Joanna Shields (2:08)

We showed them what we had and we said this is the medium that you guys are familiar with. It just happens to be delivered on the Internet. And that changed everything.

Michael Birch (2:17)

I do think it was really powerful in some ways and I also think it was a complete failure. People didn't actually want to watch and it was really important that it succeeded. So we kind of forced it upon

Danny Fortson (2:28)

users at the time. Creating and publishing a TV show for an audience on the web helped set Bebo apart. It showed the world what was possible in this brave New world of social media.

Michael Birch (2:39)

We were certainly the largest website overall in Ireland and New Zealand, and for one month we overtook Google in the UK as the largest website. And I thought, this is amazing. This is going to be such big news. This is like an English guy, for the first time ever, has built the large website in the uk. No one gave a pardon my French gave a shit.

Danny Fortson (3:11)

In this episode, we're going to pick up where we left off last time. We introduced you to Michael and Xochi Birch, a British American couple who started dreaming up websites in a little Richmond flat in the late 1990s. They came to California to seek their fortune and amazingly, they found it. There were many web tycoons, viral marketeers who had a couple small but very profitable successes. But they wanted more. Friendster had started a revolution. Facebook was changing the way that people kept in contact and MySpace was changing how people expressed their creativity online. Social networking was taking off and the Birches wanted a piece of the action. Enter Bebo. Little did they know it, but their lives and the lives of teenagers all over the world were about to be flipped upside down. I'm Danny Fortson, west coast correspondent for the Sunday Times, and this is episode three of Tales of Silicon Valley and the finale of our story of the Bebo billions. Stick around. Jim Sheinman was an early employee at Friendster, the original social network. He was one of the first people who tried it after its founder, Jonathan Abrams, came up with the idea. He was entranced with how easily it connected people. It was a quintessential big idea. But two years in, the wheels were coming off. Friendster may have created social networking, but it was ravaged by technical issues. Users were starting to leave en masse. A merry ago round of CEOs each tried and failed to fix it. Scheinman was given a job. Go find a rival to buy. That is when he first met a teenage Mark Zuckerberg.

Jim Scheinman (4:58)

The company that was very interesting to us was also Facebook. So, you know, we flew Zucker out and, you know, he was really smart and very special founder. He had a much bigger vision, frankly. When he turned down the offer from the Friendster board, I went and had lunch with him and I said, well, how do you turn down such a lucrative offer? You're just starting out, you're 18. I'm just wondering what you're doing. He said, we have a much bigger vision. We're going to connect the world. Why would I sell it to Friendster? I'm going to put you guys out of business.

Danny Fortson (5:26)

Watching all of this unfold. And having learned a few lessons from their previous projects, Ringo and Birthday Alarm, the Birches wanted another go at one of their first ideas. A self updating address book.

Michael Birch (5:37)

It was kind of the first idea we ever had and we thought it would be really viral at the time, and it wasn't. The challenge was going back to our very first viral idea and then applying all the knowledge we'd gathered since then.

Danny Fortson (5:49)

Working from their attic in San Francisco, Michael spent a couple weeks coding the first iteration of Bebo. They launched it on January 12, 2005, the day after Xochi's birthday.

Xochi Birch (6:00)

And I remember yelling at him, saying, michael, nobody's going to care what day this is launched. Launch it tomorrow.

Danny Fortson (6:05)

She was right. When they launched Ringo, social networking was in its earliest days. By the time Bebo went live, the world had changed dramatically. Social networking was growing into something that even if it didn't have a proven business model, was clearly going to be substantial. Seven months after Beebo launched, News Corp. Mother company of the Sunday Times, paid $580 million to acquire MySpace. Looking back at the coverage of the deal is like opening a time capsul, and not just because much was made of how one of the most popular bands in the world, the Black Eyed Peas, remember them, used MySpace to stream its new music. The New York Times referred to it as a youth oriented music and social networking site. The social networking bit was in quotes because the very term social networking was so new. It was around then that the Facebook dropped the the from its name. Zuckerberg raised a big new round of funding from Silicon Valley's finest that valued his little upstart at nearly $90 million. The Harvard dropout was getting ready to make News Corp feel very bad about the deal it had just made for MySpace. Burch felt the pressure as well.

