170 Silicon Valley: What Happened & What People Are Confused About
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It’s been a crazy handful of days in Silicon Valley. But now that the federal government has made their announcements and has the ball rolling, I wanted to spend a few minutes with you just clarifying some things that seem to be creating confusion in the recent Silicon Valley Bank situation.
There seems to be more confusion about what just happened with the collapse of the Silicon Valley Bank and what the federal government just did as there was about COVID. So let me see if I can break this down for all of you.
Welcome to Lochhead on Marketing. The number one charting marketing podcast for marketers, category designers, and entrepreneurs with a different mind.
There is no Bank Bailout for the Silicon Valley Bank
Let me say that again: there was no bank bailout here.
The executives got fired. None of the investors, creditors, nobody doing business with the bank, in that sense, are getting any of their money back, particularly the investors in the board. The Silicon Valley Bank is gone.
The Effect on the US Finance
The President has said that this will not cost taxpayers’ money. You may choose to believe it or not, but that is the current position of the government on the matter. What they’re saying is if there’s any protection money required, it will come from the Federal Deposit Insurance Corporation (FDIC).
The FDIC is an insurance company managed by the federal government, which is paid for by Wall Street and the banks. They pay insurance fees to the FDIC for drastic instances such as these.
Making that point clear as soon as possible was a good move by the federal government, because if they have wavered in their decision to do so, twisted narratives about bank bailouts and conjuring the past instances of it happening would have been a bad blow to the US government’s image.
The Silicon Valley Bank Depositors will get their money back
White there’s no direct timetable for when the depositors can get their full funds back, the federal government, via the FDIC, came in and said that they will make sure that the people will get 100% of their money back.
Here’s where most of the confusion lie at the moment, because there are some who spin the narrative like this resembles the recent FTX crash. But unlike the FTX crash where the money is in large parts gone, the Silicon Valley Bank’s money is still there. The main issue at the moment is that there were some horrendous mistakes in investing the money, which caused it to be stuck and become inaccessible at the moment. So when a bank run happened, they didn’t have enough cash. And that’s what caused this.
But the money is still there, unless we learn otherwise after the ongoing investigations.
To hear more updates and suggestions on how Silicon Valley, the federal government, and the FDIC can prevent such a crisis from happening again, download and listen to this episode.
Bio
Christopher Lochhead is a #1 Apple podcaster and #1 Amazon bestselling co-author of books: Niche Down and Play Bigger.
He has been an advisor to over 50 venture-backed startups; a former three-time Silicon Valley public company CMO and an entrepreneur.
Furthermore, he has been called “one of the best minds in marketing” by The Marketing Journal, a “Human Exclamation Point” by Fast Company, a “quasar” by NBA legend Bill Walton and “off-putting to some” by The Economist.
In addition, he served as a chief marketing officer of software juggernaut Mercury Interactive. Hewlett-Packard acquired the company in 2006, for $4.5 billion.
He also co-founded the marketing consulting firm LOCHHEAD; the founding CMO of Internet consulting firm Scient, and served as head of marketing at the CRM software firm Vantive.
We hope you enjoyed this episode of Lochhead on Marketing™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on iTunes!
