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Tell Me A Story

Scott Galloway@profgalloway

Published on August 25, 2023

A lot can happen in 18 months. Last January, the Nasdaq and venture funding were fresh off all-time highs. The market was birthing two unicorns (startups worth more than $1 billion) per day. Then the music stopped. Tech stocks led a market collapse with some shedding more than 90% of their value. Bitcoin fell from $60,000 to $16,000. The Iron Bank of Silicon Valley imploded. 

And then the steady hand and hype of the Fed and AI, respectively, seized the controls and pulled the nose up. The markets recovered, led by a small number of stocks that dominate the Nasdaq. The hype machine has returned to full spin cycle. Animal spirits have returned as we, again, become increasingly skeptical of skepticism. Some of today’s prophets will turn out to be frauds (just like last time) and, unable to raise money or hawk SPACs, will start podcasts. I wrote the following post 18 months ago during the froth and, as our subscribers have grown 50% and we enjoy a 44% open rate … three quarters of you have not read it.    

[The following was originally published on January 21, 2022.]

“A man’s reach should exceed his grasp, or what’s a heaven for?”

— Robert Browning

Entrepreneur is a synonym for salesperson, and salesperson is the pedestrian term for storyteller. Pro tip: No startup makes sense. We (entrepreneurs) are all impostors who must deploy a fiction (i.e. story) that captures imaginations and capital to pull the future forward and turn rhyme into reason. No business I have started, at the moment of inception, made any sense … until it did. Or didn’t. The only way to predict the future is to make it.

This is not the same as lying. There’s a real distinction between an entrepreneur and a liar: Entrepreneurs believe their story will come true. This requires confidence … and delusion. It helps to be somewhat detached from reality — to assume that, for whatever reason, you are the one who can see into the future, and that in the new world your product/service will be needed and successful, despite overwhelming evidence (i.e. the current reality) that it’s not. A reality distortion field if you will.

The Crazy Ones

A vision that’s not widely derided likely isn’t much of a vision. MLK was a radical reformer who had a 63% disapproval rating at the height of his activism. Women were perceived as physically incapable of the demands of flight, until Amelia Earhart landed her Lockheed Vega in an Irish farmer’s field. Steve Jobs was a Zen Buddhist college dropout who believed he didn’t need to shower because he only ate fruit and that you could treat pancreatic cancer with juice therapy. He also believed he could put computers in the homes and pockets of everyone on Earth. Crazy.

Being a great storyteller carries risks. Success begets acolytes who tell you you’re right when you’re wrong. Worse, you start believing them. This leads down a dangerous path where vision breaks from reality, and — likely aided by a fear of failure — curdles your confidence into a con.

Elizabeth Holmes

Holmes was assembled in a factory from parts of prior visionaries: smart, Stanford dropout, turtleneck, building blood-testing technology. Plus a nice backstory: Her professor told her the original concept for Theranos would never work. In addition, hundreds of millions in funding from backers including Tim Draper and Larry Ellison, coupled with covers on Fortune and Forbes, were a heavy blanket of affirmation that ensured Ms. Holmes was a visionary. The visionary narrative is a self-perpetuating machine: a flywheel of storytelling, capital, and the future that capital can pull forward, which buttresses the storytelling, and so on and so on.

Fun fact: Ms. Holmes cost her investors less than a billion dollars, didn’t make any real money herself, and is going to prison. Adam Neumann cost his investors $11 billion, received a 10% commission on those losses, and is going to Coachella. Note: Ms. Holmes’s vision progressed to the exaggeration/fabrication of contracts and clients, whereas Mr. Neumann’s “only” went so far as accounting irregularities.

When I Say Steve, You Say Jobs

Fast forward: There was no working technology, and Ms. Holmes has been convicted by a jury of her peers — and faces 20 years in prison. Soon after, VCs distanced themselves, claiming they’d seen through the facade. The tell for people who exaggerate for a living is, after it’s been deemed illegal, they begin preaching the importance of restraint. The narrative being wrapped around the very unlikeable Ms. Holmes is that she’s an outlier. No, she’s just one point on the line that is our storytelling economy in a frothy part of the cycle.

