A lot of people lost a lot of money speculating they could sell their blockchain tokens at a higher price than the one at which they bought them.
A relatively small number of people promoted that promise. They made people believe that the blockchain was revolutionary. That it would change everything. That only investments in software startups doing web3 was worth it.
That led to increased demand and allowed them to sell such tokens for billions of dollars, euros and whatnot. Pump and dump.
So for several years, web3 companies hired people to build software to support what ultimately turned out to be part of a big, messy scam. People who could have been designing and programming and product managing and QA-ing useful software.
Now I expect that some of the people involved would counter, yeah, easy to say now. We really believed we were changing the world. Our founders team was legit. They, too, believed we were changing the world.
Of course there were and still are these scammy trading platforms. But there were at least as many web3 entrepreneurs who seemingly attempted to build real products and services and real businesses. They got rather upset when I politely asked fundamental, critical questions about their businesses though.
I don’t know why it took me so long but my main learning from all that comes down to the a variation on the old “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
It is difficult to get a business person to understand something, when their business model depends on them not understanding it.
I used to listen this Dutch podcast hosted by two media entrepreneurs. One of the hosts in particular contributed to the blockchain hype and never tried to hide that he made good money with it.
Today I read his newsletter. It was about how his plan to buy the company issuing a journalistic magazine fell through. The current owners didn’t like his plan with it. The story ended with that he was glad about it ending like this. Because now it was over, he believed it would have been terrible for journalism, because the plan would have led to expensive, important journalism being removed, while the the cheap, profitable would have remained.
It is difficult to get a business person to understand something, when their business model depends on them not understanding it.
I’m convinced this particular entrepreneur didn’t want to do develop an evil masterplan to make monster profits by destroying journalism. And still, he pitched a plan that, once the possibility of making profits had been removed, he considered damaging to the thing he cares about very much.
Now I don’t think posts like this one right here are going to change the minds of entrepreneurs like that. Markets are not going to punish them for only caring about money. In fact, I suspect that in the current global economy, the entrepreneurs making the biggest profits are those who don’t bother with ethics.
But us workers, we have another advantage. We have choice. Because we’re not only in it the money, we can decide who we work for. We can decide to work for organizations and products we not only believe in, but are convinced will bring about something good.
Just because someone we respect says that their company is changing the world for good, doesn’t mean they believe in it. And if they believe in it, it doesn’t mean it will be true.
Business people aren’t rewarded for correctly predicting the negative consequences of their work. They’re rewarded for ignoring any externalized risk and convincing others to put money into their business. If that means they need to talk convincingly about the sustainability benefits of their business, they will. It doesn’t mean they care about sustainability though.
Many of the richest people right now accumulated their money through pump and dump schemes. Crypto currencies opened up that racket to a whole new generation of entrepreneurs. They invest in businesses (sidenote: This Better Offline episode convinced me that this problem is way bigger than just a few kids who made too much money off Bitcoin and that it’s a structural error in how innovation is funded and rewarded. ) , as long as the stock prices go up and they can sell the stock before the market compensates for the error and makes the stock crash.
Because such investors are so numerous now, we must assume that many companies currently have such shareholders.
If it’s unclear why a company promises ‘AI’ features, assume it’s a request from their shareholders. To pump up the valuation of that company, or to promote AI features in general and pump up the price of their AI startups. Or both.
If it’s unclear how a business can be economically, ecologically and socially sustainable in the short term, it probably never will be. By joining such a business, best case you’re creating some venture capital-subsidized convenience service for early adopters. More likely, you’re just wasting a lot of your time, mess up a market and end up getting fired when the stock price goes down.
If it’s unclear how much a business owner thinks about the real world effects of their company, assume it’s very little.