Hiring of Kevin Rose by Google sends all the wrong signals to Silicon Valley

“Embrace failure” is the first thing anyone will tell you is the secret to Silicon Valley’s success. There are other things of course, but that’s likely the first thing that will pop out of people’s mouths.

But as important that philosophy is, the news today that Google had “hired” or “acqui-hired” or “whatever-hired” Kevin Rose seems strange and depressing. AllThingsD broke the story that Rose is joining Google. And then TechCrunch followed with the additional news that Google had hired Rose as well as his entire team from his latest venture, Milk.

There’s been no official statement from Google or Rose as far as I can see.

Milk is best known for, well, nothing. It released a mobile app called Oink which it recently announced it was killing after three months. Rose is best known for starting Digg which was going gangbusters until it wasn’t, and Rose left.

But, as you know, we’re supposed to embrace failure. And so, when Rose started Milk, he was apparently able to hire at least five other people who are listed here on Twitter (TechCrunch says total number of Milk employees is 8.) and raise $1.7 million from at least 24 members who are named on this Twitter list apparently created by Milk. (h/t to Atul Arora for posting these links in the TechCrunch comments.)

The investor list is a rock star lineup: Mike Arrington, Don Dodge, Ron Conway, Matt Mullenweg, Dave Morin, Mike Maples, Chris Sacca, and Ashton Kutcher.

TechCrunch reports:

“We’re also hearing that Milk’s investors were happy with the deal, the price of which was somewhere in the range of $15 million to $30 million.”

Now, we can assume some chunk of that goes to Rose and his friends at Milk, who must have retained some equity. And the rest gets parceled out to the long list of investors who each probably chipped in what amounts to spare change. It essentially seems to bail them out on an investment that appeared to be going nowhere.

Still, the return for such a short-term investment in a company and team that accomplished pretty close to zero seems disproportionate. I know the competition for talent is fierce in Silicon Valley these days. And TechCrunch says Rose and Milk also were negotiating with Facebook, which probably helped drive up the price.

But still, what is Google actually getting for its money that it couldn’t get from a stack of applications flooding its databases? It’s hard to see what makes these guys stand out, other than the brand name of Kevin Rose. And while the valley needs to encourage risk, it seems there wasn’t much risk taking going on here. Worse, it’s always dangerous when there isn’t some sense that rewards are at least somehow tied to performance. It reminds me too much of the dot-com days when people who started terrible companies that quickly tanked still managed to cash out millions before sneaking out the back door. It’s not really taking a risk if you’re going to get rewarded for failure, something that potentially encourages reckless risk taking.

I also have to wonder, will the Milk team’s new co-workers feel about all this when they arrive at Google?

And as for investors, this seems to send an equally bad signal. Bankroll a group of talented techies who are unemployed. Shop them to big players like Facebook, Google, Yahoo. Make a quick buck for doing pretty close to nothing.

Seems like the kind of small thinking that shouldn’t be rewarded or encouraged.

 

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  • Anonymous

    Sour grape much?

  • MonsterMunch

    Rose isn’t really an entrepreneur. He’s a front man for the money people.

  • Chris

    What has Kevin Rose ever done? G4 – Failed. Digg – He sunk it over night due to bad business and technology decisions. Pownce – A failed Twitter clone. Milk – Failed after six months. Now he’s going to be a Google employee? Might as well throw him on Google+ to continue his track record of failures.

  • http://www.pcmag.com Mark Hachman

    The real story is probably not the people, but the data that Milk/Oink accumulated. Remember, Facebook and Google to some extent know what users “like” in restaurants, people, and brands. But my guess is that Google saw some value in the, well, “everything” that Oink purported to rate.

    Oink now looks like a contractor for Google, accumulating data that users may have been reluctant to hand over to Google itself.

  • http://www.8asians.com John

    I agree. And I don’t think Google got much out of Slide.com either.

    Another over-paid acquisition for what? Especially after Google shutdown
    everything Slide.com related.

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  • Rick

    Kevin Rose remains a name brand, despite his failures.
    Google doesn’t really have a name brand persona out their promoting the product.
    Larry Page may be running the show but he’s awfully quiet.
    The name brand persona has to have some bravado behind it, the sense that the person has, at some point, ventured off on their own with some crazy idea, whether or failed or succeeded. This is what you don’t have with someone like Gundotra.
    Apple (had) Jobs. Twitter/Square have Jack Dorsey. A company with the size and ambition of Google needs someone as well, and Rose could fill that role.

