What you’re reaching for is presence where I think, if I may, where I think you’re still getting tripped up is a kind of hacking that the only way to meet Noam’s need in that moment was actually go to the aquarium.
DIANA: Yeah. Yeah.
JERRY: That’s an impossibility.
DIANA: Right. Right.
JERRY: So here’s the kind of leadership assignment slash growth assignment.
DIANA: Yeah.
JERRY: You made the connection before to your own company.
DIANA: Yeah.
JERRY: Leaning into these spots, learning how to be with these conflictual feelings is really important for the company. It’s really important for your own resiliency. And it’s really important lesson to model for
those kids.
DIANA: Yeah.
JERRY: Because they’re going to face the same kind of conflicts in life.
DIANA: Yeah.
JERRY: They’re going to be torn.
DIANA: Yeah.
JERRY: They’re going to want to be in one place and the other. What you can give them, which very few other people in their world will be able to give them, is modeling a way to be with those conflicts. Not with guilt that lacerates. But, yeah I’m sorry I missed that. And I’m going to let it go. And I’m going to look forward to the thing that we are doing together.
DIANA: That would be amazing to give them.
JERRY: Imagine they enter their 30s and 40s with that kind of a perspective. They enter their parenting with that kind of perspective.
DIANA: That makes a lot of sense. I mean to give them that I think especially my daughter, because I do think it’s more powerful for women but.
JERRY: I think it is intensely powerful. It is a torture for women.
DIANA: Yeah. That concept of you know of no guilt or whatever else. I do think that that’s a pretty powerful thing for myself, for them, and probably for my other colleagues who are parents you know.
JERRY: Tell me how are you feeling.
DIANA: Yeah I mean, I think the part that’s really like connecting for me is you know saying it. So instead of just be like oh I wasn’t here, I didn’t make it to the aquarium, is being able to say, you know I’m sad we didn’t get to go together, we could go together on the weekend, or you know whatever else. I think the the point that I’m… I think is going to be harder for me is to, as you said you know guilt is very lacerating, is actually you know I can verbalize the remorse you know but actually just shutting down that you know stopping that and redirecting it that feels harder.
JERRY: So a word about that.
JERRY: Learn some slow time. As you’re putting the kids to bed tonight, look into their eyes. Don’t just put the phone in the bag. Look into their eyes. Here’s a memory. You know what they smell like after they’ve taken a bath.
DIANA: So good.
JERRY: So good. You know what they feel like when they snuggle you and they have their pajamas on and they’re getting ready for bed and mommy will you read a book to me.
DIANA: Yeah.
JERRY: Those are the precious slow times. Those are the times. Watch the laceration it just came back in.
DIANA: I know I feel like I’ve been rushing through it you know I’m like oh let’s get the kids to bed so we can clean up. So like… because it’s so compressed, you know.
JERRY: Yeah.
DIANA: But I’m with you, I mean that is the good… you know. That’s not one more thing. That is the thing.
JERRY: Yes.
LISA: When the session between Diana and Jerry ended, Diana took the train back home to where she lives, outside of New York City. I caught up with her a couple of weeks later.
DIANA: This is Diana
LISA: Hi Diana; it’s Lisa
DIANA: Hi Lisa, how are you?
LISA: Good, how are you?
DIANA: I’m good
LISA: Talking to Diana, I wanted to know how things had been since her meeting with Jerry. My kids are about the same age as Diana’s, and when she talked about her guilt, I understood where she was coming from.
LISA: You know hearing your conversation you know it was very… I was actually living vicariously through you. But it was very helpful.
DIANA: Yeah.
LISA: Because I mean just hearing your guilt I think a lot of moms experience that level of guilt.
DIANA: Totally
LISA: I certainly do and hearing Jerry talk to you about that guilt was interesting to kind of hear him challenge you a little bit on it.
DIANA: Yeah.
LISA: So I’m curious like… in the last couple of weeks has there been an instance where you caught yourself feeling guilt again.
DIANA: Of course. I mean it’s impossible to you know flick that on and off so, absolutely. You know my son was like Mama I don’t want you to go to work today.
LISA: In that moment … Diana borrowed some of Jerry’s language from the session.
LISA: And what did you — how did you respond to Noam when he asked you that.
DIANA: I would say I want to stay home with you too. I’m so sad I’m going to miss spending all day with you. I’m going to go to work and I’m working on building something that’s about you know doing good and helping other people. And I’m really passionate about it. And say you know what I’m sad I’m not going to be here with you.
LISA: Right right…
LISA: Before how would you talk to Noam about, about leaving.
DIANA: I guess I would say you know oh don’t worry you know I’ll be home for dinner and you know we’ll be together on the weekend or you know kind of maybe more dismissive or distraction
LISA: Right.
DIANA: Than acknowledgement.
LISA: And how did Noam respond.
DIANA: I mean you know he was like OK. He’s five so he was like oh is that a bouncy ball. It was not like a big profound moment.
DIANA says she’s leaning on Jerry’s advice in other ways, too… being gentler on herself … and experiencing the “slow times”…
DIANA: I was like you know what I’m gonna sit at the table// with my coffee you know they’re eating breakfast // you know when you really lock eyes with your little ones and you’re connecting you’re making them laugh or whatever else it’s like what are you rushing through. You know whatever time you are spending with them like there’s nothing that you know like what are you going to put them down here in like clean the dishes and do more work like that kind of stinks. So Why not really enjoy it.
LISA: Right. Right. It didn’t cause any anxiety about not getting those things done on your to-do list.
DIANA: I mean now that you’re mentioning it yeah but at the time no! thanks a lot Lisa!
LISA: Sorry!
LISA: Diana’s still looking for new hacks, like trying to include her kids when there’s downtime at work. A few weeks back, her company got a delivery in, and she invited Noam and Tali to the office to hang out while she unloaded pallets. She’s also planning to take Noam along the next time she demos her company’s products. But learning how to go easy on herself … that’s going to take time.
DIANA: It’s probably like a 16 point turn and not a u-turn. //
Lisa: Right right.
DIANA: It’s hard not to feel guilty about missing out on time with your kids. You know I’ll — What did you do today. Oh I went to swimming and you know I got a badge and I’m a slime eel now and you know you’re just like I want to be there, I wanna see you get your little badge and so you know just that’s always the challenge right.
LISA: Diana Lovett is the founder of Cisse Cocoa, a company that makes chocolate products.
The executive coach she talked to, Jerry Colonna, has his own podcast called “Reboot.” If you’re an entrepreneur who’s facing a challenge in your company, and would like to talk about it on Startup with a coach, email us at startup@gimletmedia.com with the subject line “Coaching”. Tell us about the problem you’re struggling with, and how best to reach you. Next time on StartUp, a founder who’s trying to revolutionize medicine gets some unexpected lessons.
JAKE: I had to like learn a bunch of stuff about pigs because I knew nothing about pigs. So I was looking at like people who have pigs as pets. They have these lists of things to do with the pigs that they’re real smart and they’ll get bored if you don’t give them toys. They get sunburned easily. Things like that.
