Video: Author Dan Lyons on Tech Startups and the Trouble with the New Economy


In an entertaining keynote presentation at Open Source Summit in Los Angeles, Dan Lyons, author of Disrupted: My Misadventure in the Start Up Bubble, related his experience working at a tech startup and explained how that experience changed his mind about open source.

Lyons admitted to being famously skeptical about open source and Linux when he was a journalist covering tech for Newsweek. For example, he thought Richard Stallman was too extreme, too radical, that his ideas weren’t practical. But, then Lyons was laid off and decided to go to work for a startup. The company had every startup cliche imaginable dogs in the office, bean bag chairs in the conference room, an open office plan, sales bros doing daily pushups in the lobby.  

“It was like a frat house mixed with a Montessori kindergarten and a Scientology compound,” Lyons said.

“For a long time, I didn’t know what my job was,” said Lyons, “but I did know the way to succeed was just to love the company, just be super enthusiastic.” The company was so super positive that when they fired you, they called it graduating. And, they graduated a lot of people. Nobody, however, thought the turnover was a problem; they were proud of how well they fired people.

According to Lyons, that’s like proposing marriage and saying, “by the way, when we get divorced, I’m really good at it. It’s gonna be a great divorce.”

The Precariat

Lyons started to realize that something was changing in the industry in terms of how people define work, how they do work, think about work, and even why they work. He sees people returning to the work arrangements of 140 years ago, rolling back a century’s worth of worker rights. And now people in Silicon Valley brag about the long hours they work, celebrating their own exploitation. The term economists have for this new class of employee is “The Precariat” people who have precarious employment, who don’t have benefits, who don’t know how they’re going to pay the bills.

“The rising tide is rising, but it’s not lifting all boats,” said Lyons. People are at work playing beer pong and not noticing what’s being taken away. Things that workers used to take for granted like security, stability, and dignity are being taken away. And, all the focus on fun and games is a magician’s trick, a misdirection to keep employees from noticing.

Motto of the New Economy

Why? Lyons said the key can be found in the motto of the new economy, which is:

  • Grow fast

  • Lose money

  • Go public

  • Cash out

“Every bad thing springs from this business model,” explained Lyons. If you don’t make a profit, you can’t take care of your employees. Moreover, if you don’t intend to make a profit if you know you’re never going to make a profit you have no interest at all in taking care of your employees.

The Precariat know that something bad is happening. Silicon Valley, however, is willfully blind to the problem they’ve caused. For them, it’s all about escape, said Lyons. They’re making fantastic plans to take their money and go to their private island, or New Zealand, or Mars. Meanwhile, they’re stepping over homeless people on the way to work.

They don’t want to take responsibility for the problem they created, which, Lyons said, “is the long way of getting to the point that Stallman was right the whole time. This is what I finally realized 20 years later.”

Lyons still believes that we can make the world a better place, that we can abandon the new model. He said the reason he loved covering technology was that it was an industry that had lifted up thousands of people and created prosperity for entire communities. Now, that industry has been hijacked by people who just want to get rich quick.

But, he said addressing the audience at Open Source Summit “you guys, the people who build things, who build companies, you’re the ones who can fix it.”

You can watch the complete video here: