More Awesome Than Money (29 page)

The same, in fact, could probably be said for Sarah Mei, who had found time in her life to improve their code without remuneration. Later that night, Yosem dropped a note to her. The Singapore advisers had postponed their trip—one of them was in the middle of a divorce—and the
funds were not in hand. “I feel bad,” he wrote, “because I know you were excited about coming on board, just as we were excited to have you join us full-time.”

She replied with equanimity. “Pivotal is a pretty nice place to be, all things considered,” she said.

A good thing: the next day, after checking with the lawyers who were working on contingency for Diaspora, Max and Yosem separately learned that Rafi's stock did not automatically revert to the pool because he had left as an employee. While he was still on the board, his stock would continue to vest. They could make other arrangements, but as of the first week of October, his status had not changed.

What that meant is that not only could they not have given Sarah Mei the first fifty thousand dollars from the angel investment advisers, they could not have given her the 7.5 percent stock, either. They had neither the stock nor the money in hand.

The next day, a reporter from
TheStreet,
a financial news blog, asked to do an interview for a story on how competitors to Facebook were “chipping away” at its hold. He noted that Diaspora was a potential rival that was generating a lot of buzz.

The interviews were a particularly tender point, as Max had been on NPR just the week before. They had agreed to return to a strict rotation for dealing with press inquiries. “I believe it's Max's turn,” Yosem wrote. “Max, you want to take this one?”

Max tersely declined.

With everyone in charge, and no one, they decided to meet on Wednesday evening and discuss the leadership situation over dinner. They planned to go to a German restaurant, Schmidt's, but instead coded through dinner hour. After waiting three hours, Yosem headed back to Palo Alto, and the Diaspora crew went to a Meetup at Shotwell's, a bar in the Mission. Dan called Yosem from outside and said that Max was making him and Ilya uncomfortable.

“This has got to stop,” Dan said to him. “You have to put your foot down.”

For the rest of the night, Yosem got legal advice. Max had to write a single sentence resigning the title of CEO, since that was how he was listed on the incorporation papers. If he refused, the other board members
could strip—“destitute” was the legal term—him of the title. He suggested that they engage a virtual CEO, a position he volunteered to fill, or to help them fill. “The point is the business really needs someone with business experience to serve in that role, whether it's me or someone else,” he said.

“We've tried on the job training, along with my pretty much coaching Max for the CEO role over the course of a year, and there have been multiple communication issues, few results on the financing front, and dissatisfaction all around,” Yosem wrote in an e-mail that he sent to Dan at four in the morning. “This is really not Max's fault. Imagine if I had asked and tried to run product development.”

As virtual CEO, Yosem said, he would serve at the pleasure of the board, which would have the final say on all decisions. The board meetings would be, in essence, training sessions. They would become “Q&A sessions, where I explain the logic of business decision-making, make recommendations, and the board votes and makes decisions.”

He ended on an emphatic note. “You told me last night to put my foot down, and this is where I'm going to put my foot down. Enough is enough, and you're right, the time has come.”

Except, Dan decided in the light of Thursday, the time had not come. He had not talked it over enough with Ilya and Rafi. They'd have a board meeting on the following Monday, and everyone would be prepared.

—

At the end of the first full week of turmoil, Ilya needed a clear break.

“There's a secret rave being held on a cruise ship,” Bobby Fishkin announced.

It sounded perfect to Ilya.

A friend of a friend of Fishkin's had purchased the thirteenth largest cruise ship in the world, the first oceangoing passenger liner built by Germany after World War II, with berths for three thousand people. The ship had long since run out its commercial life and, after a period when it was a kind of dry-docked hotel for a cult, was bought by a ship aficionado named Chris Wilson for one dollar. In theory, he could have sold it as scrap metal for a handsome price. Instead, Wilson, a man of quite ordinary means, set about restoring the ship, now known as the
Aurora,
and had it towed to Pier 38 in San Francisco Bay. He discovered that it was not
welcome, a subject of energetic enforcement of maritime and port codes by harbor authorities who made frequent inspections. Its main sin appeared to be that it was an unsightly presence in the venue chosen for the 2013 America's Cup, the international yachting competition that had been brought to San Francisco by Larry Ellison, the founder of the software company Oracle, and one of the world's wealthiest people.

