Clowns, Empathy, Vulnerability Authenticity and Dancing

While making breakfast this morning for my kids, I looked out my kitchen window to see the other lights turning on in my neighbors’ windows. Instead of giving my kids their morning dose of Encanto songs they always ask for, I decided to blast one of my all-time favorites: Smokey Robinson’s “Tracks of My Tears“. But when I went to put it on, I played “Tears of a Clown” by mistake. I always get those two songs mixed up. I love them both, but they are essentially the same song.

Both are about hiding one’s sadness behind a happy face, like the clown in Leoncavallo’s Pagliacci who makes people laugh while disguising his own sadness. So while standing in front of the kitchen window in clear view of my neighbors, making breakfast and dancing like one of Smokey’s Miracles to “Tears of a Clown”, I was thinking about empathy, vulnerability, and authenticity.

We are better colleagues when we are empathic. By empathetic, I mean trying to really listen to people and see behind the costume they are wearing and know they may be struggling.

We are better colleagues and leaders when we are able to show some of our own vulnerabilities. It builds connections. It shows our humanity. It allows for an open environment. It shows that we need each other. And finally, it allows us to bring more of our authentic self to the office.

A touch of vulnerability is at the heart of all charisma. Think of all of your favorite characters in movies or literature. There is always that touch of vulnerability that makes them feel authentic and real. It makes you root for them and want them to succeed. And ultimately, we cannot succeed in organizations or as organizations if we do not root for those around us and want them to succeed.

So letting myself look like a fool at the window as I tried to dance like I was in Motown, was a strong show of my own early morning vulnerability. I wish someone had told my younger self not to be so afraid of looking ridiculous. I would have danced, danced and danced.

Zidane and Positive Leadership

before taking the penalty kick


There’s a moment in the 2016 Champions League Finals between Real Madrid and Atlético de Madrid that sums up positive leadership. If you recall, the match ends in penalty kicks. While Atletico’s coach, Diego Simeone, is pacing back and forth, pulling at his hair, Cristiano Ronaldo approaches Real Madrid coach Zinedine Zidane and whispers in his ear that he wants to take the fifth penalty kick. Zidane puts his arm around Cristiano and gives him a big smile. Atletico misses two penalty shots. Madrid scores all five, with Cristiano’s as the winning goal.

Ever since that moment, I have wanted to write about Zidane and leadership.

As I have written before, a leader’s job “is to create the environment where each team member can thrive and have the biggest impact.”

Even beyond having the advantage of the authority and charisma from being one of the sport’s greatest legends, Zidane created that environment by:

  • Not micromanaging his players on the field
  • Celebrating his players and not himself
  • Showing poise and positivity in the face of adversity
  • Not being afraid of failure, knowing that win or lose, he was still going to be who he always way
  • Showing how much he enjoyed working with his team and seeing them succeed (something he repeated in interview after interview).

On that last point, imagine how much better you would perform if you knew that your boss loved seeing you happy and succeeding at your job?

Collage from players’ Instagram messages to Zidane. Showing joy and affection toward your team is a key to leadership.

This joy and complicity are captured in all of the photos that his team members posted on Instagram this week when Zidane announced he would not coach next year.

A lesson to all of us who strive to be better leaders.


This blog is about lawyers being better business partners after all, so I should add that a key to our success is letting our clients feel that we experience the same joy, satisfaction, and complicity you see in those images when they succeed.

Leadership: Normal is Not Good Enough

A crisis means opportunity, and all those business leaders and politicians who aspire to a return to normal or whose strategy is to ride it out are not up to the challenge. They don’t cut it.

These are extraordinary times where only better than normal will do. They demand leaders who will take the extraordinary opportunity to strive towards a New Normal better than a Back to Normal.

As Ted Lasso would say, change isn’t easy, but there is no going to back to the old status quo. Our North Star has to be guiding us to better versions of ourselves.

I Love Ted Lasso


I love Ted Lasso.

Did I tell you that I love Ted Lasso? Yes, I keep pushing the show on anyone who will listen. No, I don’t get a referral fee. I just love it. If you haven’t seen it yet, please cancel the rest of your day’s meetings. It’s more important.

