Delusions of grandeur

Even visionaries have blind spots

Apologies for the extra email on Tuesday about the Substack Chat. I didn’t know Substack would blast it out to everyone. That said, I’m interested in continuing to use the chat feature as a way to have discussions, so if you have the Substack app, check it out.

Thanks to Omeda for sponsoring this week’s newsletter – and for hosting a great dinner last night in NYC.

Subscriptions-based models are critical for publishers beyond recurring revenue. Mastering a subscriptions model means mastering the details. Omeda, the full-stack marketing technology platform for managing first-party data, has compiled an actionable guide with tactics publishers can use to grow their subscription businesses, from instituting bundles to testing pricing to battling churn. Developing the right strategy leads to higher retention and increased revenue. Find out how to take your subscription program to the next level.

Delusions of grandeur

This has been a bad week to be a visionary founder. Silicon Valley, broadly understood, has always fallen for the Jobs archetype of a visionary who sees around corners and invents the future, no matter the constraints of the present. This model broadly works, as evidenced by the immense wealth and power accrued by the tech industry. Yet this week was a reminder that the constraints of the present can’t be willed away.

Sam Bankman-Fried had arguably the worst week, seeing his $32 billion in net worth rapidly evaporate, and there’s still 1.5 days to go. His company, FTX, was on the surface a way to buy crypto, but SBF – it helps to be a visionary founder with a moniker – peddled a grander vision. In what reads now as satire, FTX backer Sequoia recounted how its partners swooned over SBF’s explanation of a sprawling vision of a super app that would be “a place where you could do anything you want with your next dollar.” In what sounds a lot like Adam Neumann sketching his magic triangle for Masa Son, SBF’s vague musing was seen by Sequoia as “a vision of the future of money itself – with a total addressable market of every human on earth.” Hilariously, SBF made this pronouncement while in the middle of a League of Legends game.

That vision will need to wait as FTX now teeters on the edge of insolvency and bankruptcy after apparently using investor funds to backstop affiliated hedge fund Alameda Research. His rival, Changpeng Zhao, one-upped SBF on account of the constraints of the present, namely FTX ignoring risk management principles in handling its cash reserves. Sometimes people with visions are just delusional.

The same impulse is at play at Twitter, where Elon Musk held what was surely the biggest lunch and learn ever with advertisers. The hourlong Twitter Space was fascinating, as big name advertisers mostly stayed quiet as Musk laid out a similar grand vision for Twitter that was big on ideas but short on specifics. What Musk did not do on the call is address the very real present-day concerns advertisers have around staying on a platform in seeming daily chaos. Musk’s spreading of a homophobic conspiracy theory about the husband of the House Speaker was seemingly to him just another shitpost that’s attracted him a legion of fans. His advice for the assembled marketers was to give it a try themselves.

That’s not going to work. As Peter Kafka notes in his newsletter, advertisers are conservative by nature, unlikely to be swayed by some gauzy vision of a super app and empty sloganeering around creating a global digital town square. What they want is assurance they’re not going to put their hard-earned reputations at risk by associating with a platform that, while often one of the more fascinating spaces on the web, is also full of hateful rhetoric and endless anger. What’s more, the chaotic nature of Musk’s stewardship might win him legions of fans but are unlikely to appeal to staid marketers who want predictability, not people impersonating their mascots, as silly as that sounds.

Musk will go through the motions of assuaging advertiser concerns, but he clearly isn’t enamored with the ad business, at least the world of brand advertising, which he estimates accounts for 70% of its business. Silicon Valley has always preferred the math of direct response. His commitment to advertising is shaky at best, and advertisers know this. He’s more likely to use advertising as a blunt instrument to compel users to paying for a subscription, a sell I’ve always found bizarre: Pay us to use your brand to annoy people to the point where they pay us to avoid you. Sign me up!

Silicon Valley’s vision of connecting the world has never seemed like a worse idea than the present. It’s hard not to conclude that social media’s next act is not more connected and open but smaller and more controlled. Facebook and YouTube have faced down calls for advertiser “boycotts” mostly because advertisers needed the platforms more than the platforms needed them. Twitter is different. No big company’s quarter is going to be made or missed based on Twitter ads. Pausing ads on Twitter is pretty much risk-free. Musk’s bluster about “going thermonuclear” is not going to help.

The flavor of free speech that Musk and his acolytes peddle is, they insist, rooted in optimism of the goodness in people. That’s one way to view it. The other is that it’s naive to the point of arrogance. I can understand the backlash of tech people at journalists and pundits who cast doubt on these grand visions, although I’d argue that the world needs both those who put forth audacious plans and those who dissect them for weaknesses.

Clearly SBF could have used someone close to him to point out the extreme risk in the model he cobbled together. Musk could use someone outside his merry band of podcasters to tell him when he’s full of shit.  In an echo of the Twitter situation, the overall crypto industry now faces an uncomfortable reality check. The principles of crypto are very attractive. I remain crypto curious, since moving to digital money seems a logical step, but in order for crypto and web3 to establish themselves long term, they will need to provide real-world utility in the present beyond speculation for future gains. The entire industry itself faces the problem of reputational risk, as mainstream companies weigh the downsides of associating with an industry that’s become synonymous with scamming. “Do you really want to be the allocator at a big endowment that placed a big bet on Beanie Babies?”


The office serves a blunt role in forcing collaboration and connectivity, but it is also often baffling. This TikTok nails how a lot of us feel about offices by breaking them down as religious sites filled with bizarre ceremonies.

Sports is what kept the cable bundle together, and it’s now poised to play the same role in the future of streaming, as the land grab phase gives way to the elusive “profits” stage. Netflix, which has avoided live programming, is looking to bid on sports league streaming rights, although it is apparently targeting niche sports like surfing.

Meta’s big job cuts are pinned on its overexpansion during the pandemic, but it’s just as likely a result of Apple kneecapping Facebook’s ad targeting and souring advertiser sentiment. WARC found that 30% of advertisers it surveyed planned to spend less on Meta ads next year, a sharp turnaround from the sentiment it measured in previous years.

Insider stood its ground against Barstool’s Dave Portnoy and won. A judge threw out Portnoy’s defamation suit that alleged Insider’s investigation of sexual misconduct allegations made against Portnoy. This is the upside of having a big company – Insider is owned by Axel Springer – rather than being solo or part of a small company. Many publishers just cave to threats because the “business interests” always say fighting isn’t worth the risk. The real ones stand up to bullies.


If you missed SparkLoop’s masterclass on paid acquisition for newsletters, you can catch the replay. Matt McGarry walks through the basics of using Facebook and TikTok to boost audience growth. See the class.

FT Strategies has a new subscription economy report, done in partnership with Minna Technologies. On Tuesday, Nov. 22, it will present the findings in a free webinar. More info here.

Thinking of doing a podcast? My podcast producer Jay Sparks can help you go from idea to thriving show. Find out how PodHelp Us can help you get your own video podcast.

Send me your feedback:

Interested in a sponsorship? Excellent idea. Here’s the sales kit with all the details. Get in touch.