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Dark side of the boom

E.B. Boyd | February 17, 2012 | Story Reporters Notebook Tech World

One winter night in 2010, four New York University students went to a lecture about the growing threats to personal privacy in the Facebook-Google era. They emerged from the auditorium determined to save the world. Their weapon would be Diaspora, a new kind of open-source social network that would protect private information by replacing a single corporate behemoth with a so-called federation of pods. Users could join whatever pod they wanted, and if they didn’t like how they were being treated at that one, they could pick up their personal data and move somewhere else. Deep human connection without the Big Brother overtones—that was the utopian promise.
The students figured they’d need a few months and $10,000 to build a prototype. But Facebook had just made a huge misstep—a series of features that seemed to imperil users’ privacy to a stunning degree. As outrage ricocheted around the web, Diaspora went from being an intriguing but untested concept to the media-proclaimed “Facebook killer,” and the money started rolling in. The NYU students ended up with 20 times more than they had sought in their fundraising appeal on Kickstarter—even Mark Zuckerberg made a contribution. “I think it is a cool idea,” he told Wired. “I see a little of myself in [those guys].”
In the Hollywood version of the story, the four friends would’ve holed up in their dorm rooms banging out code until they’d created a site that lived up to the hype. They would’ve become famous and, despite their professed indifference to money, fabulously rich—worthy, perhaps, of an Aaron Sorkin sequel. In the unforgiving environment of the newly booming Silicon Valley, though, the reality was far more grueling, disheartening—and, ultimately, tragic. Last November, some 18 months after moving to San Francisco with his three cofounders, 22-year-old math whiz Ilya Zhitomirskiy was found dead in his Mission home, an apparent suicide.
Of the Diaspora founders, the sweet-faced Zhitomirskiy had seemed to be the most optimistic and idealistic. A unicyclist and ballroom dancer whose family had emigrated from Russia when he was a child, he was fascinated by artificial intelligence and by technology as a powerful agent for good. Cheerful and outgoing, he threw epic parties and had an uncanny ability to connect with complete strangers, whom he would often keep up late into the night, talking about his dreams of making the world a better, freer, place. “There’s something deeper than making money off stuff,” he told an interviewer back in 2010. “Being a part of creating stuff for the universe is awesome.”
But for Diaspora, as for most startups, the challenges proved daunting. There were long hours at the keyboard, frustrating meetings with potential investors, and sniping from bloggers about the gushy treatment from New York magazine and the New York Times. IEEE Spectrum, a respected technology magazine, got a look at an early version of Diaspora’s software and deemed it “vacant” and “amateur.” That same month, Google unveiled its own curiously Diaspora-like social network. Soon the Kickstarter money ran out amid questions about how it had been spent, and, without explanation, PayPal briefly froze the account the partners were using to raise more funds. Then in October, on the eve of the planned beta launch, one of the startup’s key players abruptly quit.
All of which would have been hard on entrepreneurs twice the age of the Diaspora founders, never mind kids barely out of their teens with little experience to steel them against the startup life’s inevitable pressures and setbacks. “They had failed. Publicly,” wrote a comment-er on Hacker News, the forum of the tech incubator Y Combinator. “This can be very devastating psychologi-cally to someone who has always succeeded in life.”
Indeed, a lot of the chatter following Zhitomirskiy’s death focused on the depression that frequently accompanies startup stress, and some speculated that this may have been a factor in his suicide. “I met this kid [Zhitomirskiy] at a half way to halloween party at NYC Resistor,” a Valleywag commenter wrote. “He was sharp and passionate but had a glassy eye look I know my self from my own hypo mania / depression [sic].”
Suddenly, Diaspora had become a new sort of symbol for the tech community—not just the anti-Facebook but a reminder of the emotional impact of the New Boom on the very young, and potentially very vulnerable, entrepreneurs at the center of it.

