Opinion | Sam Bankman-Fried and the fallacy of ‘founder’ hype


Americans have been promoting entrepreneurs since the dawn of the nation. The credit, or blame, probably belongs to Benjamin Franklin.

Between 1771 and 1790, while the war and the founding occupied much of his time, Franklin perfected the ultimate press kit for a businessman he greatly admired: himself. “The Autobiography of Benjamin Franklin,” published in French in 1791 and English in 1793, is the original text from which all stories of self-made heroes, all stories of quirky innovators, and all stories of doing good are derived. to do good. .

I don’t know if kids still get a big dose of Franklin. My classmates and I loved him: the brave destitute who survives on loaves of bread and catches the eye of a passing maiden; the printer’s apprentice who builds a publishing empire on the back of an advice column written in the voice of a fictional woman; the self-taught scientist trying to catch lightning with a kite and a key. As a philanthropist, Franklin invents fire departments and public libraries and other vital organs of happy communities, all while speaking with immortal wits and bracing adages.

The story became a model for generations of hagiographies: Andrew Carnegie, Thomas Edison, Henry Ford, Milton S. Hershey. The list goes on: America’s appetite for self-sufficient newcomers is bottomless. Some age better than others. The Franklin story has held up quite well; ford turned out to be a deranged anti-semite. But all of them maintained the basic requirements of getting rich and giving away a lot. Which can’t be said for some newer models.

Washington Post reporters Tory Newmyer, Julian Mark, and Peter Whoriskey explain what led to the shocking collapse of cryptocurrency exchange FTX. (Video: Joy Yi/The Washington Post, Photo: Stefani Reynolds/Bloomberg/The Washington Post)

Get into Sam Bankman-fried. On Halloween recently, this plutocratic kid with the furry bro-‘fro was a newly minted model of greed at the service of good. He had supposedly built a better mousetrap, and the world had actually made its way to his door. His net worth had reached that exalted state where it was hard to pin down to the nearest billion. But SBF, as he was widely known, had barely rolled off the myth-making assembly line when his wheels fell off. As I write this, his fortune is gone and he lives in a Bahamian jail cell.

Opinion: Sam Bankman-Fried doesn’t read. That tells us everything.

Falling down the well-worn ladder from brilliant to colorful to beleaguered to disgraced, Bankman-Fried landed in a pile of battered demigods. Remember elizabeth holmesthe turtle-necked twenty-something who pretended disrupt the blood testing industry? prison sentence. Remember adam neumanthe founder of WeWork who stated the real estate sector was a technological game? Bounced from your company (albeit under a gigantic golden parachute). Do you remember Elon Musk? Oh right: he won’t let us forget it, as he publicly sheds the crazy persona of him as a fox to reveal the real crazy self of him as a crazy person.

Journalists would be wise to write profiles of modern moguls in vanishing ink: there’s less record to correct when history falls apart. But that advice begs the question: Why are the mythmakers so wrong? It’s one thing to realize that IBM Chairman Thomas Watson got it wrong when he sell data processing services to the Nazis; at least IBM was real. Today’s recurring theme is overrated creators of overrated companies.

The problem boils down to two facts, both related to the technological revolution. The first is the belief, not entirely unfounded, that new technologies are for young people. Any parent who asks a child to Photoshop the family Christmas card can relate to this, as can older relatives who run venture capital firms (and desperate pension funds who gamble in their casinos). They are fans of the rants of the young because they believe that only the young can perceive the next new thing.

The second fact follows from the first. The more mysterious the product, the more credible the business. The credulity of investors and business writers in the face of this reasoning is staggering. They’ll think a kid in a T-shirt (Bankman-Fried) can make a major financial trade between video games. They will believe that losing millions of dollars a day in real estate is the equivalent of a high growth tech company (Neumann). They will believe in a tunnel through missouri full of super fast hover cars (Musk).

Portraits of the rich have always been distorted, their best features exaggerated, their flaws airbrushed. But in earlier times, shrines were built on the real thing: Carnegie steel. Hershey’s chocolate. The sodas, razors and insurance policies by Warren Buffett. No more. Today, all it takes to be celebrated as an entrepreneur is a gullible investor luring others into a FOMO frenzy.

Fear of missing something, that is. Ben Franklin, who taught us to earn and save a penny at a time, wouldn’t approve.

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