Here’s why, but first a little background:

I’ve always loved everything that has to do with motivating people to be better and happier whether at work, at play or in their personal lives. During these difficult times when there has been a scandalous vacuum of leadership across the entire professional and political spectrum, I have tried to do my part to keep myself and those around me positive and sane. In the process, I’ve been reflecting a lot lately on the great coaches, bosses and mentors I have had over the years. But just as I was putting together a series of posts based on what I’ve learned along the way, here comes Ted with his folksy accent, talking like my Texan brother-in-law, to steal my thunder.

Ted Lasso is the story of an American university football coach from Kansas who has been hired to train a mid-tier English premiership team on the verge of relegation. As you can imagine, Ted knows nothing about soccer and arrives in a new country where everyone expects him to fail. The entire show is about how to enter a new organization and implement change as an outsider. It is a leadership comedy and is better than anything I could have ever written here.

What I wanted to write about was:

  • the importance of building self-confidence that I learned from coaches like Sandy Maida Geopfert, Aat Muys and the duo of Dave Scaggs and Sam Debone (who could have been stand-ins for Ted and Coach Beard). But Ted Lasso does that.
  • identifying when someone is hurting and needs comforting which I learned from my mother and how to put things into perspective which I learned from my father. But Ted Lasso does that.
  • how a Leader’s job is to create the environment where each team member can thrive and have the biggest impact. The best performer isn’t necessary the best leader, and the best way to enhance performance is to strengthen one’s strengths not weaknesses. These things I learned from hours of conversations with my friend, former co-worker and expert in organizational behavior Bill Collins. But Ted Lasso covers all that.
  • How creating an atmosphere of positivity and recognition creates a culture of positivity and recognition which I learned watching how my former boss, the amazing Angel Cabrera, uses every opportunity at his disposal to celebrate the excellence of those around him not himself. But Ted Lasso does that.
  • How important it is, especially during times like these with Covid fatigue and despair, to create a culture of positivity and to focus on relationships. I have been turning to the articles and Linkedin feed of Beth Cabrera, a friend and workplace psychology guru, for guidance on these. But Ted Lasso covers all that.

F-ing Ted Lasso. All this is in that wanker’s TV show and more. Plus, the acting is phenomenal.

In fact, you could teach an entire course on Leadership with each session covering what is to be learned from each episode of the show. At the end of the course, each student should know:

  • Leadership is a transversal, portable skill. It isn’t about being a subject matter expert. It is about the atmosphere you create. Ted knows nothing about soccer, but he does know about coaching. His job isn’t to improve the team’s soccer skills – they have those – but to make sure they are able to perform at their highest level, to be “the best they can be on and off the field”.
  • Be positive and calm. As leaders set the atmosphere and tone for how those around them to perform, leaders must remain positive and calm in the face of adversity. Some of my favorite scenes are when Ted consciously struggles to stay positive.
  • Everyone matters.Engage with everyone. Each person in an organization should be treated with equal value regardless of rank. We don’t have all the insights we need. Often times a person at the bottom of the pyramid is the best placed to fill those gaps.
  • Manage Up. A Leader needs to build buy-in 360 degrees. You need your team to get with the program, but you also need to win over your boss. It’s not about making the boss happy, it is about making the boss buy into your vision.   
  • Trust: you need to build trust across the organization and in your community. This takes work, and it often means showing respect even if the result is a horrible stomachache. It also means keeping your word and building relationships with all stakeholders big or small.
  • Forgiveness: Often times to build and maintain trust you have to forgive people when they have treated you unfair or unkindly. It comes with the job.
  • Identifying leaders within. You need to identify the other leaders and influencers within your organization. The Leader’s job isn’t to do all of the leading. Help others step up. Remember the best player or top performer may not be your choice.
  • Quick wins: When you start out, you need to show that you listen even to your team’s smallest and most mundane issues. If you can solve one or two of those – like improving shower pressure – you can show that you listen.
  • Resilience and relationships. One thing I love about the show is how it depicts everyone’s need for someone to help them through tough times and the importance of finding and being that person who helps others. Handing out little toy soldiers is a message that says, “hey it’s okay to be vulnerable, we all need a little help.”
  • Feedback. Feedback should focus on reinforcing good performance, but when it is time to lay down the law, it should not be to micromanage but to address the big picture and reinforce the team’s mission. Episode 6 where Ted lectures Jamie about not practicing is probably my favorite scene and example of this.
  • You gotta know when to hold them (as in the “Gambler”). You don’t need to intervene in every dispute or problem your team members suffer. Sometimes it’s best to let them resolve their own issues. You need to know when to stand back and when to intervene.
  • Bring people together by allowing them to share something about who they are, but also be prepared to share about yourself.
  • Be Curious, not judgmental. Don’t underestimate yourself or those around you. Be curious, ask questions. Get to know people.
  • Leadership and change are really hard. Being an effective leader doesn’t mean you’ll win. It is a long road to victory, whatever victory means.

