The Genesis of Founder Mafias
Why there is a PayPal Mafia but no Google Mafia
Why is there no Google mafia? There is no great Facebook mafia either. Ditto for Amazon.
Why are the most talked about mafias from companies like PayPal?
The best predictor of having a strong founder alumni network is a company that:
(1) had a successful outcome but not crazy successful -- likely had an exit between $300 million and $2 billion
(2) the company went through a bunch of trying times (and almost went out of business)
(3) the employees built a company that was super enduring and even prospered post-exit.
Pretty much all successful mafias have those three characteristics.
The PayPal Mafia is the most well-known. Of course, in their case, it is REALLY helpful to have such an extraordinary collection of talent. But my guess is that if PayPal never sold and ended up being a trillion dollar company (which is what it probably would have become if it remained independent), we would not see such a flourishing PayPal mafia today. When a company is TOO successful, people that would have become part of the mafia get distracted by their wealth.
PayPal fits all three criteria for having a successful alumni founder network: (1) good outcome (but not crazy good); (2) company almost went out of business (multiple times); and (3) the company brand endured.
There is no YouTube mafia. While YouTube had a similar sized exit to PayPal (and the founders were part of the PayPal mafia), YouTube as an independent company was successful very quickly. It was a much quicker ride. So while it satisfies the first and third criteria for a successful mafia, it fails on criteria #2.
I don’t think we will see a lot of mafias come out of most successful companies right now. Companies like Stripe, Uber, Coinbase, etc. are likely too successful to create enduring mafias.
LiveRamp, where I worked, has an incredibly robust LiveRamp Mafia. LiveRamp meets all the criteria for a company to have a strong mafia. Good outcome but not crazy good - CHECK. Almost went out of business - CHECK. Enduring company - CHECK (NYSE:RAMP). And even in the short time since exit, LiveRamp alumni have built some incredible companies like Datavant, Peerwell, Airbyte, Retain.ai, Red Planet Labs, Windfall Data, Facet Wealth, Traveljoy, Superhuman, SafeGraph, Cred PR, and many others. Of course, it helped that LiveRamp was full of super talented ambitious people.
Another super successful alumni network is the Doubleclick Mafia. Like all companies that have a successful mafia, Doubleclick also was a very good (but not great exit), almost went out of business, and lived on as an enduring company. One of the most interesting things about Doubleclick, is it actually had a run-in with the REAL mafia (which is much more scary than any startup mafia).
Many adtech companies, like BrightRoll, have strong mafias -- partially because there are many successes and most of them had times when they almost went out of business. Are there companies with strong mafias that you admire? Please let me know.
Graph of the week: