3) The core thesis of Better is Bigger is basically math: that the scale of the world's problems is huge, and so you should be much less risk averse if your goal is to donate.
This post is not about that math. This post is about people, and the world, and some history.
4) I really enjoyed this thread by @evancharles, the founder of DoorDash:
6) The core of the trade, of course, was: buy on Coinbase, sell on Bitflyer.
But you wouldn’t make money if that’s how you thought about it. Because as it turned out, most of the difficulty was in the banking.
The intersection of banks and crypto has always been a sore spot.
7) Back then, Alameda had a Bank of America account. And each weekday at 10am two team members would walk to the local branch.
They’d be there for hours: waiting in line, reading out confirmation codes, talking to the manager, requesting higher limits, signing forms…
8) Wire transfers closed at 1pm. If the wires weren’t out by then, we didn’t make money that day. And sometimes they weren’t. Sometimes 3 hours sitting in a bank wasn’t enough; so we started showing up at 9am.
8 people-hours spent sitting in a bank, every day.
9) In some sense, this obviously didn’t scale. (If only there were some way to transfer wealth online and permissionlessly!)
But if we’d never done it, we’d never understand how wire transfers worked.
10) And in some senses it did scale. You can do the math: 10% arb; once every weekday; multiply by capital base….
Unfortunately that trade only lasted a few weeks before the bubble burst. But it taught us a lot.
11) About ourselves, and markets, and banks, and companies, and how you get there from here.
Ask pretty much any startup, and they’ll tell you the same thing: you have to go all-in.
You can’t half ass it.
13) The pure number of things you have to do is staggering. You have to form entities and get bank accounts and build a brand and hire and fire and manage and raise and invest
And, of course, you have to actually build the business.
14) And if you fuck up any one of those too badly, there’s nothing left. You can’t skip management day.
Early on, I didn’t know what to do when things went sideways with people.
We had a few unhappy employees. And I… well, I kept running into the same walls.
15) I’d try to talk through our differences, and present evidence, and argue when I thought my approach was right.
And often that worked! But unhappy employees come when that doesn’t work.
And if it didn’t work the first 10 times, it probably won’t work the 11th.
16) I was out of ideas. And things festered.
Festering is the right analogy. It spread. Eventually it infected half the company.
Had I acted sooner, and more thoughtfully, I probably could have fixed it.
But by the time I did act, amputation was the only option left.
17) Over the last few years, there are a number of times we’ve faced a decision. And often, that decision is: do we want to go out on a limb?
When we founded FTX, we had no idea how to get customers. We didn’t know if we would ever know how.
18) The thing that convinced us to try it was:
Value of FTX = (probability we get customers) * (probability we build a good product) * (value of top exchange)
19) And so we wrote down some numbers:
20% * 75% * a lot
When we first started FTX, we thought it would probably fail.
We did it anyway, because 15% of a lot is… a lot.
20) In the end, we got there, because we tried hard, and learned what we could, and put ourselves in the best position we could to succeed.
And because 15% isn’t actually all that low.
21) With Serum, there was something similar: will an ecosystem actually develop here?
Together they’re discovering big problems; scoping out approaches; and generating hundreds of millions of dollars for them.
27) They’re impressive people funneling their lives into doing as much good as they can.
The amount of good each person can do is enormous, and once they chose to maximize, the rest of their stories aren’t actually all that improbable.
28) And we’ve seen the same thing at FTX: the people who think the biggest and try the hardest to get there and give the most to it often do amazing things.
29) Because the truth is, most people just don’t try that hard; maybe it doesn’t make sense to, if you don’t care much about the tail cases.
30) And so if you do push yourself--you do motivate yourself to do everything you can, and you do think strategically, and you do identify massive opportunities--maybe the odds of success aren’t all that low.