Titan Sub Disaster | No Risk, No Reward? | 5

0:06From Audible Originals, I'm Lindsey Graham, and this is American Scandal.

0:30Stockton Rush cast himself as a visionary, as a rule breaker. Through his company, Oceangate, he set out to open an untapped market in deep-sea tourism and change underwater exploration forever. I think it was General MacArthur said, you're remembered for the rules you break. And, you know, I've broken some rules to make this. I think I've broken them with logic and good engineering behind me. But in pursuing that dream, he allowed hubris to override safety. He dismissed regulators as unimaginative bureaucrats and argued formal safety certification was nothing more than an obstacle to progress.

1:06He was extremely stubborn, extremely stubborn. I think he felt he had absolute license, that this company was his creation, and that ultimately his decision was the only one that mattered. Rush's bravado eventually led to disaster when he and four of his passengers were killed on an excursion to the Titanic in June 2023. But his attitude towards risk was far from unique. It mirrored a long-established narrative in American business and culture, a narrative that cast founders as geniuses who disrupt entire industries through sheer force of will. And it's an appealing story. But the reality behind it can be far less attractive.

1:48I would say generally anyone who relies on that, there's something wrong. That's already smoke. And it's sort of the emperor's new clothes kind of thing. We just think innovators never are wrong. And in fact, innovators are often wrong and often make mistakes. In this case, it was fatal. The myth of the fearless entrepreneur can be used to mask failure, ward off scrutiny, and even disguise outright fraud. Stockton Rush paid the ultimate price for his belief in that myth. But what is it costing the rest of us?

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3:53Journalist Mark Harris has spent years digging into the story of Ocean Gate. He's trying to answer the question of how an experimental submersible could take paying passengers miles below the surface with so little oversight. His journey started in 2015 when Harris got word about an exciting new company based in the Seattle area. Its co-founder, Stockton Rush, claimed OceanGate would do for underwater exploration what Google and Uber plan to do for self-driving cars. There wasn't a lot of vision happening in that world. There were rich people, you know, billionaires having submersibles made for their playthings on the back of their superyachts.

4:32And there were scientific submersibles going down and doing, you know, important scientific work. And I think increasingly he came to say, well, there's actually a different market here. we can really get real people to do things that previously only the billionaires and the scientists could do. And I thought, well, this is interesting. Let's hear what's happening here. Soon after he met Rush, Harris was invited on a trip on OceanGate's new Cyclops Submersible. It was an adventure he couldn't resist. I mean, it's really exciting to go underwater, to see the color change, the light fades away. You're starting to see different fish.

5:07You know, it's a very strange environment that kind of feels a little bit like outer space. And And Stockton Rush was leaning into that in his descriptions and talking about this like we're on a spaceship right now because you're in a very different environment. And we have to be very concerned about safety and everything working properly. But unfortunately, that didn't happen. When they reached the seafloor, the sub stopped moving. The thrusters failed and they lost their bearings. In the end, Rush had to ask Harris and the others on board to pull out their phones and see if they could orient themselves with their compasses.

5:40I was just a bit bemused, I think, that things were failing left, right, and center. I only realized afterwards that this was the deepest that sub had been while it was in their control, while they had modified all these systems, including the life support systems and the navigation. So there was a lot of stuff I wasn't really told. But Stock and Rush remained remarkably calm. He was an experienced aircraft pilot who'd even built his own planes before. He had been in plenty of dangerous situations during his life and lived to tell the tale. He wasn't flustered. He didn't get angry. He wasn't flapping about and trying to shout at people or anything like that.

6:18So there were no red flags. And Rush didn't just tolerate these problems. He embraced them as part of the process. Everything that went wrong was simply an opportunity for Ocean Gate to learn something new. And in this, Rush saw himself as following in the footsteps of America's most celebrated innovators, inventors and businessmen like Thomas Edison, Henry Ford, and Steve Jobs. These men are remembered not just for their ideas, but for their persistence in the face of doubt, failure, and criticism. They become the modern-day magicians, right? The modern-day wizards. You know, we call Thomas Edison the wizard of Menlo Park.

