The Lore of the Dream Team

Hulu released a remarkable movie on September 19, just as a firestorm was brewing against Disney and its properties in the US market. The spate of subscriber cancellations is going to keep many from watching Lily James’ performance as Whitney Wolfe, the woman credited with naming and marketing Tinder. The movie portrays sexism, harassment, and misogyny she encounters at Tinder, leading ultimately to her departure from the company. It fictionalizes the simultaneously euphoric and all life-consuming aspects of building a company at hypersonic speed. The movie finishes with Whitney’s next idea and how her small yet mighty team transforms the idea into Bumble, the other most popular dating app today¹.

In another part of the technology storytelling landscape, the long-form, research-driven podcast Acquired recently released their history of Google (Alphabet) and its various properties. I happened to be listening to one podcast segment when it collided with a part of the movie.

That small and mighty team of three women who had bonded while building Tinder were naming, inventing, building, and realizing a new dream together in a pattern that’s so mythical, so legendary, so defiantly influential that it bears a view.

Let’s take a detour out west before we return to Iowa.

The Traitorous Eight

This is one of the earliest stories from the technology industry of individuals who came together at a common employer and produced a genealogy. Long before there were microprocessors (chips in today’s parlance), a company called Shockley Semiconductor Laboratory was actively developing semiconductors. Eight of its leading scientists, fed up with the company’s management style and approach, resigned enmasse in 1957 to launch a new company, Fairchild Semiconductor. This group of eight included Robert Noyce, someone whose individual story will someday be a part of this Substack but has been masterfully told by Walter Isaacson and Michael Malone in their books before. Bob Noyce, an Iowa-born engineer created the then most efficient version of the integrated circuit in 1958 and set in motion the inventions I type on, and you read this Substack on today.

The Traitorous Eight, image copyright Wikipedia

Shockley called the group the traitorous eight² and predicted their individual and collective eventual failure as a company. His prediction never came to pass and Fairchild’s invention paved the way for two of those ‘eight’, Bob Noyce and Gordon Moore to further leave to create Intel Corporation. Shockley Semiconductor never recovered and was gone by 1968.

Eugene Kleiner, one of the ‘eight’, might have affected the greatest downstream impact. His last name remains on the premier venture capital firm he co-founded, Kleiner, Perkins, Caufield and Byers, which is credited with investing in such early ideas as Amazon.com, Google, Compaq, Sun amongst numerous others. The Fairchild diaspora was documented by Business Week in 1997 the graphic below

The PayPal Mafia

It is interesting that a payments service credited with testing, establishing, and creating the foundations of trust on the Internet would also carry the Mafia moniker. In the Internet’s wild west days of the late 1990s a service called PayPal emerged to allow people to send money over the Internet. There was a brief time when PayPal even paid new users to join the platform and send money to become accustomed to the concept. This mechanism became such an integral part of another new phenomenon, eBay, that eBay ultimately bought the company in 2002 and sunset its homegrown payments system, Billpoint.

The 200 PayPal employees who came to eBay didn’t appear to fit into the nearly 11,000 employee-culture of eBay and an exodus began shortly after the acquisition. Though many could’ve simply taken their millions and retired onto golf courses and vacation homes, these original team members from PayPal’s early days are credited for creating perhaps the largest entrepreneurial diaspora from a single company. Names such as Peter Theil and his investments in Facebook and Palantir, Elon Musk (founder of X which he merged with Confinity to form the original PayPal) and subsequent recent investments in Tesla, SpaceX, OpenAI, Twitter (X, again), Reid Hoffman, cofounder of LinkedIn and early investor in Facebook, Chad Hurley who cofounded YouTube, Premal Shah, cofounder of Kiva and many more.

Nearly 28 years later, a majority of the original group remains active in the technology industry and has begun influencing technology policy, national politics, and the zeitgeist in unimagined, often destructive, ways. Much has been written about the outsized impact of these individuals on the consumer-web (Web 2.0) since the dot com crash in 2000. An easily digested summary is at History Tools³ and citable links at Wikipedia⁴.

