Nocera: A dose of reality in HBO’s ‘Silicon Valley’

In every episode of 'Silicon Valley,' the terrific HBO comedy series created by Mike Judge, there is always a moment, rendered utterly deadpan, that both mocks and explains the current, are-we-in-a-bubble-yet state of play in, well, Silicon Valley.

In one episode this season, for instance, the show's hero, Richard Hendricks, the nerdy founder of Pied Piper, mentions the plans he has 'once we have a subscription-revenue model.' His backer, an obnoxious billionaire, leaps out of his seat. 'No, no, no!' he exclaims. 'Why would you go after revenue?'

'To make money?' Richard answers meekly. 'If you have no revenue, you can say you are prerevenue,' explains the billionaire. 'You're a potential pure play. It's not about how much you earn; it's about what you're worth. And who's worth the most? Companies that lose money!'

In other episodes this season, we've been introduced to an app called 'Bro' — its only function is to allow someone to send the word 'bro'' to someone else — and the coming of 'datageddon,' thanks to all the 'selfies and useless files people refuse to delete.'

And, of course, there is the way all the young, scruffy entrepreneurs on 'Silicon Valley' profess to be in business to 'make the world a better place' rather than get rich. 'We're making the world a better place through Paxos algorithms for consensus protocols,' says one company founder at a TechCrunch Disrupt conference.

'And we're making the world a better place through software-defying data centers for cloud computing,' says another.

Which perhaps explains why I immediately thought of Judge's parody of life in techland as I read the real-life news last week that the social app Secret was shutting down after only 16 months. Like many of the fake companies on 'Silicon Valley,' Secret was based on a truly ridiculous idea: that an app that allowed people to send anonymous messages would not only be a hit but would 'reduce the barrier to communication' and make it possible to convey the 'raw truth' without that annoying filter of identity. Anonymity was going to be the next big thing in 'social,' according to its founders, David Byttow, 33, and Chrys Bader-Wechseler, 31.

'It helps you become a better person if you want to be a better person,' Byttow told the audience at — where else? — a TechCrunch Disrupt conference.

Internet anonymity can make you a better person? Since when? Hadn't we learned long ago that cyberbullying, gossip of the rankest sort, and the spreading of false rumors were the usual results of Web anonymity, crowding out other, more ennobling responses.

But Byttow — who wears only black in public, to judge by his various YouTube appearances — and Bader-Wechseler were convinced that making it easy for people to post anonymous messages — to their friends, no less — would, indeed, make the world a better place. Or at least they convinced enough gullible venture capitalists of this that they were able to raise some $35 million during their company's short life, giving it a valuation at one point of $100 million.

As for revenue, it pretty much followed the 'Silicon Valley' model. Any interviewer who asked how a completely anonymous 'community' could serve as the foundation for a moneymaking business was told, quite matter of factly, that it was far too early to contemplate such mundane matters. Searching for a revenue model 'would be a distraction at this point,' Byttow explained to the technology journalist Kara Swisher, who occasionally plays her sardonic, all-knowing self on 'Silicon Valley.' 'You have to build liquidity in your users,' added Bader-Wechseler.

So what happened to Secret? Cyberbullying was a problem from the start, which seemed to surprise the founders, who were in a constant struggle to keep control of the posts. Security and privacy were also issues. ('We have learned a lot!' Bader-Wechseler told an interviewer five months in.) Brazil ordered it shut down. Marc Andreessen criticized it. As the app's novelty wore off, people stopped using it. Byttow and Bader-Wechseler responded by redesigning the site so that it more closely resembled Yik Yak, a more successful competitor.

Employees started leaving, including Bader-Wechseler in January. Meanwhile, as the New York Times reported, the founders had each taken $3 million off the table in the second round of financing, and Byttow had bought a red Ferrari (which, the Times also reported, he has since gotten rid of). Most new tech companies that realize their business model is doomed spend the rest of their money 'pivoting' to something more promising. Byttow instead decided to return the leftover money to his investors. A classy touch.

In the blog post in which he announced that he was shutting down the Secret app, Byttow promised that he would 'publish postmortems so that others can learn from the unique mistakes and challenges we faced and the wisdom gained from such an incredible 16 months.'

No doubt Mike Judge will be taking notes for future episodes.

Joe Nocera is a columnist for the New York Times.