Mentorship and access, 1988–2001
How a commune-raised engineer with no capital reached the chief executives of Cisco and BP, the top technology lawyer in Silicon Valley, and a founding partner of Kleiner Perkins.
Hare had no capital, no family standing in technology, and a childhood on a commune. What he had instead was a small number of people with reputation to spend who chose to spend it on him.
He is aware this is the mechanism the architecture exists to democratize. Michael Spence took the Vice Chairman title at Consilient and opened Cisco and BP. Larry Sonsini mentored one young entrepreneur a year and Hare was one of them. Frank Caufield emailed from an AOL address and could reach anyone.
Inverted Spence signaling is a direct attempt to make what those men did for him available to people who do not happen to know a Nobel laureate. It is not a rejection of the favor. It is an attempt to industrialize it.
The Catalyst Network exists because this mechanism works and almost nobody has access to it. Inverted Spence signaling is an attempt to make what these people did for Hare available to people who do not happen to know a Nobel laureate.
Access in Silicon Valley is usually described as networking. What actually happened here was narrower and more interesting: a small number of people with reputation to lose chose to spend it, publicly, on someone with none. That is costly signaling operating exactly as the theory says — and one of the people doing it had won the Nobel Prize for the theory.
The trail exists so that people who were there can reconstruct their own memories, recognize what they helped incubate, and add to or correct the record — or forward the few pages that belong to someone they know.
Spence took Vice Chairman rather than Chairman deliberately, leaving the chair open in case the silver bullet was used.
He was deployed as endorsement rather than as principal, because he was not a credible entrepreneur — which is precisely what made the signal credible.
What these people spent was reputation, which is the only currency that cannot be faked because spending it costs the spender.
The architecture's answer is to make participation nearly costless, so what is revealed is what a contribution caused rather than who could afford to vouch.
Michael Spence was Oak Hill's trophy: a Nobel laureate and former dean of Stanford GSB who had seen everyone who ever founded a company in the valley.
He took Vice Chairman rather than Chairman, deliberately — so the chair stayed open if the silver bullet were ever used. And he was better deployed as endorsement than as principal: he was not a credible entrepreneur or technologist, so putting him in the chair would have signaled the wrong thing entirely.
I was the star; Spence was the cheering section. That is Spence signaling, with Spence as the signal — a costly, credible endorsement that works precisely because the endorser has reputation at risk and no operating claim to make. He understood the arrangement perfectly. These people understood the mathematics of it.
Wilson Sonsini Goodrich & Rosati represented roughly seventy percent of the technology companies in the valley. Larry Sonsini took on approximately one young entrepreneur a year to mentor. Ken Rudin had been one, and made the introduction.
You got thirty minutes.
Frank Caufield — a founding named partner of Kleiner Perkins, Stanford GSB in the 1970s, which is how he knew Spence. I made the reservation; when Caufield arrived the concierge became flustered and moved us to a better table. Caufield waved it off. He was an enormous tipper; I tipped twenty percent like a normal person.
He was on AOL's board and emailed from his AOL address, and through him I could reach anyone — including John Doerr. He came close to investing a million dollars personally, and later explained why he did not:
Everything I ever sold, I'd have made more money holding. And my biggest problem is how to spend all my money before I die — so I really shouldn't be investing in future internet stuff. And then: you're like Steve Jobs. You almost got me to invest, and I don't invest in anything.
None of this was transactional. Sonsini took one entrepreneur a year. Caufield was retired and declining everyone. Spence took a title beneath his standing. Wolfson and Scholes said publicly that I was the best student they had seen in forty years, and repeated it.
What they were spending was reputation, which is the only currency that cannot be faked, and which is worth something precisely because spending it costs the spender.
The architecture's answer to this is inverted Spence signaling: make participation nearly costless, so that what is revealed is not the capacity to bear a cost but what a contribution actually caused. That is not a rejection of what these people did for him. It is an attempt to make it available to everyone who does not happen to have a Nobel laureate willing to vouch — because the mechanism worked, and almost nobody has access to it.
Episodes are building blocks. The same material appears in more than one where it belongs in more than one, and every claim traces back to a primary source.
Vice Chairman of Consilient, and the introduction into Cisco
Open →In the graph“You're like Steve Jobs. You almost got me to invest, and I don't invest in anything.”
Open →In the graphOne young entrepreneur a year. Thirty minutes.
Open →In the graphThe Aspen lunch, and passions that ran to sustainability
Open →In the graphExpert testimony, and where arguments learn to survive attack
Open →The record and the architecture are not separate arguments. Each of these mechanisms exists because of something in this episode, and each is what the episode turned out to require.
The episode is the story. The explainers are the mechanism — what problem it solves, how, and where it would fail.
The mechanism in full, with the condition that would defeat it.
Open the explainer →Consilient Innovators NetworkThe mechanism in full, with the condition that would defeat it.
Open the explainer →Quantum Adaptive Systems TheoryThe mechanism in full, with the condition that would defeat it.
Open the explainer →