It’s been my entire professional life as a writer. I’ve been talking to founders and doing deep dives into technology companies for decades. Whatever mojo he worked on the partners at Sequoia-who fell for him after one Zoom-had worked on me, too. This stuff is so wrong it would be funny, if billions of dollars of wealth had not been stolen.Īfter my interview with SBF, I was convinced: I was talking to a future trillionaire. Of course we know that nothing is ever deleted on the internet. Legendary venture capital firm Sequoia Capital was another “victim” of the ponzi, but what’s notable is that they had a fawning profile of founder Sam Bankman Fried (SBF) up on their website before deleting it this past week. As recently as September 2022, CEO Jo Taylor was quoted as saying “In terms of the risk profile, it is probably the lowest risk profile you can have in that it’s everybody else is trading on your platform.” The Ontario Teachers’ Pension Plan lost $95 million of its’ members money in FTX. Lesson 3: Don’t assume the big guys know what they’re doing What to remember for the next bubble is that these products are just an industry meeting investor demand, not a validation of the safety of the investment. They set their professionalism aside and participated in a bubble with their clients’ savings because it was good for their bottom line. Unfortunately, many mainstream investment firms who should have known better caved to the speculative masses and cranked out various crypto funds and products to meet the demand.
Lesson 2: “Mainstream” doesn’t mean “safe” For those with a good-sized portfolio and a reliable source of income, there was no logical reason to take this risk, and avoiding the urge to participate was the right decision. “The secret is to win going as slowly as possible.”Īs a very young, unregulated industry, cryptocurrencies and non-fungible tokens (better known as NFTs) were treacherous. But for those who should have been investing defensively, what was to be gained from participating? I can’t make a comment better than referring to the quote from Niki Lauda that appears in my book: There was a lot of excitement around it, and money to be made (or at least, that was the perception).
Lesson 1: Resist the temptation to follow the crowdĪs the crypto bubble was peaking in 2021, I spoke with several investors who felt compelled to take part in the boom.
Now I know that most of my readers are not invested in this space, but there’s a lot to learn here as you watch safely from afar. The big story of the moment is the implosion of the FTX crypto exchange. So I write this memo at the risk of being that punchable guy. You especially hate that guy when you’ve paid the price and learned your lesson, and he’s sitting there in the corner with a smug little smile on his face, shaking his head at you. Alright, let’s get this out of the way right up front.
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