LISA: The lengths you’ll go to, to follow a dream. That’s next week on Startup.
StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen and Emanuele Berry. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe.
Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music.
Additional music by Bobby Lord.
David Herman mixed the episode.
To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter @podcaststartup.
Thanks for listening. We’ll see you next week.
BONUS – Introducing Every Little Thing
Gimlet’s newest show examines the hidden lives of office plants.
Friendster: Part 2 (Season 5, Episode 3)
Why aren’t we all logging onto Friendster today?
LISA CHOW: From Gimlet Media, I’m Lisa Chow. You’re listening to Startup, the show about what it’s really like to start a business. Last week, we told you about the beginnings of Friendster, the company that essentially created online social networking. It had launched in 2003, before Myspace, before Facebook, and grew incredibly fast. Users were making all sorts of new connections on the site…for business, romance and friendship… and investors were dying to get a piece of the company. But the site started crashing because of all the traffic. Pages were taking forever to load, and Friendster’s board decided that the founder, Jonathan Abrams, had to go. So they fired him. But they told the staff not to worry… they would find a great new CEO someone with lots of experience. That’s where we ended last week’s episode, with the board telling Friendster employees the future was bright.
KENT LINDSTROM: It was the board of directors coming in and saying. This is going to be amazing. We’re going to get you a professional CEO. And all of a sudden it was stars and lights. Today on the show, what happened next.… and how Friendster’s mistakes may be the reason another company is worth over $400 billion today.
LISA: A quick warning, there’s some swearing in this episode.
[MUSIC]
LISA: After Jonathan Abrams was removed as CEO, one of Friendster’s board members filled the spot temporarily. And then, 3 months after Jonathan was out — the board announced that they’d found their impressive new CEO. His name was Scott Sassa. Scott was a TV wunderkind. He’d dropped out of college but went on to be the first employee at Fox, writing the TV network’s original business plan. He then worked for Ted Turner, and at 25, became one of the youngest cable network executives in the country. After that, he ran Marvel, a division of NBC, and in 2004 … Friendster.
LISA: why do you think they picked you for the job?
SCOTT SASSA: I’m not sure exactly why they did, but I would hope that part of it was I had a background of starting companies and scaling companies, albeit media companies, but you know, TNT, Cartoon Network, things like that.
LISA: The TV networks that Scott ran made money through advertising. And Friendster’s board saw advertising as the way the site was going to make money. They were focused on revenue because they’d been burned by the recent dot com crash when a lot of companies went public with no business model. When the Wall Street Journal reported on Scott Sassa’s appointment, they wrote that it was a move to turn Friendster from “a quirky internet startup to a profitable online business.” But other people at Friendster had their doubts.Why would you recruit a media guy to run a tech company, especially one that’s facing serious technology challenges. The skepticism was so apparent that even Scott, the new CEO, was aware of it.
SCOTT: My favorite thing is the engineers used to say, how’s our brain dead media executive doing today?
LISA: But it wasn’t Scott’s job to fix the page load problems. Friendster had just hired a bunch of superstar engineers and the new head of engineering, who came from Netscape, had a radical plan to fix the site.
He invested millions in a new server system, and rewrote the site from Java to an open source language, called PHP. People I’ve interviewed debated whether these were the right decisions at that time. But one thing became clear pretty quickly. These moves did not solve the site’s issues. Chip Benson, an early employee working in customer support, says this period was really frustrating.
CHIP BENSON: I can remember you know the board coming in to one of the all hands meetings. And … I stood up in the all hands meeting and just basically went off — on … I didn’t understand why things hadn’t been fixed. I didn’t understand what was taking so long. You know the board should have the power to make this stuff happen. And you know I just remember them going, “Thank you very much, Chip, for your feedback and insight. We’re going to take this into consideration and then we’re going to work on it.” You know, and I sat down and I thought, “Ah, crap this isn’t going to go anywhere.” I just had that feeling.
LISA: We reached out to Friendster’s board members from this time. None of them agreed to talk for this story. The technology problems at Friendster were difficult to solve, but there was something deeper happening at the company that was making it nearly impossible to make progress—power struggles and conflicts between teams. Chris Lunt, an early engineer at Friendster, says a highly political culture had emerged as its leadership changed.
CHRIS LUNT: People started to get into camps and form loyalties within the company. And there was a lot of politicking in order to see who was right about the vision for the company, who could best carry the company forward. And so there was a tremendous amount of gossip, rumor, innuendo that drove what people were doing day to day.
LISA: A big tension was between product and engineering. People on the product side wanted to release new products. Like blogging, chat, music sharing. But people on the engineering side thought: we have to fix what we already have before we can even think about new features. Scott Sassa, the CEO, said the tensions showed up in all sorts of ways.
SCOTT: My favorite line was a product person from Yahoo told a 5 year MIT PhD, “You’re a plumber and you’ll do as I say!” So that was a problem.
LISA: Friendster was already dealing with managerial, technical and cultural problems when Chip, the employee in customer support, started to see a completely different kind of problem on the horizon…a serious competitor: Myspace.
CHIP: You know — MySpace started to come into being. And we noticed some of the people were saying, “We don’t want to join Myspace. We want to stay on Friendster, but you know you got to fix the performance.” And around that time, we started seeing all these profiles being created and there was a picture of a really charming man and woman, you know, a really clean cut having fun skiing or something. And all there was on the profile with the names, what I like to do, about me, and stuff all in caps. Excuse my language, but all in caps it said, “Fuck Friendster join MySpace.” And there was thousands and thousands of those profiles being pushed out by, you know, MySpace obviously.
LISA: Chris Dewolfe who founded MySpace with Tom Anderson, told me the company wasn’t behind those fake profiles. But he did say the whole idea to start MySpace came from watching Friendster. He and Tom were living in LA, working for an internet marketing company when they kept hearing about this new website.
LISA: Do you remember getting an invitation to join friendster?
CHRIS DEWOLFE: Yes, it definitely piqued my interest
LISA: This is Chris Dewolfe.
CHRIS: it was like the first time I think ever that I’d gotten 5 or 6 invitations for any kind of service ever, from people that I actually knew. So I thought that was interesting and there must be something to it.
LISA: But when Chris started using Friendster, he noticed it could be super slow. And he thought the site was too restrictive about what it let people post.
CHRIS: There were bands on the site, that would set up profiles on Friendster. They would get taken down. You could set up a profile with your dog being your primary photo. They would take that down.And it seemed a little bit too dictatorial for where the web was going.
LISA: And some of Friendster’s users agreed. Tila Tequila, who was a little known model when she joined Friendster, complained to Howard Stern about being kicked off for not following the rules.
TILA TEQUILA: They would always delete my profile so I’d make another one, so they deleted me 5 times. So I said fuck you Friendster.
LISA: Tila says Tom Anderson from MySpace saw this happening and recruited her to join him at his new website.