From time to time, Fishkin explained to Ilya, Wilson quietly rented out the space to help pay his storage bills.

They made their way down to Pier 38, along the darkened waterfront, and boarded the
Aurora
. About three or four hundred people had turned up, and they were all collected in a few spaces on the ship, waves of electronic music pulsing across the decks. Officially, no drugs or alcohol were permitted. Ecstasy would not have been unusual, though.

Whatever was going in the actual rave was not on the agenda of Bobby and Ilya. In fact, Ilya had once told Max that his ideal girl was a raver who did not do drugs, an esoteric combination.

Through Bobby's friend, they were given a tour of the boat, which seemed like a skyscraper lying on its side. It had ten stories. Some three thousand place settings were stashed away. Down they wandered to the lower decks, to engine rooms, to the galleys and any other cranny. So big was the ship that the swaying ravers were unseen and unheard.

“We could bring two thousand people here, and it would still feel empty,” Bobby said.

Ilya's eyes lit.

“What if we got one thousand hackers to hack the boat?” he asked.

O
ver the weekend, Dan and Yosem conferred. At a board meeting on Monday, Dan, Ilya, and Rafi would formally remove Max and decide about appointing Yosem. The battle plan, legally, had been laid out. On Monday, Dan sent a quick note to Yosem: “Meeting has been postponed.” Later, in a phone conversation, Dan explained why: they were busy.

Early the next morning, an e-mail arrived from Yosem, sent to Dan, Ilya, and Rafi, but not Max. The subject was “The Story of Diaspora to Date.”

“I was not concerned when I heard from Dan that the meeting with Max was being postponed, but I was concerned when I heard about the reason why,” Yosem wrote. “Dan said that Dan, Ilya, and Max had had a very productive product brainstorming session and did not want to stop it to talk about the officer role reassignment.

“That's fine, but you need to realize what that decision signals in terms of priorities: ‘Since things were going so well at building a product, we could not take time away from that to focus on building a business.'”

The story he laid out, in six thousand words, was primarily his indictment of Max: failed pitches, missed opportunities, the unilateral decision on hiring Sarah. It was tough and true, but not true enough. All four of the Diaspora guys were shareholders in that history, due to either their
inattention, indifference, disinclination to mind the nitty-gritty details of being a CEO, failure to have the slightest idea of what they were supposed to do as board members, or, if Max was correct, their mutual decision to turn down the financial support of Kleiner Perkins. (Max's version of the history on that point was not shared by the other three.)

But their ages ran from nineteen to twenty-two. And that youthfulness was not only tied to the mistakes they had made collectively or individually, it was also their treasure. They were the ones who heard Eben Moglen's challenge, who asked themselves, since we do need something better, why shouldn't we build it? They had inspired six thousand people to send them money, and more than one hundred software engineers to contribute code, and Yosem, with his Rolodex of powerful people, to devote the better part of eighteen months to working for them for free.

“What has been accomplished with these resources over nearly two years?” Yosem asked. “Is there a business? No. Have we secured new financing? No. Have we built a great product? Absolutely. But as they say, cool products don't pay the bills.”

Diaspora had not found a way to sustain itself. To do so, he argued, it needed leadership that the four of them could not provide, a CEO who had a clue about the business world. “I have recommended that you either appoint me to the position, or if you prefer, I will leave, and you can get someone else with the experience to fill it,” Yosem wrote.

The stakes were high.

“Think of the hundreds of thousands of people who have placed all their hopes and dreams in your hands to change the social web for them, and how they would feel if our wrong decisions were to determine their fates adversely,” he said. “This is not an issue to take lightly.”

It would be Tuesday when they woke to Yosem's message. They realized there would be no meeting on the leadership that day, either. Peter Schurman was getting another fund-raising e-mail message out the door to the public.

