#378 Musings Beyond the Bunker (Wednesday June 15)
Good morning,
DISRUPTORS, DECEPTION, AND DRAMA
Andrea and I recently have watched several excellent mini-series about bad behaviors in selling an idea to investors—capitalism gone awry. These four series are each extraordinary in their own right. They’re about people inventing themselves and inventing ideas, trying to be the next “big idea” as fast as possible, ignoring the guardrails of business and decency. Two are about swindlers who defrauded and violated law and decency with impunity. The other two are about swindlers with a great idea who were able to make a mint off of the latest “unicorn” from Silicon Valley.
These are the stories of big ideas, hubris and “disruptors.” Disruption is, of course, a euphemism for the willingness to ignore laws, lie, cheat, mislead investors, and operate under a moral code that lacks morals. Ironically, for all the talk about changing the world for the better, people like Travis Kalanick and Adam Neumann didn’t really do that much to compensate their employees. If there is a lesson in these shows, taken together, it’s that disruption is not a pretty thing and not a moral thing (although, sometimes, perhaps even a necessary thing…), but if played to the extreme, can fool some of the people some of the time and make the disruptors rich most of the time. I’d rate all of these shows highly.
Inventing Anna. Russian immigrant invents herself and her background, clawing her way through high society, all the while hoodwinking nearly everyone she meets, including JP Morgan and other established financial players, with the crazy idea of a special social club in Manhattan that purports to be better than all others before it and creating the proverbial “new paradigm.” Anna is able to manipulate people and finds herself nearly at the top, but unable to make the last move, which requires the confirmation of her creditworthiness before receiving a loan. The story is as much about the journalist who pursues the story and interviews all the parties, including Anna, who is in jail. The reporter (played by Anna Chlumsky, of Veep fame) develops a bizarre connection and identification with her subject. It’s not quite a Killing Eve obsession, but definitely bordering on the edge of responsible journalism. Once released, Anna is deported. In the end, not a story of riches but of thwarted ambition.
The Dropout. About Elizabeth Holmes and Theranos—another example of a complete fraud fooling a lot of people with an idea that sounds like a great idea (only scientifically not possible). A tiny drop of blood never contained enough material to administer the various tests Theranos promised. It was a simple question of science and math. The lesson? Tell a little lie, with the best intentions, then another, then another. Pretty soon it’s all a gigantic lie. People will believe what they choose to believe, in the absence of facts. And when the walls start closing in, become paranoid and vindictive. The book Bad Blood is one of the best stories of corporate intrigue and how venture capitalists and successful public figures can get taken in and refuse to acknowledge the flaws in their thinking. Who wants to admit being conned in a game of Three Card Monte? But that’s a fair analog. People like George Schultz and Henry Kissinger got hoodwinked but, rather than get up from the table and take their losses, they stayed in and doubled-down in their support, against all logic. Bad, bad, bad. A company based on sales and promotion, without the support of science, data, or logic. Worse than the stories in all the other stories because, in this instance, lives were put at risk for hubris and profit.
Superpumped. As opposed to the first two stories, this actually was a good idea that served a real purpose. It’s the story of Uber, starring Joseph Gordon-Levitt as Tyler Kalanik, the charismatic leader, with Kyle Chandler (aka, “Coach Taylor” from Friday Night Lights) as the venture capitalist who stakes him early on and tries to get him to stay within rational norms. Interesting to watch the venture capitalist try to convince the “unicorn” founder to allow for tipping of drivers because people are human and want to be kind. Kalanik doesn’t buy it. He doesn’t see the cogs in his corporate machine as human. Watch hubris overshadow reason, while the venture capitalists, including Google and TPG, fall into the thrall of “TK.” Eventually, with the help of Arianna Huffington, these venture capitalists move TK to the side, but only when their profits are in jeopardy. The company made serious wrong turns and misused information collected from riders. But despite bad behaviors and decisions, fortunes were made by some.
We Crashed. The story of shared workspace isn’t really a story of technology. It wasn’t even a new idea. This is the story of a promotor trying to corner the market as the “middle man” between landlords and users. Neuman, a “serial entrepreneur” with a series of unsuccessful ideas finally comes up with one. Initially, funders cared only about market share and growth. And the likes of Jamie Dimond at Citibank couldn’t wait to lavish personal lines of credit on the founder. But as the company went into an over a $50MM weekly “burn rate” (lost money each week), questions were asked by funders and bankers, eventually leading to an IPO. But Mr. Neuman and his wife didn’t stop at shared workspace and the alcohol-fueled parties with employees; they had to venture into schools, lifestyle and other areas under the “we” brand. Eventually, an IPO was required but, adhering to the mantra of being disruptors, they decided to write their own S-1 (initial public offering) that became the laughingstock of Wall Street. Needless to say, things did not improve from there. Most employees got nothing; investors were disappointed; but the architect of this disaster walked away with over $2 billion.
ODDITIES OF ENGLISH
Some additional weird bits on the English language:
Bob Cronin reminds us that our noses run and our feet smell.
Mark Shpall notes that we drive on a parkway and we park in driveways.
Have a great day,
Glenn
From the archives: