The more one limits oneself, the closer one is to the infinite; these people, as unworldly as they seem, burrow like termites into their own particular material to construct, in miniature, a strange and utterly individual image of the world.
—Stefan Zweig, Chess Story
MAY 17, 2012
Time to call Jimmy.
Jimmy was my exotic beer dealer at Willows, the local family-owned grocery store in Menlo Park, which had survived the chain-store assault of Whole Foods by developing a thriving sideline in craft beer. The market was on Willow Road, which started just outside 24-karat Palo Alto, then wended its way through equally gold-plated Menlo Park and past the VA hospital that Ken Kesey once worked in and that inspired One Flew Over the Cuckoo’s Nest. Almost as if on an exotic safari, Willow Road then traversed East Palo Alto, the local slum that once had the highest murder rate in the Bay Area (two of the local schools are named after César Chávez and Ron McNair, an African American astronaut), before ending at Facebook’s entrance gate, complete with Like sign ringed by an ever-present scrum of tourists.
Like a true dealer, Jimmy took calls at any hour. And when called on a random (to him) Friday at twelve thirty a.m., it was no biggie. Payment? Don’t worry about it . . . just get the keg and pay me when you come in.
The situation was this: Facebook was finally going public. This meant Facebook stock would be traded on the NASDAQ for the first time. In order to duplicate all the old-timey capitalist theatrics, back when an exchange was a physical space full of traders whose day would start with an opening bell, NASDAQ marked the occasion with its own purely cosmetic bell that was rung with great fanfare in New York’s Times Square, and the apotheotic scene was projected onto a billboard screen overlooking that crucible of tourist kitsch.
Zuck had other ideas, though.
Appearing besuited in New York would be a step down for such a history-warping company. No, the IPO proceedings would take place at Facebook.
That’s right. Zuck and the FB high command wanted to stage their assumption into the technological heavens from Facebook’s own courtyard. This was like Napoleon and his coronation, which he insisted take place in his Paris backyard rather than in Reims Cathedral, where they’d been held since the tenth century. Furthermore, similar to Napoleon snatching Charlemagne’s crown out of Pope Pius’s hands and crowning himself and Josephine, no outside blessing was required from NASDAQ or Wall Street. Zuck would stage the production, pushing the bell button himself right next to his beloved Aquarium.
From that moment on, Facebook would have a public-facing share price, and employees who either were less fired with zealotry than Zuck or simply didn’t have three commas in their net worth like he did were apt to get soft and worry about that volatile number. In order to make sure nobody fixated on the IPO stock price, the high command declared a hackathon the night before. The theory was that if everyone stayed up the entire night hacking, then they’d be conked out the next day, sleeping through the first day of trading. As with many neat Facebook theories, reality would prove to be rather more complicated. But this was the plan.
As a useless, email-writing product manager, I had few options to contribute to this IPO pregame beyond urging it along in the bacchanal direction. I had once, memorably, brewed beer at the office, and decided to recruit a crew to make a batch for the IPO festivities.* My home-brewing setup was still intact, and under the FBX desks. We had upgraded our Ads drinking facilities, and I had bought the team a real tap and kegerator, which I filled with a locally brewed IPA and an arsenal of bottled Belgians. The first rule of brewing: you must be drinking beer while making it.
Come the big night, I set up shop right in the middle of the courtyard, in front of the one café that stayed open all night. The huge, steaming brew kettle and flaming burner certainly got attention. The beer tap alongside helped too. Zuck sauntered by, took one look at the scene, and shook his head before walking on to the cafeteria. Boland and I were in the throes of a short-lived bout of friendliness given our close work on Custom Audiences, and he hung around and helped out. PMMess was also flitting around, although it seemed that dish had definitely cooled. The presence of her boss, Boland, with whom she had an always ambiguous relationship, didn’t help matters.
I poured beers for the ever-changing scrum of Ads peeps who would swing by, or even random Facebookers. There was that carnivalesque feeling in the air when humanity achieved, for one fleeting moment, a state of generous fellowship with its fellow man, a festive celebration of the universe being so kind as to favor us, a communion among fellow bipedal primates.
Then the beer gave out.
The brew still had some time to go (we wouldn’t even try to cool it using Facebook’s crappy plumbing again), and a beer shortage was a cardinal sin. That’s when I called Jimmy. Source secured, I asked Boland if he could maybe drive, as I was starting to see double from the liquid tour through Belgium we’d just taken.
I climbed into in his beater Volvo station wagon, with its worn tan leather interior abused by too many kids and trips to weekend soccer games. The car looked as though lots of people and their hurried meals had ridden in it. To break up the awkward intimacy of sitting next to each other in a confined space, I asked somewhat absently where he lived. “Atherton” came the reply, the exclusive neighborhood where Sheryl, among other truly elite tech tycoons, lived. “We rent,” he was quick to add, perhaps reacting to my impressed look.