So what are you waiting for? It is happy show in the current sea of gloom that surrounds us. More importantly, though, ask yourself what you are doing to create a positive atmosphere for those around you. It’s hard work, but if you aren’t even trying, then you’re not doing your job. These desperate times demand us all to do better.

UPDATE 5 March 2021:

This morning while walking my kids to school (humming the song “Ease on Down the Road“, in case you know it), saying good morning to everyone like I always do, in my head I was thinking about Social Perception and Ted Lasso. Social perception is about the difference between how you perceive yourself and how others perceive you. In the show, at first everyone thinks of Ted as some redneck American clown. It takes time and his perseverance before people start seeing what he is trying to accomplish. I love in the episode when Ted lectures Jamie, you can see Roy in the background finally processing that Ted isn’t an idiot. Personally, I have always used calmness and humor as a way to make everyone around me comfortable, and I have always had to prove to my bosses that looking relaxed, talking to everyone or using humor doesn’t mean I am not working hard. What I am doing is very intentional and in fact effective.

One of the great scenes in the show is when Ted is playing darts and explains how all his life people have underestimated him because they preferred their social perception over being curious.

While thinking of all this, holding my kids’ hands, a parent stopped me and said, “Hey, my husband and I are watching Ted Lasso. We love it !” So there you go. One person at a time.

Revisiting My Days as a Start-Up Lawyer

Last week when going through old files, I found this photo of a marketing campaign I had helped develop 15 years ago during my start-up days. In January 2006, I joined a tech start-up called FON. The company’s mission was to build a ubiquitous user-generated WiFi network where any user could connect to any other user’s WiFi signal when roaming. Share at home, roam for free. When I joined, I was employee number 6, the only lawyer on staff and the only native English speaker. 

On my first day, right as I was leaving the office, the founder and CEO – who loved to test new employees by giving them some last minute arbitrary assignment – asked me to prepare an urgent presentation detailing a new product concept. When I finally got home around midnight, the red light on my first generation, newly issued Blackberry was flashing: “Attached draft agreement, first round of seed money. Send mark-up by START OF BUSINESS.” That was only part of week one. I often tell this story about those first days:

. . . the CEO and founder who had literally made hundreds of millions selling businesses he had founded, proposed a certain marketing campaign. I sent him a lengthy email with a very well-reasoned description of why his idea was misguided. He called me into his office and said, “Eric, I know you are very smart, but I didn’t hire you to tell me that my ideas are bad. Either you make them better, come up with a better idea, or don’t come back to work tomorrow.”

By the end of the month, we had secured around €20 million in financing from the likes of Google, Skype, Sequoia Capital, and Index Ventures. Thus started a wild and intense ride.

During that ride, as the lawyer and native English speaker, I became jokingly known as the palabrator, a play on words in Spanish and terminator. That meant I wrote everything. So on top of contracts, I wrote all copy. I prepared or signed off on all customer and partner facing presentations, marketing materials, newsletters and press releases. I wrote or edited FAQs, product descriptions, and spent countless hours trying to get all of our messaging right … not because any of this was technically a lawyer’s job, but because the words and their delivery had to be perfect.

Emceeing our 2007 1st year anniversary event

Because our CEO and founder thought that business developers – definitely not lawyers — added value, I was expected to do business development as well. I traveled to customer meetings, I emceed events, and I coordinated the relationship between sales teams around the world. I even interviewed all candidates for open positions. It was a start-up after all, so no one had the luxury to say, “that’s not my job”. 