Michael Birch (7:21)

We were always in catch up mode,

Danny Fortson (7:24)

Having seen the rise and fall of Friendster up close. Scheinman, the executive who tried to buy Facebook from an unknown. Zuckerberg, was looking for a new job. He knew the Burches from their Ringo days and thought he might be able to help them avoid the same pitfalls. Scheinman became employee number one at Bebo.

Jim Scheinman (7:42)

And I thought that I was a good compliment for them. You know, I had already been through this at the largest social network. I'd seen all the mistakes that Friendster had done.

Danny Fortson (7:48)

The Birches moved Beebo's headquarters from their attic to a garage in the Mission District.

Jim Scheinman (7:53)

And you'd roll up the garage door and I'd actually, I'D pull in my car because I drive in.

Danny Fortson (7:57)

So this is just a garage.

Jim Scheinman (7:58)

It's just a garage. But we had like four desks inside this garage. On one side there was an auto PA body shop. So one day, you know, you never know what's going to be the fumes. One day we had paint fumes, the other day it'd be the pot dispensary on the other side. Maybe that's maybe one of the reasons why Bebo is such a creative. We were by far the most creative.

Danny Fortson (8:19)

Bebo's beginnings were humble.

Michael Birch (8:21)

MySpace was the biggest. The positioning we were trying to do. We wanted to have more self expression than Facebook, but we didn't want the kind of geocities look of MySpace like we wanted it to always have a little elegance and not to be the complete wild west of craziness that MySpace was.

Danny Fortson (8:38)

The British creation took off especially for some reason in Singapore.

Michael Birch (8:43)

We launched it and after nine days we added a million members to it in nine days. On the ninth day we'd added 350,000 members on that one day and 100,000 of them were from Singapore.

Danny Fortson (8:56)

What's up with that?

Michael Birch (8:57)

I don't know. So I obviously looked up Singapore, saw what a tiny country. I didn't quite realize how tiny the population was. So we'd added like a meaningful percentage of the entire country in one day. And then we thought, who cares about Singapore? So we blocked their IP addresses and we thought, well, we want to grow in English speaking countries. So we basically blocked all IP addresses that were growing in countries that we didn't want to focus on.

Danny Fortson (9:25)

For what it's worth, I looked it up. 100,000 people is 2% of the entire population of Singapore who all joined in a single day. Bebo racked up users, but just like with Ringo, engagement was tiny. People signed up and then forgot about it.

Michael Birch (9:41)

First of all, only 10% of people even enter their address. So you've now got an address book which only has 10% of your contacts in it and then none of them ever update. So it was more the sort of non self updating, self updating address book.

Xochi Birch (9:55)

Right?

Danny Fortson (9:55)

So the Birches, holed up in their garage filled with pot and paint fumes, started trying different gimmicks to improve the site.

Jim Scheinman (10:02)

We built a quiz. How well do you know me? Most people would say how well do I know you? But if it was how well do you know me? I'd fill out my 10 question quiz and send to all my friends on Bebo and not on Bebo and that would bring in millions of people, Right? Like little ideas. And we had hundreds of these and many of them didn't work. But that's the beauty of a small team, right? You know, Michael never got the credit that he should have, but he was like the wizard of viral marketing. He understood that better than anybody else.

Danny Fortson (10:30)

The little ideas started paying off.

Michael Birch (10:33)

So then we added photo sharing, which people did start using.

Danny Fortson (10:36)

That must have been big, no?

Michael Birch (10:38)

Yeah, that was popular. Yeah. And then we started adding profiles and then we added comments and we just developed it into a full social network.

Danny Fortson (10:46)

As Bebo grew, the Burches were slow to bring on staff for a long time. Michael did all the coding for the website himself.

Michael Birch (10:54)

I was the only one that could fix the website when he went down.

Danny Fortson (10:57)

So you had the happiness of teenagers around the world in your laptop.