  • Jim Browski

    Let’s be honest about how things work: there are slow running you scratch my back / I’ll scratch yours relationships here. Whoever initiated the buy at Google will be able to go to Oink’s investors years from now and get funded since they know he/she/they is a “team player”. And on and on.

    This is why I don’t really invest in public companies, you’re just funding this type of indirect corruption.

  • http://andreelijah.com Andre Elijah

    Wow you are way too bitter! Maybe you’re jealous that he’s sitting on a pile of cash and you aren’t?

    Digg was great. No question there. He made a product that people didn’t know that they wanted and made it work for a while. Yes some poor decisions were made – but what company doesn’t make a mistake?

    Pownce as Chris in the comments states – wasn’t a *major* success… But it was purchased by Six Apart if I’m not mistaken and Leah Culver got a job there out of that. (She was the co-founder)

    Kevin started Revision3 which is a popular online video content site with millions of viewers every month. They rake in tons of money on advertising and really have great quality content.

    Milk did what they set out to do with it. It was a team of guys with ideas that quickly made products and tossed them out into the public. If the idea works – GREAT! If not – scrap it. Too many companies waste millions of dollars on ideas that we deem as stupid, or great ideas with sloppy execution. Milk mitigated that risk by trying to get 3 ideas out there a year. It just so happened that they stopped after being approached by Facebook and Google.

    Kevin knows social.

    He proved that with Digg.

    He proved that with Revision3.

    He’s also an angel investor in some of the most popular services out there (Twitter, Foursquare, Path, Facebook, Square, Zynga, Fab) and a couple of them have had some good exits (ngmoco with a $500 Million exit, about.Me which sold to AOL, fflick which sold to Google, and Gowalla which Facebook bought last week.)

    He’s also an investor in a few funds including The Crunchfund with Michael Arrington.

    If that’s not success I really don’t what is. He’s diversified his investments between small companies, big ones, and other funds. Would you like to re-evaluate your statement of how the “Hiring of Kevin Rose by Google sends all the wrong signals to Sillicon Valley” – I think he’s doing just fine!

  • http://www.siliconbeat.com Chris O’Brien

    Thanks all for the commments.

    @Andre: I don’t think bitterness enters into it. My concern is the signals it sends to others regarding priorities. Yes, in some regards, Rose has been incredibly successful. Digg was great, but as even he acknowledged, it didn’t quite make the leap when the Web became even more social. It happens, no shame in that.

    And along the way, he made some personal money, which he invested make in the ecosystem, which was also a success.

    The issue, for me, is when you come to Milk and Google. Taking a risk means that there is the prospect of real failure at the end of the road. And as such, there have to be stakes. Not life and death, but some cost.

    In this and similar cases, such people seem to have a pretty nice safety net awaiting them at the end of the road should they stumble. As another commenter noted, Slide could arguably be put into this category.

    I don’t begrude Rose his success. Success should be rewarded and celebrated. Failure should also be celebrated, and should provide lessons. But it shouldn’t be rewarded in this fashion.

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  • Johnny Worthington

    Something to consider though. You’re only judging the acquisition by what has been publicly released in regards to the app. There is a good chance there was something that the team was working on that no one but a select group knew about that Google may have found too tantalising to pass up.

    Sometimes, some acquisitions can be pre-emptive.

  • BigO

    Haters gone hate but yeah they bought a brand.

    I know Rose especially from watching Diggnation and I do believe he has done the legwork to deserve his reward, despite his failed ventures.

  • Amber

    “Apple (had) Jobs. Twitter/Square have Jack Dorsey. A company with the size and ambition of Google needs someone as well, and Rose could fill that role.”

    Ha, ha ha ha ha ha. Rick you’re killing me. He couldn’t make Milk work, an 8 man team, but now he’s going to turn the Google around.

  • Bryan Jowers

    This team is solid. They’ve spent a good time working together and have proven that their able to produce awesome products together. It is impossible to know how a team formed from a ‘stack of resumes’ could work together much less what they could create together. That risk is removed greatly by picking up great teams, like Milk. It’s no coincidence this is happening over and over recently… I congratulate all sides on this one . For any acqui-hire – that’s exactly what it is all about.