Definitely one of the highlights was sitting with the marketing team, especially next to the designers who could turn any whim of mine into a great campaign. At one point we were running a pilot in Madrid’s LGBT neighbor Chueca and were handing out free routers to bars and restaurants. We wanted to convey the message that our technology allowed you to safely convert your home/business WiFi signal into a hotspot. As we brainstormed, we came up with the idea of handing out condoms with our logo and catchy slogans printed on the packaging (ie, comparing safe sex to WiFi sharing). Coming up with silly, juvenile one-liners was way too easy: “Have FON”, “Safe Connection” and a couple of other phrases I won’t repeat relating to hotspots and easily locating them.

Sometimes being a lawyer is more than just cutting and pasting phrases like:

  • which consent shall not be unreasonably withheld,
  • as otherwise agreed by the parties in writing, or
  • to the extent permitted by law.

Yes, we draft and negotiate contracts, structure transactions, assess risk, give recommendations based on existing legislation, manage disputes, and all that other good stuff. But a huge part of being a lawyer is being your company’s advocate which means making it look good to the outside world and showing up at the party like you’re the big brother. Our weapon is words. 

We used to joke that the first week on the job felt like a month, the first month a year and 6 months – if you lasted that long – a lifetime.  And there were lots of casualties along the way. We even kept a running count of those who didn’t survive.

As I have written about agile teams, start-ups achieve end-to-end agility almost right away:

Sitting on puffs working with PR and Marketing

[A start-up] is a small team that inhabits the same open-space. When you want to talk to marketing, operations or to the product manager, you pull up a chair. When I worked for a start-up, we’d literally take our laptops and puffs to a quiet corner of the office. In fact, I happened to sit between two web designers. I would bug them all day long with my ridiculous ideas for new marketing campaigns. In a normal company, no one would have paid any attention to me. But in a start-up, nobody cared that I wasn’t Marketing. We all gave our input and were able to try out lots of ideas quickly until we got one right.

But start-ups can also lose that agility very quickly:

Imagine that start-up (or a new business unit) scaling up very quickly. Suddenly you have a product management team of ten people, three regional sales teams, and operations and R&D located at separate sites from the business-facing teams. Next thing you know, your business has become very siloed, communication is strained, messages are lost in translation and teams become tribal. We’ve all seen this happen. Sales doesn’t understand what it is peddling and R&D doesn’t understand what the customer needs. The support functions, like Legal, HR or Finance, become their own centralized tribe out of sync with actual customer and market needs, and what they have to offer is many times too late, out of context, or one size fits all.

When we peaked at around 150 people across three continents, we were already breaking off into tribes just as described above. This coincided with the 2008 Great Recession, and as our cash was evaporating, tensions flared amongst a once very tight-knit group. Some of my favorite people left and others stayed. I didn’t want to take sides, so I finally decided to exit and take my chances as a slasher working for multiple start-ups.

On my last day at the start-up, I wrote:

These have been the “best of times, the worst of times, the tale of two companies”, but overall they have been amazing! I have never had so much fun or enjoyed myself like this before working with a better group of people than I have at FON. It was all worth it!

I have had the great honor of working with such a wide variety of different people from different professions and different fields. I learned about everything from technological geekiness to designing webpages to building a company from the ground up. I also had the great fortune of working closely with our teams across Europe and Asia. But most of all, I had fun — fun with a young and dynamic group of people — and never had to wear a suit, tie, or shave. And we laughed and laughed and laughed the whole way through. When I look back at this time, I am sure that I will think of it as one of the best experiences of my life.

Eventually the slasher business was too unstable. I was a newlywed hoping to start a family, so I moved to an established multinational tech company, in an established legal department where I have been ever since. At first the contrasts were extreme. I left a room full of eclectic sales, marking, finance and ops people and a bunch of developers we called the Men in Black – where there was always someone kicking a ball in the hallway, on their laptop in the corner on a puff, or yelling on the phone with a Gallego accent. And I settled on a silent floor full of lawyers with their heads down quietly typing away. I went from being part of every strategic decision to a place where to make an impact, I had to start at the micro level, one deal at a time. Surprisingly I have really enjoyed and thrived being in a much larger organization, with its amazing pool of lawyers to learn from and a much larger network of business colleagues to build relationships with.