TILA: So then I joined Myspace and I was like oh my gosh nobody is over here. I feel like a loser. There’s like the cool party over there and I’m here by myself with all these dorks. And so I used my website, and said hey guys. Fuck Friendster. They kicked me off so why would you guys want to be on a lame site like that anyway, and
HOWARD STERN: And you went to myspace
TILA: I’m on myspace now. Come join me here…so I kind helped them blow up.
HOWARD: Right.
LISA: Tila Tequila went on to be a reality TV star. She was booted from Twitter last year after a photo showed her doing a Nazi salute. But at the time she was a young pretty woman racking up friends on a brand new social media platform. And it wasn’t just the Tila Tequilas of the world who started preferring Myspace. Tommy Nguyen was an early Friendster user.
TOMMY NGUYEN: my friend Amy Wang sent an e-mail to our group of friends on an e-mail and basically said, “hey guys I got a new website called MySpace sort of like Friendster but a little souped up. There’s more bells and whistles to it.”
LISA: Myspace gave people all kinds of options. You could make your page whatever colors you wanted, have whatever photos you wanted in the background, even have music playing on your page. And not only was Myspace seen as a freer more laid back world, it had another huge advantage. It was fast. Myspace didn’t have the same page load problems as Friendster. That’s because Chris and Tom started it as a side project at a much large tech company called eUniverse — which meant they had infrastructure, resources, and server capacity. All of this made MySpace a big threat. Here’s Chip again, from Friendster customer support.
CHIP: We knew that there was going to be some jumping ship if we couldn’t do something about it pretty quick.
LISA: MySpace wasn’t the only one. New competitors were popping up every day like Bebo, Tribe and Orkut. Friendster was still the number one social networking site, but its position was quickly eroding. And so Friendster’s executive team thought, let’s join forces with one of our competitors. Maybe one of them can help us with our technical issues. Friendster approached Myspace. Chris and Tom were not interested. Friendster met with another social networking site called Bebo. They said no. Jim Scheinman was head of business development at the time and was setting up all these meetings for Friendster. He says they also approached another little startup they’d heard about, founded by some 19 year olds from Harvard. Facebook.
JIM SCHEINMAN: By the way, this is controversial because there are people at Friendster at the time who were like, “Harvard only. OK so they’re doing well at Harvard. But come on. We were so much bigger than they were.” But if you look at the growth trajectory, actually, in the engagement numbers, they were actually doing quite well relative to how we were doing. I knew it. But it was hard to admit it because of ego and we’re still much bigger.
LISA: And so there were actually people at Friendster who were like, “No way, we’re not going to buy this company.”
JIM: Yes. Who pushed back — like this is stupid. They’re two kids! Who’s going to — why are we going to pay them 10 million dollars, I don’t know what the number was — why are we going to give them millions of dollars, you know? But you know to the credit of the executive team and the board, they said, “Yeah, great.” So they met him multiple times and they were — we made an offer.
LISA: At the time Mark Zuckerberg was also talking to Silicon Valley investors. And ultimately, he chose them.
JIM: You know look — Zuck had a vision and he didn’t need to sell out to Friendster.
LISA: So another potential deal was dead.
JIM: Friendster was still adding users, so it did have that going for it. But there was something a little unusual about that growth….something that would develop into a bigger problem for the company. Chris Lunt, the engineer, remembers the first time he saw it.
CHRIS: I sort of noticed that seems like traffic has been shifting later, and so why don’t I take a look at some traffic graphs. And I found that, 2 in the morning was the peak of traffic that we were receiving. I spent some time trying to convince myself that it was college students on the west coast up really late, and realized that something wasn’t right about those numbers. So I went and I looked at the map to see where the traffic was coming from and that was the point that we discovered that the site was exploding in the Philippines.
LISA: Chris says by 2004, a year after Friendster launched publicly, 50 percent of new users were coming from the Philippines. And it was bad news because these users … who appeared to be a lot more patient when it came to page load times … they were starting to crowd out users in the U.S.
CHRIS: You can believe that you’re the most egalitarian person on the planet, and if you walk into a bar and everyone in there is Filipino and you aren’t. You’re going to turn around and walk out. And we started to see that as a public forms in places where people were maybe weren’t already connected started to be dominated by Filipino topics, it started to erode our traffic elsewhere in the world.
LISA: Chris says he and other people at the company came up with all kinds of ideas for dealing with the growth in Asia.
CHRIS: “Should we just block the traffic from the Philippines?” And I think it would have been a very bold move, and we decided, that no we couldn’t do that, that it was a large audience that was getting a lot of value out of this site and that we should focus on trying to find a way to monetize that audience.
LISA: But monetizing that audience wasn’t easy. To big advertisers, users in the Philippines just weren’t as valuable as users in the U.S. Jim Scheinman, the head of business development and an early employee at Friendster, was getting increasingly frustrated.
JIM: I still remember that feeling in my gut like, I think I’m having an ulcer. I can’t. Stand the fact that we’re so close to building something so amazing We all knew, we all knew we were onto something very special. We all knew this was a 100 billion dollar idea. We also knew that we were losing. Things were not going in the right direction.
LISA: And so two years after joining the company, Jim left. Then Scott Sassa, the former TV executive that the board brought in to lead the company and boost ad revenue … he left as well. That made three CEOs in three years. Jonathan Abrams, an interim CEO, and now Scott Sassa. By this point, Myspace had eclipsed Friendster. It had more users. And the company that once feared growth… was now desperate for it. Especially in the U.S. The board brought in a new CEO, a guy named Taek Kwon, who came from Citysearch. His job: to turn things around at Friendster in a big way. And to do that, he hired a new head of product, a woman named Larissa Dinh.
LARISSA DINH:I love a good challenge um I’m not gonna take over a product that’s you know already successful and it’s just on maintenance mode it was exciting to me to to the thought of turning around this company that people had pretty much given up on was was huge.
LISA: After the break, Larissa sets out to remake Friendster. Launching some new features that are both addictive … and controversial…
[BREAK]
LISA: Welcome back to Startup. So Friendster was on its fourth CEO with a new head of product. Larissa Dinh. She went hard out of the gate, working to innovate at Friendster. She started by cleaning up the site… getting rid of features that people weren’t using…. for example, a feature that displayed users’ horoscopes. She thought it was weird. And then she started experimenting, trying to give users more of a reason to come back to the site. She and her team launched something called a friend tracker, which was similar to the newsfeed on Facebook. But before Facebook had the newsfeed. Then she discovered something else that she thought might stick.
LARISSA: It was like a backdoor feature that one of our engineers had built to see and he wanted to see who was looking at his profile.
LISA: Who viewed your profile … a feature that’s now incredibly popular on Linkedin … it was Friendster that came out with it first.
LARISSA: It was controversial because it wasn’t in our terms of service or our privacy policy so people hadn’t opted into this but I knew it would get people coming back to the site. I knew they would be curious to see who was looking at their profile and it would give us an uptick
LISA: The team went back and forth on this but ultimately they decided to go ahead and release this feature. Chip Benson, who worked in customer support, saw the reaction from users.
