Goldman Sachs/Ozy Scam: If This Isn't Proof Of White Privilege, I Don't Know What Is
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From the New York Times:

Goldman Sachs, Ozy Media and a $40 Million Conference Call Gone Wrong

The digital media company has raised eyebrows for its claims about its audience size for years. Then came the strange voice on the phone.

By Ben Smith
Sept. 26, 2021

This past winter, Goldman Sachs was closing in on a $40 million investment in Ozy, a digital media company founded in 2013, and there seemed to be a lot of reasons to do the deal. Ozy boasted of a large audience for its general interest website, its newsletters and its videos, and the company had a charismatic chief executive, Carlos Watson, a onetime cable news anchor who had worked at Goldman Sachs early in his career. And, crucially, Ozy said it had a great relationship with YouTube, where many of its videos attracted more than a million views.

That’s what the Zoom videoconference on Feb. 2 that Ozy arranged between the Goldman Sachs asset management division and YouTube was supposed to be about. The scheduled participants included Alex Piper, the head of unscripted programming for YouTube Originals. He was running late and apologized to the Goldman Sachs team, saying he’d had trouble logging onto Zoom, and he suggested that the meeting be moved to a conference call, according to four people who were briefed on the meeting, all of whom spoke on the condition of anonymity to reveal details of a private discussion.

In other words, the person saying he was the Youtube executive Alex Piper apparently never showed his face on Zoom to Goldman Sachs, but instead, via audio or text or email, asked to switch to an audio-only conference call.

Once everyone had made the switch to an old-fashioned conference call, the guest told the bankers what they had been wanting to hear: that Ozy was a great success on YouTube, racking up significant views and ad dollars, and that Mr. Watson was as good a leader as he seemed to be. As he spoke, however, the man’s voice began to sound strange to the Goldman Sachs team, as though it might have been digitally altered, the four people said.

Is there a digital effect you can click on entitled Silicon Valley Executive? What does that sound like?

After the meeting, someone on the Goldman Sachs side reached out to Mr. Piper, not through the Gmail address that Mr. Watson had provided before the meeting, but through Mr. Piper’s assistant at YouTube. That’s when things got weird.

A confused Mr. Piper told the Goldman Sachs investor that he had never spoken with her before. Someone else, it seemed, had been playing the part of Mr. Piper on the call with Ozy.

When YouTube learned that someone had apparently impersonated one of their executives at a business meeting, its security team started an investigation, the company confirmed to me. The inquiry didn’t get far before a name emerged: Within days, Mr. Watson had apologized profusely to Goldman Sachs, saying the voice on the call belonged to Samir Rao, the co-founder and chief operating officer of Ozy, according to the four people.

Samir Rao doesn’t look much like Alex Piper, which may explain why he didn’t want to impersonate Piper in a video conference.

He probably should have risked video but worn both a mask and a shaded plastic visor.

In his apology to Goldman Sachs and in an email to me on Friday, Mr. Watson attributed the incident to a mental health crisis and shared what he said were details of Mr. Rao’s diagnosis.

“Samir is a valued colleague and a close friend,” Mr. Watson said. “I’m proud that we stood by him while he struggled, and we’re all glad to see him now thriving again.”

He added that Mr. Rao took time off from work after the call and is now back at Ozy. Mr. Rao did not reply to requests for comment.

Ozy was born in 2013 as a Gen X dream of what millennial media ought to be: earnest, policy-focused, inclusive, slickly sans-serif. Other ventures of the same era, Mic and Fusion, projected similar images.

Ozy’s public face was Mr. Watson, the son of a working-class Jamaican family in Miami and a graduate of Harvard University and Stanford Law School. In addition to his early-career stop at Goldman Sachs, he worked at McKinsey & Company and was an anchor on MSNBC for part of 2009. His co-founder, Mr. Rao, also came from Goldman Sachs, via Harvard.

Mr. Watson raised the money to start Ozy from a list of blue-chip friends. Laurene Powell Jobs, who had co-founded a college prep nonprofit with Mr. Watson in 1997, invested and joined the Ozy board. The Silicon Valley venture capitalist Ron Conway also invested, as did David Drummond, who was then Google’s chief legal officer.

In 2014, Axel Springer, the Berlin publishing giant, invested an undisclosed amount. In 2019, Ozy also raised $35 million from a group led by Mr. Lasry [co-owner of the NBA champion Milwaukee Bucks], a boon that included money from the media-focused investment bank LionTree and the radio and podcast company iHeart Media. The Ford Foundation, seeking to support a minority-led company, also backed it with grants, its president, [gay black] Darren Walker, said. The data service PitchBook reports that Ozy had raised more than $83 million by April 2020 and valued itself at $159 million….

… Ozy reached nearly 2.5 million people during some months in 2018, but only 230,000 people in June 2021 and 479,000 in July….

I could beat those numbers with nothing but a month of pro-vaccine posts.

“I’ve never heard an explanation of Ozy that made sense to me,” said Brian Morrissey, the former editor in chief of Digiday, a publication covering digital media and the tech industry, who now writes The Rebooting, a newsletter focused on media businesses. He said he was struck by the company’s claims, adding, “then you do the gut check, and never once in my life has a piece of content from Ozy crossed into my world organically.”

I’d never heard of Ozy until right now.

… On the channel, many videos have more than a million views but fewer than a hundred comments, an unusual ratio for YouTube that suggests the views aren’t coming from regular YouTube watchers, Mr. Urgo said. Other videos on the channel have fewer than a thousand views. …

While Mr. Watson often disavowed an interest in turning the company into a vehicle for his own broadcast talent, his genial style of interviewing has carried most of the shows

In other words, the black CEO is a pretty talented celebrity schmoozer, but he’s trying to get his gig valued at Silicon Valley multiples by claiming it’s a growth business rather than him just hustling up interviews. I bet, without any evidence, that he’s inspired by comedian/interviewer Byron Allen, who is said to be worth $450 million due to various business deals that I can’t quite wrap my head around.

… The president of the Ford Foundation, Mr. Walker, said in an email that he had confidence in Ozy. “We need new media companies to challenge the status quo, shake things up, and go deep on the issues that matter most,” he said. “In an increasingly diverse world, it’s no coincidence that a company with co-founders of Black and Indian descent would be so successful.”

And Ozy did not allow the episode to curb its fund-raising efforts. In April, two months after Goldman Sachs walked away, the company raised another round of financing, two people familiar with the transaction said.

If Goldman Sachs is the smart money, investing in firms abandoned by Goldman makes you … what … the Really Smart Money?

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