But when I read that post from my last day, and especially now as I revisit old photos and videos of that time (especially this one or this one with some many faces I haven’t seen in years), 10 million stories come to mind, and I feel the same bond with my colleagues as I did back then and still continue to think of them as teammates today.

That time definitely made me a better lawyer, a business partner, and colleague. In particular: I learned:

  • Solutions only. You are not getting paid to say no.
  • Be part of the conversation on all aspects of the business. You need to be in the (virtual) room to make an impact, and no one will invite you if you show up with the word “no”.
  • Be a Big Brother to those around you. Not just as your client’s advocate but also as a mentor and coach to your younger colleagues.
  • Understand the business. Understand the technology, but more importantly know the business rationale driving the technology. The business use case always precedes the technology, but “coming up with the idea” means nothing without the ability to execute.
  • Get started, make things happen. Don’t wait for perfection. Get going.
  • Do not isolate your work from your client’s work. It is all your work.
  • Don’t talk law to business people. They will tune you out. Talk business. That is what they understand and what they care about. You can worry about the law when you get back to your desk. Listen to how everyone else talks, learn their language.
  • Relationships and trust are everything, and they last longer than you do at any company. Remember we are ultimately emotionally committed to our colleagues not to our companies. It is why most engagement survey questions are geared towards whether an employee feels valued by and connected to their coworkers. But just as easily as camaraderie can be built, it can be lost. Think long term: once we are on the same team, we’ll always be teammates. 
Teo and I at the South Summit 2018.
I always feel so much pride whenever I run into one of my old colleagues and I see how they have grown.

Most importantly, laugh on the job. I don’t mean party with your colleagues, I mean make work enjoyable. We spend too many hours of our lives at work or worrying about work. You have to make the effort to make it fun, especially when the work is tough, intense, and demanding. Life is too short not to enjoy your time with your colleagues. But the moment you start dreading waking up to go to work in the morning, it’s time to move on.

Talk to Me like Lovers Do

Last year I posted the following on Linkedin:

A reminder to business lawyers, especially in-house counsel: always talk business to your client. They don’t care about your legal issues. They expect you to solve them. They care about their business. So during their time, talk business. During your time, solve the legal issues.

Every once and a while, one of my internal business clients will say: “you don’t talk like a lawyer, you talk like one of us,” and I think of that line “talk to me like lovers do” from the Eurythmics.

This came to mind now while writing about what I had learned working at a start-up.

QuaranTeams: We are the Leaders

Hopper Small Office

Through solidarity and reaching out to each other, each one of us plays a key leadership role in these difficult times

Lawyers freak out. It’s our job to worry … about everything. Nobody wants us at their parties because what others see as fun, we see as imprudent. But the secret to being an effective lawyer is to always keep calm, stay positive and never let the client see you worry. Just as you don’t want to see fear in your doctor’s eyes, you certainly don’t want to see your lawyer panic either. Most importantly, people are much more likely to listen to their lawyer’s advice if their lawyer is good humored, constructive and positive.

For context, I live in Madrid, Spain where we have been in almost complete lockdown for over two weeks. My children have not left the house now in seventeen days, and the shopping center across the street – where I go to the pharmacy and grocery shopping on the rare occasion that I leave the house — has been converted into a make-shift morgue.

So when all of my Madrid Legal colleagues started working from home two weeks ago, I realized that as one of the more elder senior members of the department, I needed to step up and use my best lawyer skills to help keep my colleagues inter-connected and engaged during these very unique times. Furthermore, many of my younger colleagues are single, not from Madrid, and could easily feel overwhelmed from the sense of isolation. Other colleagues have friends, family members, especially elderly ones at risk or even in the hospital. These are scary times.

As someone who is not shy of the spotlight, I decided to take the lead by setting up a Microsoft Team called “QuaranTeam MAD”. I envisioned a video-podcast a la Robin Williams’ “Good Morning Vietnam”, where I would open each day with “Good Morning, QuaranTeam” followed by a few bad jokes. A good sense of humor goes a long way, but as a senior colleague once told me, an effective leader needs at times to show vulnerability, meaning knowing how to admit, “I don’t know” or “I need help”.

