Sam Bankman-Fried is just another Tech Jerk, and he won’t be the last.

$8bn is unaccounted for as a result of the collapse of the crypto exchange FTX. Sadly, these types of headlines don’t shock tech industry insiders. To us industry veterans, it is a very real and predictable pattern. In the press, Sam Bankman-Fried is painted as a man who refused to give up control because he thought he could out-smart the crisis and rescue the troubled twin companies: FTX and Alameda Research.?

Reports highlight how Bankman-Fried played hard and fast with the rules, such as using FTX like his own personal fiefdom. The size and scope of the problem are notable and if you’re unfamiliar with the tech industry, this really is NEWS. But for us tech veterans, this is sadly commonplace.

That is because Bankman-Fried is a classic case of the “high-performance technical jerk”.

Everyone knows High-Performance Jerks

High-performance jerks (HPJ) are well-known entities within business. They are known for “bringing in the numbers” and their performance is used as a reason for leadership and HR not addressing the behavioural problems.

While they “get results”, they rely heavily on power play moves that leverage their personal, positional or relational powers. This frustrates colleagues who feel that normal rules do not apply to these individuals. This type of behaviour earns them the “jerk” part of the title. Many companies have them, and within the cut-throat world of business, they are here to stay.

To many, Bankman-Fried wasn’t a jerk. He didn’t rely on power moves, he relied on something else. He was a High-Performing Technical Jerk and is a very different entity with different, potentially bigger, problems.

The Tech Jerk version is different

In the tech industry, things look a little different, especially when the high-performing jerk is within, or leading, a very technical group, such as a software engineering team. Or a group of highly specialised traders running a crypto-exchange where only a few people truly understand how it really works. (Remember Enron? Not knowing how/ where the money flows was a big part of what brought them down. FTX is also being compared to Lehman Brothers)

Tech Jerks are a very different breed from the normal business HPJ. Rather than getting results by using “power moves” that frustrate others, there are 3 key elements that make Technical Jerks:

• They have extreme technical ability and are talented at building very technical things. This is the bedrock from which they have built their career and reputation. This ability is empowering, but they are also aware that there are things they do not know. They are avid readers and learners. When they have an opinion, it is strong, and they believe it is well-formed, regardless if it is technical or not.?
• They hold key, difficult-to-obtain, knowledge on how things work. The technical HPJ has normally built a critical part of the system or been a key factor in building it. They, therefore, know everything inside and out. Through time and hard work, they have built a bank of knowledge that is not easily transferred. This knowledge is a critical part of their defensive walls.
• They are creative problem solvers who can think around difficult problems to create solutions that seem simple. This is both a blessing and a curse. They often play fast and loose with rules, thinking they can outsmart the system. This can lead to highly innovative solutions that fundamentally reshape industries, but such innovation can be a double edged sword.

The cornerstone of the Tech Jerk is the belief they have built the systems that have driven the company’s success. Many others, inside and outside tech, will openly admire their technical knowledge and ability. People want to work for them due to their technical knowledge and ability. The Tech Jerk enjoys the attention and revels in the notoriety.

If they are a founder or co-founder, these three characteristics feed the cult of personality that often surround technical founders. They are admired both inside and outside the company. To make matters even more complex, investors typically love this person. They will sometimes even say that one of the key reasons they invested in the company was this person and their ability.??

All this attention goes to their head. It might be hard to see, but these factors add up.

Same confidence, with less jerk. Personality is different for the Tech Jerk.

Unlike normal high-performing jerks within the business, the technical jerk often has a positive outward reputation. This “mask” both enables and grants permission for their problematic behaviours. They often seem humble with noble goals of changing the company/ world for the better. They believe that for things to improve, you have to tear down the status quo and build something better. And that is what they are doing. They believe they are creating a better world.

Sometimes they fit within the perceived stereotypical mould for technical people. i.e. they are not usually overly social outside of the technical world. When they are, they are kind and friendly. However, this is not always the case. The technical jerks can also radiate confidence, almost to the point of arrogance. If they are in the fortunate position where what they have built takes off into a truly large, well known entity, they dive head first into the ‘cult of the personality’ and revel in the attention.?

Outside of technical discussions, you won’t see any of the typical jerk's power play moves. Many who interact with them will think of them as nice people who want to help.

The dangers are, therefore, difficult to see or identify.

How to spot a Tech Jerk:

The Tech Jerk can sometimes be hard to identify. Unlike the power play moves typical of the business HPJ, the technical jerks not only enjoy control and attention, but they also thrive from it. There are a few key behaviours that can help you spot a technical jerk:?

• They act as the central point for all things technical, and they don’t want to give up control. This can come in many forms, including insisting on reviewing every line of code. They struggle to delegate highly technical/ critical work effectively, and ensure they are always in control.?
• They will explain how the system works, but their explanations do little to give control. Often if they are challenged on A, then they will refer to B, a previously unknown/ unexplained. They firmly believe they are the only ones who can solve technical problems. Others can not comprehend the full extent of what they have built, or maintain the high standards they have set.?
• They are predisposed to hate management and any form of external control. On its own, this is not a problem, but when it is combined with other behavioural problems, then it becomes a dangerous trait as they resist any form of oversight.

Wrestling control away from them is extremely difficult. In the worst situations, the level of control they exercise results in reckless behaviour that can have serious business consequences.

The very real risks

The High-performance technical jerk has placed themselves, and the technical part of the business, at the centre of the company. The power they wield, either directly or indirectly, can be a danger to both themselves and the company.

