Thursday, 30 May 2024

Create a Crisis, Capture a Unicorn

It’s unicorn season and the money is gushing on Wall Street.

I’ve figured out a way to get hold of some of that money, and maybe you’d like to join me. It involves industry disruption and crisis management, with my own soulless twist.

This is high-tech stuff, so let me define a few technical terms.

First, by unicorns, I’m talking about fantastic beasts: privately held companies worth at least a billion dollars. (Insert your joke here about who can catch a unicorn.) Unicorns like Lyft are sold to investors in initial public offerings of stock (also known as I.P.O.s), enabling insiders to make a ton of money. The precise terminology for these lucky people is “obscenely rich.”

As always, I’ve been wondering: How can I become even naughtily rich? The trick is to find a business I can bootstrap to billions.

Disrupting established industries seems to be the way to go: Even children know that Lyft and Uber have disrupted taxi service and Airbnb has disrupted hotels.

Now it’s my turn to make a fortune. The crisis management business seems to be ripe for disruption.

Crises are everywhere, especially in the business world. A company called Theranos failed so spectacularly that it has generated a best-selling book, an HBO documentary and a big podcast. Theranos claimed to have revolutionized blood tests. It has been a disaster, like the Fyre festival, but with pricked fingers.

Then there’s Boeing, not to mention a number of current presidential campaigns. You get the idea.

Crisis managers are already in great demand, but I intend to do something different: I’ll create crises, then solve them, leading to a staggeringly successful unicorn I.P.O.

Lyft just had its I.P.O. and may soon be followed by some of the biggest names in tech, including Uber, Airbnb and Slack, the annoyingly ubiquitous program for sharing messages in the workplace.

Exciting, right? Hope you like roller coasters: Lyft’s shares dropped below their offering price by their second day of trading, which means the stock price could use a … well, you know.

The point with an I.P.O. is to be an insider, not a chump who gets fleeced by the insiders. Lyft’s founders, employees and early backers are getting quite a payday. Andreessen Horowitz, the venture capital firm, comes away with about $900 million in instant profit. Carl C. Icahn apparently made about $550 million, according to The Wall Street Journal, by selling his stake to George Soros.

That’s the life for me: mogul. I’ve been driving the same car for 10 years. It’s time to move up to something that extravagantly shows how much I love the planet. Not a mere Tesla, but the Jaguar electric E-Type Zero, which costs about $400,000.

That kind of ride requires I.P.O. money. So, fellow insider, here’s my plan.

I formulated it with invaluable help from Eric Dezenhall. He runs Dezenhall Resources, which, among other things, does crisis management. In an email, I told him that my life is an unmanaged crisis, so I need advice if I am to build a future in his field.

His response was promising: “You do realize that the whole discipline is a farce, don’t you?” That convinced me that crisis management would be a good fit.

He added: “All you need is a sport jacket and a cliché (such as ‘Get ahead of the story,’ a great-sounding phrase that has no meaning.)”

This was getting better and better. As a veteran journalist, clichés are my métier. And, as it happens, I own a sport jacket. There are some moth holes, but I’ve gotten pretty good at using a felt-tip pen to match the jacket color with the lining. Mr. Dezenhall was impressed by my inventive use of the felt-tip pen. That, in itself, “is crisis management,” he said.

But he cautioned that crisis management is no longer a matter of simply altering perceptions so that a bad situation looks like something good. “What people think we’re going to say is, ‘We didn’t dump PCBs in the river, we’re shampooing the fish!’ and people will say, ‘Ooh, that’s good,’” he said. But, no. That’s old thinking, he said. His trade has evolved.

Instead of just changing perceptions, he said, the great crisis managers provide “operational solutions” that address root causes. That way, he said, a company can transcend the fickle and uncontrollable emotions that dominate the 24-hour news cycles and waves of Twitter outrage.

So he would not, for example, advise the chief executive of Boeing to go on a televised apology tour for two recent crashes and the loss of hundreds of lives. (And, in fact, the company’s public response has been notably muted.) These days, he said, such gestures are instantly deemed inadequate. Instead, he said, it’s better to help companies actually fix their problems, which will do more to vindicate them than any snappy patter.

That sounded hard.

“What you’re saying,” I said, “sounds like it takes actual management ability.” I was beginning to despair. And that’s when the thunderbolt hit me: I could work the other side of the market. Crisis creation!

I’d ferret out dire problems and make them much worse. Corporate executives already do that routinely, of course; I mean, just look at the series of apologies from Mark Zuckerberg over … well, almost everything. But hotshot executives have been calling those problems “mistakes.” I’d call them “my strategy.”

Mr. Dezenhall ran with the idea: He said I could get paid by short sellers, or work directly with him to concoct scandals that expose companies to reputational crises, which he — and I — would be paid handsomely to relieve. Most of the time, we’d do nothing but wait for the situation to resolve itself and celebrate our success.

Ideally, he said, we would cause problems that look like random events and that don’t besmirch the character of the company. He pointed to a spate of syringes found in Pepsi cans in the ’90s. (The Pepsi problem, which I covered a lifetime ago, earning mere workingman’s wages, turned out to be a hoax, with a splash of copycat effect.)

Our corporate slogan would be this: Plant a problem, find the problem, claim to fix the problem. All in a profitable day’s work.

“The future is in crisis creation!” he said. “I am happy to secretly finance this, and we’ll work together, and hopefully we’ll be on the Forbes 400 list in a few years.”

It sounded exciting. It sounded like big money. Also, it sounded like he was joking. Unfortunately, he was. He turned out to be one of those people burdened with a sense of ethics and even a conscience.

I need another partner.

It could be you! This is a can’t-miss opportunity: We’ll capture a unicorn, throw it into crisis, and reap unfathomable rewards.

It will definitely happen, though for now, I’ll keep my day job: describing crises without capitalizing on them.

If I save my pennies, who knows? I might be able to get a new sport coat.

John Schwartz is a New York Times reporter and author of “This Is the Year I Put My Financial Life in Order.” Follow him on Twitter: @jswatz

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