The Empire of Pain, Patrick Keefe, 2021

Rating: 5/5

This is the third such book that I have read in the last couple of years, the other two being “The Billion Dollar Loser” on WeWork and on Adam Neumann and “Bad Blood” on Theranos and on Elizabeth Holmes. While the first is about a business built on hubris and the second about a complete fraud, “The Empire of Pain” was the most shocking of the three. It is about a legitimate business that was extremely successful but one that was built using several unethical means and one that ultimately caused the death of thousands of Americans.

The book traces the history of the Sackler family and of Purdue Pharma, starting with the early years of Arthur , Mortimer and Raymond Sackler, children of an immigrant family in New York. Their parents desired their sons to become doctors, given the perceived nobleness of the profession, which turns out ironic given the later history of the family. The first section traces the lives and the initial wealth creation of the three brothers, especially that of Arthur. It gives an insight into their ambiguous views on integrity around medical products and conflicts of interest and their desire to be recognised as a leading family in the country. The second section is about the rise of OxyContin as a majorly profitable drug for Purdue, the issue of widespread addiction caused by it and Purdue’s attempts to fight the hundreds of legal cases. The final session is about the third generation and the eventual fall of the company. The book is extremely well-researched and written in a way that makes it interesting reading despite the subject matter and the length of the book.

The Sackler empire was built on Roche’s Librium and Valium, especially the latter. By the time Valium was controlled, it was used by 20 million Americans and became the most widely consumed — and abused — prescription drug. The second generation of Sacklers multiplied that wealth with OxyContin.It could be argued that OxyContin was a legal drug, approved by the FDA, but the fact was that America did not have an opioid crisis before the drug’s introduction. It is also clear that the company was aware of the problem for a long time but chose to ignore it for selfish reasons. And its usage of its legal teams, influential government representatives, threats and otherwise Machiavellian methods to thwart any attempts to stop it is simply shocking. The lack of oversight by government institutions is particularly galling — as Keefe puts it, “the opioid industry is, among other things, a parable about the awesome capability of private industry to subvert public institutions”. 

As I write this review, the Sackler family appears to have got away with it. They have had to pay billions of dollars as penalties, have had to give up their stake in Purdue Pharma and have to bear the ignominy of seeing their family name stripped away from many of their philanthropic attempts. However, they still have several billions of dollars of wealth created by the opioid crisis, have had no criminal charges against them and seem to have procured immunity against future legal liabilities. And that’s indeed a pity!

Pros: Extremely well researched, the narrative style makes it an interesting read despite its length

Cons: The length of the book to some extent

The Billion Dollar Loser, Reeves Wiedeman, 2020

Rating: 4/5

The “Billion Dollar Loser” chronicles the history of WeWork and its founder, Adam Neumann, mainly from the beginnings of WeWork to the failed IPO. While Wiedeman acknowledges Adam’s ambitious persona and the possibility that he may be back sometime in the future, the book largely focuses on his hubris that eventually led to the collapse of the IPO process and to his sacking from the company he founded, poking fun at Neumann and his wife, Rebekah, along the way.

While following the WeWork story as it unfolded, I was amazed at the strategy of venture capital investors such as SoftBank and the book reinforces that feeling tremendously. While I can understand how early investors were willing to take a bet that a simple real-estate leasing model can become a “physical social network” (in Adam’s words), it’s mind boggling that an investor could pump in $10 billion at a later stage, especially when the founder spouted inanities such as “we used the work mission to enter into the larger category of life”, had a mission statement “to elevate the world’s consciousness” and pointed to financial parameters such as “return on community” and valuations based on the company’s energy and spirituality rather than on revenue (my favourite was the concept of “community-adjusted EBITDA)! Also, a part of SoftBank’s investment gave Adam a sizeable exit for himself. 

The WeWork story highlights the many issues with modern-day venture capital investing, which appears to be based on the “greater fool theory of finance”, as Wiedeman points out. There is too much money to be deployed rationally (SoftBank had raised $100 bn in its Vision Fund). The entrepreneurs with the most chutzpah and ambitions, however impossible the ambitions may be, are preferred to their more solid but conservative peers, and in the process, the latter’s genuine business models are often wiped out. Unlike a traditional model where valuations follow the success of a business model, companies such as WeWork have had to pivot their model often to justify the lofty valuations that they commanded early on. And venture capitalists are willing to turn a blind eye to serious governance issues such as conflicts of interest or blatant nepotism. This issue was best summarised by Jake Schwartz, one of of Adam’s early competitors: “the reason I care is that if the most successful companies are the ones that just drive really hard, and play fast and loose with the truth, then maybe the whole idea that capitalism is great, or even useful, is really challenging to uphold.”

My benchmark for a great biography is Walter Isaacson’s one on Steve Jobs (on a separate note, I can’t wait for him to finish the one on Elon Musk). Jobs was a multi-faceted character and the biography brings out the various nuances of his life — the good ones and the bad ones. On the other hand, Adam comes out as a unidimensional person in this book, all bombast and hubris, and that was a slight disappointment.

Pros: Details the rise and fall of WeWork well, gripping especially towards the latter part of the book

Cons: A uni-dimensional portrait