I’m a Taylor Swift fan, and I highly recommend you consider becoming one, too. My admiration has nothing to do with her music. I’m a fan of Taylor Swift the businesswoman.
People have long praised Swift’s marketing acumen, particularly in managing a genre shift from country to pop. What impresses me even more is her attention to detail, especially with legal and investment matters.
Multiple sources report that Sam Bankman-Fried and FTX were in negotiations with Taylor Swift for a sponsorship deal worth $100 million. The deal reportedly fell through when Swift refused to endorse the cryptocurrency exchange or attend promotional events on behalf of the company. According to attorney Adam Moskowitz, the singer brought negotiations to a swift halt when she asked the company to explain why its cryptocurrencies weren’t unregistered securities.
Taylor Swift has wisdom that Tom Brady, Shaquille O’Neal, Paris Hilton, Matt Damon and Kim Kardashian can only dream about.
Regardless of one’s balance sheet, $100 million is a bunch of money. Last year Forbes reported Swift’s wealth at $520 million. An extra 20% would not have been inconsequential. Yet, for whatever specific reason, she declined the offer. That took conviction. Rational conviction comes from a combination of self-awareness and knowledge. And knowledge comes from focused work and attention to detail.
A lot of mistakes can be avoided with focused work and attention to detail, but too often people are seduced by some near-term benefit and neglect to adequately explore the associated details and potential risks. The upside to most decisions is obvious, while the risks are usually buried in the details.
Sam Bankman-Fried knew he was a fraud, but it took attention to detail for Taylor Swift to decide that something didn’t smell quite right with his $100 million offer. By asking basic questions before blindly endorsing a product, Swift performed better due diligence than several prominent venture capital funds.
The odds of a negative surprise increase when there is an asymmetry of knowledge between two parties in a transaction. Every week I see examples of investors overcharged by their brokers because the investment helper – who has more knowledge than the client – succeeds in having the client only focus on the potential rewards of an investment, not the details. In just the past two weeks Raymond James was fined $12.4 million for regularly inflating its commission charges for five years. Bank of America was fined $250 million for double charging fees on accounts with non-sufficient funds. Customers never reviewed their statements, and never knew they were being overcharged.
Those firms were responsible for those violations, but the clients could have avoided the losses with a little attention to detail. Remember Taylor Swift.
David Moon is president of Moon Capital Management. A version of this piece originally appeared in the USA TODAY NETWORK.