You Only Have to Be Right Once (2 page)

Sean Parker, Facebook:
Master of Disruption

The evolution of the Internet, from unfettered hacker toy to unlimited wealth machine, comes embodied in one Sean Parker. As the teenage cofounder of Napster, the music piracy site that nearly crippled the recording industry, he gained notoriety, even as he flirted with bankruptcy and jail. As the twentysomething president of Facebook, entrusted with giving Mark Zuckerberg some adult supervision, he cemented his digital bad boy reputation, even as he made himself a few billion dollars. But when
Steven Bertoni
tried to track down the mercurial Parker in 2011, he found proof of the adage about wealth's ability to buy happiness. Parker, recovering from surgery and a freshly branded villain of the tech world, courtesy of David Fincher's movie
The Social Network,
devolved into a hermit, holing up in the Peninsula Hotel in Los Angeles for two months, a digital Howard Hughes. When he emerged, he invited Bertoni for what was supposed to be a relatively brief sit-down in his new $20 million townhouse in New York's Greenwich Village. That meeting turned into a meticulously chosen sushi dinner, and after two bottles of expensive sake, a trip to the West Coast, via rented Gulfstream, where Parker pinballed around various interests. His passion at the time: Airtime, a video-sharing service that he zealously kept under wraps—and eventually flopped. No big deal. This is a guy adept at identifying problems, and at peace if not every solution works out. He also backed Spotify, a legal reincarnation of Napster—by 2014, it was valued at more than $4 billion.

 

P
ointed toward his eighteen-acre compound in Marin County, Sean Parker ripped through the night fog on the Golden Gate Bridge in a stealthy Audi S6 that masks a Lamborghini engine, one pale hand on the wheel, the other toggling through thousands of songs uploaded on the car's sound system.

Facebook's former president had endured a typically busy day. Over the last ten hours he'd interviewed two potential VPs for his new video startup, answered hours' worth of e-mails about the music platform he was backing, Spotify, and met with a potential CEO for his Facebook charity app, Causes. He had also booked bands and wrangled vendors for his engagement party, scheduled in New Jersey the same night Hurricane Irene hammered the Northeast (with Lenny Kravitz grounded in North Carolina, he eventually subbed in the Cold War Kids). Later, he broke from work to dine with Jack Dorsey, the chief of Facebook rival Twitter and payment service Square. After dinner, at the restaurant bar, he interviewed another potential boss for Causes. By the time he dropped me off at my hotel, it was 11:30 p.m. Parker's day was about half done.

For the next six hours Parker fired off e-mails, then turned to his private Facebook page. The previous afternoon—or earlier the same day, if you're on Parker's body clock—the world had learned that Steve Jobs resigned from Apple. Around 6:00 a.m., Parker posted this Schopenhauer quote: “We can come to look upon the deaths of our enemies with as much regret as we feel for those of our friends, namely, when we miss their existence as witnesses to our success.” It immediately leaked. Gossip site Gawker accused him of dancing on Jobs's grave. He e-mailed Gawker that the quote was a tribute to Jobs—his longtime idol and more recent rival (iTunes versus Spotify). Just before 7:00 a.m. he went to bed.

Four hours later he was up, ready to do it all again.

Flighty, manic, and unpredictable, Parker grates on investors—he's been jettisoned from the three companies he helped create, soon after they lifted off. “He's seen as an unknown quantity, and VCs love for things to be very much in control,” said Facebook cofounder Dustin Moskovitz. But VCs also love big ideas, and Parker has those in spades—LinkedIn founder Reid Hoffman calls him a “big-ass visionary.” And in terms of boardroom scheming, he's nothing like his fictional portrayal in
The Social Network
. “The movie needed an antagonist, but that's not what he was,” said former Facebook growth chief Chamath Palihapitiya. “He's really the exact opposite of his portrayal in the film.”

Boiled down, Sean Parker is a human accelerant, an idea catalyst who, when combined with the right people, has fueled some of the most disruptive companies of the last two decades. At just nineteen he blew up the record industry as the cofounder of the music-sharing site Napster. Two years later his address book service, Plaxo, demonstrated the potency of digital propagation, something he took a step further as the twenty-four-year-old president of Facebook, helping the social network become the most important Internet company since, well, maybe ever. Yes, all three companies eventually bounced him, but not before, by thirty-one, he tucked away enough equity to boast a fortune of more than $2 billion. And he was just getting started.

