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SBF
@SBF_FTX
3) Sometimes, we're advisors for a company. Maybe that means we're on the board, or maybe it's informal; maybe we're investors. And sometimes, we disagree with what the company is doing. ...what then?
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SBF
@SBF_FTX
4) There are a lot of playbooks here to follow here, and they don't all agree with each other. Here's ours.
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SBF
@SBF_FTX
5) First of all--we ask them about why they're doing what they're doing--let's say they're making decision X for the company, and we would have thought Y was correct. So we ask them to explain their thoughts around X.
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SBF
@SBF_FTX
6) Sometimes, that clears it up -- they just knew something we didn't! Other times we still think Y. So we'll say something like -- "Hey! Interested in chatting about X vs Y. FWIW, our weak prior would have been Y, because of reasons ABCDE, but we could totally be wrong!"
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SBF
@SBF_FTX
7) And if the company is interested, we sit down and try to hash it out. And sometimes, at the end of that, we agree. Often we do! But sometimes we still think Y, and they still think X. So what then?
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SBF
@SBF_FTX
8) Well, I guess, there are a few options: a) give up and let them do X b) keep arguing for Y c) as a board of directors, veto X d) intervene in management e) say X is right even though you don't think it is
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SBF
@SBF_FTX
9) (b) is stupid, unless you have new evidence/etc.--it's just rehashing it. (e) is stupid too: the least you can do is let them know that you still think Y, so that they don't get misled into thinking there's a consensus and no point in continuing to mull it over.
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SBF
@SBF_FTX
10) (a) and (d) are both options: either let them go with X, or forcibly change management. How about (c)--the board vetoing X? This happens at a lot of companies! But we think it's almost never the correct thing to do.
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SBF
@SBF_FTX
11) The problem is: if you veto X, what will the company do, more generally? Either it'll route around the veto and synthetically do X, in which case it was a dumb idea; or it'll try to do Y this one time but more generally do X, in which case it'll be incoherent and messy;
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SBF
@SBF_FTX
Replying to
@SBF_FTX
12) or it'll try to become 'the company that does Y'. But if the leadership deeply believes that X is correct, then--*regardless of whether X or Y is correct*--they won't be good at running the Y company. People are not good leaders of a mission they don't believe in.
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SBF
@SBF_FTX
13) We've seen this again and again--it's one of the most consistent patterns. There's no point in trying to force someone to run a company they disagree with, or work on a project they think is dumb. They won't have a vision for it because they don't believe there is one.
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SBF
@SBF_FTX
14) And *they* are the experts in their company (or else why are we bothering with them?). We should update on that even if we don't understand why they think X. So: Companies should be run the way their leadership thinks is right; whether or not we agree.
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SBF
@SBF_FTX
15) In some extreme cases there needs to be a leadership change--that's the only real way to change a company's vision, other than convincing the existing leaders of it. But unless you have a great alternative, it'll probably fail.
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SBF
@SBF_FTX
16) And so in practice, your options are: a) let them do X and hope they're right or that they learn to accept Y b) replace them and watch the company probably fail (b) just isn't exciting unless there's a great alternative.
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SBF
@SBF_FTX
17) So, to go back to the top-- when we disagree with a company we're advising: we'll try to argue for what we think. And if we convince them, great! And if we don't, then we'll encourage them to run with *their* vision, even though it wasn't ours. Hopefully they're right.
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SBF
@SBF_FTX
18) So anyway, long story short: If people disagree with us, we're super excited to chat and see if we can come to agree! Hopefully we can do so in a *constructive* way that acknowledges nuance and cares about the details and doesn't try to steamroll or judge.
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SBF
@SBF_FTX
19) That's how we operate, and the way that we would be able to collaborate. If that doesn't work--if we aren't able to have a nuanced, detailed conversation acknowledging realities--then that sucks, but so be it. There's no point in debating if it isn't constructive.
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SBF
@SBF_FTX
20) And the only remaining decision is whether we should run with *our* beliefs about what is best, or whether someone else should take the lead. And we're fine either way! Because usually we all agree on the ultimate goal--it's a question of the best strategy.
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