I was struck by Mark Zuckerberg and Sam Bankman-Fried’s recent mea culpas for driving their respective companies into the ground, like it was sincere or that it mattered.
Zuckerberg’s apology came as he took away salaries and benefits for 11,000 people, after having wasted $15 billion on a bad business decision and destroying over 70% of the value of his company’s stock. Bankman-Fried apologized after it was revealed that most of the assets of his crypto company and his personal fortune were based on tokens that a sister firm had mined (it’s confusing on purpose, BTW).
Both of them said, effectively, “My bad. Sorry.”
I say the fault lies with the investors and compliant media that supported them, and don’t hold your breath for any of them to take responsibility for the messes.
Financial Legerdemain
Venture capitalists (“VCs”) are accurately named, since they are investors in projects that have one and only one goal: Make them money. They’ve funded early-stage companieslike Google and Zoom, but their primary gift to the world have been social media businesses and their “gig economy” offshoots.
What these businesses have in common is 1) A business proposition that relies to tech instead of people to do things and, therefore 2) A promise to disrupt one or another industry and make unlimited profits. The usual catch is that these companies first have to lose zillions in order to fund all of that disruption, usually by undercutting existing industries on price.
Almost as a rule, there’s usually a company founder involved with each start-up who is usually a guy in his twenties who has done nothing but focus on said start-up idea. This is great for promoting the concept to raise money — they’re boy geniuses! — and selling stock in the companies makes the VCs and boy geniuses filthy rich.
This usually happens before said businesses have overcome that problem of not making any money, but the VCs don’t care because they’ve achieved their goal to make oodles of money. Who cares if the process empowers those boy geniuses to run actual companies with no ability to make reasoned decisions about people and offices and making money?
Media Complicity
The media are happy to play along with this nonsense.
Businesses people who’re successful at one thing have always been given the benefit of the doubt on pretty much every other thing. Zuckerberg and Bankman-Fried were inherently blessed with talent — they’re boy geniuses! — so the media never bothered to question their statements or explore the context on which it was based.
I’ve worked directly with a few billionaires who were surrounded by people who waited with baited breath for them to have opinions about politics, gravity, or whatever else they truly didn’t have a clue about.
So, Zuckerberg has blown billions on building the metaverse, only there is no such thing as “the” metaverse. It’s like saying he’s been focused on building “the website.”
His delaying tactics on his company’s culpability for social chaos and abuses of user privacy have pretty much been taken at face value.
Ditto for Bankman-Fried, whose entire business and personal wealth were built on people “investing” in cryptocurrency, which isn’t any different than putting a bet on a roulette wheel. It’s “an industry” like a Mafia extortion racket. The lack of thoughtful discussion of what crypto is (and, more importantly, isn’t) is mind-boggling.
Yet we’re supposed to believe that these boy geniuses are generating billions in value because they’re reinventing stuff. Financial norms? Social impact? Laws of physics? Pshaw!
The Never-ending Scam
The scam makes VCs rich and keeps journalists and bloggers busy.
There are other examples: Twitter founder Jack Dorsey apologized for Elon Musk’s firing of thousands of employees. Snapchat’s Evan Spiegel had to announce recently his company’s slowdown, though he avoided his own mea culpa (so far) by blaming pretty much everything short of wind direction. But I wouldn’t bet on the scam losing its luster anytime soon.
It’s a very profitable house of cards or, less charitably, a Ponzi scheme. So, we’ll continue to get VC spin and media acquiescence instead of smart people solving our very real problems.
Boy geniuses have no intention of apologizing for that.