Why you should only trust people with imposter syndrome
Or how to tell the difference between Elon Musk and Sam Bankman-Fried
I’ve been enjoying Michael Lewis’s new book, Going Infinite, about the rise and fall of Sam Bankman-Fried. I’m writing a review for Prospect so I won’t say much about it here. But the wild trajectory of Bankman-Fried raises several questions, among them this one: how do you tell the difference between a weird, brilliant, arrogant disrupter who is going to build an enduringly successful business, and one who is just a disaster waiting to happen?
Everyone who encountered Sam Bankman-Fried, from high school onwards, agreed that he was very intelligent and very odd. He was a successful trader due to his ability to calculate complex probabilities fast, under intense pressure; to identify patterns in market movements, and to take big risks which came off more often than not. He looked like a mess. He never wore anything except cargo shorts, a tee-shirt, and sneakers. He slouched, he had poor hygiene, he didn’t seem to sleep, he was full of nervous tics, and he was always at work.
To say he was intellectually arrogant is an understatement. He regarded most people as dim, boring and pointless. He thought all institutions - banks, regulators, VC firms - were full of shit. He certainly didn’t respect anyone with more experience or credentials than him and he barely bothered to conceal this. He was a terrible manager because he didn’t enjoy interacting with his colleagues, and often played computer games while talking to them (he did the same when speaking to investors and the various luminaries who wanted a piece of FTX).
In the early days of his start-up, Bankman-Fried fell out badly with his partners over a risky decision he took against their wishes. He found the episode traumatising: “It made me question myself. It was the first time in my life I was surrounded by people I respected who are saying that I’m wrong and that I’m crazy. It made me question my sanity.” This is notable because it’s the only time in the book when SBF admits to any self-doubt. Even here, while he questions his sanity, he doesn’t really question his competence to run the business.
As it turned out, he was proved right about that decision, as even his partners, who had departed, had to admit. From that point on, his already steel-plated self-belief was reinforced with tungsten. His start-up took off. He was invited to endless meetings with rich and powerful financiers, whom he treated with disinterest verging on contempt. Nearly all of them wanted in. It wasn’t long before he was a billionaire multiple times over, at least on paper.
A few weeks ago I wrote about how stories are bad for your intelligence. Michael Lewis, who was with SBF during some of these meetings, observes that selling a business to venture capitalists (VCs) is more like pitching a movie idea than a real life business: “The VCs’ eagerness to buy turned less on your hard numbers than on how excited they became about the story you told.” Bankman-Fried told them a story about how his business was the future of crypto which was the future of everything, and in doing so he generated a powerful reality-distortion field, right up until reality reasserted itself. His business was fake; a chaotic mess. He is currently on trial for fraud and very likely to go to prison for a long time.
Is the lesson of the SBF story to be more suspicious of arrogant weirdoes? Maybe, but the tech world is full of founders with high IQ and low interpersonal skills who project a deep conviction in their ability to conquer the world, and the thing is, some of them are right. Mark Zuckerberg, whatever your feelings about him, is not a charlatan, and for all that he has made mistakes along the way, if he wasn’t a highly effective CEO he would have been pushed out by shareholders long ago. Elon Musk, apparently as arrogant as Bankman-Fried and perhaps even harder to like, has been instrumental to the success of at least two multi-billion dollar companies which, unlike FTX, do real things in the real world. Peter Thiel - himself another example - argues that for tech entrepreneurs, interpersonal oddness and arrogance is a feature, not a bug, because it means they’re less likely to be influenced by all the people who tell them their weird new idea will fail.
What’s the difference between the genuine world-changers and the fake ones? Paradoxically, I think it’s that the former have imposter syndrome. Or to put it another way, they know what they don’t know and they’re intensely curious about it.
Continued after the jump: what it means to be a genuine expert in fields of high uncertainty; the benign form of imposter syndrome; the difference between Musk and SBF; how to tell if you’re talking to a potentially world-changing weirdo, and a cos-playing charlatan.
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