The narratives spun out about these three founders isn’t anything we haven’t seen before. Larger-than-life visionaries and eccentric innovators setting out to solve the world’s biggest problems—inequality, lack of access to healthcare, climate change—with one elegant solution. All-powerful Gods/heroes committed to using their powers for good. (View Highlight)
It’s an age-old story. It’s also a simplistic story. One that, as we now see, wasn’t so much built around the value of the solutions they were touting, but the charm and personality of the founders themselves. (View Highlight)
But here’s the thing, right? While there are always going to be discerning members of the audience who ignore the charm and ask critical questions (like, is the king really wearing any clothes?), there’s also always going to a large number of people, perhaps even a majority, who continue to be blinded by the fairy tales. (View Highlight)
That’s when SBF told Sequoia about the so-called super-app: “I want FTX to be a place where you can do anything you want with your next dollar. You can buy bitcoin. You can send money in whatever currency to any friend anywhere in the world. You can buy a banana. You can do anything you want with your money from inside FTX.”
Suddenly, the chat window on Sequoia’s side of the Zoom lights up with partners freaking out.
“I LOVE THIS FOUNDER,” typed one partner. “I am a 10 out of 10,” pinged another.
“YES!!!” exclaimed a third.
What Sequoia was reacting to was the scale of SBF’s vision. It wasn’t a story about how we might use fintech in the future, or crypto, or a new kind of bank. It was a vision about the future of money itself—with a total addressable market of every person on the entire planet. (View Highlight)
it seems pretty important to ask why Sequoia decided to not just invest in FTX the company, but went on to celebrate it with a crowing profile of its founder that sounds like it was a biographic novella written by a breathless fan.
One answer may lie in the venture capital firm wanting to paint an image of itself as a “founder friendly” investor . An ally that offers support, listens to the founder’s wildest dreams, and believes in them throughout their journey as an entrepreneur (View Highlight)
As far as storytelling science goes, though, there is a key difference between the two archetypes. Friends can support without critiquing, but mentors can’t be mentors if they let obvious flaws slide. And when mentors decide to take on the role of friends, stories often twist themselves into unintended shapes. (View Highlight)
Other publications and pieces have argued that the very idea of highlighting and hyping up the work of one founder or artist is a flawed way to go about things. Especially because no character, no matter how special, exists in isolation. (View Highlight)
This month, in a piece titled ‘FTX and the Problem of Unchecked Founder Power’, the Harvard Business Reviewargued that when a startup grows without any checks and balances, the adage power tends to corrupt and absolute power corrupts absolutely kicks in. In the absence of oversight, startups are likely to fail with dire consequences for customers, employees, investors, society and the founders themselves. (View Highlight)
Things work best, therefore, when a startup founder has the mindset to be a bold risk taker who charges ahead with conviction, but with a friendly but tough coach of an investor by their side, keeping them on the straight and narrow. (View Highlight)
I’ll wrap things up today with a very specific post from startup accelerator Y Combinator which draws the line between what’s really founder friendly and what’s not.
What “founder friendly” doesn’t mean: parties, gifts, saying “yes” to every request, running your business for you, rolling over on every term in negotiations, giving you a high valuation, fixing your mistakes for you and being nice all of the time.
What it does mean: honest, transparent, and responsive investors who act in the best interests of the company, shareholders, employees, and founders. (View Highlight)
