FTX's Dangerous Understaffing

Shaan shares a story about how FTX's small engineering team was initially praised as efficient but later revealed to be a major red flag.

"Another example on the FTX side - they had 25 engineers and I remember reading stories about how Sam Bankman-Fried was just saying 'We're not like these Silicon Valley companies with all this bloat. Coinbase has thousands of employees, we have a whole engineering team of 25 and we do more volume than them because we hire 10x engineers and we go for extreme operational leverage.'

Later it was revealed that of course these guys had terrible security practices and they didn't even invest in engineering. The same story had two sides - once you know the result, what was initially praised as efficient was actually dangerous understaffing."

The story illustrates how the same fact can be spun as either positive or negative depending on whether you're looking at it before or after a company's downfall.