When confronted with an unwelcome social situation (which is most of them), I default to a Terry Gross pose of interviewing journalist.
“So how’d you end up at Facebook from Microsoft?”
“Sheryl recruited and convinced me.”
Ah. That might explain why his lips were hermetically sealed to her ass.
“How’d that go?”
“Well, she basically convinced me by saying: ‘Look, I either hire you now and you come work for Facebook, or a year from now I’ll hire you to work for the guy whose job I’m offering you right now.’ And that’s what convinced me.”
Oh, Sheryl Sandberg and her wiles. So that’s how you seduced the Bolands of the world: you offered them a rung up on the ladder they thought they’d miss out on otherwise.
By the time I had gotten Boland’s informal CV, we’d arrived at Willows. In a second, I understood the charm of owning your own bar or restaurant, as the idle wealthy often did. You simply walked in and took what you wanted. Which is more or less what Boland and I did, swaggering into the Willows at one a.m. along with the last-minute tampon-and-diaper buyers, mentioning Jimmy’s name. We scooped up a keg of their best IPA like we owned the place, threw it into the back of his Volvo, and off we barreled back to the compound.
Fast-forward another two hours.
The second keg was now officially dead as well. The initial rush of the turbo alcohol-and-greed drunk had worn off. The pretense of this actually being a hackathon with productive work going on was wearing thin. One of the strange hypocrisies around the “hacker way” was that the company was so big most employees didn’t have the ability to hack on anything at all, engineers being vastly outnumbered by every flavor of corporate camp follower. Typically these nonhackers would just absent themselves from the geeky nocturnal ritual, but you couldn’t miss out on the pre-IPO party, so there was every salesperson, admin, operations specialist, and IT help-desk attendant well into the wee hours, milling around without much to do. Certainly the company had neglected to schedule anything remotely festive or musical. Facebook’s Spartan virtues contraindicated celebration, even at the moment of their corporate apotheosis. Many of these people would be worth real, liquid money come the next day.* In any normal company, people would be doing lines of cocaine off desks and getting it on in conference rooms. Not so at Facebook. Corporate discipline was maintained.
Fast-forward another two hours. Five a.m. now, the wee hours.
I considered going to the boat and sleeping, but feared missing the big moment. Doing laps around campus to keep myself awake, I ran into Boland again, who this time had a bottle of twelve-year single-malt. He and PMMess were hanging out at one of the tables in the open space between Ads and Growth, which still featured the half-finished Superman mural that had appeared on the Night of the Spray Paint.
They invited me to join, and while never a whisky guy, it would have been rude to refuse. So did this improbable trio kill the last hour before the big event. A passing former Ads engineer posted a photo of me: I looked delirious and unkempt, with rings under my eyes and a paper cup in my hand. I was wearing the Facebook uniform of a logo-ed zipped fleece, and had trotted out an old AdGrok T-shirt underneath for the occasion.
I was only semiconscious at this point. We had started pulling insane hours trying to ship FBX on time, and my deficit on the sleep front was truly Greek in scale. But the crepuscular redness of a new California day was breaking! The moment drew near!
We all wandered outside, where a crowd was gathering. Overnight, Facilities had erected what looked like a rock-concert stage, with a football-stadium-sized screen framed by scaffolding and lights. At the base of it stood a towerlike podium with a glass lectern. Embedded in that glass was the button that Zuck would push to trigger the public company genesis. Behind and above the podium was an image of those three icons whose nagging notifications had created this multibillion dollar empire: two human figures, representing friend requests; dialogue bubbles for messages; and a globe for likes and comments. This trinity, internally known as “the jewels,” appeared in every manifestation of Facebook, whether mobile or desktop, and the red notifications that popped up on them were now the world’s operant conditioning candy. The effect onstage was to make the scene itself seem like a Facebook page.
As dawn grew brighter the courtyard filled, and soon it was packed elbow to elbow. The postive mood had revived, and the crowd was noisy with gossiping expectation and the occasional whoop. A commotion could be noticed around the podium, and soon Facebook’s leadership started appearing one by one: Zuck, Sheryl, David Fischer, Elliot Schrage, Pedram Keyani, Chris Cox (both Keyani and Cox had addressed my on-boarding), Javier Olivan (head of Growth), Greg Badros (then running Ads), and so on.
It was 6:25 a.m., and history was about to be made.
The scene was projected, political-rally style, onto the large screen, allowing everyone in the courtyard to follow along. One of the NASDAQ emissaries (someone had stuck Facebook shirts on them) introduced Zuck as the company’s “visionary,” as if he needed an intro.
Out of nowhere a booming female voice announced that the scene was also playing in “Times Square New York!” Evidently, the whole scene would be broadcast above Chinese tourists taking photos with the Naked Cowboy.
Silence regained, Zuck took the mike: “So in a few minutes I’m going to ring this bell and we’re all going to get back to work.”
Stay focused on our mission!
Zuck gave a few celebratory remarks that you almost couldn’t hear over the cheering. The countdown to opening without a visible clock increased the suspense, as you didn’t quite know when it would come. Finally, the magic time somehow signaled, everyone at the podium started counting down in unison: 5 . . . 4 . . . 3 . . . 2 . . . 1!
Zuck smacked his hand down on the glass facing him, almost knocking over the entire assembly. A recording played the quaint sound of an old school fire alarm. Everyone started cheering like it was New Year’s. The assembled grandees started a group hug. Everyone in the crowd took the same photo at once. History being made! Facebook IPO! We were living and watching it; our friends can only envy, our grandkids can only imagine when we tell them the story! Feel that temporary pause in baseline human existential angst by being part of something bigger than yourself, usually ignoble like a lynch mob, sometimes heroic like D-Day, rarely profitable like an IPO.
People had looks of delirious joy on their faces as they found their friends or teammates to take a group photo with and record the moment. Employees bestowed on the experience the highest praise possible: they posted it as an MLE (“Major Life Event”) on their Timelines, a rank usually enjoyed by only births and marriage. It was a big block of white space with a single headline and photo, like newspapers when the Apollo astronauts walked on the Moon. “Facebook Goes Public” was the headline, with details like “once in a lifetime” and “once-in-a-generation company.”
Churchill once noted in a parliamentary speech, “It has been said that democracy is the worst form of government except for all those other forms that have been tried from time to time.”
Similarly, capitalism is the worst form of managing the means of production, except for yet worse ways. We should treat it as such rather than turning it into the Blue State secular religion, alongside yoga and John Oliver.
What’s my big beef with capitalism? That it desacralizes everything, robs the world of wonder, and leaves it as nothing more than a vulgar market. The fastest way to cheapen anything—be it a woman, a favor, or a work of art—is to put a price tag on it. And that’s what capitalism is, a busy greengrocer going through his store with a price-sticker machine—ka-CHUNK! ka-CHUNK!—$4.10 for eggs, $5 for coffee at Sightglass, $5,000 per month for a run-down one-bedroom in the Mission.
Think I’m exaggerating?
Stop and think for a moment what this whole IPO ritual was about. For the first time, Facebook shares would have a public price. For all the pageantry and cheering, this was Mr. Market coming along with his price-sticker machine and—ka-CHUNK!—putting one on Facebook for $38 per share. And everyone was ecstatic about it. It was one of the highlights of the technology industry, and one of the “once in a lifetime” moments of our age. In pre-postmodern times, only a divine ritual of ancient origin, victory in war, or the direct experience of meaningful culture via shared songs, dances, or art would cause anybody such revelry. Now we’re driven to ecstasies of delirium because we have a price tag, and our life’s labors are validated by the fact it does. That’s the smoldering ambition of every entrepreneur: to one day create an organization that society deems worthy of a price tag.
These are the only real values we have left in the twilight of history, the tired dead end of liberal democratic capitalism, at least here in the California fringes of Western civilization. Clap at the clever people getting rich, and hope you’re among them.
Is it a wonder that the inhabitants of such a world clamor for contrived rituals of artificial significance like Burning Man, given the utter bankruptcy of meaning in their corporatized culture? Should we be surprised that they cling to identities, clusters of consumption patterns, that seem lifted from the ads-targeting system at Facebook: “hipster millennials,” “urban mommies,” “affluent suburbanites”?
Ortega y Gasset wrote: “Men play at tragedy because they do not believe in the reality of the tragedy which is actually being staged in the civilized world.” Tragedy plays like the IPO were bound to pale for those who felt the call of real tragedy, the tragedy that poets once captured in verse, and that fathers once passed on to sons. Would the inevitable descendants of that cheering courtyard crowd one day gather with their forebears, perhaps in front of a fireplace, and ask, “Hey, Grandpa, what was it like to be at the Facebook IPO?” the way previous generations asked about Normandy or the settling of the Western frontier?
I doubt it. Even as a participant in this false Mass, the temporary thrill giving way quickly to fatigue and a budding hangover, I wondered what would happen to the culture when it couldn’t even produce spectacles like this anymore.
When I returned to work that afternoon after a nap on the boat, I was expecting to find an empty campus. On the Ads floor, however, I found everyone diligently at his desk as if nothing had happened that morning. The Zuckian injunction to get back to work had been followed.
Just to stick my finger symbolically in Zuck’s eye, I fired up Google Finance and checked the stock price. NASDAQ had evidently screwed up the market open (despite the pyrotechnics in the courtyard), and the stock hadn’t started trading until eleven a.m. Eastern time. It had started around $42 officially, and had closed around $38. A flat day, which is counterintuitively great news.