Michael Birch (11:01)

Exactly, yeah. There could be a lot of upset people.

Danny Fortson (11:05)

Bebo was scrappy. And they realized that they would have to take a different tack from their better funded competitors. Their answer was to effectively ignore America. You have to remember that in 2005, Steve Jobs was still two years away from unveiling the iPhone. The smartest smartphone around was the BlackBerry. People still mostly access the Internet over their desktop or laptops. It was harder to be global. Ideas didn't spread as fast. Startups were much more prone to focus on their local markets. Here's Leslie Berlin, the Silicon Valley historian you've heard from before, it used to

Leslie Berlin (11:41)

be that you had to go to a special room to get on the Internet or you had to go to your office to get on the Internet. I've tried to explain to my kids that the reason that Cyber Monday is called Cyber Monday is that people didn't used to be able to get to computers until they went into their offices on a Monday.

Danny Fortson (12:06)

Aside from ignoring America, the Burches made one other critical choice.

Jim Scheinman (12:11)

We were going after high school. By the way, no one had done that before. Friendster really post college. Facebook went to college. We were like, what about high school?

Danny Fortson (12:18)

As they added photo sharing, profiles, comment and other features, Beebo's popularity exploded, as did the amount of time that people were spending on the site.

Michael Birch (12:28)

We succeeded. We ended up being the highest engagement metrics of any social network.

Danny Fortson (12:33)

In Britain, Ireland, Australia, New Zealand, Beebo became the social networking site. Michael began to build an engineering team in San Francisco. But it was in the UK where they needed to beef up because that is where their audience and crucially, where their advertisers were. Around then, Mark Charkin, a young, antsy Tech executive living in London was looking for a change. He was a sales executive for Microsoft, a cog in the tech industry's biggest machine. A chance meeting in a castle changed that. It was 2006. Executives from Google, Yahoo and other tech giants had descended on Dublin for an Internet conference. The last speaker of the day was Jim Scheinman. His talk was about the new world of social networking.

Jim Scheinman (13:22)

The first and probably the last time ever I'll feel like a rock star because everyone's like, this guy's from Bebo.

Danny Fortson (13:27)

Charkin ended up chatting with Scheinman at a dinner that night. Months later, he was hired as Bebo's first head of revenue. He was the company's 12th employee and their second in Europe.

Michael Birch (13:38)

So yeah, I mean, I packed my

Danny Fortson (13:39)

bags of a 100,000 person organization, I went off to Oxford street, bought a laptop, went to WA Smiths, bought a notepad, some pens, and, you know, off I went. Bebo was growing quickly, but so was Facebook. If the Birches stood any chance of carving out a beachhead, they needed to get much, much more aggressive. In short, they needed venture capital. Not necessarily for the money, but for the validation, the network that would come if a blue chip investor sank money into their company. It would put them on the map. So for the first time since they started tinkering in the Richmond Flat all those years ago, they agreed to take an outside investor. The problem, the venture capitalists who lined Silicon Valley's fabled Sandhill Road, they weren't interested.

Jim Scheinman (14:26)

To be fair to them, they're like, Look, Facebook won. MySpace is number one, Facebook is going to be number two. You're not even close to number three. But what they didn't realize is that, you know, MySpace then soon was acquired by Fox. So they were gone. I knew that Facebook was never going to sell. So actually number three is, in the US is the largest independent social network. And now if you had to believe that social network was real, and most of these guys didn't get that vision back then, you know, so when I was out there trying to raise this a round from here, they were like, eh, the guys who got it were the VCs in Europe.

Danny Fortson (15:00)

As luck would have it, Barry Maloney, an Irishman who was partner at Benchmark Capital in London, knew all about Bebo.

Michael Birch (15:07)

He had three teenage daughters. He was trying to discipline one of them. So he said, you're not allowed to use Bebo for a week. And he said that he'd never had such a negative reaction from any of his children. Like it was literally like her world had imploded, that she wasn't going to be able to use the thing. And so he was like, I really need to invest in this social network.

