A Bruised Bear, Deniers Be Damned, Geniuses They’re Not

Hi, I’m Rick Barron, your host, and welcome to That’s Life, I Swear

As we get ready to see 2022 come to a close, I wanted to share three stories that I thought were, unexpected. The first is a about a small country that stood defiant against a giant bear and punched its nose. The second story is about a country that woke up realizing that freedom and democracy were more sacred and that deniers and psychos be damned. Finally, the story of three high tech egos that went beyond their Superman myth. 

Let’s jump into this.

During this year, we experienced many events that brought us happiness, sadness, disbelief, astonishment, and more.  As 2022 ends, I wanted to reflect on three stories I felt worthwhile sharing. Why these three stories? There’s that expression we hear from time to time, ‘what were the odds that was going to happen.’ Each story has a message. 

The Bear

When Russia launched its war against Ukraine in February of 2022, it was seen as a war that would end in hours, if not a few days. Instead, ten months later Ukraine’s success illuminated a strategy that has allowed them to, so far, outlast a larger and much more powerful foe.

Ukrainian personnel fire towards Russian positions in the eastern region of Donbas. Courtesy of: The New Statesman

What has been striking is the resolve of the Ukrainian people. Putin underestimated the Ukrainians' will to fight. His miscalculation is a failure he knows to be true, but will never admit, as his ego won’t allow it. President Zelensky has proved to be a brave leader, inspiring people in Ukraine and abroad by his words and actions.

President Zelensky meets with his troops in Bucha. Courtesy of: The Heritage Foundation

Because of military assistance from around the world, along with unprecedented sanctions on Russia, Putin stupid ambitions, aggravated by miscalculation, the Russian people are already poorer, isolated, and more oppressed.

Ukraine has told the world that national unity in the face of existential threats, self-reliance strengthened by collective defense, and courage coupled with compassion can help underdog populations resist the mightiest military forces.

Election deniers

The 2022 midterm results fell short of expectations for the Republicans. The big Red Wave campaign slogan ended up being a pink puddle. All the talk was that the Democrat's would be stomped on, yet they defied the historical precedent.

Election Deniers-Stop The Steal demonstration. Courtesy of: New York/Intelligencer

The whole country held its breath the evening of November 8th. As the results were coming in, I couldn’t believe what was happening. In states where the Democrats should’ve lost, ended up winning big. There were several elections in some states, that were so close, the results were not know for two to three days. 

The takeaway for me was seeing that people in the United States still place a high value on competence over ideology and idiotic theories. Time to grow up and act like adults again.

While inflation and abortion rights were high on the list of importance, it turned out that the quality of the candidate mattered more. The Republicans had way too many election deniers running not to mention some hapless candidates like Dr. Oz, a tv star, who lives in New Jersey, not Pennsylvania. 

Demonstrators at the Supreme Court calling out their objection to overturning of Roe vs. Wade. Courtesy of: Spectrum News/NY1

Another factor that I think played into the Democrats holding off the Republicans was the overreach from the very conservative Supreme Court overturning Roe v. Wade. This decision only angered women and young voters. For them, the court and Republicans, went too far. The message was very clear, people don’t like having their rights taken away. 

Tech Egos

Over the years we’ve seen high tech to finance technology evolve with great success. 

However, in 2022 we saw three examples of leadership and stubborn egos resulting in failures. It’s when we saw these failures that we saw these glorified geniuses do have their flaws.

Three companies fit that billing are Meta, Twitter and FTX.

Meta

Let’s take Mark Zuckerburg. Back in September of 2021, Mark led investors to value Meta Platforms at a staggering market capitalization value of $1 trillion dollars. Over a year later, the ride was over and the value of the company declined by roughly $800 billion! That’s a lot of money.

In November of 2022, Meta laid off 11,000 employees, 13% of its workforce. How did it happen? There were many factors such as the company’s core adverting business slipping, a slowing economy, competition from TikTok, and changes from Apple that put a dent in its ability to track users' activity to sell them targeted ads. 

Mark Zuckerberg demonstrates an Oculus Rift virtual reality (VR) headset. Courtesy of: Make It/CNBC

The final nail in the coffin was when Mark took a giant leap to rebrand from Facebook, Inc. to Meta Platforms, which was introduced at Facebook Connect on October 28, 2021. He presented his grand vision of Meta with a slick presentation that gave the audience what the Metaverse could be in the very near future. What was shown was pretty but something you couldn’t take to the bank with high confidence. It was a ‘wait and see’ vision.  