“If we are able to get $40,000 per month from this message, as Peter and I hope will happen, we will at least buy some extra time to build the business. But time is running short. We have roughly $20,000 in the bank,” Yosem wrote to them.

—

With the leadership sword fight flashing, Schurman was preparing their largest pitch. For the first time, he was not subjected to the herd-editing techniques that attended his first two informational e-mails, which had not explicitly sought money. Nor had they generated any.

Now Schurman spotted an opportunity in their slow-poke approach to growing the number of users.

Nearly a year earlier, when the founders had launched their private alpha version, all the original contributors had been sent invitations to JoinDiaspora.org, or were supposed to have been, but that was fewer than 7,000. Another 500,000 people who expressed interest, even without contributing, were put on the waiting list.

Of course, it was possible for anyone to download the software and set up a pod on any server, or to join others who were being set up around the world, especially in privacy-conscious pockets of Europe and Latin America. It was no surprise that most people had not attempted to run their own; it was complicated for the nongeekish, who didn't mind having someone else handle their data, just as long as it wasn't Facebook. So they awaited their invitation from the JoinDiaspora mothership.

To Schurman, this was an obvious group to tap: they were interested but did not have an invite. He had inquired casually around the office if he could get some invites. Yeah, yeah, sure, sure, he was told. No one paid any attention or asked why. Besides, the guys were passing out invites all the time, and Yosem was especially prolific at using them to placate irritated members of the public—digital grease.

Schurman's fund-raising pitch was a classic—filled with flattery, coaxing, and promises.

It began: “Dear Friend of Diaspora*—

“We love you. Yes. Really, we do.

“We're building Diaspora*, in a spirit of community, because we believe in you. You're one of the innovators, the creative ones, the people who make the world awesome.

“We're building tools that we hope will help you bring your true voice to the world.”

Then the letter turned to the delays in expanding the site. The letter
thanked the readers for being “incredibly patient” while waiting for an invitation, and said that Diaspora needed money to build faster.

And then, the payoff: “Also, if you can give any amount at all, we'll be sure to get you an invitation to join us at joindiaspora.com right away. (Just to be clear, you'll still get your invitation regardless. But if you make a gift, we'll get it to you now, so you won't have to wait any longer.)”

As with every public move they made, the headlines were quick, and in some cases, merciless:
DIASPORA GETS DESPERATE, ASKS FOR FURTHER COMMUNITY DONATIONS
.

One tech blogger said it was “totally absurd” that the guys had paid themselves what amounted to twenty-eight thousand dollars in salary and housing allowances for the previous year. Others thought it was entirely reasonable in a place like San Francisco.

But asking for the money wasn't the problem.

The problem was the promise of an instant entrée for people who gave money. (“We'll be sure to get you an invitation to join us . . . right away.”) As it happened, some of the people on the waiting list had already contributed, but somehow never got an invite. Now it looked like they were being hit up again for money. The hooting and hissing grew online.

—

A few minutes before noon Wednesday, Dan leaned over to Yosem, who was sitting alongside him in the Pivotal offices. Across the table from Dan was Ilya. At another table, sitting with his headphones on, was Max.

“It's happening,” Dan said.

Yosem stood and walked over to a coffee table near the Ping-Pong court, followed by Dan, Ilya, and Max.

They sat.

“The three of us have talked,” Dan said. “We've agreed to make you the CEO of Diaspora.”

His compensation, as Yosem understood it, was to be 3 percent equity, and, once they had gotten financing, compensation equivalent to what the three guys were getting. Dan's manner, usually so casual and laid-back, was strictly business.

“I accept your offer,” Yosem said. He noted that he would serve at the pleasure of the board, and that given the uncertain state of his health, he
was not likely to be the CEO for a long time. After they had secured financing, they could hire a CEO who had led a series of start-ups—what was known in Silicon Valley as a serial entrepreneur, a person identified less for the products created than for holding a leadership position in companies that were launching.

Ilya seemed delighted that they had turned to Yosem and that the conflict had eased.

Then Max spoke.

“We all talked about it and voted for you,” he said. “We wouldn't have let just anyone do it. We feel like you're one of us.”

