by Jarett Kobek
Some of the co-founders tapped clients for whom they’d worked at Sequoia Capital. Erik chose another route. He called Dennis.
IT TOOK A FEW DAYS of wrangling with Fear and Respect’s apparatchiks, but Erik got Dennis on the telephone.
When Erik spoke to Dennis, the latter was staying in the Hürrem Sultan suite at Hôtel Les Ottomans in Istanbul, Turkey. His father was entertaining the idea of purchasing the hotel, which was a renovated old mansion overlooking the Bosphorus.
“How’s Istanbul?” asked Erik.
“My mother, as I am sure you remember, she herself was a Turk. As was my grandmother. I always love this country. The only unpleasantness in Turkey is the Turks. Still, a person admits their hospitality. Their name for me here is Küçükkutsaldağ. ‘Hoşgeldiniz Küçükkutsaldağ,’ they say. ‘Nasılsınız, Küçükkutsaldağ?’ they ask. A beautiful thing. But Istanbul, eh, what words might a man offer about Istanbul? It is the most wonderful city in the world if a person’s sole desire is to encounter ten thousand red-faced Germans wearing t-shirts which read either ‘NYC’ or ‘Brooklyn.’”
Erik told Dennis about MoriaMordor. He asked Dennis to contribute to MoriaMordor’s limited fund.
Dennis said yes.
MORIAMORDOR’S FIRST FUND had an initial capitalization of $50,000,000. The general partners were working for Fear and Respect Holdings Ltd. They were working for the endowment of the University of California. They were working for Indiana’s Public Retirement System. They were working for other, smaller entities.
This fund had a limited term.
After ten years, the fund would disappear.
The partnership would dissolve.
The incentive, as with deregulation, was on short term gain.
MORIAMORDOR WAS FORMED at a fortuitous moment. It arrived only one year after the release of the iPhone.
The iPhone was a smartphone introduced into the market by Apple. Smartphones were small computers which performed almost all the tasks of bigger computers but also functioned as a cellular telephone.
The iPhone was a leap forward for smartphones because of two features: (1) Its display and interface employed multitouch glass, which meant that its users dragged their fingers around its physical surface to make the iPhone do their bidding, smearing the grease of their flesh as they commanded the technology. (2) Apple built an interface for the iPhone which allowed its users to both create and buy additional iPhone software while using the iPhone.
This type of software was called an application, but was better known by the colloquial name app. You could buy apps in the Apple App Store.
IN 2010, Apple had introduced a new product called the iPad.
The iPad was an iPhone with a bigger screen and no ability to function as a cellular phone. The iPad was a tablet.
It could run all of the apps that people used on their iPhones.
MOST APPS WERE DEVELOPED on the principle of the lowest common denominator, working off the general assumption that stupidity was the baseline of the human experience.
If an app was developed with stupidity in mind, and if stupidity was the baseline of the human experience, then perhaps hundreds of thousands, if not millions, would download this app.
Some apps cost money. Others were free and served advertisements.
Apps were incredible growth opportunities. The burgeoning mobile market was creating hundreds, if not thousands, of new businesses around the Bay Area. Each of them needed funding.
AROUND THE TIME that Adeline committed her unforgivable sin, Erik had begun a formal monetary relationship between MoriaMordor and a company called Lifechoosey.
Lifechoosey was a platform with a social media overlay which focused on men’s fitness. It offered good deals on gyms and personal trainers. It allowed its users to recommend the best places to workout. It had both a website and multi-OS smartphone apps.
Between rounds of power masturbation and screwing out Adeline’s brains, Erik Willems had analyzed the market research and feasibility studies on Lifechoosey. He spoke with its founders, a pair of undergraduate students at Stanford University.
MoriaMordor gave Lifechoosey $5,000,000 in funding.
In exchange, MoriaMordor gained an equity stake in the company, represented by a significant amount of stock options, and some controlling interest in the company’s destiny, represented by two seats on its board.
Contingent upon his investment of the limited partners’ money, Erik Willems demanded that Lifechoosey change the company’s name.
Lifechoosey became Bromato, which was a portmanteau of bro, a slang term for young straight men interested in physical pleasure, and the three syllables of tomato without the determining ‘t.’
A bro was the target audience. Omato induced visions of the ripe healthy swollen fruit.
Thus was Bromato born.
THE THING TO REMEMBER is that the venture capital fund managed by Erik Willems could not make long term investments. It had a limited term of ten years.
He was bound to find quick returns on the invested money.
Limited terms ensured that venture capital outfits like MoriaMordor had a unique metric by which they measured a company’s success.
To be a success for MoriaMordor, Bromato did not need to make a profit.
IF ERIK WILLEMS INVESTED $5,000,000 in Bromato for a 20% equity stake, this would set the valuation of Bromato at $25,000,000.
This valuation was determined by ideas and processes developed through years of investing. In theory, the valuation was meant to reflect the growth potential of the company and its potential earnings.
In actuality, the valuation of Bromato was meaningless. It existed in a complex and random system. Bromato offered an entirely new and untested service in an ultra-niche market.