Danny Fortson (15:33)

The moral of the story, trust your kids. And in 2006, the kids loved Bebo. Baloney put $15 million into Bebo, but it netted him a much smaller stake than a big name firm like his would usually expect. From a little company like Bebo. He got less than 20%, actually. Why? The Birch's humble little birthday reminder website that sent out witty electronic greeting cards. How you doing?

Joanna Shields (16:07)

Pardon any disconvenience, but we have received a report of a birthday at this address. Detective Sergeant Bonham, Birthday division. No need for alarm.

Danny Fortson (16:16)

The Birches, you see, didn't need the money. Of course, they wanted to grow and grow fast, especially against Facebook's rapidly growing empire. But they could still rely on that steady flow of cash from those greeting cards. The Birches were negotiating from an unusually strong position.

Michael Birch (16:33)

It allowed us to go a long way, and then when we did raise a round, we did on our terms.

Danny Fortson (16:37)

This was key when, two years later, they finally sold. But in early 2006, once Benchmark came on board, things accelerated quickly. Not long after he invested, Maloney tapped Joanna Shields, an American tech executive who at the time worked at Google in London. The search giant had also taken notice of Bebo. Google had a constantly updating radar of fast growing companies measured by website traffic, and Beebo had popped up out of nowhere. So when Shields got the call asking if she wanted to come on as chief executive, she accepted. With the CEO in Europe running the show and the Burches handling engineering, back in San Francisco, Bebo got very busy. Despite the appearance of Bebo, as this raging success, clouds were gathering on the horizon. Michael monitored the chatter on the website, and he could see that more and more of his users were talking about Facebook. Increasingly, they were telling their friends to find them on Mark Zuckerberg's website.

Michael Birch (17:36)

I could sort of see the juggernaut of Facebook coming behind us.

Danny Fortson (17:39)

In September 2006, Facebook, which began at a handful of elite universities, opened itself to to the world. The writing was on the wall, because for a social network, size really is everything. The more people that are on it, the more interesting and vibrant it is. Losing a user risks losing another who may follow their friend to the place where everyone else is. Decline quickly becomes exponential. Scheinman saw it too.

Jim Scheinman (18:07)

It became clear that Facebook was starting to make inroads in Europe. And so the question we had is this Is a zero sum game. In other words, is it winner take all? I wasn't sure, but my gut told me, yes. I lived through that with Friendster in MySpace. And so, you know, look, this was 100%. Michael and Sochi, they're the founders. But I planted the seed like I've been through this before.

Danny Fortson (18:27)

Within a year, Facebook would raise $240 million from Microsoft in a financing round that valued the company at $15 billion. Zuckerberg was hiring the best engineers, outspending his rivals. His favorite word from that time, apparently was was domination. It was pretty clear that Bebo, this experiment that had gone wildly better than Michael and Xochi could have ever expected, was headed toward the rocks. It was around then that Shields had finagled an invitation to speak to a group of executives about social networking at AOL, the granddaddy of Internet service providers, which in 2000 had merged with the broadcasting and publishing behemoth Time Warner. Bebo, you see, was everything AOL wasn't. It was nimble, creative, with daring new features like Kate Modern. It was loved by young people. To say Shields presentation was a success is an understatement. Light bulbs went off in a lot of people's heads around that room. AOL opened talks not about investing in Bebo, but buying it. It was late 2007. The Birches quietly drafted in Allen and company, the most well connected bank in the Internet and media worlds. They had all the potential Bebo suitors on speed dial, and they called them all to the right buyer. Bebo was wildly attractive. It was the biggest buyable social network out there. Yahoo got the call from Allen and Company and jumped at the chance. AOL suddenly had competition. I was recently told how the sale ended up being finalized. The story may be apocryphal. The person who told me did so on condition of anonymity. And the Birches claim they have never heard it. But as you'll soon see, that is not terribly surprising. The story goes that Allen and Company, after months of talks with multiple parties, set a deadline for final bids. They received two offers. The envelopes opened in succession. The first was from Yahoo. Then they saw AOL's bid and burst into laughter. $850 million cash for a company that its own founder admitted, at least privately, was living on borrowed time. And just to add to the intrigue on the fringes, there was a third bidder, which has never been disclosed until now.