Later, in a phone conversation, Dan told Yosem that he had been surprised Max had gone along with the change.

Fed up with complaints about his communication skills—Max felt the others simply hadn't been listening when he told them things—Max joined the vote. “I'm a team player, whatever you guys decide,” he'd said. But he did have a caveat: Yosem should only be an interim CEO, until they could hire someone with heftier credentials.

In the end, Dan said, Max seemed relieved.

“He told me he didn't like being CEO anyway, and this would let him focus on product development,” Dan said.

Afterward, when Max offered to get in touch with their start-up lawyer to make the changes, Dan was glad to let him handle the details. He had not enjoyed being so hard on his friend.

—

First thing Thursday morning, Max checked on their PayPal account, where donors would send contributions. For a moment, all seemed right with the world. Peter's first direct solicitation had gone out on Wednesday, and by eight
A.M.
the next day, they had received twenty-eight thousand dollars. Plus, it seemed that the pace of giving had gone up overnight.

“It's working!” Max announced in his early morning e-mail to the group.

“Awesome news!:)” Yosem replied.

Casey Grippi, handling their finances, was glad to hear it, too. They needed to put some money into their bank account to pay bills. He logged in to the PayPal account and transferred the bulk of the donations,
something close to thirty thousand dollars, to a bank account that had been the repository of their original Kickstarter donations.

But then, some would-be donors sent notes to Yosem, saying that PayPal was rejecting contributions. Max assured the group that the money was still flowing in, though they had gotten inquiries about a few of the transactions, which PayPal seemed to think were fraudulent. At least the spray of donations had managed to interrupt the conversation about who was in charge. For a few hours, anyway.

—

The next morning, which was Friday, Yosem sent an urgent e-mail. The wording in Peter's message had made it look like they were selling invitations. “We're now in a public relations crisis. Over night, articles and blog entries have appeared all around the world criticizing Diaspora for the perceived ‘pay to play' situation. We're also now getting emails from the reporters asking to see whether we have any comments about the negative backlash.”

In theory, at least, Yosem had been designated the CEO on Wednesday. By Friday, it was evident that he would not be able to carry out the duties without strife. The question of apologizing became a proxy in the struggle between Max, who was not so quick to cede authority, and Yosem, who wanted to quickly end the invitation controversy.

“I don't agree with this and I don't think we should have such a knee-jerk reaction,” Max said. Once everyone got an invitation, things would be okay.

Yosem was insistent.

“Let's not make the classic politician mistake of remaining silent or not saying anything until it becomes a terrible news story,” he argued. “We don't have the luxury of losing our 500,000 wait-list members and alienating their friends and supporters.”

He listed a series of actions that they needed to take—blogs, e-mails, invitations. “As President and CEO, I will inform Peter that I've decided that his role will remain the same, but that from now on, we will write our own messages,” he wrote.

He said a board decision would not be needed to make the apology, but invited them to vote yay or nay on his propositions. “I strongly feel this could break Diaspora as a startup,” he said.

Then he drafted an apologetic post, explaining that they had not intended any such favoritism for people with money. He also wrote a Q&A section.

“I'm poor, and I can't donate any money. What can I do to help Diaspora?”

“That's okay, we're poor, too,” was the draft answer. It noted that they had started the project as students, that Ilya had dropped out to work on the project, and that Casey Grippi and Yosem were getting no salary.

Ilya didn't like the language. “It's clearly not the case (and doesn't really answer the question),” he wrote late that night. “We are lucky enough to be currently from upper middle class families and to be able to afford to attend an expensive institution such as NYU and have our families' support.”

Max wrote the digital shorthand for approval—“+1 Ilya”—and added, “To call a rose a rose, none of the founders are upper middle class. To put it bluntly, we all come from ‘the 1%.' (That doesn't mean we are not sympathetic and aware.)”

A version of the apology, with thanks, was worked out. Yosem posted to the Diaspora blog, and e-mailed to people who had complained. He got dozens of e-mails from people who had been glad to get his explanation.