Why are these (and other) Groups Notable

Entrepreneurship is often lonely with those closest to the entrepreneur unable to grasp the passion and steadfast pursuit of a vision, a goal. Though numerous support organizations have attempted to address mental anguish caused by this pursuit, loneliness, desperation, and the naturally large number of failures expected from high-risk entrepreneurial ventures, the fact remains that those who have a supportive team increase their chances of success. Accelerators and incubators attempt to fill this role for the youngest companies, Young Entrepreneurs Organization, Entrepreneurs Organization, informal community groups, and experienced mentors all provide a supportive community to privately address the challenges inherent in the world of creating a new business.

One of the strongest support structures is a core founding team for a company. Venture and private investors expect a lower risk of failure in presence of founding/management teams whose members complement each other. For example, the very passion that creates a single-minded obsession in a startup’s CEO is complemented by an equally passionate marketing partner just as a pragmatic finance person tempers unbridled enthusiasm. Similarly, a revenue/growth partner may find compassion amongst sales and marketing but be tempered by the product-focused team members. This balancing force and function are a net positive, resulting in teams that dream together, build together, grow together and succeed.

It is no surprise then, that businesses and startups seeking public and private capital are often evaluated on their team composition alongside their product, opportunity, market, and competition.

Notable Support Structures

The Homebrew Computer club of the then nascent Silicon Valley is often credited with being the support structure for a community of inventors, tinkerers and hackers (the original, not the pernicious meaning today⁵). The club is where Jobs and Woz demonstrated the first Apple Computer inspired by the presentation of the first MITS Altair 8000 computer at the club’s launch in 1975. It is the same club where a young Bill Gates expressed his frustration with the burgeoning practice of people freely copying his company’s BASIC language interpreter and how the practice could lead to an early demise of the industry if programmers and creatives were deprived of their livelihood through pirated software. This unrelated group of people who gathered to support each other, marvel at each other’s creation, and share the successes is instrumental in various companies’, and possibly (IMO) the entire industry’s future.

Similarly, a group of employees at (then) industry leading research center inspired each other, learned from each other, thrived in an environment of research-driven enterprise. Even though their employer, the parent company, never saw or commercialized the fruits of their labor, the inventions from Xerox Palo Alto Research Center (Xerox PARC) continue to influence our world - Bob Mecalfe’s Ethernet is still the dominant protocol connecting computer networks, the graphical user interface took us from the world of text-based screens, object oriented programming allowed code to build upon the genius of others, the mouse and the laser printer remain in our offices and homes.

Returning to Iowa

The above stories have focused on Silicon Valley, but the structures are evident in our community. My past stories about SmartyPig/Social Money, Workiva, and Parsons Technology have contained references to such team of innovation-driven leaders. There are, of course, others worthy of discussion. Let’s see some of them

Dwolla

Iowa’s modern startup community was launched in 2009 through Ben Milne’s passionate actions as he created a company to reimagine monetary transactions without a credit card. Long before Venmo, Apple Pay, Google Payments and other similar structures had entered our lives, Ben and team had invented a system for individuals to pay via their new smartphones. They created a partnership with the Veridian Credit Union to establish the necessary banking foundation, created the physical infrastructure (servers, apps, security, and partnerships) to process money, and marketed the platform to users, businesses, regulators, and the media. They did this from a tiny office first provided by another startup in the community and then in the “Midland Building”, the building that’s home today to the Surety Hotel. The team of Ben Milne, Shane Neuerburg were later joined by notable names like Charise Flynn, Jordan Lampe, Nick Leeper, Kate Wagner, and many more at Dwolla and thus the forefront of Iowa’s most recent Startup evolution.

Although Dwolla ran into challenges before reinventing itself and continues to operate from its Des Moines HQ, its diaspora with its inherent entrepreneurial mindset remains active in area startups. Ben has launched two additional fintech startups - Basis Theory and Brale in the intervening years. Several individuals listed above are part of the fast-growing Hummingbirds team that’s establishing a national network of retail micro-influencers through creators.