Michael Birch (20:49)

It was very high level and it was kind of just. It was verbalized, like around this number. But it was basically Facebook.

Danny Fortson (20:57)

That's right. Mark Zuckerberg himself wanted to buy Bebo.

Michael Birch (21:01)

I think we spoke for about two hours just in a meeting room, just one on one and we just kind of spoke. Social networking. I thought it was kind of a fascinating meeting. But then when I went back and indicated there could be interest, it was just like no interest at all. It was a stock deal for nothing. Not particularly meaningfully more than we could have got from AOL in cash.

Danny Fortson (21:22)

Beebo's backers at Benchmark thought Facebook's $15 billion valuation was too high. For what it's worth, Facebook these days is worth nearly $600 billion. AOL won the Bebo sweepstakes. The takeover was announced in March 2008. For a loss making company with less than 100 employees, it was an extraordinary price. Within Bebo, the news was greeted with a mix of fear and excitement. There were also several parties.

Hal Stokes (21:50)

There was a party in London and Joanna was giving a speech. I think she was quite pleased with herself.

Danny Fortson (21:55)

Obviously, that's Hal Stokes, Bebo's head of music.

Hal Stokes (21:59)

She was stressing how hard it was to do the deal and how many late nights there were. And she said on the final phone call she fell asleep and she kept nodding off. So she was in and out and she was that tired. I made a joke across the audience that if she stayed awake, perhaps we would have got a billion.

Danny Fortson (22:14)

That went down rather well while celebrated. Back in San Francisco, the Burches waited and wondered from the outset. Shields, who had wowed AOL's executives all those months before, was the point person in the negotiations. The Burches were uninvolved, astoundingly uninvolved.

Xochi Birch (22:33)

I think we were the only ones who weren't offered to continue with the company.

Danny Fortson (22:38)

When did you find that out?

Xochi Birch (22:40)

They never told us and they and we never asked. So we honestly did not want to

Michael Birch (22:45)

work for AOL one or two weeks before we closed, right? We sort of said, do you want

Danny Fortson (22:49)

us to work here?

Michael Birch (22:50)

After, via the bankers. And they were like, no.

Danny Fortson (22:55)

And if that is not hard to believe, it's worth painting the picture of what was happening in the world. The global financial crisis was just beginning to unfold. No one knew just how bad it was about to get. But Navoth and Shields fretted privately about whether they could close the deal in time.

Joanna Shields (23:11)

There wasn't one single incident that I could put my finger on. But at the end of 2007, I remember Joanna and I having conversations about the fact that the window of Opportunity is closing because the markets are not going to stay as buoyant as they were forever. And indeed, we were the last train to leave the station.

Danny Fortson (23:36)

There were other hiccups. EOL's advisors were going through Beebo's books with a fine tooth combination and stumbled upon an oddity. It was $150,000 expense for a professional grade DJ booth ordered by Michael to be built at the San Francisco headquarters.

Joanna Shields (23:54)

This beautiful set of techniques, turntables. And so it was one of those examples where you're in the final stretch and you think that nothing can go wrong and suddenly there's this like, surprise.

Danny Fortson (24:09)

They did get it done. AOL officially took ownership of Bebo on May 19, 2008. What did the Birches do to celebrate the fact that they were now wildly wealthy?

Michael Birch (24:20)

We went to watch, forgetting Sarah Marshall at the movie theater for a matinee performance.

Danny Fortson (24:26)

The Burches were free and had $600 million in cash in the bank. The job of integrating Bebo into AOL fell to Shields Navoth and Evan Cohen, Vivo's head of strategy, each of whom had agreed to move to New York to help with the transition. The deal went sour virtually as soon as it closed. The companies were like oil and water.

Joanna Shields (24:50)

Meetings were all about metrics. It was metrics to the minutest detail.

