In this episode, I talk about FTX, the Bahamian-based cryptocurrency firm that went from Billions to what I call Nillions – it means nil – in just a matter of weeks.
We’ve all watched the drama unfold and heard the talking heads ponder what could have gone wrong – just last fall, there was nothing this Wunderkind couldn’t have done.
Well, my take is that I believe FTX was never created to succeed – it was created to make money. I hope you listen to my spin on this incredible collapse. It’s worth a discussion and some thought.
I hope you join me for this episode!
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Full transcript below.
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story, podcast, company, episode, business, give, lousy, entrepreneurs, sam, people, motives, suckers, whiz kid, short, making, exposed, timeframe, ordain, e s t, disintegrate
Mike Malatesta 00:06
Hey, everybody, it’s Mike. And this is the How’d It Happen Podcast solo series, the short solo episodes that I do on Fridays every Friday. So if you’re familiar with the show, I do this on Friday, and then on Mondays, I do a longer-form conversation about a How’d It Happen success story. And those people can come from all walks of life. I’ve got entrepreneurs and athletes and academics and people that are from the nonprofit world, and just a whole mix of very, very interesting people. And I talk to them about how it happened, and, more importantly, why it matters to you.
So on Fridays, like today, I do a short episode, usually 10 minutes or so, sometimes longer, sometimes shorter. And today’s episode is about something that’s kind of fresh and kind of big. I’m not going to get into all the details on this, I just have a little simple story to tell.
The title of this is “Billions to Nillions,” billions to nillions. Nillions is a word that I made up for nil, to match with billions. By now, you’re probably familiar with FTX, the Bahamian-based cryptocurrency exchange that was, you know, on fire earlier this year, most of this year, most of the last couple of years. They had huge, you know, big Superbowl ads, naming rights at various stadiums, they give millions in political donations and the list goes on. They basically couldn’t do anything wrong. That is until their own fire, FTX was consumed itself in a rapid explosion. Or maybe it was an implosion. I’m not sure what the right word to use there is. There are more competent writers than I am and many more competent podcast podcasters that are actually journalists than I am to dig way into the story. But, I’ll give you two examples in the print world. Bloomberg’s Matt Levine does a great job of talking about this story and cryptocurrency in general to help inform people like me about it in a way that I wouldn’t otherwise be. And then there’s this YouTuber that I watch, his name is Coffee Zilla? Well, that’s what he goes by. Coffee Zilla is a strange name, but he does some really, really good investigative journalism work, exposing all kinds of stories. And the FTX story is definitely one of those. So both of those, whether you’re a YouTuber or a reader, I would go to for more information because they’ve dug really deep into the whys around how a company that was founded and run by a quote unquote whiz kid named Sam Bankman-Fried or SPF for short, that’s what he was called, who was, you know, Time magazine just came out recently with their Man of the Year or Person of the Year, and I bet you before this story broke he was being considered for you know, their Man of the Year, Person of the Year award. I mean, it was like October of this year, so Halloween time, this guy and this company are on top of the world, and it’s amazing how a company by Thanksgiving, (so hardly not even a month later) could be so completely disintegrate and really, that’s not my thing.
Anyway, my thing is not to do the reporting on this, but I’m just fascinated by the details. So for example, this the story of this collapse, like a lot of other similar stories, there’s the Madoff story or Ponzi even, going back, you know, way, way back to Ponzi and a whole bunch of others is really at the core there about the pursuit of what I call, you know, Easy Street success. Easy Street, it’s about starting a company or starting something for the sole purpose of making, and of course spending, whether altruistically, which was SPF’s big thing that he was committed to giving all of his money away and supporting altruistic causes. Of course, the money turned out not to be his. But these things are started for the sole purpose of making money instead of creating a company that is built to live forever. It’s about racing to a finish line that has no meaning, just to prove that you could get there faster than anyone else. It’s about convincing yourself that only suckers fall for the building-a-great-company thing, that that’s hard work BS. Yeah, only suckers fall for that kind of BS. That’s for the not-so-smart people that people like, SPF, for example, might tell themselves, at least when they’re not being honest with themselves.
The real world, however, rarely cooperates with this kind of thinking and these kinds of entrepreneurs / founders / whatever you want to call these people. And the reason is simple. Nothing about building a great business, whether you are a genius with an MIT degree or whether you’re a high school dropout, is easy, or fast. That certainly hasn’t been my experience. In my experience, nothing good ever comes from focusing on how much money you can accumulate in the shortest timeframe, or in the longest timeframe for that matter. It’s a false incentive. And it’s a lousy way to keep friends, and I’m using quotes for friends that you bought with money, deception, etc. along the way. It’s a lousy way, because in the end, everybody gets exposed, everything gets found out, because your motives and your willingness to do something great are all messed up. It’s just about the money, or it’s just about the ego, or it’s just about the fame. And it’s not about the business and the customer and the client, and the impact. So every time I hear one of these stories, and you know, when you’re listening to this, you know, FTX, who knows where FTX will be, it’s certainly going to be disintegrated. And where Sam and some of the other people who were involved in this will be, who knows, maybe it’ll be in jail, maybe they’ll be on Oprah, I don’t know. But one thing I do know is that this is another endearing example of the wrong way to go about building a business.
So if you’re going to get into a business, if you’re going to build a business, forget about easy, forget about, get rich quick, forget about all of that nonsense, and just build something great, or as great as you can possibly build. And if you do that, you never have to worry about the people you hurt along the way. You never have to worry about people questioning your motives. You never have to worry about not doing things as good as you can do them. You never have to worry about doing the wrong thing. You never have to worry about your story. All you have to worry about is doing what you can every single day to make your business, and your life for that matter, as great as it can be.
So thanks for joining me for this Friday episode. I do appreciate having you here. If you haven’t yet subscribed to the podcast or followed it, please consider doing so on Apple or Spotify or wherever you get your podcast. If you want to learn more about me, just go to my website, MikeMalatesta.com or hit me up on LinkedIn, I’m active there as well. Thanks for making time for me today. And until next time, maximize your greatness.