CHIP: Overnight, I mean overnight they turned it on the next day. We had over 10,000 messages and they were all people going nuts about why we did that. And like an example was that some guy wrote, “My boss just called me up and he’s going to fire me because he found that I was looking at his wife’s profile. Turn this thing off!”
LARISSA: It pissed off some users but you know we have to take a chance and it was Friendster was dying and it was on life support and I was trying to bring it back to life. So you know I did what I could. To get the numbers up and it worked.
LISA: It worked for a little bit. Friendster got some press, got a bump in users. But in the end, it wasn’t enough… It was 2006. Myspace was the biggest social network in the U.S. And by now Facebook had also overtaken Friendster, taking the number two spot. By this point, Friendster’s board had made a big decision. They wanted to sell the company. But so much of Friendster’s traffic was now coming from the Philippines and across Asia that it had become a liability. U.S. companies weren’t interested …. So after 10 months, CEO number 4. Taek Kwon was gone. This is Reid Hoffman… an early investor in Friendster.
REID HOFFMAN: I was watching from the outside but it was like oh my gosh is that a trainwreck.
LISA: OK so why did you think it was a train wreck.
REID: Look, changing a CEO’s brain surgery. So if you said oh we’re sending the patient back in each month for a new brain surgery. It’s like, well what do you think the mortality rate is? Pretty high.
LISA: Sean Parker, who co-founded Napster when he was 19, was also involved in Friendster early on….he was an advisor to Jonathan Abrams, the company’s founder. He spoke about Friendster’s failures at a Fast Company event in 2010.
SEAN PARKER: I can tell you exactly what happened at Friendster. It was bad management.
SEAN: It was a bad management team that couldn’t keep their servers running, couldn’t maintain simple things like the integrity of their database, the login times the load times for every page were going up, and that created an opening in the marketplace where MySpace was able to enter. Myspace never would have existed if friendster had been a properly managed company. And I was close to that because most of my friends were investors, I was an advisor to the CEO. We were all screaming the sky is falling and nobody was doing anything about it. That is a classic case of where a company just blew it.
LISA: Even though Friendster had lost the top spot and couldn’t find a buyer, the company didn’t die. Instead, it pushed ahead trying to grow its users in Asia, under one of Friendster’s early employees, Kent Lindstrom. The board tapped him to be CEO number 5. Kent made headway but then the board brought in the sixth and final CEO, a guy named Richard Kimber. In 2009 he sold the site to a Malaysian company for 40 million dollars.Chip Benson, the customer support guy, worked at Friendster under all six CEOs. And he remembers the day Friendster closed its office in Mountain View.
CHIP: They had all the furniture and the computers and this and that on the office all bunched up in corners and anybody could take anything they wanted and they were going to donate the rest to schools. I actually wanted to take my chair it was so comfortable. So I brought a little station wagon from home and I loaded all my stuff in. I just drove away from the building and sort of looked in my rearview mirror and then went home. I tell my wife when we drive by the building over in Mountain View it’s on the corner of El Camino and Castro. I always wave at the building saying, you know, I kind of wish I was still over there at that job. But I was there through the bitter end and, you know, and then they closed the doors and it was all over.
LISA: Today when people talk about early social networking, they’re not usually talking about Friendster. They’re talking about Facebook. Facebook is now worth more than 400 billion dollars. And…the only mentions of Friendster are as a cautionary tale — a prime example of a company that was positioned to win big but totally screwed it up. So what can we learn from all of this? What did Facebook get right and what did Friendster get wrong? Well for one, Facebook grew in a much more controlled way than Friendster did. Facebook didn’t open up to the entire world on day 1. It started at Harvard, and then grew little by little, university by university. Jim Scheinman, Friendster’s head of business development, says the slower growth allowed Facebook to avoid some of the technology challenges that Friendster faced.
JIM: The fact that they stayed focus on scaling within a college allowed them to scale. So when they went to the next college like Yale, they had a new server that just went for Yale. And then when they went to the next one, they had a different server that scaled for them. So each of those different demographics scaled and worked properly. And actually, if you have seen the Social Networking movie about Facebook. There’s a famous quote in there from Zuck who said, “We have to remain fast and not end up like Friendster.”
LISA: Number two, Jim says that even though Facebook grew slowly at the start, they also figured out how to chase growth. Facebook had an entire team dedicated to it, and that team found a magic metric: seven friends in 10 days. If Facebook could help a user connect to seven friends in 10 days, that user would be hooked. And so they focused a lot of energy on trying to get users to connect to friends. They developed features like friend recommendations to get people to find and add new friends. Another thing Facebook did right: they built a site that users would love, not a site that would immediately rake in as much advertising money as possible.
JIM: Facebook focused on how do we make this an amazing product experience and how do we keep growing this business? From not revenue, but from the consumer standpoint. Where at Friendster — we were a like a traditional company. Now we’ve got millions of people, how do we make a lot of money, right? And at every board meeting, a big discussion was — how much revenue are we doing, how do we make more money? That was the wrong strategy at the time, right? At the time, we should’ve just been like — how do we just keep growing users, how do we get them happy? How do we keep them connected, how do we keep them engaged? Eventually, when we get to a 100 million people, we’re gonna have a 100 billion dollar business.
LISA: The final big difference. Facebook has had one CEO over its entire life. A CEO with a very focused and singular vision. Friendster, on the other hand, had six CEOs in seven years. A lot of people who were involved in Friendster went on to do really well for themselves. John Doerr, from the venture capital firm Kleiner Perkins, who put millions into Friendster … has since invested in big hits like Slack, Uber and Twitter. Reid Hoffman, an early investor, went on to be cofounder of Linkedin, which sold to Microsoft last year for 26 billion dollars. Jim Scheinman, former head of business development, became the first employee at the social networking site Bebo…which sold for 850 million dollars. He’s now a VC, and advises other companies. Even the Malaysian company that ultimately bought Friendster in 2009 made a killing selling Friendster’s social network patents to Facebook. According to a news report, Jonathan Abrams, Friendster’s founder, made close to 5 million dollars when he brought outside investors into the company. That’s a lot of money by most people’s standards … but the industry Jonathan pioneered … it’s now worth hundreds of billions of dollars. And that’s left former colleagues like Jim Scheinman wondering how Jonathan feels…
JIM: I mean personally I’d be curious to hear. Does it. Like you came up with this idea. And other people made billions of dollars on it. They’re billionaires that have been created because of this idea that you created. Did it eat away at you?
LISA: So I asked Jonathan.
JONATHAN ABRAMS: The reality is it is frustrating that Friendster was not a big success. When you just think about how little Friendster ended up being worth, that’s kind of astounding. You really have to think, like, how hard was it to mismanage a company with that much potential so badly. So yeah it sucked and it’s frustrating. But I still think the idea of people feeling sorry for me because I’m a millionaire instead of a billionaire is also kinda crazy.
JONATHAN: I’m not like in denial about Friendster or forgotten it and I’m proud about a lot of stuff we did. And I’m frustrated about a lot of stuff that happened at Friendster. But you know, it was a long time ago and I’ve moved on with my life. And I mean since leaving Friendster I started 4 other companies, became an American citizen, started a family, invested in more than 50 companies, and you know a whole bunch of other stuff.