Investors were not impressed and took a dim view of Mark’s plan to transform Facebook into a “metaverse” company. Nevertheless, Mark remains hot on the metaverse and intends to pour even more money into his vision. 

Companies will change strategies because they realize they’re losing money. As for Meta, it’s losing money because it changed strategies. 

For now, investors don’t have a lot of choice. The company remains under control of Mark through what we call super voting stock. This enables a limited number of stockholders to control a company. Well, guess who that would be? 

Twitter

We now come to Elon Musk. He first teased the public he would buy Twitter, then changed his mind. The man loves theatrics. When Elon did buy the company, he looked at the books and saw it was losing money like sand in an hour glass. In the span of a few weeks of the takeover, Elon Musk eliminated half of Twitter’s workforce. 

Twitter and Elon Musk. Courtesy of: FOX Business

A few days later he sent out a Google form asking the current employees to commit to working very long hours. He stressed that the company was in trouble and could even face bankruptcy. The form was simple. Say ‘yes’ and you can stay, say ‘no’ and immediately be let go. Many took the latter. 

Elon faces the loss of a key revenue resource that was coming into the company…advertisers. Approximately 90% of Twitters revenue was because of advertisers. Elon is taking a different strategy with a subscription revenue model, which will have to be significant to work. However, that idea is even muddled as to how to execute it, not to mention the off and on decision making.

With his success record at SpaceX, Telsa and PayPal, no one doubted the wonder boy could turn Twitter into another Silicon Valley gem.  

Elon’s style of a taker over has given new meaning to disruption. Twitter has become a ‘let’s see what happens tomorrow’ story. Seriously, is this the style of management Musk wants to display to the world? Be careful what you wish for, Elon. 

FTX

In the high-tech finance world that everyday people find confusing, FTX sold itself as a company skilled in cryptocurrencies. Unfortunately, we experienced how a crypto empire can implode very quickly. Sam Bankman-Fried, the founder of $32 billion crypto exchange FTX, was the industry's golden boy. He was on every magazine cover you could think of. Yes, Sam was the face of crypto. His net worth peaked at $26 billion dollars!

Sam Bankman-Fried in his office. Courtesy of: Forbes

He was an MIT graduate with the charisma to lure investors to invest $1.8 billion into FTX. 

However, in the blink of an eye, Sam’s world collapsed. His crypto empire imploded very quickly. It was discovered he was embezzling customer funds to finance investments known to be very risky, with the hedge fund he was in control of, Alameda Research. 

So, is cryptocurrency really a Ponzi scheme as many have be declaring? 

What can we learn from this story? What's the take away?

We saw a small country waiting to be conquered within a few hours by the Russian army, only to see with astonishment, just the opposite. Odds makers gave Ukraine little if no chance at all to survive, let alone kick Russia’s army’s butt.

Ukraine, however, has not yet won the war. Ten months later the battle goes on. The Ukrainian way of war is to adapt, which will probably not result in a swift end to the war, but it offers the possibility of draining the Russian military and political will. Ukraine could yet achieve what once seemed all but impossible: victory.

The mid-term elections were to be a Red Wave, but in the end it never materialized. With the Republicans taking the house, and the Democrats taking the Senate, both won by slim margins. The voters delivered a stalemate, and not a vote of confidence for either party. We now get ready for 2024 and see what lessons both parties take from 2022. For the time being, the United States is back to normal politics.

Mark, Elon and Sam, were riding their careers into the stratosphere. Along with many accomplishments they were given compensation one can only dream of. However, to be given such riches shouldn’t not be given in perpetuity until it’s proven a strategy and vision will truly succeed. Let’s put to rest the myth, that these geniuses we elevate so highly, are mortals who can’t turn everything into gold. They may articulate grand visions, but to demonstrate the ability to create companies that incorporate lasting value.

Overall, these three stories that happened in 2022, told us how what was thought of as unthinkable, can happen. What will 2023 bring? Who knows.

On a personal note, I wish everyone a beautiful Christmas and a 2023 that will bring you new beginnings and memories. Thank you for listening to my podcast during 2022, and I hope you’ll continue to join me as we enter 2023.

Well, there you go. That’s life, I swear.

For further information regarding the material covered in this episode, I invite you to visit my website that you can find on either Apple Podcasts/iTunes or Google Podcasts, for show notes calling out key pieces of content mentioned, and the episode transcript.

As always, I thank you for listening. 

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