Even though I wouldn’t be able to sell stock for a good several months thanks to the lockout, I did now have a real, ticking market price for the pieces of paper that constituted my real compensation.
So what was I making?
Facebook’s original offer was 75,000 shares, vesting over four years, in addition to a $175,000 salary. I had managed to wangle the equivalent of 5,000 shares up front in cash to pay for credit cards, a new car (with the license plate ADGROK, of course), and the sailboat I was then living on—about $200,000 in cash all together.
That left 70,000 shares.
Assuming nominal performance, from both me and the company (our bonuses were a product of individual performance reviews and a company-wide multiplier more or less arbitrarily chosen by Zuck), I’d get get a cash bonus in the 7 to 15 percent range (Wall Street this wasn’t). There would be equity top-ups as well: assuming OK reviews, it would likely be in the low single-digit thousand-share range. If I had some big promotion or started climbing the corporate ladder for real, it would be considerably more than that.
Here’s what it came to, assuming shares valued at the IPO price:
$38 per share
×
(70,000 shares ÷ 4 years + 3,000 shares annual bonus) + ($175,000 base salary + $17,500 rough annual bonus)
= $971,500 per year
Not quite a million.
Seem like much? It wasn’t.
Remember, this was taxed as common income, even the shares I’d waited a year for, given the IRS’s incomprehension of tech compensation. So it was really about $550,000 take-home per year, or about twelve times the median US family income, for a guy whose biggest line-item expenditures were fancy Belgian beer and marine hardware.
This was about San Francisco middle class, or barely, really. Coupled with another tech salary from a spouse, it would be the high-six-figure take-home that would permit a normal, though not posh, life in what was becoming the country’s priciest city. It meant that I and my hypothetical spouse could afford a house, though we’d need a mortgage, as average apartment prices in Noe Valley were $1.5 million or so. (Want a proper house? You’re talking $3 million and up.) It meant the kids could attend private school and avoid the public school savages. It meant occasional weekends in Tahoe, Christmas somewhere exotic, and Hawaii a couple of times a year, maybe. It meant a new BMW X5 for the missus every three years, and maybe splurging on a Tesla S for me.
But that’s about it. And if I lost the Facebook teat, kiss it all good-bye; already-public companies weren’t comping at these rates, and earlier-stage companies were paying piles of risky paper.
There are only two inflection points in personal wealth, two points where your life really changes. One is the aforementioned fuck-you money, the other is the even loftier fuck-the-world money.
Before that first rung of fuck-you money, when you’re counting your nickels and dimes and shares and bonuses and what all to get to a few hundred K of dosh, all that changes is what I’ll call your indifference threshold to expense. If before you didn’t think about dropping $6 for another pint of beer with your friends (and believe me, I’ve lived through times when I had to think about even that), now you don’t think about the pricey $60 salmon lunch at Anchor & Hope. If previously you thought before indulging yourself with some questionably useful $50 gadget, now you’ll drop $500 on a new phone or ultracompact projector without thinking about it. As if you lived in some dodgy country undergoing a period of hyperinflation, what used to be worth $10 in mental decision cost now takes $100 to trigger. It’s like your mental decimal point of concern has moved over a zero (or perhaps more than one). You’re not even really thinking about costs until you’ve broken $1,000.
This sliding around of an indifference threshold is peanuts in the scheme of things. Real transformation happens at the first real rung on the wealth ladder. Fuck-you money is like reaching the break-even point in the startup of you, and it means you are no longer beholden to outside forces. Imagine that inflection point for a moment.
I didn’t quite realize all this, sitting there on the first day the company was public, looking at a stock price, but I would soon enough. I’d see not just my fortunes change (even if not in a fully “fuck you” sort of way) very quickly; those of everyone around would change as well. From the slightly ridiculous nights out (I recall a double steak dinner and four-figure restaurant bills in there somewhere), to the rather rapid accumulation of Porsches, Corvettes, and even the odd Ferrari in the parking lot, things did assume a certain debauched air at Facebook, despite all the corporate clamor for austere discipline.
That was all in the future. Right then, it just seemed I was finally going to live at something above a subsistence level, and have more than peanuts in the bank. I quickly flipped to the countdown timer on my Mac, the one I had set to count down to my first year of vesting when I joined. I’d make a quarter of my nut on July 15, in about two months. It couldn’t arrive fast enough.
Oh, and the beer we brewed the night before? I’d title it the “IPO IPA.” Like the IPO itself, it was a bit of a disappointment, nowhere near as good as Zuck’s Wet Desk IPA. Two weeks later, we finished the keg all the same, but it felt more like duty than anything else. Somehow, brewing in a spirit of good fellowship, and the hilarity of drenching the CEO’s desk, had produced a better product than the strained group celebration of the IPO.