LISA: And beyond all that… talking to Jonathan I get the sense that when he looks at the social networks of today… he feels a weird kind of satisfaction… like his original vision for Friendster was right… Because when you look at the king of the social networking world.. Facebook… it didn’t build on the Myspace model, with personalization features and anonymous profiles. It’s simpler, cleaner… more like Friendster.
JONATHAN: People really ended up doing what we had always thought. I mean — using their real names, connecting with their real friends and you know. So I think, you know, a lot of the original vision of Friendster, even though we weren’t able to execute on it was valid.
LISA: Jonathan has moved on from Friendster but he still works as entrepreneur in the social media space. His latest company, Nuzzel, is in its sixth year … with six employees … and has raised 5 million dollars from investors. What does it do? It aggregates the stories that your friends are sharing on social media. Including … of course … on Facebook.
[THEME]
LISA: Next time on StartUp, an entrepreneur makes a visit to the CEO whisperer.
JERRY: What would feel comfortable talking about. And useful.
DIANA: Yeah yeah yeah. I mean, I think the biggest thing is… for me personally… Um you know… I’m like getting teary even talking about it… you know, I’m finding it challenging to navigate being a mom and being an entrepreneur.
LISA: Balancing the grueling work of starting a company, with the pains and joys of raising young children. That’s in two weeks. StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen and Emanuele Berry. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe. Special thanks to Misiek Piskorski and Natalie Jones.
Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music.
Additional music by Typhoon, Jupyter, Marley Carrol and the band Hot Moms Dot Gov.
David Herman and Ian Scott mixed the episode.
To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter @podcaststartup.
Finally: a quick reminder that Alex Blumberg is taking listener questions… So if you want to talk to Alex about Gimlet, about being an entrepreneur… leave him a message at 812-641-1231. Some lucky callers will get a call back — and might be featured on a future episode of Startup.
Thanks for listening. We’ll see you two weeks.
We do our best to make sure these transcripts are accurate. If you would like to quote from an episode of StartUp, please check the transcript with the corresponding audio.
Friendster: Part 1 (Season 5, Episode 2)
Before Myspace, before Facebook, there was Friendster.
ALEX BLUMBERG: Hey, it’s Alex Blumberg with a quick message before Lisa Chow takes over and brings you the episode. Longtime listeners will know that previous seasons of StartUp focused entirely on Gimlet Media, the company bringing you this podcast. So you’ve heard us tell our story. And now we’re trying a new iteration of that. We want to do sort of a podcast version of an AMA — an ask me anything. And we want your questions. If you have ever had any questions about Gimlet, about entrepreneurship, about what’s it’s like to record yourself while launching your first startup and sharing it with the world, now is your chance. Give us a call at 812-641-1231 and leave us a message with your questions. You can also find that number on the StartUp twitter page, @podcaststartup. We want to hear your questions. And now, here’s Lisa with the episode. And it’s a good one.
LISA CHOW: In 2003, Reyhan Harmanci had just graduated from college and moved to San Francisco, and she started getting e-mails from friends asking her to join this new website. Pretty soon she was hearing about it everywhere.
REYHAN HARMANCI: You could just hear people on the street in San Francisco talking about it like you would overhear conversations in cafes, people who didn’t really know each other before were making friends through Friendster.
LISA: Friendster … a social network, before anyone really understood what that was. A site that not only let you see and message your friends, but also your friends friends and your friends’ friends’ friends…
REYHAN: I remember leaving a bar one night and hearing some people next to me. Then being like—oh you guys are on Friendster? We’re on Friendster. And everyone exchanged email addresses and then suddenly a day later we’re like oh we actually have like 25 mutual friends and that was like a feeling that there was sort of this invisible kind of layer of connection that that you needed Friendster to be able to see.
LISA: It seemed like magic…Remember, this was the early 2000s. The internet was a totally different place. AOL was still cool. Most households were still using dial up to get online. But suddenly…Friendster was opening up this whole new world for people. There were all these connections you could explore, and people started reaching out to each other on Friendster for all sorts of reasons.
REYHAN: At some point I got a message from somebody I didn’t know whose name my name is Reyhan and that’s spelled R-E-Y-H-A-N. And I got a message from someone named Reihan, R-E-I-H-A-N, who was just a message like—hey we’re homonyms! like we should be friends.
LISA: Based on the spelling, they thought their names were pronounced the same way.
REYHAN: And then I was like you know looked him up and we had lots of mutual friends then I googled him and he’s like like a political writer and I was like cool like my homonym is a political writer for Slate. And then we actually though stayed in touch and then became friends in real life.
LISA: Do you ever ask him like what compelled him to write to you?
REYHAN: I mean we can call him.
REYHAN: Should we? I don’t know what he’s doing right now.
LISA: Sure, let’s try it.
REYHAN: Hey friend. Hold on I’m going to put you on speaker if that’s OK.
REIHAN SALAM: Just let me know when.
REYHAN: OK it’s happening.
LISA: OK. OK can you just introduce yourself to me.
REIHAN: Hi my name is Reihan Salam and I am best known as a friend of Reyhan Harmanci. That is my chief distinguishing characteristic in the world.
LISA: So What compelled you to reach out to Reyhan?
REIHAN: So she was friends with a bunch of my friends but also she was friends with a lot of my cool friends. So of course, that piqued my interest.
LISA: Reyhan and Reihan emailed back and forth … He was in New York. She was still living in San Francisco. They’d write about bad rock shows, their ex’s, politics. And then, one week, Reyhan traveled to New York to visit some friends, and decided to invite Reihan over. Something her friends weren’t fully on board with…
REYHAN: Honestly I think that they were like why are you bringing somebody you met on Friendster into our lives slash apartment. Like, they were like, this is not something we do.
REIHAN: I think we also talked on the phone before then.
REYHAN: I know God. Are we so old that we had made phone calls. I mean, this is humiliating. We like meet on Friendster and then make phone calls. Jesus.
LISA: All over the country, millions of other people were having their version of the Reihan-Reyhan experience.
ROBERT SIEGEL: Young adults by the hundreds of thousands have been signing up at a website called Friendster.
LISA: In the first year, Friendster grew to over 4 million users.
ROBERT KRULWICH: We’ve all heard that everybody on earth is connected, but now there’s a website called Friendster.
LISA: It was the hot new internet thing, the first site to really take off after the dot com bubble had burst.
CHARLIE ROSE: Friendster has quickly grown to become one of the top 100 highest trafficked sites on the network, with more than 8 million users.
LISA: The idea of an online social network was so new at this time that Friendster was able to patent it. Patent number 7 million 69 thousand 3 hundred 8. “System, method and apparatus for connecting users in an online computer system based on their relationships within social networks.”
REID HOFFMAN: Before even Myspace started, before Facebook started was oh yeah Friendster is the interesting social place… you should go check it out
LISA: Reid Hoffman was an early investor in Friendster… and co-founder of another social network, LinkedIn…
REID: There was a bunch of kind of social discovery that Friendster was the first thing that had done that…and there was enormous interest in that….
