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Why are Silicon Valley leaders sticking with Biden? Blame the ‘cult of the founder’

Reid Hoffman is urging Dems to double down on a faltering president, rather than let his investment go to zero. Is it time to cash out?

The image shows a double exposure of two men at a podium, one overlaid in blue with glasses and the other in a suit and tie with the U.S. presidential seal visible.
Source: Illustration by Clark Miller for The Standard; Photos by The Standard and Getty

Like most Democratic-leaning voters, I watched last week’s presidential debate with a feeling of abject terror, tinged with hope. Terror because of President Joe Biden’s rambling, slack-jawed performance, but hope because surely it would prove to be the final straw, the moment when even his most ardent supporters said “Enough!”

Of course, I hoped too soon. The very next day, an email from Reid Hoffman, LinkedIn founder and Democratic super-donor, landed in my inbox and thousands of others. 

“I think a campaign to get Biden to step down would be a bad idea,” Hoffman wrote, as my soul departed my body.

“Joe is our nominee; any decision to step aside is up to him and his family, period. If anything, a public effort might compel the Bidens to try to prove the doubters wrong. Joe is a resolute fighter, after all… Joe Biden can very much still win this election.”

I would like it put on record that I like Hoffman. I have met him and found him to be kind, highly intelligent (he has degrees in philosophy and mathematics) and honest. He has invested in companies I’ve worked at and I’ve never heard anyone utter a bad word about him. LinkedIn is one of the few social networks that hasn’t provided a platform for Nazis or led to a spike in adolescent self-harm. To the extent that a billionaire can be considered “good,” that billionaire is Hoffman.

But that’s precisely why his email is so terrifying. Hoffman is a huge personal donor to Biden who committed tens of millions of his own fortune during the last campaign cycle and is spending just as generously on Biden’s re-election bid, including backing Trump spoilers like Nikki Haley. But his real power comes from the network of other super-rich tech donors he has been building and guiding since 2020. Thanks to his control of that network, Hoffman is widely considered the Pied Piper for wealthy Silicon Valley Democrats, just as Peter Thiel fulfills that role on the right. And just as Thiel’s influence rescued Trump’s campaign post-Access Hollywood and later gave the world JD Vance, so Hoffman’s email wasn’t just a statement of principles. It was a set of marching orders to the donors who hang on his every word: Pay no attention to gibbering Joe. Keep calm and carry on.

My first reaction to Reid’s email was bafflement. Had Hoffman not watched the same debate as the rest of us? My next was to self-gaslight: As a newly minted American citizen (who has lived here for decades) who am I to comprehend my fellow voters? But then as I re-read the line about how Biden might stay in the race to “prove the doubters wrong,” I felt something else: déjà vu.

A few years ago, there was much hand-wringing in the valley about “the cult of the founder.” This was a period roughly from 2001 to 2017 when venture capitalists decided that their only job was to give unwavering support to their entrepreneurs, no matter how badly they behaved. The cult can be traced to author Jessica Livingstone, whose 2001 book Founders at Work offered gushing profiles of entrepreneurs like Max Levchin (Paypal) and Sabeer Bhatia (Hotmail). Thus was born the myth of the genius tech founder, whose contrarian ideas would inevitably return billions of dollars—but only to those who believed. Livingstone and her business partner Paul Graham later co-founded Y Combinator as a judgment-free creche for the next generation of geniuses. Not to be outdone, in 2005 Thiel named his new investment firm “Founders Fund.”

Like all ideas championed by Graham and Thiel, the cult of the founder soon went dangerously off the rails. By the late 2010s, investors prostrated themselves before douchebag kings like Uber’s Travis Kalanick and We Work’s Adam Neumann, pleading for the chance to fund their increasingly lawless companies. To raise the slightest moral objection was to commit professional suicide. And criticism just made the monsters more determined to fight.

It wasn’t til 2017 when Kalanick’s behavior threatened to destroy pre-IPO Uber that Benchmark’s Bill Gurley (who had stayed mostly silent as the company smeared rape victims, lied to regulators and threatened journalists) finally declared enough was enough and moved to fire Kalanick. Gurley was pilloried by Kalanick supporters for his founder-unfriendliness and by Kalanick critics for doing too little too late.

Lesson learned? Apparently not.

Hoffman’s support of Biden smells a lot like the cult of the founder, applied to politics. If the bet Hoffman and his peers have made pays off (Biden stays in the race and wins the election), democracy will be saved and Hoffman will have the ear, nose and throat of the new administration. To pull the plug now would risk that investment going to zero and Hoffman being branded a traitor to the cause. Biden will keep fighting, just to make a point! Far safer to double down and pray that the guy who defeated Trump once will do it again.

Complicating the analogy is that Biden is demonstrably not Kalanick or Neumann. Biden, as we’re constantly told, is A Good Man™. But here’s the rub: The cult of the founder doesn’t just apply to founders who are deliberately awful.

A more apt comparison might be Yahoo founder Jerry Yang who, in 2007, was brought back to rescue the floundering company. Yang’s second term was an unmitigated disaster, culminating with his boneheaded decision to turn down a $47.5 billion acquisition offer from Microsoft. (Yahoo later sold to Verizon for less than a tenth of that.) The cult of the founder had so bewitched investors that they couldn’t admit that Jerry Yang (1994) and Jerry Yang (2008) were different people suited for different times.

No amount of wishful thinking will magically make Biden younger, or sharper, over the coming months. There will likely be more disastrous performances, and Hoffman will eventually be forced to cut bait, just as even Thiel decided not to support Trump this time around. The risk for Hoffman is that he becomes Gurley, who waited so long to publicly acknowledge Kalanick’s unsuitability as CEO that both sides ended up angry.

But by sticking with Biden as the Democratic candidate, the risk for the country is a total catastrophe. Even at his worst, Kalanick could only destroy Uber and the lives of his drivers, riders and employees. Neumann and Yang mostly just made some rich people less rich. Every day Biden stays in this presidential race, whether through genuine conviction, delusion or ego, is another minute American democracy edges closer to midnight.

As a student of philosophy, Hoffman could probably recite John Stuart Mill’s famous warning that “bad men need nothing more to compass their ends, than that good men should look on and do nothing.”

To which we might add … and send emails insisting everything is fine.

Paul Bradley Carr has written about Silicon Valley for 25 years. His next book, The Confessions, will be published next year by Atria.

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