Today’s Esquire editor Aron Solomon discusses how the Elizabeth Holmes ruling will affect the startup industry on “FOX Business Tonight.”
Elizabeth Holmes and Sam Bankman-Fried are two former wonderkids whose names are remembered for scandal. How do they go from rising to falling stars?
An executive coach says that the fluid nature of technology startups, along with the inexperience of young entrepreneurs, increases the risk of poor decision-making.
“It is lonely at the top, especially for today’s leaders who face a bunch of challenges in a rapidly changing environment. It leaves little time for young people leaders who are learning in real time to actually step back and reflect on their decisions ‘re making,” said Nick Goldberg, founder and CEO of EZRA, a virtual leadership coaching firm.
Goldberg told FOX Business that the startup scene was “like the Wild West” for a long time, allowing some people to take advantage of situations.
Former Theranos chief executive Elizabeth Holmes spoke at a Wall Street Journal technology conference in Laguna Beach, California, on Oct. 21, 2015. (Glenn Chapman/AFP via Getty Images/Getty Images)
Holmes was 19 when he dropped out of Stanford University to start Theranos, a blood-testing company. He grew the idea of using a few drops of blood to diagnose medical conditions into a $9 billion business.
Bankman-Fried was 26 years old when he founded FTX. He previously worked on Wall Street before founding Alameda Research and then starting FTX. Investors valued the crypto exchange at $8 billion in January 2022 after the company raised $400 million in its first round of funding.
Sam Bankman-Fried, founder and former chief executive officer of FTX, spoke during the Institute of International Finance’s annual membership meeting in Washington, DC on October 13, 2022. (Ting Shen/Bloomberg via Getty Images/Getty Images)
FTX’S SAM BANKMAN-FRIED COLLAPSE COMPARED TO ENRON, MADOFF
‘The reason for this is power’
Both cases attracted a lot of publicity. However, Goldberg says business leaders don’t have a monopoly on bad behavior.
“What it really boils down to is power,” Goldberg said. “The reality is that anyone in any job has the opportunity to bend or break the rules. The difference is when you’re talking about a person in a position of power or leadership in the public eye, the impact of bad actors wider and more. harmful.”
Power seems to be an issue with Theranos and FTX.
For example, in a 2019 exposé, Vanity Fair reported that Holmes flew cross-country in first class and was then taken to a breeder to buy a 9-week-old puppy. He also has an entourage of security and personal assistants along with drivers and a publicist.
In a court document, FTX Trading CEO John Ray said he had never witnessed such a complete failure of corporate control as he had seen at FTX since taking over from Bankman-Fried.
“From the compromised integrity of the systems and mismanagement of overseas regulation, to the concentration of control in the hands of a very small group of inexperienced, inexperienced and likely compromised individually, this situation is unprecedented.”
Ethical leadership and compassion
Courtroom drawing of Elizabeth Holmes during her sentencing hearing, Nov. 18, 2022. (Vicki Behringer)
WHAT IS THERANOS?
Goldberg said executive coaching gives business leaders the space to step back and reflect on the decisions they make. His company has helped more than 30,000 leaders and teams in 91 countries improve performance, employee retention and promotion rates.
He explained that executive coaching is focused on personal growth rather than business results.
“By connecting leaders with coaches early, they learn not just how to lead but how to lead ethically and compassionately,” he told FOX Business.
Holmes was sentenced to 135 months in prison after his conviction on four counts of wire fraud and conspiracy in January. Prosecutors said he lied to investors from 2010 to 2015 by promising that Theranos’ technology could run multiple tests on a drop of blood from a finger prick.
Bankman-Fried is accused of secretly using $10 billion in customer funds to support his trading business. At least $1 billion in client funds are believed to be missing.
Goldberg said the worst players in the startup space will disappear as the industry matures and regulation catches up with what’s actually happening now.
Social change
Market Rebellion co-founder Jon Najarian and Nicholas Wealth Management President David Nicholas react to hitting bitcoin and weighing stocks to invest in “Making Money.”
CEOS, EXECUTIVES QUESTIONS
Goldberg also believes that society needs to change.
“For a long time, our society rewarded being cutthroat or putting profit above all else, but I think that’s starting to change and that’s a really good thing for everybody,” he said.
He believes this can be done without undermining the agility and innovation that make young tech entrepreneurs so great.
“This is where we can really use coaching to build the basic skills and integrity leaders need to minimize bad behavior or leadership choices,” he said.
| Ticker | Security | end | Renewal | change % |
|---|---|---|---|---|
| AHEXY | ADECCO GROUP AG | 17.38 | +0.27 | +1.58% |
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EZRA was launched in 2019 as an incubator for the LHH ecosystem. Talent solutions provider LHH is a global business unit of the Adecco Group.
