You have to keep yourself from breaking down and weeping openly for this guy. That is if you have a heart, and readers of this blog know that we wear ours on our sleeve. Almost anywhere else, Reid Hoffman would be considered a major success. As an early executive of PayPal, he was in the money when the company was sold to eBay in 2002 for $1.5 billion. These days, he runs a new start-up company of his own while investing in others.
But when greater fortunes are made — as happened recently to three former PayPal colleagues when YouTube was sold to Google for $1.65 billion — Mr. Hoffman said he could not avoid a twinge of envy.
“It’s kind of embarrassing,” said Mr. Hoffman, 39, whose start-up, a business-oriented social-networking site called LinkedIn, is almost four years old. “You started a year or two earlier, and they start after you and then this thing zips right past you and gets the golden results.”
Envy may be a sin in some books, but it is a powerful driving force in Silicon Valley, where technical achievements are admired but financial payoffs are the ultimate form of recognition. And now that the YouTube purchase has amplified talk of a second dot-com boom, many high-tech entrepreneurs — successful and not so successful — are examining their lives as measured against upstarts who have made it bigger.
Mr. Hoffman, who made enough from PayPal to “retire to a comfortable upper-middle-class lifestyle,” said he felt no spite toward peers who later hit bigger jackpots. Still, he said, “there’s always components of, ‘Wow, you happened to pick the right time,’ and that will always lead to some kind of implicit envy.”
The envy is magnified by the fickleness of this latest wave of sudden wealth, creating some huge paydays but a small circle of winners. Partly that reflects more judicious investment of venture capital in new companies; the amount invested has risen slightly over the last year but is down 70 percent from the peak of $40 billion in 2000.
Seven or eight years ago, when it seemed that anyone with a business plan could get rich, the finger of fortune was generous — and democratic. By the time it occurred to people to be envious, it seemed, they were rich, too — at least on paper. It was in Silicon Valley, after all, that the term “sudden wealth syndrome” entered the clinical vocabulary.
In the end, of course, much of the paper wealth turned worthless. But now, in the wake of successes like YouTube and MySpace, which was sold last year to the News Corporation for $580 million, some people believe that the foundations for more solid success are now in place. For one thing, the viability of online advertising is no longer in doubt, as Google and others have proved.
And the success of a YouTube can produce not only envy but also serious motivation — in Silicon Valley and beyond.
http://www.nytimes.com/2006/11/21/technology/21envy.html?ref=business
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