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TechSilicon Valley

HBO’s ‘Silicon Valley’ Ends Third Season With An Accidental Success Story

By
Kia Kokalitcheva
Kia Kokalitcheva
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By
Kia Kokalitcheva
Kia Kokalitcheva
Down Arrow Button Icon
June 26, 2016, 11:15 PM ET
Courtesy of HBO
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What a journey for the Pied Piper guys, whose fictional startup in HBO’s Silicon Valley show has been through hell and back again.

As the finale of the show’s third season opens, Pied Piper has a lot of fake users, almost no money left, and CEO Richard Hendricks has no idea what to do. To make matters worse, Erlich Bachman’s, Pied Piper’s landlord, investor, and PR guy, has lured a venture capital firm into offering the startup $6 million in new funding.

Just moments later, he and Jared Dunn, the startup’s business guy, secretly discuss whether they should keep the fake users and run a program Dinesh Chugtai, another Pied Piper engineer, that would make them blend in with real users. Now that there’s new funding at stake, is it unethical, the guys wonder?

“I mean, our platform does exactly what it says it does. It’s not like we’re lying about it, like fucking Theranos,” Hendricks tells Dunn in reference to the blood-testing startup Theranos, whose technology is under fire following a series of Wall Street Journal reports questioning its validity. (Too bad the show’s writers never consulted Theranos investor Tim Draper—he could have corrected them that apparently, “nothing’s gone wrong with Theranos.”)

Hendricks seems to have decided it’s okay as he and Bachman head over to the venture capital firm’s office to sign the paperwork—or has he?

As the investors hand him the term sheet agreement he must sign to get the money, Hendricks’s conscience bursts out and after blabbering about Pied Piper video chat app and some back user feedback, he blurts out the truth about the fake users.

“If I sign those terms sheets, I would be committing fraud,” Hendricks tells a visibly upset Bachman as the two walk out into the parking lot.

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Now, Raviga, Pied Piper’s existing investor, wants to sell its stake. “Even a whiff of fraud is a mortal sin for VCs. She needs to wash her hands of any Pied Piper business,” Monica Hall, a Raviga employee and member of Pied Piper’s board, tells Hendricks and Dunn of her boss’s plans.

And things are getting even worse: Pied Piper will be sold to Gavin Belson, whose company Hooli, the show’s Google-like entity, has spent the entire season trying to compete with our young startup. What’s more, because of the terms of Raviga’s investment in Pied Piper, practically all of the money will go to Raviga, leaving Hendricks and his friends with nothing.

But as Hendricks, Dunn, Hall, her boss, and a third Raviga employee head into Pied Piper’s last board meeting at which they’ll formally vote on the sell of the company to the highest bidder, there’s a twist. It wouldn’t be great TV if there wasn’t one!

First, there’s a bizarre back-and-forth among the Raviga board members when Hall declines to vote in favor of the sale. Apparently, Hall’s coworker is in love with her, which is just confusing since we’ve never really seen this character and her love life has not been part of this season’s plot at all. Raviga chief Laurie Bream resolves the matter by replacing Hall with a new employee walking by, and Hendricks steps in as the third “yes” vote to put an end to the madness and authorize the sale.

But the real surprise (or maybe not so surprising if you’re an astute TV watcher), is the revelation that Bream is selling Pied Piper to none other than Bachman and his business partner, Nelson “Big Head” Bighetti, a former Pied Piper and Hooli employee. They submitted the highest bid, Bream explains to a stunned Hendricks and his fellow board members.

It turns out, Bachman and Bighetti had just earned a bit of money through the sale of a tech blog Bachman had acquired earlier in the season. Belson is not above acquiring a news organization that is preparing to publish a negative story about him, and that blog is not above killing off that story in exchange for a fat check.

For Fortune’s recap of the previous episode, read: HBO’s “Silicon Valley” Proves That Life Can Be Stranger Than Fiction

So what exactly are Bachman and Bighetti acquiring if Pied Piper’s file compression product is such a bust with users?

A video conferencing app (think Google Hangouts, or Skype). Earlier in the season, Chugtai had built it using the startup’s technology so he could more clearly video chat and flirt with a pretty contract developer working for Pied Piper. The app was just a side project, and Pied Piper’s team didn’t invest too much in it, despite Chugtai’s half-serious suggestions they focus on it.

But unlike Pied Piper’s original product, this app started to organically catch on with users. In fact, shortly before the last Pied Piper board meeting, it had more than 7,000 users and they had all joined without the team spending even a dime on marketing. In short, this is the Holy Grail in Silicon Valley: to have a product that is so good that it just sells itself.

The video chat app actually has a real world parallel: workplace chat service Slack. Slack was originally built as an internal tool at Tiny Speck, a gaming company co-founded by Flickr’s Stewart Butterfield. While Tiny Speck’s first game was not a success, the tool the company had built to communicate internally became its new focus. And like Pied Piper’s video chat app, it has spread largely through word-of-mouth. Ironically, Hall mentioned in an earlier episode that she never understood Slack’s appeal, though she also criticized the original Pied Piper product’s incomprehensible design.

Now, if Pied Piper is as lucky as Slack, the show’s fourth season will include consecutive rounds of fundraising at astronomical valuations—just because it can.

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By Kia Kokalitcheva
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