Silicon Valley likes to say that it celebrates failure—that a willingness in the culture to take huge risks and learn from mistakes is why great innovations happen there. You can crash and burn in the Valley, the lore goes, and still have venture capitalists lining up to fund your next company; there are plenty of people who even insist that you haven’t really earned your entrepreneur stripes until you’ve failed at least once.
But failure is one thing when you have a track record of success and a wide network of contacts; it’s quite another when you’re 22, just out of college, far from your family and friends, and completely green. Or maybe, egged on by self-proclaimed disrupters like investor Peter Thiel, you’re one of those high school geeks who didn’t even bother with college. Maybe you have a condition—Asperger’s syndrome, say, or bipolar disorder—that makes you well suited to the intellectual and creative challenges of the tech life but also makes it much harder for you to cope when adversity strikes.
If anything, the myth of the young geek genius sets people up for failure, says Rich Aberman, cofounder of the online-payments company WePay. Today, WePay—which offers individuals and small organizations simple, user-friendly ways to collect money and sell goods—looks like a Silicon Valley success story, with nearly $10 million in funding from the likes of PayPal’s Max Levchin. But the first year, when Aberman was 23 and the startup was struggling, was harrowing.
The idea for WePay began when Aberman was trying to arrange a bachelor party in 2008—14 guys spread across the country, $4,200 in expenses, and no efficient way for the group to collect and distribute the money. Seeing an exciting opportunity, he and a college pal, Bill Clerico, put their respective plans for law school and Wall Street on hold. Aberman was inspired by a 2006 BusinessWeek cover story about Digg founder Kevin Rose (“How This Kid Made $60 Million in 18 Months”). “I remember thinking, ‘Wow, all he did was come up with a great idea, and he built it, and he made a ton of money,’” Aberman says. “‘That’s not that hard.’”
Only afterward did it occur to Aberman that he didn’t know how to code: “You spend three weeks learning how to program, and you realize it’s going to take you another 10 years to get good enough to build something saleable.” He and Clerico had no idea how to catch the interest of VCs or the media, either, but they had already gone all in—failure was not an option. “It’s impossible for you to draw a bridge from where you are now to where you’ve made promises about where you’re going to go,” Aberman says. “That feeling leads you to paralysis.” Suicide, he says, can seem like “an escape.”

The tendency of entrepreneurs to overidentify with their company compounds the pain of failure, says Cass Phillipps, a veteran of a doomed startup who now organizes the FailCon conferences, which analyze how companies go wrong. Halfway through her own startup’s first year, it was clear the idea—a plan to aggregate conversations in online forums—wasn’t working, but one of the partners resisted the decision to shut down. “He felt like his personal worth was being judged by our startup’s value.”
The tech-blog culture, with its breathless coverage of fundings and launches and its tendency to ignore promising ideas that bomb (except to viciously tear them apart), can amplify the pressures and feed the insecurities. Then there’s the terror of having to concede defeat to the people whose money you’ve been burning through. While some entrepreneurs say that the Valley’s top VCs can be a founder’s best source of support, taking funds from angels or investors who can’t afford a loss, or who aren’t willing or able to help a startup through the inevitable rough patches, can be a huge liability. “The ones who give you money and walk away aren’t in the trenches with you,” says Ben Huh, founder of the humor site I Can Haz Cheezburger. “When things start going south, it can feel like they’re putting more pressure on you rather than helping you find a way out.”
Yet the industry that makes a fetish of dissecting every angle of startup success has been remarkably close-mouthed about the emotional vulnerability of its workforce and the psychic toll of the entrepreneurial process. The result, noted a Valleywag commenter, is that people who are hurting believe “it’s just me who is weird and sick.” “Oftentimes, my clients do not tell anyone in their lives that they’re seeking psychotherapy,” says Dr. Sarah Villarreal, a psychologist who counts founders among her Silicon Valley clientele. “That exacerbates the feeling that they’re alone in their struggles.”
After Zhitomirskiy’s death, Ben Huh decided to break the silence, blogging about contemplating suicide back in 2001, when his former company was floundering. “Loneliness, darkness, hopelessness…those words don’t capture the feeling of the profound self-doubt that sets in after a failure,” he wrote. Such despair can be so debilitating that it “makes you question if you should even exist anymore. I spent a week in my room with the lights off…thinking of the best way to exit this failure. Death was a good option—and it got better by the day.”
The post went up shortly before Huh was scheduled to speak at two conferences. “Almost everyone I met had read it,” he says—but they were only willing to admit that in private. “Maybe three of us would be having a normal conversation and one person would leave, and the other one would say, ‘By the way, I read your post. And I know what you’re talking about.’”
Entrepreneurs are left with the feeling that, for all the abstract idealization of failure, the real thing makes Silicon Valley deeply uncomfortable. “I have to act as if I’m going to take over the world, even if inside I’m struggling,” says an entrepreneur in his late 30s who founded a startup two years ago and this winter considered shutting it down.
“We are very accepting in Silicon Valley of career failures and decisions that were made incorrectly if the founder can be, like, ‘I figured everything out. I’ve got it under control.’ We as a culture love that,” Phillipps says. “But we don’t know what to do with a founder who’s depressed or who says, ‘I’m really confused.’ Our response to that is, ‘Figure your shit out.’