LISA: Do you feel like the crown was theirs to lose? Like in the sense of you know the social networking crown. You know they were the first in this space before MySpace before Facebook.
REID: Absolutely….It’s possible that Friendster would be bigger than Facebook, it’s possible that Friendster that would be equal to Facebook. Or even secondary but still a significant presence.
LISA: Instead Friendster faded from people’s minds and was eventually sold to a company overseas, while Facebook went on to be worth 400 billion dollars. So how did a company with so much promise end up losing so badly? Over the course of the next two episodes, we’re going to find out. From Gimlet Media, this is Startup, and I’m Lisa Chow. And today, we’re taking a page from business school — and presenting a case study of Friendster. What went wrong? And what can we learn from it?
[THEME]
LISA: The guy who started Friendster was Jonathan Abrams. He moved to the U.S. from Canada in the 90s, and founded his own company. But it ran out of money in the dot com bust. He was trying to figure out what to do next, and he started thinking about how people make connections in Silicon Valley….
JONATHAN ABRAMS: You don’t just email a venture capitalist out of the blue…they want to meet people through referrals and introductions. And I didn’t know anybody in Silicon Valley. I hadn’t gone to MIT or Stanford or any American school that gave me a built in network. , So I had to do a lot of networking. I went to a lot events and met a lot of people and really had to do a lot very conscious networking. And I think in general that’s the way a lot of people meet people — You meet people through other people you know. Whether it’s for business or other things.
LISA: Jonathan was also single at the time, and thought meeting people anonymously through dating sites was kind of creepy. So he had an idea: what if we take this thing that happens everyday in real life — you meet a new person through someone you already know — and put it online. Create a place where people could connect with the friends of their friends. And the friends of their friends’ friends… for business, romance or just for fun.
JONATHAN: They would actually uh, map out their real life social graph. On the internet. And you would be able to see this sort of uh, 6 degree of separation concept mapped out in real life. You’d actually be able to see it. And people would be willing to do this and would actually enjoy it.
LISA: It was this last bit — that people would be willing to do it and would actually enjoy it — that was a risk. Because for this idea to work, Jonathan would need people to radically change the way they interacted on the internet. He would need them to start using their real names with their real photos. Which at the time — no one was doing….most people chatting online were doing it anonymously… behind pseudonyms and avatars…here’s Reid Hoffman again.
REID: Whether it was AOL or instant messenger or the various kind of community sites you wouldn’t say Reid Hoffman you’d say you know anime fan right or classical music aficionado or whatever. That’d be obviously a little too long. So the idea of using your real name online in 2003…it seemed kind of crazy…
REID: It was still kind of like is that dangerous you know are stalkers going to find you. How’s it going to be used. What’s going to happen.
LISA: Even Jonathan wasn’t sure this thing was gonna work. But he started coding up a prototype anyway, and he called it Friendster. He invited a dozen or so people to start testing out the site. And one of those people was Jim Scheinman. Jim was in his 30s, married with kids, and he didn’t really think the site was for him. He thought it was for younger people, people looking for friends. So he asked a younger colleague of his to check it out.
JIM SCHEINMAN: And she used it over the weekend, and I’ll never forget this. She came back on Monday and I said — “So, you know, Nicole, what’d you think?” And she said, “It changed my life.” [chuckles] I said, really? At that time, I’d never heard of a company that had changed someone’s life. With a couple of hundred people on this service in a weekend. So I asked her specifically what happened. And so she said, first of all, I met a long lost friend that I hadn’t seen in 10 years who used to be a camp buddy. And we’re gonna— get to know each other again and have coffee. I’m like, “Oh, that’s really cool.” So what else? And she said, “And I got a date next weekend.” I’m like, okay — this is a big idea.
LISA: Jonathan… the company’s founder… was watching early users in amazement.
JONATHAN: I would just look at the logs. And people were uploading photos, they were sending messages. I mean, they were doing all the things I’d hoped they would do. And i was just watching it kind of in shock that it was working.
LISA: Pretty soon — the number of people testing the site grew from the initial dozen to several hundred. Jonathan felt confident enough to start looking for investors. One of his first calls was to his close friend Melissa Lloyd. They’d met at his first startup.
MELISSA Lloyd: When I met Jonathan, within the first 3 minutes, I realized he was a genius. He had this sense of purpose and confidence about the future of the internet that frankly, I’d never heard before. Three years after their first meeting, Jonathan went to Melissa’s house for Thanksgiving, and described Friendster to her and her husband around their dining room table.
MELISSA: He goes, “We built a prototype and it seems to be catching on.” And I go, “Well, I’m not even sure I’d use it but whatever you do, we would put money in.” So we put a very modest investment of like 10,000 dollars, and that was his first investment. And I’m the very first person listed on the term sheet.
LISA: Over the next several months, Jonathan raised nearly a half a million dollars from angel investors. And in March 2003, Friendster launched publicly. On the main page, the site was described as quote “an online community that connects people through networks of friends for dating or making new friends.” end quote. There were small oval shaped photos of people, connected by lines. And Jonathan’s face was at the center. People’s individual profile pages looked a lot like a dating profiles. They listed people’s age, interests, location. And people were using all those things to search the site.
MIKE MOHAN: You could search you know other people who were like you know one or two steps removed from you.
LISA: This is Michael Mohan. He started using Friendster pretty soon after it launched.
MIKE: I was searching for single women one or two steps removed from me
KELLY: You could set a filter. Like you know within a 10 mile radius or such and such an age
LISA: Kelly Tillery was another early Friendster user.
KELLY: And one of his filters was likes midnight cowboy.
MIKE: The movie Midnight Cowboy. And so on Kelly’s profile she also liked midnight cowboy which is one of my favorite movies. And so that’s why I was like oh I should I should totally hit this girl up.
KELLY: [laughter]
LISA: Mike and Kelly got married 7 years after they met on Friendster. And it was these kinds of experiences people were having … meeting people they never would have met otherwise … that really made the site explode…Within a couple of months of launching publicly, Friendster had a million members. Six months later, it was at 4 million members.
LISA: What was it like going to the office everyday?
JIM: It was so exciting!
LISA: This is Jim, the guy who let his younger colleague test the site early on. He had been so sold on the idea behind Friendster that he joined the company as head of business development.
JIM: If you were a Friendster member early on, you used it everyday all day long. There wasn’t any other competition. There wasn’t Facebook, there wasn’t Snapchat, there wasn’t Instagram. If you were social on the internet and you were under 30 you were under 25, you were living on Friendster.
LISA: Friendster was one of the fastest growing sites anyone had ever seen at that point. Which makes sense because if you think about how a social network grows, you join, you invite 10 friends, they join, and they each invite 10 friends, that’s exponential growth. Kent Lindstrom was an early employee and investor. He remembers when the site went from a local San Francisco phenomenon to a national one.
KENT: I remember driving to work one day and I was listening to the Howard Stern radio show.
