Hypergrowth Hijinks
Fortune telling and telling fortunes with Nitya Mandyam and Lauren Matrka
Is growth inherently good? In the Tech-Workers Tarot, Nitya Mandyam and Lauren Matrka explore the possible destinies and outcomes of a VC funded tech startup.
(Note: this article has been adapted from the Logic School final project presentations)
I’ve been thinking a lot about the gardens we grow. Growth is non-negotiable in the tech world — we are told we MUST grow. The faster the better.
But is growth inherently good?
In the body and in nature when things proliferate at a faster pace than normal - we call the growth a tumor, a cancer. Weeds grow fast and threaten to take over the whole ecosystem. Viruses replicate pretty fast and monopolize the host. Wouldn’t these phenomena qualify as “hypergrowth” as well?
There comes a time in the lifecycle of the company when the C-Suite must take a call on “to scale or not to scale”. What happens when a startup seeks to scale venture capital? Consider a mid-sized startup that receives a few tens of millions of dollars in venture capital.
Overnight, the mantra to the workers becomes: “Get things done fast! (The how/why is immaterial)”
“It’s your company”, the C-level tells its employees, “You are the people who make this company happen”
The worker implicitly knows: We are the people who make things happen… but this is not our company.
In fact, it is unclear whose company it is exactly. The CEO’s? The board’s? The VCs’? The people whose funds the VCs invest?
To make sense of any of this we have to look into a brief history of venture capital in tech.
There is a very informative article in Logic Mag’s Spring 2018 issue titled “Unicorn Hunters” by Kim-Mai Culter — “Venture capital emerged from a particular moment in American
history, when military funding for technological development was waning. The story of venture capital began at a semiconductor company called Shockley Semiconductor Laboratory in Mountain View, California.”
Essentially, the article describes how in the late 1950’s a few disgruntled physicists and electrical engineers went on to found some of the most influential VC firms. However due to the “prudent man rule”, which restricted how much risk investors could take, to “avoid speculation, and behave as if the money they are investing were their own”. By the late 70s, new legislation around capital gains tax and the prudent man rule were amended, allowing for a massive influx of VC funding and fundraising towards riskier, rapid growth companies.
So… who owns the company?
Vague but correct answer: The interests of “the Rich”
Here’s a quote from Kim-Mai Cutler who wrote the article:
“To a startup founder seeking financing, venture capitalists might look like masters of the universe. But they answer to higher masters in the form of “limited partners.” These are the masters of the masters of the universe—venture capital’s customers, who supply most of the capital.”
What do the so-called “unicorn hunters” look for? Well, unicorns of course! “Venture capital needs scale to survive…Many companies will never match the “return profile”—the rate of growth—required by venture capital. When a company accepts venture funding, it commits itself to steep expectations for future growth…2X a year is considered good, 3X is great, and 4X or more a year is amazing.”
Here’s a quote from Jeremy Neuner, the NextSpace Cofounder:
“When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.”
In other words, the house always wins. How do such risky ventures still manage to keep the VC’s and their partners rich? It’s got something to do with Markowitz’s portfolio management theory - but I’d like to focus elsewhere now.
What happens when a company receives VC funding? Examine companies in their hyper growth phase and you begin to see a pattern.
For the tech worker, competition paranoia, loss and burnout. For leadership, compromised visions and loss of autonomy. For the tech itself, quality dilution — contrary to myths about VC model fuelling innovation, cutting costs everywhere and prizing quantity over quality means the creation of mediocre, irresponsible technologies.
Some familiar archetypes stand out in this story…
The idealistic startup employee is not so different from the mythical fool. They quest for adventure and want to make their fortunes while doing good. Armed with their Patagonia vest, a bottle of soylent and their grammable cat, this the beginning of their hero’s journey.
In this quest, they come across the magician, the CEO, the sleight of hand artist, the one who alchemizes all the tools in hand into technology. Are they an alchemist or a trickster? Marker in hand, crypto in sight, code running through the ethernet, the Magician stands in a garden tantalizing the Fool with possibilities of adventures and treasures.
The union of capital and the company is portended. The angelic VC blesses this coming together of the lovers… Or is it all flipped?
Is capital the devil that they are all beholden to? Has this quest for treasures turned into a pursuit driven by unbridled greed? And if so where is this all headed?
Heck, you know what - let’s just do a reading, shall we?
We have a nine card spread here. The Fool and the Magician have effectively chained themselves to the Devil, the other dimension of the Lovers card. What is promised here is the 10 of Cups symbolizing the tech utopia that the Fool thinks they are headed to. The Knight here represents action. The Knight charges forward with their code in the pursuit of the 10 of Cups but with the Devil watching over this all…
…. the outcomes might be closer to the 7 of Pentacles in Reverse. In the upright position, the 7 of Pentacles represents long term prosperity, a sort of patient waiting for a deep contentment to roll in while knowing one has done good work. In the reverse it represents
instant gratification — a seeming appearance of wealth that is ultimately a bit soulless and hollow.
The corollary to this would be the 10 of wands — which is acknowledged to be the burnout card within the Tarot. The worker with their Redbulls strewn around carrying the visions of leadership - they seem to be ready to put those markers down and yet they cannot yet.
Our final card in the spread is the tower. The upending of existing hierarchies. The tower looks ominous - it seems painful and yet it is the only way out.
So we present to you The Tech-Worker’s Tarot, designed by a close friend and kindred spirit, Lauren Matrka.
We have the 4 suits here:
- The wands representing creativity and passion are instead whiteboard markers.
- The pentacles, a symbol of wealth, literal and metaphorical, represented by the intangible cryptocurrency.
- The swords, symbols of mental acuity and the intellect, by code.
- And the cups, the lifegiving symbol of water representing connection and depth by wifi.
The full deck is still in the works!
So far, I haven’t talked about “solutions”. Maybe because sometimes, you cannot fix something that is foundationally wrong.
The Tower is probably my favorite card in the Tarot. It almost looks emblematic of Luddism here, with a server center struck by lightning as stocks crash — and yet I think the Tower here is telling us:
Sometimes, foundations need to be broken apart, the structures of power toppled and while it looks like catastrophe… it is not!
To envision something new we need to reconsider our role in the technologies we’re building and the ways we’re building them. The tower is an opportunity to consider the systems we would want to build. It seems like an end but truly it clears the way for beginning anew and I find that beautiful. Logic School has given me so much to think about, so many strategies to organize and act and a community to rebuild with.
Nitya Mandyam (she/her) is a Data Scientist and Lauren Matrka (she/her) is a designer and web developer living in Brooklyn.
Follow Nitya at https://twitter.com/themandyam and Lauren at https://twitter.com/lmatrka
Read The Unicorn Hunters to learn more about the history of venture capital