Fake it till you make it baby! (EN)

I heard it so many times. In good, in bad and in the ugly meaning. It came back to me with the Theranos case and Orange square – Fyre festival and Nikola, which are just the pinnacle of this modern saying. I know it is hard to succeed and earn trust from the investors. It is hard to make the right pitch and follow the dream to create something new and better. The chance you get with every investor (if you get it) is quick and you have to be absolutely on spot. Investors in general will want to give you money, at least a little if they see some potential. Of course getting hundreds of dollars is a bit different.

What changed? Not sure how it was in the past, so don’t want to speculate… much. But what I managed to see and find out, the investors in the last millennium spent more time on finding the talent or a really good idea they could benefit off of. Something or someone who would stand out and could be boosted by marketing efforts, ideally something or someone that would bring long time value to the table. It seemed to be somewhat more a Special Forces effort in terms of getting things done, than a regular army style accomplishing things by strength of manpower. It was a fairly low-risk betting game.

Photo by Brett Jordan on Unsplash

Today it is the regular army style investing – a lot of it, big and fast. Do as much as you can and maximize the chance of getting in on that technological unicorn. Unicorns are 1+ bil. Dollar valuation start-up companies. Everybody with an idea wants to attract that amount of attention and capital, every investor wants to have a piece of unicorn to make up for the thousands of wasted investments in the ideas that didn’t go down so well. This approach naturally leaves a big opening for high-stakes fraud or cooking books as well as for the investors to believe the charisma and progress of those who seem to have the gift to make it.

Unicorns are an extreme example, there are many levels of this. Theranos grew to be a unicorn and built just on an idea. Nikola managed to exploit the thirst to find an alternative to electric vehicles, to bring to front the beautiful dream of running on hydrogen (by the way when somebody really tackles the problem of cheap / safe hydrogen tanks that don’t leak, let me know). Fyre managed to live off and build upon social media, the other side of extreme – if Theranos managed the major investors – Fyre managed to create magic and fake it till you make it social media style and get the ordinary followers to invest. Okay more or less, but this is not the detail about these FUPs, but a general overview to understand the point.

The last spice in the mix is the popular notion and glorification of failure. It is part of a good marketing / PR narrative, that all these unicorn owners, inventors, self-made people were stubborn enough not to get detracted from being turned away by investor after an investor, etc. The never give up attitude, which is great if you are a lucid human being, but quite scary if you are boarder-line psycho. Generations Y and Z really embraced this, absolutely understandable in the world that is increasingly putting pressure on individuals to be perfect more than ever before, to be out there and create that virtual world – everybody lives large on social media. Let’s be honest, it is OK to fail, but it is not OK to glorify failure. Will this attitude change? It sure will in the future. A new generation of investors will grow up, seeing the troubles as well as opportunities the current system and style has. As well as the landscape of wealth distribution is changing and the technologies are creating new openings, the new investment styles and moguls are still to make their move. Will it be for better… or worse is still to be seen. Until then, don’t fake it – just make it.