As they say: Haters gonna hate.
That’s the valuable lesson the Pied Piper guys learn in the seventh episode of HBO’s Silicon Valley as they prepare to debut the “beta” version (read: not final) of their file compression software. As any startup, or even a large company, will tell you, releasing the first version of the product employees have been toiling over is a big deal—a huge deal. It’s a rite of passage, one that comes with a lot of anxiety and fears of what people on the outside will think.
“That is what a beta is for. You give it to people, in the real world, they use it and that is how we find the bugs,” Dinesh Chugtai, one of the fictitious Pied Piper’s engineers, tells CEO Richard Hendricks at the opening of the episode as they argue about whether to take the plunge. As the CEO, Hendricks’s apprehension is understandable: Pied Piper is his baby and he’ll be responsible if the product isn’t too great. But in Silicon Valley, that’s sometimes okay.
“Richard, Reid Hoffman says: ‘If you’re not mortally embarrassed by the quality of your initial release, you’ve released too late,’” Jared Dunn, Pied Piper’s business guy, reminds Hendricks.
Eventually, Hendricks relents and agrees to let a small number his employees’ friends try out Pied Piper’s initial version, and by and large, the response is overwhelmingly positive. An employee at file-storage company Dropbox and a 15-year Silicon Valley veteran, who apparently “hates everything,” even tells Hendricks that Pied Piper has built the best “beta” version he’s ever seen.
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But one important person doesn’t agree.
Monica Hall, an employee at Pied Piper investor Raviga Capital and a member of the startup’s board of directors, isn’t impressed when she finally gets to try out the first version. However, after realizing she’s the only hater, Hall lies to Hendricks and denies having tried the Pied Piper’s app yet, much to the team’s surprise.
At the same time, someone across town is also greatly upset by Pied Piper’s beta: Gavin Belson, the pompous CEO of Hooli, the Google-like company that’s secretly building a competing product. Belson was able to get a look at Pied Piper’s beta version after his security chief impersonated a friend of Hendricks via email (yes, people still fall for fake email addresses even in the real Silicon Valley), and he’s rushing his employees to catch up.
Luckily, Bertram Gilfoyle, one of Pied Piper’s engineers, had built what’s known as a “God View” capability, which lets the startup track all of its users’ activities in real-time, into the startup’s product. As ride-hailing company Uber learned a couple of years ago, using the feature too liberally can have massive repercussions—and create a PR disaster when journalists realize they’ve been secretly and inappropriately surveilled by the company.
Legal complications aside, the feature helped the Pied Piper guys catch Belson’s snooping (they then sent his a virus to his computer as a lesson), as well as figure out that Hall had been using the beta version all along. When Hendricks shows up at the local hookah bar where Hall is taking a break, he confronts her and asks that she tell him what she thinks, even if it’s negative. As she finally confesses that she doesn’t like Pied Piper’s product and that she once passed on the opportunity of investing in buzzy workplace chat tool Slack, Hall also sums up the reality of betting on startups in Silicon Valley.
“I didn’t get it, I still don’t. I mean, what is it — is it email? Is it a chat room? Turns out the answer is, it’s a $3 billion company,” says Hall. “But that’s the fucked up thing about what we do. Sometimes our opinion is wrong and no matter how good something is, there’s always gonna be someone who doesn’t get it.”
Indeed, haters gonna hate, but startups need to keep going.
Meanwhile, Erlich Bachman, an early investor in Pied Piper, spends the episode on a quest to recover the millions of dollars that vanished without explanation shortly after he formed an investment fund with Nelson “Big Head” Bighetti, a former Pied Piper employee. Bighetti was paid $20 million as a severance when Hooli fired him.
For Fortune’s recap of the previous episode, read: HBO’s “Silicon Valley” Calls Out the Tech Industry’s Thin Skin
Thanks to Dunn, who looked over Bachman’s accounts, he figures out that Bighetti’s former financial manager took several millions behind their backs to loan to his other clients. Now, the money is gone, they haven’t been able to pay off the extravagant party they hosted on Alcatraz Island near San Francisco (and Code/Rag’s intrepid blogger is on it!), and Bachman wants to sue the financial manager. But there’s one problem: Bachman and Bighetti aren’t exactly the sympathetic figures a jury would side with in a trial.
“I see two able-bodied, entitled young white men, who lucked into more money than most people see in five lifetimes. and who, if they hadn’t had their millions stolen, would have promptly squandered them on more things like relocated swimming pools and lost Tiki heads,” the attorney Bachman and Bighetti consult tells them.
Bachman’s only chance to pay his party’s outstanding bills is to sell his shares in Pied Piper, something the show’s ending suggests he did despite his reluctance. “I can’t sell my shares in Pied Piper, not now,” he responds to the attorney’s suggestion. “They could potentially be worth billions!”
But then again, doing the right thing might just be more important—and Bachman knows it.