Onwards from FTX
In the year end rush of early stage companies trying to raise capital I’ve seen a number of exciting presentations from new businesses that could be making high impact developments in 2023 and beyond. Before leaving 2022, however, I’d like to share a few thoughts on choices aspiring entrepreneurs make in pursuing their careers, and some high profile examples of those who just tried to game the system. I just want to make it clear that in spite of all the media attention on bad players, I remain optimistic about many of the new businesses in the life sciences, the talented people driving them forward, and the high impact problems they are setting out to solve.
I was recently speaking with a fellow serial entrepreneur, someone who has raised over a billion dollars and created life science businesses worth many times that. The topic of career paths came up, and we discovered that we both had started our careers in large established companies, learning best practices for evaluating new product opportunities and then starting, growing, and managing emerging businesses. We had the benefit of years in the industry, learning from talented experienced mentors, and obtaining first hand operational experience across all business functions before attempting to launch a new business on our own.
We both feel that there are always a few really special people out there who through their intelligence, insights, hard work and/or good fortune are able to launch a business with no prior significant experience and achieve dramatic success. They are remarkable, and they get most of the media attention. Their stories are widely known. But the vast majority of successful CEOs do not fit this mold. Their journeys look more like mine or my friend’s. Just something for an aspiring entrepreneur to consider when they think about charting their own career journey.
We spoke about Elizabeth Holmes being a poster child for what can happen when people lack prior experience, believe they can figure it all out on the fly (or fake it till they make it), and then try to lie when things go wrong or they encounter life’s inevitable unexpected events instead of seeking help.
With Holmes finally having been given her just desserts, my attention shifted to the man of the hour, Sam Bankman-Fried (SBF). His FTX venture was clearly a con game. Another individual more focused on a quick path to creating personal wealth than actually creating high impact products.
I had recently seen a YouTube video about SBF and FTX posted 12/7/22. https://youtu.be/jdazsXctLNc
This clip is from a segment of the Jon Stewart show where they are discussing the level of deception going on at FTX, the political contributions made to both parties, and their efforts to get regulated by the Department of Agriculture rather than the SEC to avoid rigorous oversight. Somebody joked: “Bitcoin ain’t nuthin but soybeans on steroids”
I’m not saying that what SBF was doing is equivalent to trading soybeans, but it’s true that there’s a lot of gambling, dubious investments, and risk of significant financial losses even in established commodity markets. The difference is that those systems are designed and regulated to provide a service that is truly of value to users. In contrast, SBF didn’t start a breakthrough business facilitating trading of cryptocurrencies. He appears to have just created a get rich quick scam, taking in funds that were unsecured and funneling profits into his own accounts, while using celebrities to convince customers that you don’t need to know anything about crypto in order to make money on it.
How unfortunate for those who lost money with FTX, and for the black mark scammers such as SBF give the broader field of entrepreneurs. The vast majority of entrepreneurs I’ve met are trying as hard as they can to create real value by commercializing products and services that improve people’s lives and change the world for the better.
Happy New Year everyone. Here’s to a fulfilling 2023 for all!