Venture investor Chamath Palihapitiya recently wrote a critical e-mail to the founder of Airbnb. Palihapitiya passed on the opportunity to invest in Airbnb's latest financing round. His criticism focused on a controversial and unusual element of the transaction. In a nutshell, a dividend to common stockholders was being used to provide cash to founders to the disadvantage of other employees. The e-mail raised many valid points and some good coaching, including the sentence, "Treat your employees the same as you'd treat yourself."
So what's the problem?
The problem is that the e-mail was somehow leaked to a reporter. Given the amount of confidential information Palihapitiya was given, this amounted to a credible insider public service announcement that the founder could be considered, as the e-mail put it, "shady and self-dealing." I don't believe that Palihapitiya intentionally leaked the e-mail, but the disclosure was embarrassing to all involved.
It's also symptomatic of a couple challenges in Silicon Valley's business culture.
We have become too reliant on e-mail to communicate in detail about sensitive topics. Coaching and constructive criticism are valuable, but e-mail is often an unhelpful channel for it.
In addition, Silicon Valley is sometimes too open. We have open office spaces. Many investors refuse to sign non-disclosure agreements. Some companies sign NDAs without reading or thinking about them - a very risky practice given that I have actually seen proposed "NDAs" in the last few years that assigned all intellectual property created in the business relationship to one party. Every thought is posted on Twitter. The "confidential" footnote is not inserted in the first place or ignored.
It's a good time to revisit the value of 1:1 verbal communication and confidentiality. Not everything is meant for public dissemination.
If Palihapitiya's email "really was just an attempt to give (the founder of Airbnb) private feedback," he should have picked up the phone.
Post a Comment