Danny Fortson (24:55)

To be fair, the Bebo lot knew what they were getting into.

Joanna Shields (24:58)

AOL was the place where startups went to die.

Danny Fortson (25:02)

Did you know that going in though?

Joanna Shields (25:03)

I actually did. We convinced ourselves that this is going to be different. We saw that the opportunity is so huge to take this incredible media company, Time Warner, and help them transform the way they do business and transform the way they build relationships with their audience. That was a pretty bold vision for us and it was enough to convince ourselves that we are not just going to be limited and minimized and cast away, which eventually is what happened.

Danny Fortson (25:32)

It was not all AOL's fault. The Bebo executives moved to New York in August 2008. Just a few weeks later, Lehman Brothers imploded, which was the match that set the global financial system alight. Advertisers stopped spending, budgets were slashed and Kate Modern left computer screens forever. On top of that, all was not well at AOL Time Warner. In March 2009, Randy Falco, AOL CEO and the driving force for the Bebo takeover, was fired. Two months later, Time Warner announced that after an unhappy eight year marriage to aol, it was spinning out the online business into a separate company. And Falco's replacement made his views of the Bebo deal. Clear. The whole social media lark was a mistake. He put Bebo up for sale. It had become an embarrassment back in New York. The old Bebo crew were dismayed. Here's Evan Cohen.

Joanna Shields (26:27)

Yeah, it was tough. I mean, basically the short answer is most of the Bebo folks, most of us, left about a year after the acquisition. You know, it was like a irreconcilable situation.

Danny Fortson (26:38)

The eventual buyer was a company called Criterion Capital, A small investment fund based in LA. They bought the company for an undisclosed sum in June 2010. Burch said he had a good idea of the final price tag.

Michael Birch (26:52)

I think it might be a dollar. My belief is they. They wanted to sell it to someone that would completely fail because it would look bad if they sold it to someone and then someone else succeeded with it. So they had no interest in selling it to me in case I was able to kind of revive it.

Danny Fortson (27:11)

So were you bidding for it as well?

Michael Birch (27:12)

No, they didn't. Never spoke to me about it.

Danny Fortson (27:14)

Right.

Michael Birch (27:14)

And I would. Obviously paid more than a dollar for it. Obviously $2.

Danny Fortson (27:21)

This was not the first time that the New York media conglomerate bought a Silicon Valley startup only to watch it disintegrate in its hands. Remember Warner bought Atari way back in 1976? That deal took longer to unravel, but just like then, they underestimated the culture clash. But the Birches weren't done with Bebo. When the new owner raised money, the Birches invested. Just over two years after selling out, they were back, even if they were only minority investors. The Facebook steamroller, meanwhile, was crushing everyone in its path. The social networking company went public this

Leslie Berlin (27:57)

morning, becoming one of the hottest.

Danny Fortson (27:59)

Topping the news this morning, Facebook going

Joanna Shields (28:01)

public and a dorm room dream turns

Danny Fortson (28:03)

into a $104 billion Bibo, meanwhile, was being hollowed out. The Birches and several other investors sued its new owner, Criterion, who they said was sucking money out of the company to pay salaries while the site withered on the vine. After a nasty legal fight, the Birches forced Bebo into bankruptcy, only to buy the assets back. Criterion and its former chief executive, Adam Levin, declined to comment. Despite its downfall, the Burches weren't yet ready to throw in the towel at Bebo. In August 2013, they had a party in San Francisco to announce the relaunch and invited all the ex Beboers to come along. They made a video to announce its resurrection.

Michael Birch (28:44)

As competition with Facebook became fierce, we introduced a new exciting feature. We called it the whiteboard, A creative canvas for unlimited self expression. And Bebo, express yourself. You did. Over the past seven years, nearly 1 million of these pictures have been drawn across the site, making it arguably the single biggest repository of illustrated cock and balls ever recorded. I'm not going to take the moral high ground. I can't. I drew a couple myself. On July 1, we brought Bebo back, and I think we can all agree it's time to wipe the slate clean. The new Bebo will be very different from the old one.