In a strange twist, in small teams, this behaviour usually works to drive results and draws on the technical jerk's talent. They get stuff done at an amazing speed. They can almost single-handedly build the rocket ship. However, once a team becomes larger than around 8-10 technical people, it starts to become more of a problem than an asset.

This can lead companies to two major problems:

• Overconfidence as the Tech Jerks play fast and loose with rules: Technical jerks believe that rules are flexible and can be broken if the situation needs. They take risks. Sometimes much bigger than they realise. They believe they can cover their tracks. After all, that is how they built the system that the company runs on. Shortcuts were taken. They faked it until they made it.? They will keep trying and cover their tracks until it is too late. When that happens, people realise that the calculated risk-taking that drove the early performance has been replaced by bad decision-making processes. It is now just a question of when things will unravel. If a company is lucky, it will catch it quickly and make the necessary changes. Left for too long, well then you end up with situations like FTX.
• Burnout: The tech jerk has placed themselves at the centre of the tech org, and as a result, they work long hours reviewing every line of code. They are only human, so burnout happens. Technical HPJs believe they are invincible, so will not notice it until it is too late. Companies can recover from this position, especially if the technical team has grown and there are some strong mid or senior people who can pick up the pieces. The burnout of a high-profile technical leader has a huge reputational impact, but it is recoverable. Remember, burnout never happens at a convenient time.?

Regardless of the problem, the control the Tech Jerk wields results in a house of cards that can come crashing down. In the very worst case situations, it can take the entire company with it, including co-founders, investors and clients.

Solutions: How to deal with a Tech Jerk?

So yes, the tech jerk is a double edged sword. They drive so much success, but as a result, find themselves as a single point of failure.

There is good news: the tech jerk is manageable. Especially if those around the jerk are aware of the situation. The tech jerk might not even be aware they are such a potential problem. Good training, especially in soft skills, for them and everyone around them can help minimise the problem or transition the person into more of a team player.?

Size of the team matters: As a general rule, after a team grows larger than around 8-10 people, the methods of the tech jerk can be more of a liability than an asset. However, when teams are small, the benefits of their technical skills normally outweigh the risks as there is not enough critical mass of control or attention.?

When a business is confronted with a technical jerk who remains a technical jerk, they have two main options, and they both come with a catch. The hard part is the company can’t decide what the best course of action is. Only the individual, technical jerk can.

Option 1: Get them to transform into a manager, stepping away from day-to-day.

• Requires them to let go and give up control. Delegation does not come easily. They will need support, and help from other leaders within the technical organisation and company leadership.
• This can take 2 forms:
• ?Bring in someone to help, coach or mentor the person.
• Hire great people underneath who can handle the difficult politics of the transition.

The technical jerk who makes this transition can either become an amazing business leader (and I personally know many who have made this transition successfully) or transform into a business HPJ. Elon Musk is probably the most famous person who made the transition from a technical leader who helped to build x.com (that later became Paypal), to someone who, love him or hate him, runs a few high-profile businesses with a controversial approach. Side note: Many tech jerks see themselves as the next Elon Musk.

Option 2: They stay building and narrow their technical leader focus.

This lets the technical jerk remain focused on building stuff.?

• Recruit someone to come in and be the control. Guard rails are needed, and a watchful eye. This can often unlock the technical problem solver and allows them to continuously innovate.?
• Leadership needs to structure the company to let them excel. The ex-tech jerk needs to be allowed to innovate without the burdens of being a manager or business leader.?

Common to both options: Both approaches require a transformation of the entire technical organisation. Training is required, especially in areas that many are not used to receiving. That means technical people need to learn skills outside of tech.?

Learning from the FTX saga:

Bankman-Fried built two companies: Alameda Research and FTX. Many got involved without fully understanding it. Crypto unfortunately has that reputation. You can make lots of money, even if you don’t really understand how it works. (This has a lot of the same traits as the stock markets of the pre-great depression era.)

Bankman-Fried made a few, very typical, technical jerk mistakes:

• He ignored the rules. He ran the company like his personal fiefdom. Buying houses in the Bahamas for senior staff reeks of someone who thought they were above the rules.?
• He believed he could outsmart others and solve problems as they arose. The “bank run” that brought down his empire was a result of a PR problem, which he thought he could control.?
• He refused to give up control and let others inside the true running. The lack of audited financials shows that no one was really willing to do a check and balance. Investors seemed happy to just take his word for things.

Compare this situation to the early days of Facebook. Back when their motto was “move fast and break things”. Tech talent was in abundance and people didn’t bother with rules. Instead of letting things get out of control, Mark Zuckerberg was convinced to recruit Sheryl Sandberg, who is widely credited with professionalising the young company.?

Love or hate Facebook, the company is still here. In the early days, at a critical moment, Facebook recruited someone to ensure the company didn’t spiral out of control while Bankman-Fried didn’t want to give up that control. It ultimately brought down two companies and left a lot of investors hanging out to dry.

Conclusion: Tech Jerks are here to stay.

The technical jerk is a massive challenge for any organisation. They have been integral in building the company, driving performance and results, and unless you manage them right, they can also be the reason the empire comes crashing down.

They don’t need to be as big or high profile as Bankman-Fried, FTX or Alameda Research.

Remember, bad news early is good. Dealing with the tech jerk early, and managing them as part of an ongoing process can lead to more high performance, with less jerk. All you need to do is be aware of the issue and continuously work towards doing things better.?

The bad news is Tech Jerks are not going anywhere. The good news is their impact on your business is 100% up to you. If you manage the situation well the tech jerk will even thank you for it.

#techjerk #techbro #ftx #sambankmanfried