The Mechanics of Mafia: How to run a Sucessful Startup

You might be wondering why anyone would bring up the mechanics of the Mafia as a guide to building a successful startup but hear me out. Despite being diabolical to some extent, the Mafias and fresh startups have a lot more in common than you think they may. And when you look deeper, there are many things you should learn from how the mafias work, and adopt them in your startup. In this article, we will focus on the Mechanics of Mafia and how running your startup like a cult can increase your chance of reaching the company’s goal.

INSIGHTS FROM ‘ZERO TO ONE’: PETER THIEL’S NOTES ON STARTUPS

The discussions in this post will mainly revolve around concepts introduced in “Zero to One” written by Peter Thiel with Blake Masters. This book provides a unique perspective on how you can build a successful startup right from scratch. You get to explore how most successful startups with successful entrepreneurs by creating entirely new products (0 to 1), instead of blindly copying ideas that already exist (1 to n).

Peter Thiel has co-founded one of the most famous financial technology companies – PayPal. Not only that, but he has also created Palantir Technologies, and Founders Fund, each worth billions of dollars. For those of you who haven’t looked into his book, I would recommend reading it.

In the upcoming sections, we will go through the insights from a chapter from the book “Zero to One” – “The Mechanics of Mafia”.

MORE AS FAMILY THAN PROFESSIONALS

That’s right, in the world of business, there are many things paralleling between a successful startup and a close-knit family. You might hear from people how keeping it professional is the best practice when you run a company. They are not entirely wrong, but let me tell you how being a family, or a cult can give you plenty of advantages in running a startup over being a bunch of poker-faced moose in suits.

THE PAYPAL MAFIA

The Paypal Mafia, founded by Peter Thiel, is one of the best examples to look into here. The team had one main goal, to bring the exciting world of digital currency to the market. The members of the Paypal Mafia were no ordinary people. Each member of the PayPal Mafia later went on to build massive billion-dollar companies like LinkedIn, YouTube, Tesla, SpaceX, and so on.

Just the way families go the extra mile to make sacrifices for one another, people in successful startups tend to give it their all to reach the common goal. There are companies where the shareholders are asked to work for a certain time of the day to be a part of the startup. This might seem like a traditional, more stable approach. But in contrast, when the people in the startup all have a common vision in their mind and they are trusted and respected by each other, they all voluntarily work to attain that goal. When the team is surrounded by people who share the vibe, interest, and passion, it tends to create a more productive, efficient, and thriving work environment. In other words, they become part of the cult, filled with several others who are loyal and share the same goal.

Of course, all these are in no way professional, but it seems that such teamwork and collaboration tend to take startups from 0 to 1.

VISION IN MIND WHEN RECRUITING

You indeed need to recruit people who are skilled at what they do, indeed you should. But there is something more important if you are aiming for success. When someone talented joins your company, they are indeed attracted to the high stakes, high equity, and profile within the startup. As mentioned in the book, these are valid reasons why someone skilled would join you instead of getting into prestigious companies. But skill is not a good enough reason for you to get somebody into your startup.

This brings us back to looking at your startup like a cult, you and your mafia members collectively working towards a single mission (a legal one of course). Now do you think possession of skill alone would suffice? No, they must match the vibe. The people in the PayPal mafia were all like-minded within their team, they shared similar interests. All the members of the PayPal mafia loved science fiction, they loved Star wars, they were a team who were all in sync with each other.

More than joining the company because they think the idea is good or because they can have a chunk of equity, they need to feel the mission. Now this might sound very subjective, so let me give you an example. The members of the PayPal mafia wanted to see the new digital currency replace the US dollar. They all wanted to be a part of the new digital currency revolution which they found to be extremely exciting. Now that is very different from being a part because you think the startup could yield decent success. In some funny extreme cases, it gets to the point where they join because they enjoy the services offered in the building, this is definitely something you must avoid at all costs.

BE A CULT

At this point, this might sound like a cliché, but it’s true. Startups don’t usually start with luxury, everything you get, you need to work for it. In such an environment, working as a team could be a time waste if all you have is a bunch of geniuses who don’t know or care where the whole thing is going. As mentioned in the previous section, being in sync is a must, but how do you do that?

You need to create a sense of belongingness within the cult. When you keep your initial team as like-minded as possible, you tend to understand each other better. Despite the differences in talents, the understanding within the team would be enough to make a difference. It doesn’t matter what you look like and where you come from.

In most cases, being professional gets in the way more than being helpful. It is partly the reason why many companies these days, big or small, don’t make you wear tight uniforms with a nice shiny logo at the front. Instead, they let you dress more casually and along with a hoodie, or jacket with the logo of the company. It captures the members’ unique style while keeping the mission in common between them.

Just like in any cult, distinguishing your team from the people who are not your team is important. Once again, this happens when you have a room full of people intrigued by certain common topics, that might not be that interesting to the ones outside. The goal is to build a team of good friends facing similar challenges under similar circumstances to achieve a certain something (the mission).

A TEAM OF GENIUSES WITH UNIQUE SKILLS

When you have a startup where each member of the startup is highly skilled in their domain, you have a team capable of solving any problem in a heartbeat. Anytime something comes up, you know who to turn to. In the early stages of any startup, the job roles are unclear. But when you make each person responsible for one thing, you are not only simplifying management but also enhancing productivity.

When the job roles are not clear, and the members’ expertise is all over the place, you end up complicating everything. The goal is to keep it simple and let one person, who is very skilled in that particular problem handle it. Now, this may sound obvious, but most new startups tend to hire a bunch of people and try labeling them to a job role. It’s wrong, you’ll most likely end up, say, giving the “research” role to someone decent at research, but expertizes on some job that is unrelated to the startup. You might as well end up creating job roles that are not necessary.

Instead, what you need to do is know your mission and only look for people when there is a need. This way, the responsibilities and roles are well defined, and everyone knows who to leave a problem when they face any.

DEFINE PURPOSE

The first step to start running your startup like a cult is to define a clear purpose, the end goal. In Thiel’s book, the a contrast between consultants (where there is a lack of clear goals) and cults (extreme dedication towards a distinct goal). Successful startups tend to have a clear vision and sheer determination. “Cults” thrive on goal and determination, and it is the opposite for “consultants”. When nobody is building something and the people outside don’t understand, that’s where startup cults come in to start successful businesses. Usually in cults, the people outside don’t understand the purpose and workings of the cult since it’s foreign to them. Thriving businesses are similar, when you build something, only your team understands and feels the mission, and that sets the bunch away from the outsiders’ views.

In extreme cults, the people in the cults give a deaf ear to whatever is coming from the outside. This isn’t something that can help with bringing success to the startup. In contrast, getting it wrong about something important can mess up the startup. Successful startups, tend to be right about the things other people misunderstand, therefore making their cult dogmatic to a safe level.

Once you find a way to define that purpose and effectively communicate about it with the team igniting their passion in working towards that purpose despite what others think, you are already running your startup like a cult, like the mafia.