The Valley’s “always tell the truth” sermon is reductionist and hypocritical. It ignores the fact that many of our nation’s most valuable companies are priced on promises of technologies that don’t exist. The entire venture capital industry, in fact, is predicated on promising things that don’t exist.

Microsoft, perhaps the most successful tech company in history, got its break when Bill Gates sold IBM an operating system he didn’t have. (He and Paul Allen subsequently bought what they needed from another programmer, but they didn’t tell him they had the deal with IBM to distribute it.) Allegedly, an engineer at the company coined the term “vaporware” a year later. Promising something that doesn’t exist is as central to the Valley ethos as late-night coding sessions, hoodies, and the hallucination that the public has asked you to solve the world’s problems vs. just do less damage.

“[Google Glass] will be broadly available. You won’t have to jump through any hoops.”

— Sergey Brin, 2013

“Can we build a better phone for prime members? The answer is yes.”

— Jeff Bezos, 2014

“A year from now, We’ll have over a million cars with full self-driving.”

— Elon Musk, 2019

Yes, claims about health-care solutions warrant scrutiny beyond whether or not rich investors get their money back, but Holmes wasn’t convicted for defrauding patients. She’s going to prison because she ripped off George Schultz, not because her bogus blood-test machine errantly told someone they had HIV.

Florida AR company Magic Leap has (no joke) burnt billions since 2010, with nothing other than a failed $2,300 headset to show for it. The company routinely hyped technology that didn’t exist, even using Hollywood special effects to mock up its PR videos. An early (fired) employee called the company’s founder “a believer in magic.” It was meant as a compliment. And the tricks keep coming. In October, Magic Leap announced it had raised another $550 million and was pivoting from consumer to … wait for it … health care. Nobody seems all that concerned that a company with a 12-year track record of false promises and fake products is now going into medicine. And, with the right leadership and engineers, it could build something valuable. You know … vision and capital … and more vision and more capital.

The line between vision and fraud is only drawn in hindsight. We set arbitrary deadlines for entrepreneurs to deliver on their vision, and their vision only becomes fraud when we say time’s up. What if Holmes, with five more years and another billion dollars, shipped a working product? Or pivoted to a home-testing machine for an acute respiratory syndrome?

“Real artists ship.”

— Steve Jobs


When valuations are overwhelmingly driven by stories, things can get ugly. Investors will do whatever it takes to defend their narrative — their investment depends on their flocks screaming “heretic!” at anybody who questions the scripture, as the foundation doesn’t hold up to more modern orthodoxies (i.e. math). Theranos employees made a video game where they shot at the Wall Street Journal reporter who exposed the company’s fraud. The firm also engaged Harvey Weinstein’s attack-dog-attorney, David Boies, to try to shut down the story.

Swarming anyone who questions the narrative is a built-in feature of stocks and sectors that have gotten too far out over their skis. I often commit the crime against humanity of pushing back on Bernie Bros, VC-backed unicorns, Tesla longs, meme stocks, or web3. I do this knowing the flying monkeys and bots will attempt to burn the village to save it from my boomer views. These guys, and they’re always guys, make the High Sparrow’s Faith Militant look thoughtful.

Note: I’m going to see if I can offend everyone with this post. #squadgoals.


The pendulum swings between stories and fundamentals. Right now, we’re still deep in the story phase. Capital is cheap: $621 billion went to startups in 2021, a 111% jump from 2020. We’re seeing record numbers of unicorns: 959 across the globe, up from 569 in 2020. The hottest sector is fintech, which accounts for 15% of these firms — all promising to become the next JPMorgan. Are they lying or telling the truth? A: Yes. Vision.

There are few fundamental truisms in the markets. One of them is … fundamentals. Another is cyclicality. And in my view, the atmospherics, if not sheer probability, augur that we’ve entered the less-appealing part of the cycle. Ground zero will be a regression from fiction to nonfiction, story stocks that represent ownership in a (shitty) business, not a movement. The meme trade is already unwinding.


