If you want to see everything that’s wrong with Silicon Valley, and possibly America, you should visit New Jersey. That’s where Newark mayor and senatorial candidate Cory Booker, Google chairman Eric Schmidt, LinkedIn’s Reid Hoffman and even Oprah Winfrey have come together to epitomize the incestuous back-scratching intersection of tech start-ups, politics, and wishful thinking.
The mayor as chief networking officer
Booker is running for the US Senate, and had to disclose last month that he has a stake worth between $1 million and $5 million in a video curation start-up called Waywire, which he co-founded with marketer Sarah Ross and entrepreneur Nathan Richardson. Ross and Richardson run the company; Booker, who tapped his list of A-list friends like Schmidt, Hoffman and Winfrey to raise $1.75 million for the company, appears to contribute little besides his admittedly impressive connections.
It’s one thing for an elected official to tap his connections in the private sector—Booker’s buddy Mark Zuckerberg famously gave $100 million to Newark’s schools, albeit with mixed results. But an elected official raising money for his own private business isn’t a good look, especially when he has no business experience and he’s favored to win a statewide election that could make him very useful indeed to his co-investors, whose huge tech and media businesses have many interests before the federal government. (Booker will need to leave Waywire’s board if he wins the Senate race.)
What does Waywire do anyway?
Just over a year old, Waywire has no discernible revenue and has already seen its first round of lay-offs. Initial press reports pegged it as a “platform for teens” or maybe a “socially conscious Youtube,” but after a year its founders seem to have settled on “Pinterest for video.” Sweet value add, except that Chill is already a Pinterest for video, Telly is a Pinterest for video, RockPack is also a Pinterest for video, and oh yeah, Pinterest is already a Pinterest for video. It’s possible that Waywire will hit it big because it’s got some kind of online video secret sauce—maybe that’s why it hired 15-year-old Andrew Zucker, reputed social media teen whisperer and the son of CNN President Jeff Zucker, for its advisory board (he resigned after the story broke yesterday). Or, more likely, the company is a generic start-up that doesn’t have much going for it besides some big names.
Who’s taking advantage of who?
The Waywire saga certainly pushes back against the myth of the founder-as-brilliant-entrepreneur, replacing it with founder-as-brilliant-billionaire-schmoozer. It’s hard to believe that the company’s early vision was compelling enough to attract investments from Silicon Valley’s brightest on its own merits. That raises the uncomfortable possibility that Booker took advantage of his politically influential position to raise money for himself and his business partners. The relatively tiny investments were a rounding error for billionaires like Eric Schmidt. Given the potential political damage to Booker’s campaign, maybe he should have asked for more money.