Around the time of the demise of Jumo, the social network for nonprofits and activists started by Facebook co-founder Chris Hughes, Betabeat got an email from a source intimately familiar with the social media startup sector. “I’m intrigued by the fact that Facebook doesn’t seem to be proving to have the kind of second-act momentum among early employees that PayPal had, and I wonder why that is,” the source wrote. “I don’t have high hopes for Asana, Quora, or Path either, but maybe it’s too early to make a judgment call.”
With the rise of secondary trading, many Facebook employees have already cashed out. The company’s hefty exodus of early employees has been well-documented. Sarah Lacy, writing for TechCrunch, identified the emergence of a “Facebook mafia” as “early and distinct” last year. But with the Facebook-spawned startups still unproven, is it fair to say that yet?
“There is no organized ‘Facebook mafia,’ although more and more former Facebook employees have either started their own companies, joined others or invested together with former colleagues in new ventures,” former Facebook executive Netanel “Net” Jacobsson weighed in via email. “It’s only natural, people who have been working together and know each other and also trust each others judgment regarding new opportunities, that they invest together = social proof. However, to the best of my knowledge there is nothing organized, but friends investing together from time to time.”
The “PayPal mafia” describes the collective of PayPal co-founders and early employees including Peter Thiel, Elon Musk, Max Levchin, Roelaf Botha, Keith Rabois, Reid Hoffman, and others, who Wikipedia says are “often credited with inspiring Web 2.0.” The PayPal mafia invested in each others startups, founded little things like Yelp, LinkedIn and YouTube, and plunked down bucks in promising companies like Flickr and Zynga. The nickname caught on after a 2007 article in Fortune magazine that featured several mafiosos dressed like gangsters.
Xooglers got the same moniker in 2007, three years after Google’s IPO when their stock fully vested. But Google size’s meant those connections were less apparent and more diffuse. Plus, as one purported Xoogler wrote on Quora, “Every time I try to get out, they pull me back in!!”
It may be too early to judge Facebook by the startups it’s spawned just yet. Not everyone can be like Mr. Hoffman, who served as PayPal’s executive vice president when the company was sold to eBay in 2002 . . . then went on to found LinkedIn later that year.
Facebook has an IPO coming up shortly, after which we’ll surely see more from early employees. Academic and entrepreneur Vivek Wadhwa told the Mercury News that the coming flood of capital from “hundreds of millionaires who can fund thousands of startups” might even offset any potential downturn in the overall VC market. Tim Kendall, Facebook’s former director of monetization, thinks Facebook employees may be more entrepreneurial. After a year or so of advising and investing in young companies, Mr. Kendall, who left the company in late 2010, is itching for another taste of the startup life. “[Facebook employees] want to be in the trenches; we don’t want to be on the sidelines, writing checks,” he told peHUB yesterday.
With a little digging, we realized there is already evidence of a syndicate: a few high-profile startups founded by ex-Facebookers, copious cross-investments, at least one inter-Facebook marriage, and some stealth projects that could be the next big thing. For every few employees who now boasts titles like “Baggage Handler at Traveling” or “Chief Mom Officer at Deitch Family,” on LinkedIn, there’s an budding venture capitalist. Meanwhile, former Facebook engineers lying low find their careers pored over on Quora. It’s no wonder some of them have run from the scrutiny and turned off the messaging function on LinkedIn.
“Despite its size, Facebook is still just at the start of the cycle of spawning new startups,” Facebook co-founder Dustin Moskovitz, who left to co-found the task management software startup Asana, wrote in an email to Betabeat well before the company’s S-1 filing. “Asana is an early example, but the Facebook network will produce a lot of compelling companies. Smart people, unique experience, and access to capital is a powerful combination.”
But with the IPO looming, we thought now would be the perfect time to look at where Facebook’s early employees—Zuck’s chosen ones, and those lucky enough to be in the right place at the right time—landed next. -Adrianne Jeffries