The darkest side of our idolatry of innovators is that we become blind to the costs incurred by those who are least able to bear them — and we protect those who least need protection. It bears repeating. Holmes is going to prison because she defrauded investors — specifically, members of the Valley aristocracy and the global elite. Tim Draper led her seed round, and Rupert Murdoch invested $100 million. That’s what brings the feds to your door. Remember Martin Shkreli, the guy who raised the price of a life-saving treatment needed by AIDS patients 56x just because he could? He’s in prison, but not for price gouging. He was convicted of defrauding … investors.

Our laws reflect our values. What we hold dear, who we deem precious (i.e. who needs protection). We’ve decided the rule of law in the U.S. must be a warrior for corporations and old, wealthy investors. Teen girls and rural American families burying opiate addicts? Fuck you, you’re on your own. Who’s going to jail? No member of the Sackler family. Nor this guy.

Life is so rich,

P.S. This week on Prof G Markets, we took a deep dive into my personal finances. Listen here, or watch on YouTube.

P.P.S. Section’s Marketing Mini-MBA closes enrollment next week. The AI for Business Mini-MBA just opened (and is already 50% full). Sign up and I’ll see you in class.



  1. mike Joubert says:

    ‘Fake it till you make it’ is being outed as the emperor’s new clothes. It is the inevitable start-up “Gotcha!” moment. For VCs & Entrepreneurs alike the basic table stakes are now virtually equal. The bright light of truth, economic balance and common sense now illuminates the once dark & smoky dancehalls of raises and dealmaking. It has never been more crucial to get ‘your story straight’ (and truthful) – for your brand and for your business. As always, Scott delivers an incisive context to prove this argument. Well worth the read.

  2. Lilian Burgler says:

    The prevailing theory about valuations is that they are fueled by cheap capital. And I think that this is not wrong. However, the unexplored angle here is bureaucracy and regulation. Tech companies are capable of potential high margins because, for now, they flourish in a relatively unregulated environment. This connects back to public investment and men… Our country is like this place of wannabe cowboys, lawless legends in their own minds, when in reality it’s probably more bureaucratic than the USSR. The only cowboys who sort of get to live out their dreams are the tech guys. This longing for freedom also fuels the valuations, which serve as a sort of release valve for frustrated investment, and paralysis.

  3. Yatish says:

    Dear Scott it is really interesting that American writers and may I say even thinkers like you are obsessed with Steve Jobs. It is also ironic that a country that large puts on a pedestal an individual who was just a great salesman. Tells you something about the most important skill that is most valued in America to sell things well. Note not to create new things and its not as if Apple has created great things but it has sold them well always at a premium. Has this iconic status created a sustainable economy that merits talent, skills and entreprise or just marketing chutzpah. Maybe it would be interesting if you were to connect this marketing approach by US corporation with the hollowing out of US economy. I know for a writer story telling is important but it is not the most important and not the only skill which makes up an economy bouquet of talents needed to make a thriving country

  4. Peter singh says:

    This essay is not prose but pure poetry, and could not be a more accurate sad observation of the state of our values! The SVB depositors needed to be bailed out for poor money risk management! The rhetoric worships the small business owner instead of acknowledging the selfless giving of volunteers, teachers and community service providers. When did “founder” become a effing thing?!… lol

  5. TLentych says:

    This post really bothered me for a long time this weekend. I do not know why – even after thinking about it. Your target at the top seems to be the key. For some, the center is the fraud, not the outer ring. I just can’t understand why that is so hard to realize.

  6. AJK says:

    It is funny and sad, when you watch people “read to comment (respond, defend)” without the intension of “reading to understand”. Instead of picking on detail, which is contextual and when you respond without taking the whole article in account, you change the context of the argument and miss the point.

    This is what I read:
    1. How long do you keep giving someone money and wait for a promise to materialise, before you start questioning?
    2. Only certain people are being prosecuted, while others have done similar things but hasn’t been or gotten off lightly, and it appears to be a trend of “visionaries” who crossed the wrong powerful people that gets prosecuted. That isn’t how the law is supposed to work.