LISA: On the show…Howard Stern was talking to Kathy Griffin about how she had just fired her personal assistant for spending too much time on the site…
KATHY GRIFFIN: He’s all about Friendster…
HOWARD STERN: Did you don’t hear about Friendster?
ROBIN QUIVERS: No.
KATHY: And Looking up. Friends on Friendster and corresponding with his friends and Friendster.
HOWARD: Friendster’s the new Internet craze. Yeah. You… I don’t even know how to explain it. Ron Zimmerman put me on it. I want to kill him.
KENT: It was sort of the first time I’m hearing that on a national radio broadcast. Like, “Wow.” Like somehow something jumped out of Silicon Valley, made its way across the country to New York and I’m listening to it on my radio. That, was the moment when I went “Wow- this is really. This is something different.”
LISA: Newsweek, Vanity Fair, Rolling Stone all wrote about Friendster. One Silicon Valley publication put Jonathan on its cover, with two women, one on each side, leaning in for a kiss.
JONATHAN: And then we get this email from somebody at the Jimmy Kimmel show asking me to be on the show. And when I saw that email I was just like, huh?
LISA: Jonathan accepted the invitation, flew down to Los Angeles and went to the studio.
JONATHAN: There’s these blazing lights, there’s an audience full of a lot of people.
JONATHAN: There was an actress from Buffy the Vampire Slayer. And she I think gave me a kiss. And Jimmy Kimmel spent the whole time really kind of teasing me and asking all these crazy questions.
LISA: Friendster was officially a hit. And from the outside, it looked like the company was on track to be the next big thing. But inside the company, signs of trouble were starting to emerge. As the number of users ballooned …..the site struggled to keep up with all of the increased traffic… And Friendster was still a tiny company, about 10 employees. One of the engineers, Chris Lunt, remembers everyone working around the clock to keep the site running out of their small office in Mountain View.
CHRIS LUNT: The place was kind of unwashed. It had sort of the funk of a big dorm room of people who had been spending too much time in that space. We couldn’t move fast enough to keep up with the growth.
LISA: Part of the problem…Jonathan says… is that the technology back in 2003 just wasn’t as advanced as it is now.
JONATHAN: Today we can click a button and create ten new servers in five minutes. But back then, if you wanted ten servers, we had to call some company in Fremont and say, “We want 10 servers.” And we want this amount of RAM and this amount of this, and they’d build them and we’d go to their office, we’d pick them up and we’d take them up to a data center, rack-mount them. I mean it was — a lot more work.
LISA: So there was actually someone who was going and picking up a server and putting it in a data center?
JONATHAN: I actually did that myself in the early days, which I’m really not qualified to do. I mean basically we were always behind. Like whatever we were in the process of setting up was quickly no longer going to be sufficient.
LISA: Chip Benson was an early employee at Friendster, working in customer support. And he says users were starting to notice the problems.
CHIP: we had customers actually you know the users actually writing in saying, “Can you guys please fix the performance issues? Please!” And they said, “We really love Friendster, we think it’s so neat — but it’s killing us to wait two minutes for a page to load.
LISA: Jonathan said he started to fear the very thing that all startups want most: growth.
JONATHAN: Instead of having a party every time we got to some new milestone, it was just more like panic.
LISA: So the team was confronted with a very weird problem. How do we slow the growth? How do we prevent people from visiting the site and new users from signing up?
Again, here’s Kent Lindstrom, an early employee and investor.
KENT: We used to send out different emails. Like every week we would send you an email that said your network grew by XYZ people. We stopped sending those because of the surge of traffic we would get when those went out was too big.
LISA: So you actually started doing things to stop–to basically not incentivize the growth?
KENT: Yeah, we were in the business of not wanting a surge of traffic.
LISA: And every time Jonathan would get another media request, there was a collective groan among the small team of engineers because they couldn’t handle more traffic.Frustration was growing … and as the engineers looked for solutions… one idea emerged that seemed like a fast and simple fix… Remove the social graph … the feature that showed you how you were connected to other people on the site. People one degree, two degrees, three degrees away from you.
CHRIS LUNT: It was one of the most technically challenging parts of delivering the website and the thing that could be very slow.
LISA: Again, Chris Lunt, an early engineer.
CHRIS: At one point, I went to Jonathan and I said, “You know if we take this off of the page – if we don’t load this automatically when somebody comes to the page, but only provide it on demand, or if we cache it, put up a sort of periodic update on that – as opposed to giving it to you live in the moment every time, we can really increase the speed that the page loads in.” And he said, “Absolutely not.” He said, “That is what the site is really about, it’s about how you’re connected to these other people, that’s what’s interesting, that’s the thing that’s worth doing and beating everybody else.
LISA: The very thing that had drawn users like Reyhan and Reihan to Friendster. This ability to see your friends and your friends friends and your friends friends friends all mapped out was proving to be his undoing. What happens when too much of a good thing is killing your site? That’s coming up, after the break.
[BREAK]
LISA: Welcome back to Startup. So Friendster launched, saw this tremendous growth, and then, the site started crashing under all that growth. But despite all their technical problems, Jonathan and his team had still created something that was entirely new — a social network. Their site was seeing unprecedented growth…. And that got Silicon Valley’s attention. Investors were intrigued. And they felt that the technical problems were solvable…Reid Hoffman was an early investor….
REID: They got out there early. They got a viral growth curve. They had an interesting product, they had a lot of momentum.// suddenly people were like oh my god this is really interesting I should I should try this.
LISA: Instead of Jonathan chasing investors, investors started chasing him. Friendster was a year and a half old at this point. And Jonathan says this time was surreal.
JONATHAN: I remember I was driving in between the offices of a couple venture capital firms, and i had a voicemail from another venture capitalist, pretty famous guy, um, I don’t even know how he had got my phone number, because I had not given it to him. And he said “Hey jonathan, what’s this hear about you doing the deal with so and so and so and so, I thought you were going to do a deal with me. And I hadn’t even pitched this guy.
JONATHAN: And that was weird. And that is not normal.
LISA: And things got even crazier for Jonathan when one of the biggest Silicon Valley firms approached him. The firm was Kleiner Perkins. And specifically one guy at that firm, a guy by the name of John Doerr, who was an early backer of Google, Netscape and Amazon.
MELISSA: He was considered the…the visionary in Silicon Valley.
LISA: That’s Melissa, Jonathan’s close friend and first investor in Friendster.
MELISSA: When he started courting Jonathan…I was like, “Are you kidding me, John’s Doher is going to be after me on a term sheet?”It was just sort of a little heady. It was sort of like a Hollywood director discovering an actress. You were like, “Woah, you are going to be, this is gonna be real.”
LISA: And while Jonathan was being pursued by these famous investors, another offer came his way…from a young company that was growing rapidly. A little company called Google. Its founders Larry Page and Sergey Brin told Jonathan they wanted to buy Friendster for 30 million dollars. Suddenly, Jonathan had a decision to make: sell to Google … or take money from the venture capitalists who’d been courting him. Exit now for 30 million, or try and build the next billion dollar company. It didn’t take long for Jonathan to decide.