By 2011 he was out to upend music distribution again, bringing the Swedish music platform Spotify to America—and masterminding how the service would work with Facebook's music efforts. He was also hunting new startups as general partner at venture firm Founders Fund and reuniting with Napster's Shawn Fanning to create Airtime, a live video site.

Parker's personal network is astounding, a combination of foresight and fate. Starting as a teenager, when he interned for Mark Pincus (now Zynga's chairman) Parker has teamed, in one way or another, with the men who now control the modern Internet: Mark Zuckerberg, Mike Moritz, Peter Thiel, Reid Hoffman, Yuri Milner, Dustin Moskovitz, Adam D'Angelo, Daniel Ek, Ron Conway, Ram Shriram, and Jim Breyer.

“He can see things most people won't be able to see for a year or two,” said Palihapitiya. As Shervin Pishevar of Menlo Ventures describes it: “Parker has access to trends and signals that are invisible to many people. For him it's like hearing a dog whistle.” Parker didn't disagree: “I find a lot of things relevant that aren't necessarily relevant to the world when I'm thinking about them.” Parker is drawn to big, universal problems and spends years looking for them. “Most of us kind of agree on the thrust of history. The key is to understand how we get there,” said the young billionaire as he rolled his desk chair closer to me in the office of his recently purchased $20 million Manhattan townhouse. “The transition strategies are more important than understanding what the outcome state will be.”

By focusing on problem selection, rather than rushing out an innovation no one wants, like so many trigger-happy entrepreneurs, Parker put himself in position for the string of blockbusters that his critics blithely attribute to sequential luck. Napster was the transition between CDs and MP3s after the Internet made it possible to strip content from its container. Facebook was a vehicle to create a reliable identity in an anonymous online world. Spotify is an attempt to fix the very music industry that Napster helped break a decade before.

“He thinks about where he perceives the world to be going,” explained Spotify founder Daniel Ek. “If he doesn't think there is a company that will win, then he builds it himself.”

This deep investigative thinking bleeds into everything else in his life. Ask Parker about the genesis of his former company Plaxo, and he starts with theories of how real viruses spread across populations. Before he shares the name of his favorite sushi restaurant—prior to one dinner we had in New York, he called five to find out which chef was cutting the fish that night—he discusses rice density and the ideal geometric shape for sushi cuts (trapezoids). Question this audiophile about the best brand of headphones and you first learn how sound waves are registered by our tympanic membranes. As the expression goes, ask him for the time, and he'll tell you how to build a watch.

“We talked for what I originally scheduled for an hour, ended up being three hours,” Reid Hoffman recalled about their first meeting back in 2002. Jack Dorsey had the same experience: “It's rare to find someone who can have those kinds of conversations. . . . I appreciate any conversation where I can walk away questioning myself and my ideas.”

Thus, Parker's life becomes impervious to time, a subject friends and business partners acknowledge with a defeated laugh. Peter Thiel calls it Parker's “absence of dramatic punctuality.” Ek manages Parker by telling him there's a meeting at 11:00 a.m. and informing others it starts at 1:00 p.m. There's even a name in Silicon Valley for this phenomenon: Sean Standard Time.

“Making people wait and not fulfilling all your obligations feels bad. I probably feel worse about it than people realize, but I don't do it with malice,” said Parker. When focused on a task, he blocks everything else out and works himself into a trance. The outside world fades; time slips away. “It requires a lot of rescheduling, but I try to focus on things that are the highest value and get those done perfectly.”

Parker's definition of “done perfectly” is extreme. On the afternoon of his
Forbes
cover shoot, Parker summoned three full racks of Italian suits. Twenty dress shirts—still in their wrappings—waited on the wicker couch in his Greenwich Village townhouse. Rows of eyeglasses and sunglasses blanketed the coffee table, piles of suspenders and ties filled chairs, a shoe store's worth of wingtips, loafers, and boots lined the wall. The shoot was scheduled for 4:00 p.m. Sean emerged at 5:30 p.m., flanked by a proper entourage: a clothes stylist, hairstylist, makeup artist, assistant, publicist, tailor, and his fiancée (now his wife), Alexandra Lenas.

