The Valley Of The Sith Lords

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Twitter just gave the bird to startups, and I am not talking about their logo.

By now, you have probably heard that Twitter is going to cut off third-party access to its firehose of data. DataSift, one of several startups that rely on this access for their business, are now scrambling to reassure customers that their product is going to continue to work. “Blindsided” is how DataSift’s CEO Nick Halstead described his reaction.

Twitter, of course, has a right to shut off access to its platform at any time – they do own it after all. But it was definitely a Dick (Costolo) move.

Startups developed their products on top of Twitter’s platform after being aggressively courted by the company in recent years as a solution to the social network’s continuing profitability and growth problems. The idea was that while Twitter would control its end-user clients, startups were free and encouraged to build datasets and analytics packages on top of Twitter’s data. Now, Twitter is building out its own function in-house through its acquisition of Gnip.

But that may not even be the worst news this week. Mark Pincus, the founder of Zynga, is returning to the company following quarters of disappointing earnings. Discussion was mostly positive among the Valleyerati, as this tweet typifies:

I understand the Jobsian sentiment, but really, why is that the case here? This is the CEO who led Zynga to have among the most hostile work cultures in Silicon Valley, if its workplace reviews are any indication. The low morale and and long hours have become so notorious that it has led to such headlines as “Zynga’s Tough Culture Risks a Talent Drain” and “One Horrifying Account Of Working At Zynga.” Maybe things have gotten better since Pincus left, but as an employee, I would not be thrilled to have him returning.

Even worse than how Zynga treated its employees was how it treated other startups. The company became notorious under Pincus for copying successful games, most notably Tiny Tower, which was published by NimbleBit. After the small studio refused a takeover offer, Zynga simply made their own game called Dream Heights, whose similarities were truly breathtaking to behold.

Maybe Pincus has reformed since he walked out as CEO several years ago. But few seem to believe that, with the stock falling more than 8% after the announcement was made. If anyone can identify a Sith Lord coming home, its Wall Street.

We can argue that all of this is just competition and capitalism doing its job. It’s not like investment banks on Wall Street are cuddly feel-good places that want to make just a few dollars and then go home and relax with their competitors. DataSift chose to be dependent on Twitter, bad move. Game developers –- Zynga is coming for you, and they have more money so you might as well just take that buyout when it comes or they will destroy you. It’s a dangerous world out there, young padawan.

Silicon Valley’s success, not just against other economic regions in America, but also against other innovation centers around the world, comes from the incredible levels of trust that exist here. Yes, there is competition, but designers from Lyft and Uber can still go to the same event and share best practices. There is a camaraderie here that comes from the pursuit of the future that is above cutthroat month-to-month revenue growth figures and our selfish desire to win.

That trust is endangered every time a company decides to rip off another idea, or simply jettisons their API access program without warning. It increases our paranoia and vulnerability, and those are not the kinds of emotions that are going to help us innovate and build the next-generation of great products.

Just a few weeks ago, I argued that Silicon Valley had become the most powerful single economic force in the world. What I tried to avoid then was bringing up the classic line that power corrupts and absolute power corrupts absolutely. I avoided it because I want to believe that we are better than all of our predecessors in this position, industries like banking which massively profited and then left the global economy in tatters. Technology is one space that is both highly-profitable and can make the world a better place.

As competition intensifies in our region though, it is hard to maintain trust. Google had no real competitors in its rise to power, and neither did Facebook. Today, companies can barely get started before a myriad of startups are competing for the same space (just take a look at the battle between Uber, Lyft and Sidecar). Increased competition forces us to focus more on our present state rather than the future, the exact opposite conditions required for confidence and trust.

Furthermore, as the number of people in our industry increases, the sort of community social ties that ensure we maintain trust and honor also decline. There are now enough founders that no VC or journalist can ever possibly meet them all, much less get to know them and understand their dreams and challenges. With less social inhibition, we just start seeing everyone else as the other, and do whatever it takes to win.

I am focusing on two cases, and maybe Twitter’s behavior this week and Zynga’s past behavior are highly unusual. One can hope that they are not indicative of what the future has in store.

Part of building trust though is ostracizing those who abuse it. If you are interviewing at Twitter and Zynga in the coming weeks, ask your interviewers for a response to their actions. Apply elsewhere if you don’t like their answers. Trust is what built up Silicon Valley over the past few decades of the internet age, and wary of the rise of the dark side we must be.

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