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Chapter 26
THE MUTINY
Every founder goes through it.
When Facebook introduced the “timeline,” its few-million-strong user base grew enraged
at the privacy violations that came with involuntarily sharing everything you did with others. But
Mark Zuckerberg had no choice; he needed to grow his revenue, and this was the path forward. Uber
went through it when the company defiantly refused to eliminate its “surge pricing” model, which
would make customers’ car rides double, triple, and in some instances even octuple without much
warning. But Travis Kalanick had no choice; he needed to grow his revenue. Every tech company has
faced these challenges: Twitter, Google, Apple, Yahoo! All seemingly screwing over their customers
for their own gain. People don’t realize that these are simply some of the tough decisions a CEO must
make in order to survive. So if Ross wanted to continue to grow the Silk Road, he had to make these
kinds of grueling decisions too. And just as in the revolts at Facebook and Uber and every other startup
in Silicon Valley that had pissed off its users, the drug dealers on the Silk Road were outraged at
the latest decisions of the Dread Pirate Roberts. So much so that there was talk of a mutiny on the
HMS Silk Road.
Rumors had been rumbling up through the decks of the ship for weeks about such a rebellion. At
first Ross had justly brushed them off as just that, rumors, assuming they were just hearsay from a
couple of unhappy vendors who were spreading gossip. Yet now the chatter was growing louder, and
there was talk of an insurgency, or even of a mass exodus, that could be in the works on the site.
The turmoil had begun earlier in the year when Ross had made the decision to raise the
commission rate he was charging dealers on the site. Back then, whether someone bought a tiny
baggie of weed seeds for $5 or $5,000 worth of cocaine, the Silk Road would take a 6.23 percent
commission for helping facilitate the deal.
This tax worked out really well for the little guys, who ended up paying pennies for each
transaction. But the dealers who were moving the largest volumes of drugs were being forced to pay
massive commissions. To get around the fee, some of the top dealers had started doing side deals off
the site, in which the Silk Road got nothing.
So the Dread Pirate Roberts and Variety Jones had a plan. They penned a “State of the Road”
address, announcing that the commission rates were going to change. “Now, instead of charging a flat