Even before the diaspora tragedy, momentum was building for a healthier, more open and compassionate approach. Last April, Ben Horowitz, a former entrepreneur and a cofounder of the vaunted VC firm Andreessen Horowitz, wrote a widely read post on the emotional challenges of being a tech leader, admitting,
“By far the most difficult skill for me to learn as CEO was to manage my own psychology.” Phillipps’s FailCon idea dates back to when she and her cofounders couldn’t figure out what they were doing wrong, and the events they attended—mostly whiz kids talking about their successes—offered no insight. Though much of FailCon’s focus is on impersonal issues like hiring and growth, “by signing up for a conference that says you have [failed], or you are going to fail, you walk in with a slightly more exposed mindset,” Phillipps says. “It’s beginning to change the tone of the conversation between founders.”
One of the most valuable things about the proliferation of startup incubators around the Valley is the way they allow, or force, these kinds of conversations to happen—and youthful poses to be dropped. WePay’s Aberman says an emotional turning point was getting accepted into Y Combinator, whose cofounder Paul Graham talks about “the trough of sorrow” as an almost inevitable phase of a startup’s growth. While Y Combinator doesn’t have an explicitly emotional component to its curriculum, the incubator approach—a number of startups per “class,” with 150 or so other young geeks to lean on and commiserate with as they try to get their companies off the ground—inherently addresses the psychological strains of entrepreneurship, Graham and his partners believe, and Aberman concurs. “At the beginning of our class, you’d ask people how their start up was going, and they’d be like, ‘Excellent, great, super,’” he says. “But a few weeks in, you’d ask the same question, and they’d say, ‘We’re so screwed.’ It made us realize we weren’t doing any worse than anyone else.”
Yet sometimes even having that kind of support isn’t enough. Among Zhitomirskiy’s friends and colleagues, there are different theories about what led him to take his own life. One possible trigger, of course, may have been his despair over the project’s problems and the way its idealistic goals were being subverted by the likes of Google. “He thought Google+ was a knockoff,” says a fellow entrepreneur—one that had replicated some of Diaspora’s features (or so it appeared), but hadn’t embraced the underlying idea of giving people control over their data. “He was feeling upset about that in October and November,” the friend says.
Others note that Zhitomirskiy suffered from serious psychological issues that might have proved crippling no matter what happened at Diaspora. “Ilya had a bipolar disorder,” says Janice Fraser, the former head of Adaptive Path, cofounder-CEO of the LUXr incubator and an adviser to the Diaspora crew since they joined LUXr’s inaugural class in the summer of 2010. But sometime before his death, she says, Zhitomirskiy had decided to stop taking his medication. That’s common, adds Fraser, who suffers from depression herself and who’s seen several other members of her family grapple with mental illness, including a brother who committed suicide. She says Zhitomirskiy seems to have planned his suicide, perhaps scouring the Internet for guidance. While Diaspora’s stresses may have aggravated his condition, Fraser believes his decision was based more on realizing what it would mean to have to live with his illness—how it would affect his capacity to think and enjoy life. That wasn’t something he wanted, she believes.
It’s even possible to see significance in the date of his death. Zhitomirskiy was found early on the morning of November 12. The night before had been November 11. Of the year 2011. Ever the math nerd, the theory goes, Zhitomirskiy might have found some poetic delight in departing this earth when the clock hit 11:11 11/11/11.