Erik Willems could have arrived at an equally valid number by standing in Golden Gate Park’s Sharon Meadow, the place where all the old hippies held drum circles, counting the number of farts that drifted beneath his nose and multiplying the number by one million.
A FEW MONTHS after the initial investment, Erik Willems helped Bromato stage another round of funding. The equity being sold during this round had a higher cost than the equity purchased by MoriaMordor.
When another fund bought in at $10,000,000 for a 10% equity stake, the company’s valuation increased to $100,000,000.
The mutual fund’s original stake went from a value of $5,000,000 to $20,000,000.
On paper, he had produced a significant return on the initial investment. He was making money for Dennis and Dennis’s father.
THE LIKELY FATE of Bromato was total failure. It would survive for some time, but as with most venture backed companies, it too would disappear.
The dominant model of investing in the San Francisco Bay Area was the business of investing in companies that failed.
TO GET TO THE POINT where it could be acquired by a bigger company or offer its stock on a public exchange, both of which could transform MoriaMordor’s initial investment into a ridiculous amount of money for Dennis, Bromato had to mimic the outward edifices of a functional business.
It would have to attract workers.
These would be either: (1) Young ignorants who’d heard of a gold rush out West. (2) Tech industry veterans with actual experience at other companies.
The big catches, the ones with skills and experience, would earn salaries somewhere in the six figures. A few would get signing bonuses.
The small fries, the interns, and the young ignorants would be sucked into miniscule salaries and deferred compensation. This deferred compensation would come with promises of vested equity.
ALL OF THESE HIRES were expendable.
Everyone was expendable.
The people of San Francisco. The entry level workers. The experienced stars. The co-founders. The managing partners.
Everything existed for the sole purpose of making Dennis and his father and their friends and rivals richer. They wanted their capital to prod
uce more capital without paying the costs associated with labor.
They had crashed the global economy before. They would crash it again.
But they themselves would never suffer.
THERE WERE HUNDREDS AND HUNDREDS of Bromatos all over San Francisco. Each attracted new workers and each rented office space.
Because Bromato had been given its money by Erik Williams in an investment scheme, and because there was no expectation that Bromato earn a profit, Bromato could sign bad leases at egregious price.
Businesses that actually made money, that actually had a profit, were losing their leases to businesses like Bromato. Businesses that made actual money were generally run by responsible people who couldn’t sign bad leases at egregious prices.
These business were referred to as lifestyle businesses. They allowed their owners to maintain their lifestyle. This was a bad thing.
THE NEW WORKERS had a detrimental effect on the real estate market. San Francisco was seven miles wide by seven miles long. Housing was limited.
People with salaries in the six figures could afford to pay $3500 for a 1BR apartment in a traditionally working class Latino neighborhood.
The other employees, the dopes who came West with promises of deferred compensation, would bunch together.
They lived eight people to a 2BR apartment. They paid $5,000 a month in rent. They had two sets of bunkbeds in each room.
THE CITIZENS OF SAN FRANCISCO were being victimized by low interest rates.
That was capitalism and it was simply grand, darling.
chapter fourteen
The video of Adeline in Kevin Killian’s class became public domain. Adeline was making money for the Internet.
The Internet was a wonderful resource for sermons about inequality amongst the 1,000 Americans who cared about contemporary poetry, moral outrage about governmental policy, and arguing that religious figures from previous millennia understood the social conditions of the present.
Adeline used the cupcake and the pastry to explain her situation.
“I’m being victimized,” she said to Baby, “People are separating me from them and taking offense. They think I’m the cupcake and they’re the pastry. Or they think I’m the pastry and they’re the cupcake. The peculiar part is that the vast majority of these people harbor very similar political positions as yours truly. One could argue that I am both the cupcake and the pastry and my accusers are also both the cupcake and the pastry.”
“What are you talking about?” asked Baby over the telephone. “All I know is that I have requests for interviews about your epic rant and you’re rambling about delicious kitchen treats.”
BABY WAS SPEAKING to Adeline from his Cape Cod home. Cape Cod was a land mass jutting off the coast of Massachusetts that looked like a flexed human arm.
Baby had left New York City after people from Wall Street ran up the rents.
Rent wasn’t his problem. His apartment on 7th Street had been rent controlled. Plus, he could’ve afforded the market rate. His agents were good at selling film options on his books and Baby’s money manager used Baby’s capital to produce more capital.
Trapped Between Jupiter and a Bottle, which Baby titled after an ex-boyfriend’s mishearing of a Bob Dylan lyric, had sold to a eumelaninless film producer and director named Alan Pakula.
Alan Pakula never made Trapped Between Jupiter and a Bottle into a movie, but he had directed All the President’s Men, one of the films featuring an Academy Award winning performance by Jason Robards.
Jason Robards was Adeline’s father’s last patient.
Sometimes it feels like there are only eleven people in the world and that the rest are paste.
BABY DIDN’T LEAVE New York because of the rent on his own apartment.
He left because all the wonderful queers were chased off Manhattan island. All the beautiful freaks. They were chased away because they had no money. Manhattan had experienced extreme gentrification.