    @bryanjowers

  • Deborah

    Since when is it news that Google’s hiring practices are screwed up? For just about forever, they have been known to hire for appearances that make no sense to anyone with any reasonable management experience. Hey, I wonder what his high school GPA was?

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  • Aindreas

    Success is rewarded and celebrated, failure is celebrated, or should be celebrated,

    You are making no sense. This piece has no real point, you just went to have a go at Rose, and wrapped it up in a false thesis.

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  • http://www.gootoor.com Goo Toor

    Seems like a desperate attempt by Google to get some traction in Social Biz.

  • Ving Leo

    Over the last few years he’s become an evangelical apple fanboy, he never used to be To be until maybe 2007/8, google is hiring him just so he can promote how cool their android stuff is and show he’s now a convert.
    A hack ? Yeah, like to see him a barista

  • tof

    Is working for Google some kind of prize? I don’t see the connection between their “failure” and being hired by Google. Oink wasn’t a gigantic success, but it doesn’t mean it was a bad idea. Do remember as well that Milk itself was more of a geek think-tank. Maybe they had other ideas in the pipeline that weren’t made public and Google has interest in those ideas. Honestly, I think this move has to be related to G+. Talk about a failure…

    I do believe your “failure shouldn’t be rewarded in this fashion” idea is definitely bitterness. It sounds like you’ve been trying to get inside Google and can’t! Put down your tall glass of Haterade and change out of those Hater Pants. Give Kevin his dap!

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  • Justin Matthew

    Gotta say, I have to agree. With initiatives like Schemer, Google is attempting to emulate the startup facade that so easily garners media attention and frenzy. It seems as though a brand name was purchased over actual content or product. But the immediate future activity of Google in the SoMoLo space will tell.

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  • Ric

    This is a Google+ strategic move and and a smart one at that. They need to take + out of the box to give it a chance at success and say what you will about Rose he knows social flow. I expect this to pay off over time in unexpected ways.

  • http://urbsly.com Michael Bernstein

    I think the Milk team was hired because Google needs an internal non-G+ ‘Red Team’ to build apps that test out (and provide feedback on) unreleased G+ APIs, NOT because they wanted more developers on the G+ team itself.

  • Stig

    If you look at most start-up acquisitions, the companies have failed. They’re mostly a sale of assets or companies that have no choice and VCs are pushing for any exit.

    For Google this is nothing more than a drop in the bucket, call it a “recruitment fee.”

    Hiring Kevin is a huge win for google, and sends a correct message of valuing talent. He’s a luminary who has earned his keep and draws a big crowd.

  • http://www.marybranscombe.com Mary Branscombe

    think I’d be giving the credit for the success of Revision3 to Jim Louderback myself…

    everything Milk has done has felt like a 20% project at the Google of old, throwing stuff against the wall to see what sticks; if less of that is happening internally where once it was a way to make major new products, bringing in a team that works that way could be about kickstarting the 20% culture (but then you also have to ask why it was withering internally in the first place).

  • Matt Cutts

    Interesting way of looking at it, but the PR value alone for Google is enough. We got cash, and if we need more we tweak the algo and add more ads to increase our earnings.

  • AnotherValleyEntrepreneur

    Definitely agree with everything written here.

    This sort of behavior does encourage a sort of Valley aristocracy which includes people who had some minor success in the past. It gives people the illusion that everyone can exit with an acqui-hire and that if your product doesn’t go gangbusters in 4 months then you should sell.

    None of the real successes in the Valley were anything near this.

    This has little to do with Kevin Rose, per se, and more about the Valley as a whole.

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  • http://www.inflatabletubesale.com Inflatable Water Tubes

    Hi Linda, I think most of us are on a path, searching, maybe for the meaning of life, or for peace in the moment. Yoga is a path, but is only one of the paths. Time flies by too fast, and if we dwell on a question, and just that moment of clinging, we will never be free. I hope you find your path to freedom soon! All the best!

  • DXL

    I hope the recent Instagram deal make the armsrace in Silicon Valley a lil more clearer for you O’Brien.

    • http://www.siliconbeat.com Chris O’Brien

      Huh? The Instagram guys built something that is growing like crazy, and that millions of people love, and that just maybe had the potential to disrupt Facebook’s growth. Rose and Milk accomplished…what, exactly? Google just overpaid to hire a few developers with name recognition. The two things don’t really compare.

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