During the shoot Parker changed his wardrobe more often than a Las Vegas headliner. He switched from streamlined suits to three-piece numbers to casual cardigans over designer jeans. He obsessed over the spacing of suspenders and triple-checked that the red in his skinny tie matched the red in his hipster eyeglasses. At one point he broke for a snack. Ten minutes later he was in the kitchen, dressed in a dark Christian Dior suit, whisking a bowl of homemade ranch dip. He was trying to lose weight and was eating only vegetables. The ranch dressing on hand was too runny, so he added sour cream to firm it up. His assistant (one of three) coaxed him back in front of the camera. After hundreds of photos in four locations around the house, the shoot was finished, at 2:00 a.m.—perfect, calibrated Sean Standard Time.

Two nights later I arrived at his house at 11:00 p.m. A chartered G450 was scheduled to fly to San Francisco from Teterboro, New Jersey—wheels up at midnight, sharp. Parker was out meeting Spotify's Ek. When midnight hit and there was still no Parker, I got a little nervous. Everyone else yawned. Parker strutted in at 2:00 a.m. He still had to pack and shower. At 3:30 a.m. a Cadillac Escalade was loaded with luggage and takeout fried chicken from Blue Ribbon, a late-night, New York chefs' hangout, and across the Hudson we went.

We took off at 4:00 a.m., a half hour before FAA fatigue laws would have grounded the pilots. When I awoke to a view of the California desert outside the plane window, Parker was sitting across from me, snacking on a piece of fried chicken, his veggie-only diet already over. “Did you sleep well?”

We landed in San Francisco at 9:00 a.m., where yet another Escalade ferried us to Marin County. Everyone parted ways to sleep for a few more hours before Parker, eager to meet with colleagues and pitch potential hires, began a sprint through San Francisco and Silicon Valley.

• • •

PARKER'S PATH TO SILICON
Valley began the day his father, Bruce, formerly the chief scientist at the National Oceanic and Atmospheric Administration, taught him how to program on an Atari 800. He was in second grade. By high school Parker was hacking into companies and universities (alias: dob, which he chose for its aesthetic symmetry). When he was fifteen, his hacking caught the attention of the FBI, earning him community service. At sixteen he won the Virginia state computer science fair for developing an early Web crawler and was recruited by the CIA. Instead he interned for Mark Pincus's D.C. startup, FreeLoader, and then UUNET, an early Internet service provider. “I wasn't going to school,” he said. “I was technically in a co-op program but in truth was just going to work.” Parker made $80,000 his senior year, enough to convince his parents to let him put off college and join Shawn Fanning, a teenager he'd met on a dial-up bulletin board, to start a music-sharing site, which became Napster in 1999.

Parker never did make it to college, but Napster provided an education all its own. “I kind of refer to it as Napster University—it was a crash course in intellectual property law, corporate finance, entrepreneurship, and law school,” said Parker. “Some of the e-mails I wrote when I was just a kid who didn't know what he was doing are apparently in [law school] textbooks.” Those e-mails, which admitted Napster customers were likely stealing music, would end up as evidence in copyright lawsuits that would eventually shutter Napster. But by that time Parker had already been exiled by management and was living in a North Carolina beach house. “I didn't understand at the time that when someone asks you to take an extended vacation that's basically a prelude to firing you.”

While at Napster, Parker met angel investor Ron Conway, who was funding another company in the startup's building in Santa Clara. Conway has backed every Parker production since.

On our first night in San Francisco, Parker and I visited Conway on the porch of his house overlooking Richardson Bay. We drank Brunello and nibbled on prosciutto. “We've gone through hell together,” said Conway, who backed Google, PayPal, Twitter, and FourSquare, among others.

Napster was less a company than an all-hours circus, a strange tangle of people who thought they had joined a renegade social movement rather than a startup. “So much of what I learned at Napster was learning what not to do,” said Parker, as Conway scribbled on a notepad. Conway had learned the hard way to listen to Parker. “When Sean became president of Facebook, he called me and said, ‘You have to look at this company.' The killer is that I could have been Peter Thiel,” said Conway, referring to Thiel's investment in Facebook, which made him a billionaire. “But I said, ‘You have to clean up the issues at Plaxo, so don't introduce me to this Facebook thing.'” He sipped his wine, shook his head and laughed: “These are painful memories.”