Some moved to Brooklyn. Others left the city.
Baby refused to move to Brooklyn. He was too much of a snob.
HE CHOSE MASSACHUSETTS because he decided to marry his long term boyfriend, a failed architect named Massimo Colletta.
At the time, Massachusetts was the only place in America where gay people could get married to other gay people of the same gender.
Weirdly, anywhere in America, gay people could marry other gay people of the opposite gender. This tended to defeat the purpose of marriage, a social tradition by which sex is legitimized through shared bank accounts.
PROVINCETOWN, WHERE BABY LIVED, was full of gay people and the pleasantries of gay culture. It was beautiful in the summer and filled up with beautiful homos who expressed their faggitude in the Summer sun. You could go to parties thrown by the film director John Waters, who didn’t have any eumelanin in his epidermis.
The winters were hard but Baby was from Wisconsin. New Englanders complained about the snow, but it wasn’t much compared with Baby’s childhood.
Sometimes, Baby liked looking at Norman Mailer’s house. Norman Mailer was a writer who didn’t have eumelanin in the basale stratum of his epidermis.
Back in the early 1990s, Baby and his friend Regina, who had some eumelanin in her epidermis, were at a party. So was Norman Mailer. Norman Mailer made a leering advance at Regina and called Baby sweetheart. Baby threatened to beat Norman Mailer like a dusty broom.
This incident raised Baby’s profile with New York’s literati.
A few years later, Baby and Adeline crashed a party at Norman Mailer’s apartment in Brooklyn. There was another confrontation. Baby was asked to leave the premises.
When Norman Mailer died in 2007, Baby stopped looking at the house.
“I CAN’T GET OVER that you know Kevin Killian,” said Baby.
“What’s peculiar about that?” asked Adeline. “Every one in this demimonde of ours has made the acquaintance of Kevin Killian. Not only is he a great writer, he’s also a social butterfly.”
“I’ve known Kevin for years. He’s very supportive. He’s such a nice person and such a good writer.”
“Why do you think I talked to his bothersome students?” asked Adeline. “It isn’t for everyone that yours truly wanders around spouting objectionable opinions. I only go viral for Kevin Killian.”
“I’VE GOT A NEW BOOK COMING OUT,” said Baby. “It doesn’t have a title. What if I called it The Cupcake and the Pastry?”
“What’s the book?” asked Adeline.
“It’s an official sequel to Annie Zero. It takes place fifty years after the Neo-Maoist revolution has failed. Annie Zero’s daughter Annie Terminay is a fugitive from justice. Her best friend is a sentient computer virus with a drinking problem.”
“A sequel,” said Adeline. “Can you recollect those olden days when you cared about your scribblings? Remember how sick it made you to try and read Infinite Jest?”
“I remember, but I live in Barack Obama’s America. We got a huge advance and sold it into foreign territories. I need the money.”
BARACK OBAMA was the President of the United States. He’d been elected in 2008 and then re-elected in 2012. The basale stratum of his epidermis was full of eumelanin.
George Bush II, the predecessor of Barack Obama in the office of the Presidency, was a truly horrible President.
George Bush II had driven America insane. Things were bad enough that a majority of the country temporarily put aside their racism and elected an African-American into the highest office of the land.
Eight years earlier, this was thought impossible. Most people believed that they would be dead before America elected a Black man to the Presidency.
So that was something like a functioning model of American progress: change is only achieved once half the country is crazy enough to forget that they participate in a system of institutionalized racism.
AMERICA HAD BEEN DRIVEN CRAZY BY: (1) A possibly stolen election. (2) A twice crashed economy. (3) An episod
e of being terrofucked. (4) An Army scientist mailing Anthrax. (5) Two foreign wars in the Middle East. (6) A guy trying to blow up an airplane with his shoes. (7) Revelations of torture. (8) A hurricane that destroyed much of New Orleans and in particular its African-American communities. (9) The failure of two foreign wars in the Middle East. (10) Tens of thousands of American causalities during two failed foreign wars in the Middle East.
It was a terrible time to be alive. It was like being kicked to the ground and then being kicked while you were on the ground. Again and again and again and again and again and again and again and again.
The kicking never stopped and because the kicks were a simile, you could never lose consciousness. You could never be kicked to death. You had to live and watch and be kicked.
If you didn’t live through the kicks, you can never know how awful it was.
HERE ARE THE TWO MOST INSANE THINGS that happened:
(1) The United State of America, a warrior culture filled with good people, became a nation that embraced torture and unprovoked war. 4,487 American soldiers were killed in Iraq. 32,223 were wounded.
(2) After France’s President, Jacques Chirac, refused to help the US invade Iraq, there was a movement to rename French Fries, which were apolitical strips of deep-friend potatoes.
The new name for French Fries was Freedom Fries. This actually happened in the commissaries of the United States Congress.
JACQUES CHIRAC refused to go to war in Iraq for a very good reason. He believed that George Bush II’s main motivating factor was a crackpot interpretation of the Bible.
