Silicon Valley can turn on you in a hurry.
As the show continues to remind us from episode to episode, the modern cradle of technological innovation is a comically fickle one. Not a day after every VC firm in the valley lined up with higher and higher Series A funding offers, an intimidation lawsuit from tech giant Hooli claiming intellectual property fraud leaves Pied Piper with a stack of useless offer sheets from backers that won’t touch a startup embroiled in a lawsuit, however frivolous the claims may be.
According to Richard, the idea for Pied Piper’s compression algorithm was entirely his own, completely independent of the mobile messaging QA work he previously did for Hooli and never developed on company time or using Hooli property.
Whether Richard’s telling the truth, though, is more or less irrelevant.
As Pied Piper’s lawyer Ron LaFlamme (Ben Feldman) nonchalantly acknowledged Richard’s explanation: “Always tell me that, and tell yourself that. If you believe it, a jury will too.”
The lawsuit is “usual boilerplate,” according to LaFlamme. Hooli is claiming breach of Richard’s employment contract, unsolicited enrichment off property Hooli claims it owns, and solicitation or poaching of Pied Piper’s now-CFO Jared Dunn (Zack Woods). The case is a slam-dunk, LaFlamme claims. All Richard needs is to hire yet another law firm—one that “litigates,” apparently—and pay them a cool US$2.5 million in Pied Piper’s nonexistent funding.
The funding is nonexistent because Raviga, the VC firm founded by the late Peter Gregory and now run by analytical, deadpan managing partner Laurie Bream (Suzanne Cryer), says the legal, financial and political risks of associating her own newly confirmed tenure with Pied Piper’s legal cloud is “untenable.”
Thus, the more and more tired trope of Monica (Amanda Crew) coming to deliver bad news to Pied Piper with a look of compassionate pity is trotted out yet again. Aside from a joke about making sure she doesn’t look too pretty when she delivers the news, the show is still using its only main female character as a glorified middleman.
A parade of meetings later, every VC firm formerly begging to give Pied Piper money took pleasure in throwing Erlich’s brash negotiation strategy back in his face. The only firm that took a serious meeting sent in all its engineers to take notes and ultimately steal Richard’s coveted “middle-out” compression algorithm.
Pied Piper is untouchable in legal limbo, which is exactly what Hooli and CEO Gavin Belson (Matt Ross) wanted.
“Hooli has the unlimited resources to hamstring you until Nucleus comes out, at which point they will be the market standard and you will be irrelevant,” an executive in one VC meeting told Richard and Erlich. “We’re here to invest in innovation, not lawyers.”
Frozen out by every VC firm, out of options, and running low on his $50,000 winnings from TechCrunch Disrupt, Richard gives in and takes a secret meeting with Belson. Mirroring the show’s pilot, Hooli wants to acquire Pied Piper. While the conventional thinking would be to throw Belson’s offer in his face, the show gets serious with Belson’s surprisingly insightful rendition of the “We’re not so different, you and I” shtick.
“You’re out there getting funding so you can hire people, scale up, roll out a product, IPO and eventually become a publicly traded…what? Corporation,” Belson said. “Once Pied Piper’s a billion-dollar company, you think you’ll seek our your competitors and help them?”
The legal freeze was a blatant tactic, but it worked and left Richard and Pied Piper at a disadvantaged bargaining position. “Runaway Devaluation” was a slightly down episode from the strong Season 2 premiere, but it was important in driving home some of the sitcom’s most prevalent themes about the illusion of money, loyalty and the free spirit of innovation in a place where few ever actually turn their ideas into something real.
Richard likely won’t take the deal—because there wouldn’t be much of a show left if he did—but faced with a seemingly insurmountable legal and financial stonewall for his little startup with the golden algorithm, he at least has to think about it.
Odds & Ends
- LaFlamme, explaining to Richard why he’s distancing himself from Pied Piper and the need to hire another law firm despite him being on their “team”: “I’m part of the team that team is on.”
- The episode’s best running joke by far was Dinesh’s cousin’s Kickstarter campaign for an app called “Bro,” which lets you send the word “Bro” to everyone else who has the app. As Dinesh says, “It’s like the Yo app but less original.
- Like all the best “Silicon Valley” jokes, it skewers not only the culture around creating apps but also one of the silliest California Generation Y-isms, “Bro.” Then of course, the joke turns. Jared, the loneliest nerdy sad sack on the show, gets into it. He finds the app “sticky” and starts bro-ing back and forth with more Bros than he’s ever had before, double and triple-liking other Bros’ “Bros.”
- Jared, delivering the line of the episode: “I’ll find some hoes to prioritize behind you.”
Erlich: “Are you trying to say bros before hos?”
Jared: “It’s sexist, but it’s about friendship.”