Parsons Technologies

I won’t repeat the story published on April 15 in these pages but refer to the product design, marketing and engineering talent that collected and prospered at Hiawatha-based Parsons Technology between 1987 and 1994, found itself in a new environment upon their company’s acquisition by Intuit, and launched wildly successful companies like TaxAct. Others from the team such as Craig Rairdin launched Laridian software, the publisher of Bible Study software. And, of course, the founder of Parsons Technologies himself, Bob Parsons, created the GoDaddy juggernaut.⁶

Gobound

We haven’t met this Ames-based company on this Substack yet, but their name is already a verb amongst parents of school-aged children. Sam Schill and Nathan Haila are two founding team members who have long remained connected to the Central Iowa startup community, first entering orbit during the community’s early days in 2010-11. Just as Ben Milne (above) and the Dwolla team were engaging creatives, entrepreneurs, and enthusiasts in Des Moines, a cohort of similarly passionate people worked to expand the feeling to Ames. Where many might’ve simply moved to Des Moines, they saw value in building their community with the same values and the community’s unique strengths. Together with cofounders Todd Lawler and Rob Lynch, one of their original experiments became a company called Tourney Machine, created as software for tournament and sports league management. They’d grow it considerably through 2016 when they were acquired by Sports Illustrated Play, a division of Time, Inc.

Again, the founding team could have simply ‘retired’ with what was likely a significant windfall for a group of young entrepreneurs, but they weren’t done. As soon as they could post-acquisition, they regrouped and narrowed their focus on another opportunity learned during their first endeavor. They’d observed how athletic directors at middle and high schools were drowning in paper-based scheduling, roster management, player profiles, payments, fundraising, ticket sales, and numerous other activities. Though software existed to address each problem individually, it was expensive, had to be acquired separately, learned, deployed, data copied between disparate programs and formats, and took them away from their core function - to help their teams grow, thrive, and win.

They decided to reinvent the entire ecosystem of products and collapsed them into a single solution. Not satisfied, they further restructured how these products could be funded in tightening budgets.

Gobound, an Ames-based company, is the team’s latest incarnation. Parents with children on the sports fields, show choir stages, fundraisers etc. across schools in Iowa and beyond are aware of the now ubiquitous Bound app on their phone and interact regularly. The activities directors are freed from the grind of using multiple applications, the fees are borne by participants and donors, and the company is well on its way to ‘verb’ status amongst its users.

In closing

I highlight two companies above that I haven’t addressed in my stories before, companies whose stories remain to be told in detail. However, in these companies and more, it was the critical mass of complementary founding team members who affected their nascent, then growing companies AND persisted in their influence as they became diaspora from those companies.

We have not only seen that at Parsons Technology referenced above but at CADSI → Engineering Animation → Workiva → Vertex Software⁷, we have seen it at SmartyPig/Social Money → Austin Capital Bank⁸, and we have seen it from Microware Systems → Zapperbox⁹¹⁰

This post was further inspired by a recent presentation by James Chung at the Greater Des Moines Partnership’s regional summit. He used finance and investment concepts of alpha and beta in discussing the region’s strength, history, future, and opportunity and delved into areas we should address strategically. He asked what happens when AI replaces commonplace office functions and when our core growth slows amongst new data centers and national companies. He implored us to consider our workforce composition, our special sauce and our social dynamic that gives us alpha - the measure of grown above the norm, deviant from the mean.

I posit that a special sauce we have is demonstrated by a handful of team examples above. Such teams exist in our startups and corporates alike, some thriving through deliberation, debate, research, experimentation and commercialization of nascent ideas and others suffocated by those who’d prefer a reversion to the mean on the way to obsolescence.

I’d rather invest in the former.

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Several of us writers who are part of the Iowa Startup Collective, all volunteers, are thinking it’s time this online community comes together for an in-person interaction. On November 12, we’re hosting a happy hour experience at xBk’s Annex in the Drake neighborhood. Let us know if you can join (and become a writer amongst us yourself via the link below. Space is limited so registrations will be capped once we hit maximums :)

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1. Tinder and Bumble Nearly Tied Among U.S. Dating Apps

2. Traitorous eight - Wikipedia

3. The PayPal Mafia: How a Tight-Knit Group of Innovators Went on to Shape Silicon Valley - History Tools

4. PayPal Mafia - Wikipedia

5. Hacker - Wikipedia

6. The Tech Giant of Hiawatha

7. The Engineers who Animated a Movement

8. Would you build a technology company and the core banking APIs from scratch?

9. Ken Kaplan

10. The mighty set-top box