The easiest thing to do in life: criticize others.
One of the hardest things to do in life: understand others – the circumstances they are in, they decisions they have to make.
When Elon Musk smoked Marijuana (which by the way, went legal in Canada yesterday – and has been legal in California for a while) on air, many spectators were shocked.
Of course, pundits are shocked and dismayed as well, like this one:
However, picture yourself in his place. When ambitions became a ‘nightmare’ and for months you are under increasing pressure from your shareholders, the short sellers, media and gossip hunters.
It takes more than a real Iron Man to keep cool under such circumstances.
When you hear the stories about these personalities, the human side is often missing.
In my WeChat groups with other entrepreneurs, hardly anyone was critical towards Musk. Instead, many went “He must be under 1000 Times the pressure I am facing – but I understand why he did what he did.”
Theranos founder an inherent fraud?
Now another person – Elizabeth Holmes, founder of now-disgraced blood test company Theranos.
If you ask around a random group of people who know about the episode. The comment tends to be the same: “she is fraud, period.” or “how could she even think of doing it? This is so unethical.”
Sure, she might be a fraud all along and what happened at Theranos were pretty disgraceful.
However, again, picture yourself in her place. I believe the more plausible scenario is: she had sold investors and the public a dream she genuinely believe in. However, after the money poured in, the breakthrough in technology somehow did not happen – no matter how hard the team tried.
In normal state or medical device funded scenarios, this project must have already been written off. But in Holmes case, so much as at stake – much much more than her reputation.
When you are in that situation – you probably know what is the right thing to do: admit your mistake, take the hit and move on.
However, under that level of psychological stress, would you be able to do the right thing? Or you do the convenient of covering up, even when you know sooner or later this will explode?
The latter is a much much easier choice.
In this way what Holmes did was similar in nature to acts by some of the rogue traders. Anyone still remember Nick Leeson who brought down Barings Bank in 1995? After making trading losses, instead of reporting, he took even riskier bets, in an attempt to recover the losses.
Eventually, things exploded, in a big way.
In fact, many of the rogue traders did something similar: using a tactic which was profitable (for a while), encountered losses, tried to cover the losses by taking excessive risk …
Gamblers do the same.
Not the same scrutiny
However, traders are luckier compared to entrepreneurs in that regard. Through decades of collective experience, trading firms have full supporting structure to try to avoid such mistakes under pressure: from ethics curriculum to compliance/regulatory checks to psychological counselling.
Most of the time, entrepreneurs had none of these – even though they might have been entrusted with hundreds of millions of dollars.
So from the human side, maybe we should try to be a bit more understanding and compassionate.
Even though what is wrong is still wrong.