Doing Something Stupid For "Friends"
It's easy to get caught pretending things are good when they're not.
The Teardown
Monday:: December 5th, 2022
I didn’t set out to write about FTX again, but the news keeps coming. And it grabs my attention just enough every time that I put together today’s piece with Sam Bankman-Fried and FTX as a collective point of orbit. Many other posts and articles dig into the details of the fraud. I’m more interested in the intrigue surrounding (and eroding) around Sam Bankman-Fried.
I’ve written a lot about friendships in this newsletter. I’ve dissected my own, described my tendency to bullshit during conversation, and highlighted having no one around. People do lots of stupid things to make friends. They pull pranks. They make fun of other people. They behave uncomfortably for the sake of a laugh. They dress a certain way. I’m looking right at you, Abercrombie. The net result is sometimes real friends, or maybe a strange purgatory between friends and groupies. The difference is simple in theory: you give and receive trust from real friends. You pretend to do give and receive the same way with groupies. What I think we may be learning about Sam Bankman-Fried is that he had a lot of groupies. Why not? He was worth $15B. You needed to know that guy however possible.
Sam Bankman-Fried (SBF) was close to or already that guy. He had the money. Other crypto entrepreneurs, investors, and fans idolized him. He had transcended his own life and role to become a crypto deity. But most importantly, it was a combination of money and an unorthodox personality that helped him move and shake in his personal life, political circles, and the business world.
The New York Times wrote a piece with a headline that encapsulates my thinking, titled Inside Sam Bankman-Fried’s Quest To Win Friends And Influence People. The article describes this process at the top:
In May, the founder of a Chicago nonprofit that works with recently incarcerated people got an email from the father of Sam Bankman-Fried, offering to make a donation on behalf of his son’s cryptocurrency exchange.
Soon after FTX pledged to give the nonprofit $600,000, a consulting firm hired by the exchange blasted the news to members of prominent think tanks, urging them to praise the program publicly on Twitter. At least two email recipients did so.
The money never made its way to the nonprofit, called Equity and Transformation. But the pledge — and its attendant publicity — provides a glimpse into the inner workings of the sprawling influence campaign that Mr. Bankman-Fried shaped before it all came to a halt this month when his company was forced to file for bankruptcy, prompting a criminal investigation.
It’s peculiar that the money never made its way to the non-profit. Maybe SBF forgot, or maybe he documented the commitment in his poorly-organized chicken-scratch balance sheet. But let’s assume that the money was simply delayed for whatever reason. That commitment was designed to 1) help, sure, and 2) win influence or friends or both. The problem is using money to make real connections is, well, bullshit. I’ve talked about that concept in a prior newsletter titled Wanted, Just Friends:
I'm pointing to my bullshit because I think it's one of my mechanisms for building intrigue. I'm intriguing when you think I know what I'm talking about, assuming that you possess a base-level interest in the topic. Otherwise, you can move on, discuss something else, or find another conversation partner. But in the corporate world, you can exclude me from a meeting if you think I don't know what I'm talking about or deny a promotion or pay raise.
One word stands out as relevant to SBF: intrigue. More than anything, SBF embarked on a tour of intrigue, wooing people in the business world, in the political world, and in his own social circles. The more he did, promised, and importantly, committed monetarily, the more people were intrigued.
This intrigue-building tour continued until it all came crashing down in recent weeks. SBF was nearly drunk from his significant wealth, media attention, and quirky presentation. He was doing something stupid, allegedly, in part because it helped maintain an elevated sense of purpose, importance, and intrigue.
How did this attention exercise start? Lots of us make friends without hand-outs and without being in the. Sequoia highlighted his earlier personality in an article titled Sam Bankman-Fried Has A Savior Complex - And Maybe You Should Too:
Highly mathletic, SBF breezed through Crystal Springs Uplands, an elite prep school in Hillsborough, California. Though he earned top marks, he kept to himself, spending most of his free time playing computer games (StarCraft, League of Legends) and a trading card game, Magic: The Gathering.
A potential clue is SBF’s tendency to keep to himself. One hypothesis is that he was indeed so stimulated by computer and card games that he just didn’t bother talking with other kids. It’s also possible that other kids didn’t bother talking with him, and his earlier friend-making experiences were littered with disappointment. The article alludes to an a-ha moment in his friend-making progression:
But at MIT he found his tribe: fellow pledges at Epsilon Theta, a coed fraternity of supergeeks similarly interested in Magic, and video games. Thetans are fond of debating math, physics, computer science, linguistics, philosophy and logic problems—for fun—at alcohol-free parties.
It’s hardly surprising to follow the progression. A young kid on the edge finds their way once they attend college and run head-first into a much wider pool of people. It happened to me too, as I transitioned from a teen with frayed and anxious friendships to more of an adult with real friendships once I hit freshman year in college, and even more significantly during sophomore year.
Maintaining real friendships is hard work, especially as (and if) you progress into other parts of life inclusive of marriage, kids, and other related obligations. But I’ll surmise that it would be easier to maintain what seems like friendships if I was able to buy some of the loyalty critical to their upkeep. This is not to say everyone with lots of money simply buys their way through friendships. But money, power, and success certainly align with some status-seeking behaviors. It’s devastating to lose one of the major social clamps on your network.
The Times describes the frantic hours before and after the bankruptcy filing:
Reached by phone on Sunday night, Mr. Bankman-Fried declined to address the messages that top executives exchanged leading up to the bankruptcy filing. But he said that even after FTX’s collapse, he had found “numerous parties” willing to invest funds. He declined to name any of the possible investors.
And:
Mr. Bankman-Fried was also frustrated. Despite giving up control of FTX, he continued contacting possible investors about new funding for the exchange. In a letter to former colleagues last week, he said he regretted filing for bankruptcy, claiming that “potential interest in billions of dollars of funding came in roughly eight minutes after I signed the Chapter 11 docs.”
It may be easy to conclude that SBF was trying to save the business. But his network, power, and influence were extraordinarily intertwined with his business. So, in another light, SBF was doing something to make sure he still maintained his friends. We’ll probably not know who the “numerous parties” were or from where he garnered “potential interest” unless he’s required to tell someone in legal setting. But it does feel like a pretty obvious intrigue-maintenance exercise in the most desperate way possible.
It will be interesting to see what happens to SBF after the dust settles. He might go to jail. But he might not, and if he doesn’t, memories are short. All it takes is another good story to build that intrigue.