JONATHAN: We thought okay by now it’s clear this could be the next big thing. And I thought that if we had the opportunity to get the investors who had helped all these other companies Yahoo, and Amazon, and Netscape and Ebay, all become huge successful companies, If we have those kind of people stepping up to help us? That just seemed like a, a really good shot.
LISA: Jonathan said no to Google’s offer to buy Friendster. Kent Lindstrom was one of the first employees to hear the news.
KENT: The moment that Jonathan turned that down. He really set himself on a path. He really set aside millions- tens of millions in retrospect because Google hadn’t gone public yet. Probably hundreds and millions of dollars. To build something.
LISA: Jonathan had chosen the venture capitalists. Two of Silicon Valley’s most prominent firms, Kleiner Perkins and Benchmark Capital, invested 13 million dollars in Friendster. And in return Jonathan gave up some of his shares and voting rights at the company.
LISA: how did things change when the investment money started to pour in?
JONATHAN: Everything changed, actually. Part of it was not just the money, we also started hiring VPs, then additional team members and members of the management team that were recommended to us by the investors. Um And we moved to a bigger office and — I think really everything changed at that point. I mean, I was excited because at the time I thought that this was a really smart move and that with the additional capital that I thought we needed to keep up with the growth as well as the advice and the help that we were going to get from the investors that this was. A real step forward in sort of increasing the likelihood that we’d be able to take Friendster to full potential and make it a big success.
LISA: A lot of people with impressive resumes started joining Friendster. A guy who’d worked at Netscape came to help build a world-class engineering team. A woman who’d been the third employee at eBay became Friendster director of community development. And then, there was a product guy from Yahoo, who had launched Yahoo news, sports, weather, and finance. Chris Lunt, an early engineer, remembers the hype around these hires.
CHRIS: Jonathan spoke to everybody about this is such an exciting opportunity, look, you’ve got people who have already made it, who are coming here to be apart of it because it’s that revolutionary and exciting.
MELISSA: In the very beginning – he was very enamored with the group of people around them.
LISA: Again here’s Melissa…
MELISSA: He was like, “Oh I must be part of the club, I brought together the heaviest hitters in Silicon Valley, and they have money in this idea and they’re supporting me, and look at this, This is amazing!.
LISA: But when Jonathan brought Melissa in to see Friendster’s new office … she felt something else..
MELISSA: He was so excited to show me his new offices, and I met one of the people that this new engineering group had brought in and I was sick to my stomach.
LISA: She said it was clear to her right away that this guy, didn’t respect Jonathan.
MELISSA: Here’s the founder of the hottest startup in Silicon Valley, and he says to this – I believe he was the director of engineering – he said, “I really want you to meet my friend Melissa, she was the first investor in Friendster, And he looked at me, and he goes, “I really have to get back to what I’m doing over here.” The fact that he was so dismissive of Jonathan and felt ok doing that in front of me said that there is a big problem here. And he is clearly seeing Jonathan as someone that’s not adding value or he would have treated him with value and I remember turning to Jonathan and I said, “Watch out because this is – these are not the people I want you to be around.” I felt from that moment, my gut was in knots about what was going to happen at this company. Because they weren’t people that were there to serve Jonathan’s vision.
LISA: And Melissa was right. A lot of the new people coming into Friendster had already made names for themselves in Silicon Valley…they’d been successful elsewhere…and they had their own ideas for how to fix the problems at Friendster. The board made a choice.
JONATHAN: One of the investors basically emailed me, said we needed to meet. And then met me, I think, at a bar or a restaurant in Mountain View. And basically informed me, while we were gone, we had a secret board meeting and voted to repl — to essentially replace you as CEO.
LISA CHOW: What did this board member say exactly? Did they give reasons?
JONATHAN ABRAMS: There were some things that were sort of mentioned, things that I had been sort of — blocking, that were cited as things maybe I was getting in the way of. I mean basically the idea was we’ve lost confidence in you, and we think it’s so urgent that we need to make an abrupt change.
LISA CHOW: What were you feeling inside during all of that?
JONATHAN ABRAMS: Frustrated.
LISA CHOW: I mean it sounds painful.
JONATHAN ABRAMS: Yeah, I mean it sucked —
LISA: The guys who had been courting Jonathan five months earlier, had just fired him. I reached out to John Doerr and some of the other board members at that time. None of them was willing to talk to us on tape. But one confirmed Jonathan’s account — that they felt he was blocking things and was the reason problems weren’t getting fixed. Melissa, Jonathan’s old friend and first investor… remembers when Jonathan told her the news…
MELISSA: He was very measured. “Well I’m no longer CEO of Friendster” Just like that. Just like when he said, “I have this thing I’m working on” at the very beginning. And I remember feeling so devastated for him and for the company.
KENT: I remember sitting down at our office in Mountain View.
LISA: Kent Lindstrom also remembers hearing the news….he was one of the first employees that Jonathan had hired.
KENT: It was probably late at night, it was dark, and he- Jonathan came into my office before I left he said “I have been, you know, I’ve been replaced by the board of directors.” And then the things start going through your head are-” Is that normal? Is that not normal? Wait he founded this company how can he do that?” You go through a quick entire jumble of thoughts. The denial, the anger, the grief all that.
LISA: But Kent says there wasn’t much time to process these feelings because…. pretty quickly the board was putting an entirely different spin on the firing…
KENT: All of a sudden it was the board of directors coming in and saying: This is going to be amazing. We’re going to get you a professional CEO. Even the guy who ran Yahoo. Maybe somebody who ran Intuit.” These big names and all of a sudden it was stars and lights.The shock and disappointment was really quickly eclipsed by this wave of activity, and recruiting, and new people coming in- and excitement, and promise about the future.
LISA: That future … and what actually came next for Friendster … that’s in the next episode of Startup.
[BREAK]
LISA: Next week on Startup, what happens when you go from running a TV network to running a tech company?
SCOTT SASSA: My favorite thing is the engineers used to say, how’s our brain dead media executive doing today?
LISA: That’s next time on Startup.
[CREDITS]
StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen and Emanuele Berry. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe. Special thanks to Eric Mennel and Natalie Jones.
Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music.
Additional music by Takstar, Jupyter, Tyler Strickland and the band Hot Moms Dot Gov.
Andrew Dunn and Ian Scott mixed the episode.
To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter @podcaststartup.
Finally: a quick reminder that Alex Blumberg is taking listener questions… So if you want to talk to Alex about Gimlet, about being an entrepreneur… leave him a message at 812-641-1231. Some lucky callers will get a call back — and might be featured on a future episode of Startup.
Thanks for listening. We’ll see you next week.
Hosted by
Lisa Chow
Lisa is co-host of StartUp. Previously, she was a senior editor at FiveThirtyEight and a reporter at NPR's Planet Money and WNYC. She has an MBA from Columbia .
Hosted by
Alex Blumberg
Alex is the host of StartUp, and CEO and cofounder of Gimlet. He 's an award-winning radio journalist and former producer for This American Life and the co-founder of Planet Money.
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