    Thanks for the interesting points to ponder, not that I needed a reminder that “some are more equal than others”. 🙂

  7. Law says:

    Dude, why the hate for Bitcoin? It defies all rationality and objectivity. Bitcoin is the best performing asset bar none since the global financial crisis, year after year. In other words since its creation. These are just facts, whether it fits your narrative or not. I’m a fan of your work but sometimes you get subjective too. I guess we are all human.

  8. C Cook says:

    Seems too much politics infect your otherwise good insights.

    Holmes is in prison for FRAUD. And, because that FRAUD literally could have KILLED people who used the results of her blood testing at a Phoenix pharmacy beta test site. And, attempting to defraud US military on battlefield use of her machines. If it were just the fact that Geo Schultz or others lost money, our jails would be filled with Startup CEOs. But, take a shot at anyone not DNC/Woke or employed by the NY Times.

    If you insist on being political, Musk ISN’T in jail for security fraud (‘I have the funding to take Tesla Private…’) because Pelosi Family Office was likely up to their eyeballs in Tesla stock and options. That was a legit crime that was probably glossed over with a few phone calls about upcoming Funding bills and position appointments in Congress.

    But, you are correct about the fine line between a pitch story and a lie. I have spent a lot of time listening to Startup pitches. The were all highly formula-ized, all from the same ‘How to raise money’ seminar (just $599 if you act today). Very few people who get to the pitch stage have a real business, as those were taken in by friends/family/former employers. But, hope springs eternal.

  9. Ted Finn says:

    What about when those stories are compelling enough to get you to start a company you never dreamed of to solve a problem you had and are not yet adopted by the Valley Aristocracy?

    Like the very real story of my cofounder Dr. Charles T. Krebs who was paralyzed in a diving accident yet walked out of a rehab hospital in Australia and then dedicated his life to helping others and developing a suite of holistic solutions based on his recovery and the integration of neuroscience and ancient wisdom.

    After 2.5 million air miles and burnout he told me about his solution to reset the human body clock using precision nerve stimulation, and all I could say was “where have you been all my life” and “I am from Missouri show me?” He did and we started a company to solve a host of global problems including Jet Lag and nightshift work. (Uplift – Travel without Jet Lag on the App Store)

    Will this story come true? tbd…but we know it works (ie: we are confident, delusional, and with 8 million air miles our team lived the problem and solution) and if we can solve this problem for you and others, then? We are open for advice and guidance vs raising the drawbridge and setting fire to the moat. Thanks always for making life so rich.

  10. Bob Dillow says:

    I was reminded of Vivek Ramaswamy, an entrepreneur/presidential candidate, when I read this commentary from Scott, specifically…
    “Entrepreneurs believe their story will come true. This requires confidence … and delusion. It helps to be somewhat detached from reality — to assume that, for whatever reason, you are the one who can see into the future, and that in the new world your product/service will be needed and successful”.

  11. John Zac says:

    When reality distortion fields fall apart, violence tends to take over. Even the ancient Greeks knew that

  12. Kirk Klasson says:

    Proving yet again that George Costanza was right. “It’s not a lie if you believe it.”

  13. DeepStateX says:

    Scott, you would have made a great expert witness for the defense during the trial of Holmes. Did they ask or did you offer?

  14. Stephen Ruben says:

    It is the old story. If you owe a bank 10,000 they’re your enemy. If you owe then 100,000,000 they are your friend. Big money rules. And the rules were written 150 years ago to protect the wheel spinners not joe nothing new here but a cautionary tale to the minor leaguers and amateurs

  15. Justin Ross says:

    Loved the note. Which I always do. But I feel it’s disingenuous to say that “we” have decided to privilege and protect investors and elites over average people and opioid-destroyed families.

    “We” didn’t make that decision at all. The very investors and elites who are being privileged and protected made those decisions. If it were up to the rest of us, the average family and sub-$100k investor would have far more protections and rights than those people.

    But we don’t get to make those decisions. They play a game that has very little to do with us, over there somewhere, and our only interaction with that game is when they outsource the consequences of it to us.

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