A Heartbreaking Work of Staggering Stupidity

It's a bit strange, really. To wake up every morning – sometimes in the middle of the night too – and have a voice inside your head that says “I’m a total idiot”. It’s unsettling. It chips away at your self-esteem as it wears its groove deeper and deeper into your psyche.

For much of the past year, I woke up tense and angry every single day, until my girls woke up and reminded me how fortunate I am. Once they were off to school though, the feeling of idiocy often came flooding back. Stomach issues, blood pressure problems and headaches followed.

It has finally subsided, and I’m down from “total” to being maybe a 50% idiot these days.

I should back up though, and provide some context.

***
I bought into an NFT project late in 2021. After following its founder through a series of podcasts (his own and other ones in which he was the guest) and noticing his remarkable track record in the previous 18 months of crypto and NFT investing, I had come to view him as a highly credible person in the otherwise very shaky and grifty world of crypto and NFTs.

So when it came time to buy into his own NFT project, I was all over it. Here was a beacon of trust with a very keen sense of spotting trends early, with a high-profile Silicon Valley network to boot.

Fast forward from that day to 4-5 months later, and the project briefly hit around $400,000 in value. For those who bought in on Day 1, like moi, it cost only $4000. A tidy little 9,900% ROI, if the math is correct.

There were signs quite early that less-than-credible people were actually at the helm. More on that below.

Hindsight also messes with your head. As Annie Duke puts it in Thinking in Bets: “When we think in advance about the chances of alternative outcomes and make a decision based on those chances, it doesn’t automatically makes us wrong when things don’t work out. It just means that one event in a set of possible futures occurred.”

***
Extreme ownership – a book and a term coined by Navy SEAL turned author and corporate trainer Jocko Willink - is the only way forward really. Blaming no one other than yourself for your decisions and owning them 100%.

I had dozens of chances during the meteoric rise of this project (and 100 times on the way back down) to sell it for more than I paid for it. I need to own that fact, and I do - as do a number of my fellow round-trippers. Sometime in mid-’23, I settled one quiet day for a 4X return.

But before selling, I sat there, on the hook with the announcement of the next announcement, each time optimistic with the hopeful and even inspiring messaging coming from a team of 30+ people at the forefront of a new industry of some kind. It was intoxicating.

There were others too, as I mentioned - smart, successful people who rode the same wave. If they were still in, there has to be some kind of future bounce, right? (Morgan Freeman voice: there was no bounce.)

This massive fumble led to some exceptionally difficult moments and conversations at home. Decisions about schooling for our kids have become much more tense, and the options way less palatable. Dinners out, summer camps, or vacation planning are not exciting things to look forward to now. They are instead tense, grit our teeth, should-we-or-shouldn’t-we discussions that definitely create tension. But I own all of this.

***
For those still in the NFT space and for those about to dip into it, most of the lessons to be learned will be personal and subjective.

But old lessons still hold true. Trust your gut. Listen to those warning bells. These are easy clichés, but when those early warning bells start ringing, pay close attention.

For me, there were a few bells for sure:

• A highly questionable set of decisions by the first COO, combined with some easy online searching of his background, and of the founders’ background that showed troubling earlier patterns of behavior? Ding.

• A company that shouted “inclusivity” like so many empty corporate mantras? Sounds like a nice term but pro tip: don’t talk inclusivity – just do inclusivity, quietly. It’s 100x more authentic, and the people you hire will feel like they are there based on merit, not an HR checklist. When you talk a big game and are overly concerned about your image, you’re less focused on the actual success metrics that will make everyone better off. Ding.

• Another big ding for me? Going to the company’s first major event in NYC and seeing a roped off VIP section, complete with bouncer and a definite sense of hierarchy on the other side of the velvet rope. Wait, I thought this was Web3? We’re throwing off the shackles of old power structures, it’s all GMs and love, inclusive AF right? This inner circle seen at NYC repeated itself online too. Or maybe exclusivity is the new inclusivity… maybe I’m just behind the times.

• After a rapid change in the project’s direction – not discussed nor asked for by the community - plus three or more subsequent failures to deliver on promises? Well, if you’re still holding on at that point, you’re doing it with pure emotion and a sunk cost fallacy. Ding ding ding. GET OUT.

***

For those specific founders, and any other founders, here is one big lesson that you may have missed:

• Your decisions have real-life impacts on people. Yes, it’s true you are not babysitters, nor are you meant to have all the answers. Rational people accept the ups and downs of a start-up – it’s part of the rush and part of the deal. But the stress and anxiety you might have felt pales in comparison to the collective stress and hardship felt by hundreds of your fans.

• Speaking of fans, you had it all. An extremely loyal and intelligent community that believed in you. The true 1,000 True Fans concept in action. But the lure of VC money and even more significant wealth were too much, and this desire for moar took you away from it al. Know when to say when.

• In a normal, securities-regulated world, many of you would be facing serious financial and legal problems. The fact that Web3 doesn’t have these guardrails makes it even more important that you act with integrity and deliberation.

***
Anyhoo, back to extreme ownership.

I’m out now, not down and out - but nowhere near where I could have been. It’s still on me: the lack of discipline to have made life-changing (or at least life-considerably-enhancing) money.

The lessons learned might still prove to be valuable in the future (not $400K worth of value, but hey).

What is most valuable now are the relationships made during that fiasco, friendships that will endure well beyond the hype-fuelled fever dreams of a couple of shallow strangers. Relationships with men and women that are on the leading edge of new tech and new financial vehicles who get the idea of sharing knowledge and resources for the benefit of everyone. True Web3 stuff.

There are more than a few highly intelligent, high-integrity, high-character people still in this space.

Find them, enjoy them and strive to become one of them yourself.

We’re still early.

*Title borrows generously from an old book by Dave Eggers

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