The truth, of course, died with Zhitomirskiy, and his cofounders, who might come closest to knowing what happened, did not respond to requests for interviews. It’s worth noting that Diaspora is not the failure many assume; donors happily contributed $45,000 on PayPal after the Kickstarter money ran out, the beta launch is still in the works, and top-flight VCs have been sniffing around. With Facebook’s continuing success and huge IPO (“Zuckerberg…has created a wholly owned Internet,” one writer put it), the hunger for an alternative will only grow.
What matters now, says Fraser, is that his death “busted open a door on this conversation.” It’s time for the tech community to start recognizing the hallmarks of mental illness and extreme distress, she says. And it’s time for Silicon Valley to jettison one of its most cherished ideas, one she calls the Mark Zuckerberg
problem: “The myth of the single perfect hero who gets it right is bullshit.” Fraser says all founders need to have someone they can be completely candid with. She has played that role for some entrepreneurs, including one very successful founder she’s advising, whose startup has done quite well by Valley standards. “I came in one day, and they got teary,” Fraser says. “They said, ‘I don’t know how I’m going to cope.’ So we just laid it all out. We did an hour’s worth of work organizing the stuff on their plate.”
FailCon’s Phillipps goes even further. “To raise VC money, you need an advisory board,” she says. “It would be so cool if every startup was also required to have an emotional adviser, someone who could give psychological support when the founders are in trouble.”
And what about all the other geeks—the ones who aren’t running startups but who are caught up in the frenzy and ferocity of the tech economy just the same? One night last December, 25 such men and women, ranging in age from their 20s to their 50s, shuffled into a conference room at No Starch Press in SoMa. They were responding to an invitation from Mitch Altman, cofounder of Noisebridge, the Mission hacker space that provides geeks (including the Diaspora guys) the infrastructure and support to explore their passions and bring their ideas to fruition. Altman, who battled serious depression for the first half of his life, had been deeply upset by Zhitomirskiy’s death. He decided to convene the meetup after getting more than 100 responses to a blog post he’d written about his own struggles. “So many people expressed how thankful they were that someone was openly talking about this,” he says. “We need to create an environment where people feel it’s totally OK and natural to talk about feeling depressed, even suicidal. Then people may not feel they need to hide, and maybe they can reach out for help.”
Four months later, the “Geeks & Depression” meetup has turned into a regular gathering, and similar events are starting to bubble up around the world. At a recent conference in Berlin, organizers asked Altman to throw together a panel on the topic, and he’s planning another for the annual HOPE (Hackers on Planet Earth) conference in New York this summer.
What’s striking to Silicon Valley veterans is the new willingness among geeks to bare their souls in public. For all their vulnerability, Fraser sees an emotional upside in the fact that today’s entrepreneurs are so young. “The kids who are coming up today are more courageous,” she says. “This is a generation of people who are used to letting it all hang out on Facebook. So if I say, ‘Talk to me about mental illness in your life,’ probably somebody would tell me their story. And that’s really different than 10 years ago.”

E.B. Boyd’s last piece for San Francisco was “Where Is the Female Mark Zuckerberg?” in December 2011.

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