I took his advice, broke my lawyer-with-a-smile facade and started QuaranTeam by recognizing that I am vulnerable. So here it goes: This is frightening like I have never been frightened before. I am worried about my parents’ health and having them so far away. When will I see them again? I am worried about my wife, children and myself. I am worried about how we’ll manage closed off indoors for so long. I am worried about my friends and colleagues. I am worried about my own finances and the global economy, and I am worried about what the future will look like for society. Will life ever be the same?

I uploaded the first video, and immediately my colleagues joined and began participating. One of them set up a daily virtual coffee break for the group, and I can’t explain how exciting it is to witness the positive vibe around the chat when people see each other’s faces. People share experiences while getting a glimpse into the sides of our lives we don’t usually see at the office, like children and pets coming in and out of the background. Suddenly it was not me, but dozens of people taking the lead. Colleagues checking in on each other to make sure we’re staying physically and mentally healthy. Instead of me thinking I was keeping other people sane, they were helping me keep my s – – t together.

By staying online, inter-connected, checking up on each other, and sharing a piece of our own daily lives – no matter how trivial — each of us is playing a leadership role to get us personally and professionally through these times.

This has made me realize a few things:

  • I don’t need an engagement survey to tell me that someone at the office cares for me. I am seeing that now every day and it is incredibly moving.
  • We all have the opportunity to take the lead by simply staying in touch with each other. Calling each other. Reaching out using the tools we have at our disposal. Staying connected. It makes a huge difference. Not just with colleagues but with friends and family.
  • If we are not active, interconnected and focused, we will lose ourselves in the negativity of the news cycle and become isolated.
  • And most importantly, we are only as strong as the relationships we have.

I want to thank my friends and colleagues for keeping me sane. I cannot promise to not run out of bad jokes. If I get repetitive, humor me!

* Note: This post is not intended to reflect the views of my current employer Amadeus. It is entirely my own viewpoint .

Architecture of Deals

Duc TrangLast year my team of lawyers had our annual offsite meeting in Athens, Greece. Besides the sightseeing and team bonding, we also got schooled … by Duc Trang. As I wrote at the time, Duc Trang a senior legal exec

now trains lawyers and other professionals in business acumen and is due to come out with a new book about the Architecture of Deals and how to design transactions. But for our Athens adventure, Duc gave us a session on how to analyze a business’ competitive position in order to make better strategic decisions. along to run a training session on how to analyze a business’ competitive position in order to make better strategic decisions.

Duc has just published Architecture of Deals: Strategies for Transactional Lawyering about helping transactional lawyers like myself and those in my team become more effective at what we love doing: helping our clients meet their business objectives. You can read more about the book here.

His European book launch is in London this week, but let’s see if we can get him to come to Madrid later in the year.

The Spanish Chapter of the ELTA and Rethinking the Lawyer’s Value Proposition


I am very honored to join the Spanish chapter of the European Legal Tech Association and head its section on skills and training. Yesterday, the chapter, led by María Jesús González-Espejo and Laura Fauqueur, presented the Spanish team to the Ilustre Colegio de Abogados de Madrid (ICAM). Each of the section leads in attendance — including Carlos Martín Ugalde, Paloma Aparicio, Moisés Barrio, Manuel Deo, Alberto Dorrego, Gonzalo García Valdecasas, Juan Manuel Moreno (for Javier Martín), Mariló Pardo, María Belén Pose, Pablo Rabanal, and myself — were asked to describe what we hoped to achieve within our respective areas.

To be quite honest, I hadn’t put much thought into what I was going to say. Even though I am fluent in Spanish – having lived in Spain for almost two decades – I am not as good of an improviser in Spanish as I am in English. But when the deputy of digital affairs from ICAM, Esther Montalvá, opened the event perfectly hitting the nail on the head with the challenges and opportunities facing the legal profession, I knew exactly what message I wanted to convey: Lawyers need to  focus on and reinforce our original value proposition:

  1. We are your confidants.
  2. We are your advocates, here to defend your rights and your interests. We are not mere traffic lights signaling when to stop and when to go.
  3. We are communicators.