Danny Fortson (29:26)

I don't need to tell you how it turned out. But the best part for the Birches is that it doesn't matter. They live on Billionaires Row, with their own personal pub, views of the bay, and stakes in more than 100 startups. With stories like theirs, it's no wonder Silicon Valley has such a lure. It's a place where the impossible happens, where luck and timing have as much to do with success as creativity and guile. Where the founders of Bebo become billionaires while the creator of the entire industry did less.

Jim Scheinman (29:58)

Well, if a few things had gone differently, we would have been talking about the success story of Friendster as the $400 billion company you know today. And that's Silicon Valley, by the way. I still think Friendster is literally the best name of all of them.

Danny Fortson (30:13)

For my job as a Sunday Times tech correspondent, it feels like I write about Facebook every week. Data breaches, congressional hearings, election meddling. In fact, when you step back, maybe out of everyone who played the social network game, the Burches are the ones who made out the best. They're certainly not as rich as Zuckerberg, but they have none of his worries. Can you believe where we are now, social networking wise?

Michael Birch (30:40)

Yes.

Xochi Birch (30:41)

I'm so glad I'm not part of that world anymore.

Danny Fortson (30:44)

It's very complicated.

Jim Scheinman (30:45)

It is.

Danny Fortson (30:45)

It's very complicated these days. It is.

Michael Birch (30:47)

I always thought it was going to be big. I can't say I you necessarily be the biggest. I'm not sure they're technically the biggest website in the world, but effect as good as. Yeah, it's a crazy world. Yeah, I'm sort of also glad to be out of it in many ways. I think it would be pretty stressful.

Danny Fortson (31:04)

And a quick postscript. We started this story at Birch Castle. Now they're leaving it. The Birches are moving to Mosquito island, the Caribbean paradise set up by Sir Richard Branson. Just a jet ski away from his other island, necker in Silicon Valley, sometimes losing really is winning. Next week on the Pivot Tales of Silicon Valley, we take a step back from the highs and lows of startup life and dive deep into San Francisco itself, where our future is being plotted and planned every day and yielding some terrifying results. This place is one of the great producers of inequality in the world. This is a new Gilded age and they are the railroad barons of our time. Tales of Silicon Valley was written and narrated by me, Danny Fortson, with production by Chica Ayers at Rethink Audio. Matt hall is the Executive Producer for Wireless Studios. It was a Wireless Studios production for Times Newspapers. And one more thing. If you enjoy this series, head over to my other podcast, Danny in the Valley, where you can hear interviews with everyone from Bill Gates and Marc Andreessen to the anonymous startup founder working on what they hope will be the next big thing. That's Danny in the Valley. Wherever you get your podcasts,

ServiceNow Sponsor Announcer (32:35)

This episode of the Times Tech Podcast is sponsored by ServiceNow.

Danny Fortson (32:39)

There's a lot of excitement around AI right now, but the problem is what happens after the demo when you have

ServiceNow Sponsor Announcer (32:45)

to plug that technology into a real company.

Danny Fortson (32:48)

Different clouds, different data, different systems that were never designed to talk to each other.

ServiceNow Sponsor Announcer (32:52)

ServiceNow's platform is designed to help people by connecting these pieces, enabling organizations to coordinate work across departments, tools, and increasingly, AI agents.

Danny Fortson (33:03)

In fact, the company says more than 80 billion workflows run on its platform

ServiceNow Sponsor Announcer (33:07)

every year, which gives you a sense of the scale of operations it's designed to handle.

Danny Fortson (33:12)

Learn how ServiceNow puts AI to work for people@servicenow.com

Progressive Insurance Announcer (33:20)

Insurance isn't one size fits all. That's why drivers have enjoyed Progressive's name your price tool for years. Now. With the name your price tool, you tell them what you want to pay and they'll show you options that fit your budget. So whether you're picking out your first policy or just looking for something that works better for you and your family, they make it easy to see your options. Visit progressive.com, find a rate that works for you with the name your price tool, Progressive Casualty Insurance Company and affiliates Price and Coverage Match limited By state law.