What They Saw in Ozy

The story behind the story is about the elite investors who plowed millions into a media dream without much due diligence, persuaded by the charm of Ozy’s head, Carlos Watson.

By Ben Smith

Oct. 3, 2021, 7:41 p.m. ET

There’s an irresistible temptation, in this age of scams and hype, to obsess about the man or woman at the center of a company’s implosion. Theranos’s Elizabeth Holmes was the subject of an HBO documentary, and is now the center of a high-profile trial. And when Ozy Media collapsed on Friday, less than a week after The New York Times reported on a series of misleading statements and actions, all eyes turned to the man at the center of the company, Carlos Watson, an ambitious dreamer who seemed to believe in what he was selling. When he spoke with me over Zoom from a California backyard on Sunday, he conceded nothing.

“I put everything I have into this company,” he said. “We tried to do what we could to hopefully live out a set of values about inclusivity and growth and innovation and change and possibility. Those were real things.”

I am sympathetic to people like Mr. Watson and Ms. Holmes — strivers whose dreams apparently led them into deception. If you’ve ever worked for and loved a new institution, you can imagine how hard it would be to let it fail. And it’s easy to see how small lies can become big ones in any part of life.

Just under the surface of the extensive coverage of these executives is the story of those who were charmed by them, and why. Part of the genius of people like Mr. Watson, in other words, is what they reflect back to the people who put up the money. The most interesting part of their stories, always, is the mirror they hold up to the ones who believed.

And so the fall of Ozy — a company that aimed to build a large audience with a general interest website, podcasts, newsletters and online videos (many starring Mr. Watson himself), along with events and TV shows — provides a few insights into the top tiers of the business world. One is how little analysis some investors perform and how much they rely on gut instinct and herd-like validation from their peers.

Want to know how a bunch of seemingly sophisticated people fell for a company that every social media intern in America had questions about? A pitch deck Ozy circulated to potential investors last fall included a graphic featuring the smiling faces of a few high-profile backers: the billionaire philanthropist Laurene Powell Jobs; Marc Lasry, a hedge fund manager and a co-owner of the Milwaukee Bucks basketball team; and Mathias Döpfner, the chief executive of the German publishing giant Axel Springer. Wouldn’t you want to join that club?

The people who were burned by Ozy — corporate marketers and the people whose investments became worthless when the company shut down — were not particularly sympathetic figures. The investors’ loss of millions won’t put them in the work house, much less keep them from going to this or that conference by private jet. The whole Ozy episode seemed to confirm the widely held suspicion that venture capital and advertising may be the world’s least rigorous industries.....

https://www.nytimes.com/2021/10/03/business/media/ozy-media-investors.html