FTX with Sam Bankman-Fried & Mario Gabriele (Extended Cut)

1. MGMario Gabriele0:00

   I don't know if it matters, FYI, but, um, I just checked, and technically, the number that's, uh, of employees when I wrote the piece was 82.

2. BGBen Gilbert0:09

   Eighty?

3. MGMario Gabriele0:09

   I said 75. I mean, it's kind of like whatever, but-

4. BGBen Gilbert0:12

   When you started your research, it was probably 75.

5. MGMario Gabriele0:14

   Exactly.

6. BGBen Gilbert0:14

   Yeah. [chuckles]

7. MGMario Gabriele0:15

   [chuckles] They hired seven between publication one and two.

8. BGBen Gilbert0:18

   [chuckles] I believe that.

9. SPSpeaker0:21

   Who got the truth? [upbeat music] Is it you? Is it you? Is it you? Who got the truth now? Is it you? Is it you? Is it you? Sit me down, say it straight. Another story on the way. Who got the truth?

10. BGBen Gilbert0:38

    Welcome to season nine, episode seven of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs, and our venture fund, PSL Ventures.

11. DRDavid Rosenthal0:52

    And I'm David Rosenthal, and I am an angel investor based in San Francisco.

12. BGBen Gilbert0:59

    And we are your hosts. Today, we are telling the story of the crypto trading exchange, FTX, started just two and a half years ago, and today, worth over $25 billion. They're by far the fastest-growing crypto exchange. In the research, I found that they grew an astonishing 10X by volume in the year 2020. I went to look if they repeated that unbelievable feat in 2021 and found out that they actually 10X'd just in the first half of 2021. [chuckles]

13. DRDavid Rosenthal1:29

    So the answer is no, they didn't. They doubled it. [chuckles]

14. BGBen Gilbert1:32

    [chuckles] Unbelievable! So the pace is accelerating for FTX. We're still waiting on end-of-year numbers, but this company is, is just astonishing. So FTX is now the sponsor of the Miami Heat's basketball arena, FTX Arena, and you can see their logo on every Major League Baseball umpire's uniform. You can see Tom Brady and Gisele in FTX commercials. It's wild. So what is going on here, and how did they get so big, so fast? W- and what's with these huge brand deals? Today, we're gonna tell the story with the CEO and founder, Sam Bankman-Fried. Sam is a genius, an effective altruist, and he's also the wealthiest person under 30 in the world, with an estimated net worth of nearly $9 billion. And we are trying something new at Acquired. We have a guest host here with us today. We've brought in Mario Gabriele from The Generalist to team up for this episode. Welcome, Mario.

15. MGMario Gabriele2:28

    Thank you guys so much for having me. I'm, uh, quite honored to get to be the first.

16. BGBen Gilbert2:32

    [chuckles] You bet. Listeners, if you haven't read it yet, Mario did a three-part epic series on FTX over at The Generalist, and I, I think it's safe to say, Mario, you are truly a world expert on this company after writing, I think, 36,000 words.

17. MGMario Gabriele2:49

    Yeah, it was a, it was a long one, or, or a long series. Brevity is never really my strong suit, but, uh, I really let myself sort of fly on this one, and as you sort of said, there's just so much to talk about, uh, that, uh, it always leaves you wanting to do a little bit more on it.

18. BGBen Gilbert3:06

    I think that's why, uh, us, and you, and Packy get along so well. [chuckles]

19. DRDavid Rosenthal3:10

    We are all birds of a feather.

20. MGMario Gabriele3:11

    Yes, that's right. [chuckles]

21. BGBen Gilbert3:12

    [chuckles]

22. MGMario Gabriele3:12

    All go along.

23. BGBen Gilbert3:14

    So before we get in, is it right to say, Mario, do you know, this- is this company only 200 employees, and I think maybe started the year at, like, a f- a few dozen employees?

24. MGMario Gabriele3:24

    Yeah, that's right. Um, I think it is, you know, just pushing 200, and when I sort of wrote my pieces in, in summer, uh, it was closer to, I wanna say, 70, 75. Um, so they're growing extremely fast, but still, when you look at the output, uh, the leverage on each individual person is, is astonishing.

25. DRDavid Rosenthal3:47

    All right, well, before we dive in, I would like to welcome our presenting sponsor for all of Season 9, Pilot.com. Pilot is the backbone of the modern financial stack for startups. They themselves are backed by all-star investors like Sequoia, Index, Bezos Expeditions, and Stripe, and they are truly the gold standard for startup bookkeeping. Now over to our conversation with Pilot co-founders, Waseem Daher and Jessica McKellar. All right, so we've talked a lot now about how Pilot works technically, and the combination of humans, and software, and Iron Man suits for your finance professionals. What does your actual tech stack look like, and what types of technical talent are you looking to recruit to come join the team at Pilot?

26. SPSpeaker4:32

    Pilot has a really stacked engineering team, and that's because what we're doing is quite difficult. So how do you build the right systems to scalably deliver high-quality books and other financial services to a wide range of customers in a wide range of circumstances? That's actually a really nuanced set of systems design and technical challenges that require a lot of finesse from people who are very, very good at what they do. So as a consequence, we've really assembled quite the team to pursue this. I've spent basically my entire adult life quite rooted in the Python community, and that's served us well [chuckles] for bringing together a great team with that expertise and that ecosystem. But I think the thing I would emphasize is the sophisticated systems that we're building, sort of the workflow and systems design, is where there's a lot of finesse, and we've really built the right team to do that.

27. DRDavid Rosenthal5:31

    You can learn more about Pilot, and whether they can help your company eliminate the pain of tax prep and bookkeeping by going to pilot.com/acquired. And thanks to Waseem and Jessica, all Acquired listeners, if you use that link, you will get 20% off your first six months of service. Thank you, Waseem and Jessica, and everybody at Pilot.

28. BGBen Gilbert5:51

    ... Thanks, Pilot. All right, listeners, we're gonna dive in here. Please know, and, and maybe even more than usually when we tell you this, but this is not investment advice. We, we may have investments in the things, the, the projects, the tokens, the companies that we discuss. Uh, this show is for informational and entertainment purposes only. Mario, I think, uh, we wanna make sure that, that we say this and, and cover you as well, that you may, uh, you may have interests in things discussed, and, uh, do your own research. With that, on to our interview with Sam Bankman-Fried. Sam Bankman-Fried, welcome to Acquired.

29. SBSam Bankman-Fried6:28

    Thanks for having me!

30. BGBen Gilbert6:30

    Well, it is, uh, it is our pleasure and our privilege to really, uh, get to have you tell the story of FTX today, of Alameda Research, how this whole crazy thing came to be, and, and really help us analyze the, um, the crypto assets ecosystem today.

Episode duration: 1:53:31