An FTX story you definitely didn't ask for
And be very, very, very careful of tasting menus
Hello Gobbledeers,
I hope you had a great Thanksgiving. And I definitely didn’t spend much of the break thinking to myself, “I really, really wish I wrote the Gobbledy column before the break so I didn’t have this hanging over my head the whole time like a college essay that I wanted to do at the last minute, except that this entire newsletter endeavor is like a constant college essay that I’ve waited to do at the last minute, and also I know it’s incredibly annoying for you to read my inner monologue about this newsletter.” Also, enjoy!
A Super Obvious Idea I Never Thought Of
I’ve mentioned a few times how I felt the logo block on SaaS websites tends to be pretty under-utilized, as just having a bunch of company logos on there doesn’t tell you much. Case studies accomplish far more, for example.
But then I came across the homepage of language translation provider Motionpoint and saw how they handled logos:
They put the number of years they’ve worked together under the logo. Why haven’t I seen that anywhere else? Why didn’t I come up with that? It’s a great bit of real estate to put something (anything) in there to explain why the logos matter. Bravo.
I’m sure what you were hoping for was a marketing-related take on the whole FTX thing
A few weeks back I wrote about the My Pillow Guy and how he’s using election denial content marketing to sell pillows - and that those two things (saying bananas things about the election and his desire to sell more pillows) are directly related.
I was really struck by the idea that you can use an idea seemingly unrelated to your core product as a way to sell that product (if anything, making yourself crazy about Venezuela interfering in our election will make you sleep worse, and no pillow is going to help with that.) But rather, you can use a seemingly unrelated idea to drum up feelings amongst a group of people that you can then (somehow?) transfer your core product. (In other words, “we have to expose the truth about the election, and we are a group of true patriots, and true patriots support each other, and I make my pillows in America, and if you’re going to buy a pillow, you should buy one from me, since I love the same things you love.” (Close enough.)
So fast forward a couple of weeks, and I am mesmerized by the entire FTX saga (if you’ve skipped all the FTX articles because you don’t care about crypto):
a) you’ve really missed out on a real humdinger; and
b) here’s what you missed (in one long run-on sentence): Guy (Sam Bankman-Fried, also known as SBF) starts crypto business that’s basically an unregulated bank, then proceeds to lose most-to-nearly-all of the billions of dollars in crypto deposits by lending it to an associated company run by his girlfriend which, itself, was facing a liquidity crisis and then used those funds to quadruple-down on some crypto investments (er, “investments”) which collapsed, leaving everyone broke, especially SBF who was previously - on paper - worth something like $30 billion, also associated malfeasance/fraud stuff.
(Now you’re caught up.)
I bring all of that up because somewhere between “started unregulated bank” and “lost $30 billion” SBF built a Pillow Guy-level marketing machine using a not-exactly-dissimilar strategy of personal brand building. This marketing machine was built to create a brand that said, “we care deeply about progressive causes, and also although we play in an industry with shady characters we will show that we are not shady…and also we’re a quirky startup.”
How’d he create that brand? I’m glad you asked.
SBF was deeply involved in a charity movement called “Effective Altruism” which espoused an idea called “Earn to Give,” which said (in part) you should make a ton of money so you can give it away.
He donated millions and millions of dollars to democratic causes and politicians, including something like $10 million on Biden’s campaign.
Crypto is notoriously unregulated, and he made a show of lobbying congress to regulate the industry.
The usual startup stupidity, including everyone who worked there living in the same house in the Bahamas + stories of SBF playing video games (League of Legends) while a board meeting was going on.
To dig into that a little more:
The charity stuff showed he was a good human, while also saying “see, making $30 billion is great for earth and earth’s people because I’ll give it all away.”
The political donations showed which side of the divide he was on - Pillow Guy took the right, SBF took the left.
If he were doing anything shady, would he be asking for regulations? Like this Bugs Bunny cartoon:
If Bugs was hiding someone in the oven, would he throw a match in there? “You might, rabbit, you might.”**
(**If this means nothing to you, it’s not even worth explaining.)
And finally, FTX wasn’t a stuffy financial firm, it was a modern startup, where everyone lived in a house together and the founder cared so little about the Board that instead of participating in Board meetings, he just played video games and ignored the conversation (he’s not like a regular mom, he’s a cool mom.)
The brilliance of this strategy is that it was perfectly targeted to his customers.
Oh, not his deposit customers. Those weren’t really the customers. They were unwitting suckers.
His customers were the venture capital firms that continued to pour funding into FTX. $1.8 billion worth. Including a $400+ million round last year which, it turns out, he used to pay himself $300 million.
His marketing strategy was geared to make VC firms feel comfortable about investing in crypto (we want regulation!) while feeling good about that investment (we’re helping the world! Also, left-leaning politicians!) while creating an Adam Neumann-level aura of quirkiness (we all live and work together and having an in-house doctor who prescribes us all ADHD medication.)
Even crazier, that strategy worked.
And finally, the most upsetting New York Times caption I’ve ever read
I really, really, really hope they’re the only restaurant doing that.
On that note…
An uneasy transition into mentioning that if your software website makes no sense, I fix the copy on websites for a living. I’m happy to chat…