As such, to be an effective lawyer today and tomorrow, you need to improve how you gain and keep your clients’ trust, how you defend their interests, and how you communicate with them, their customers, regulators and other third parties.

At least that was what I wanted people to hear, so I was happy to read in the that that is more or less what I actually said (in Spanish):

Lo importante es preguntarse, en este contexto, cómo podemos los abogados seguir aportando valor”, reflexionaba Eric Napoli durante la presentación de la ELTA española. “Creo que, a pesar o gracias a la tecnología, podemos poner en valor tres de nuestras características que no debemos olvidar. Somos personas de confianza, como los médicos. No somos meros asesores: ayudamos y defendemos los derechos de las personas. Y somos, o deberíamos ser, grandes comunicadores.

My plan is to organize a discussion open to the public on this topic in July. Stay tuned!

Nouriel Roubini on the Big Blockchain Lie

Arcade token

As I have written a number of times already, including in my previous post, I still don’t get (i) why cryptocurrencies create better market conditions for building ventures than good old fashioned money, and (ii) why tokenization – instead of just giving investors and workers plain old money – is the only viable path to building a successful business in the digital era. And when the answer comes in the form of a libertarian soundbite about democratization of money, the burden of regulations or the end of intermediation, I am convinced the speaker knows nothing about history, technology or business. The answer has sham (or gullible) written all over it.

That, of course, doesn’t mean that I don’t believe in distributed ledgers (aka Blockchain technologies) as interesting solutions for solving some important transactional inefficiencies. It’s the whole obsession with tokenization and refusing to use real money that baffles me.

With this in mind, I was very encouraged by a series of Nouriel Roubini tweets over the weekend where Roubini – who made a public name for himself by being one of the few, brave souls to openly predict the 2008 economic crash – unabashedly called out the willful blindness, ignorance and outward deception of Crypto’s most ardent supporters. For example:

Then this morning, Roubini published this must-read article “Blockchain isn’t about democracy and decentralization – it’s about greed” where he makes all of the aforementioned arguments about the false narratives around cryptocurrencies, including:

In practice, blockchain is nothing more than a glorified spreadsheet. But it has also become the byword for a libertarian ideology that treats all governments, central banks, traditional financial institutions, and real-world currencies as evil concentrations of power that must be destroyed. Blockchain fundamentalists’ ideal world is one in which all economic activity and human interactions are subject to anarchist or libertarian decentralization. They would like the entirety of social and political life to end up on public ledgers that are supposedly “permissionless” (accessible to everyone) and “trustless” (not reliant on a credible intermediary such as a bank).

Yet far from ushering in a utopia, blockchain has given rise to a familiar form of economic hell. A few self-serving white men (there are hardly any women or minorities in the blockchain universe) pretending to be messiahs for the world’s impoverished, marginalized, and unbanked masses claim to have created billions of dollars of wealth out of nothing. But one need only consider the massive centralization of power among cryptocurrency “miners,” exchanges, developers, and wealth holders to see that blockchain is not about decentralization and democracy; it is about greed.

But he also makes an interesting observation about the non-crypto part of Blockchain as well:

Moreover, in cases where distributed-ledger technologies – so-called enterprise DLT – are actually being used, they have nothing to do with blockchain. They are private, centralized, and recorded on just a few controlled ledgers. They require permission for access, which is granted to qualified individuals. And, perhaps most important, they are based on trusted authorities that have established their credibility over time. All of which is to say, these are “blockchains” in name only.

It is telling that all “decentralized” blockchains end up being centralized, permissioned databases when they are actually put into use. As such, blockchain has not even improved upon the standard electronic spreadsheet, which was invented in 1979.

No serious institution would ever allow its transactions to be verified by an anonymous cartel operating from the shadows of the world’s authoritarian kleptocracies. So it is no surprise that whenever “blockchain” has been piloted in a traditional setting, it has either been thrown in the trash bin or turned into a private permissioned database that is nothing more than an Excel spreadsheet or a database with a misleading name.

I absolutely agree, and for the reasons he states, I actually like private blockchains. Not to change the world, but to improve processes. And if you control those spreadsheets, you are able to give your customers much more flexibility, protection and value. Works for me!