6:56That's Kara Swisher. She's a veteran tech journalist who has reported on and interviewed some of the most celebrated innovators in the world. If you try something, it doesn't work, it doesn't work. You move on to the next thing. And what they try to do is very hard to say, I learned something here. And often they do. It's an attitude that's common in the tech industry. One of the most famous commercials in history is Apple's 1984 campaign. It promoted the company's new Macintosh computer with striking images of a futuristic dystopia ripped apart by one brave modern hero wielding a sledgehammer.

7:29In Apple's vision of the world, creation and innovation were in part an act of destruction. The stale, gray status quo had to be broken, violently if necessary, for progress to be made. Decades later, in the early years of Facebook, Mark Zuckerberg embraced the same idea. The company's unofficial motto was, move fast and break things. Innovation came through a willingness to take potentially destructive risks, no matter what others might say. There are some people who are sort of innately more excited and have more ability to just go with their gut instinct on something, and some people who are more influenced by outside opinion.

8:13Author Safi Bakal is a former CEO who ran a biotech company for 13 years. You just need to recognize, are you the kind of person that if someone tells you it's stupid, you're going to stop? Other people can say that I'm stupid or that my idea is stupid, and I can't change that fact. What I can change is am I willing to go ahead despite that. Stock and Rush wanted to be like Zuckerberg, Steve Jobs, and Elon Musk. And when OceanGate developed the carbon fiber hull for its Titan submersible, he was certain he'd found the innovation that would write his name in the history books. Mark Harris. I don't think he really appreciated how much of a change that he was suggesting by operating a carbon fiber submersible at this depth.

8:59He thought, if my software program shows that it can work, then that should be good enough for anybody. We should be able to do this. But the classic agencies really wanted a lot more rigor than that, and they wanted a lot more safety focused than that. Rush had a choice to make. He could change course, stick to more tried and tested methods, or he could push on. You have to make a virtue out of that, right? You have to say, well, there's a reason. I mean, we're choosing not to do that because classing wouldn't make this any safer. From then on, Rush took on a more and more defiant stance toward regulators and the rest of the submersible industry.

9:33He talked openly about his willingness to break the rules, to take even more risks. To him, that was just Innovation 101, part of the Silicon Valley playbook. And if there is no enforcement and if there's no one telling you you can't do it, great. I mean, what's to stop you, right? Why not do that? It just seemed that was the path of least resistance in order to get Ocean Gate to where he wanted to be, which was actually providing a service and getting people out there under the water. But no matter how many times Rush was warned that what he was doing was potentially dangerous, he continued. The critics didn't deter him.

10:10If anything, they just confirmed he was on the right track. In his eyes, Stockton Rush was an explorer and visionary who could ignore the doubters and push past the limits that would stop anyone else. He had embraced the mythology of the trailblazing innovator, and the consequences would be disastrous.

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12:43Stockton Rush and his company, Oceangate, planned to send their Titan submersible to one of the most hostile environments on the planet. But they intended to do it in a way no one had ever tried before. The traditional design that had safely taken teams of scientists, explorers, and filmmakers to the bottom of the ocean was rejected as too old-fashioned, too expensive, and too limited. In its place, Stockton Rush and his team built a submersible out of layers of carbon fiber. It was a material that had never been used in a deep-sea crude submersible before. Many experts warned OceanGate against it.

13:18But Rush wasn't deterred. Here again is journalist Mark Harris. He's been reporting on OceanGate since 2015. That's one thing I heard from almost everyone I talked to, that once he had his goal set, once he thought he wanted to do something, he would really do everything he could to achieve that goal. And I think that was kind of wrapped up in his concept of himself as an innovator. He wanted to be an innovator. He didn't want to do things the same way and just shave off 5 % or 10 % of the cost. He wanted to reinvent something and be acknowledged as somebody who had done that reinvention. But despite some successful deep sea trials, Oceangate's radical carbon fiber hull soon began showing signs of structural fatigue.

14:02By early 2021, it was clear the original hull would have to be replaced. Now, at that point, you might think if you were someone who was really rigorous, you would say, let's just not build another hull the same. Let's make sure we get it better this time and let's make sure everything's spot on. Now, what Rush actually did was kind of fire most of his engineering team. He thought that was just a one-off problem with the hull. Everything else is fixed. Everything else is working. We just need a new hull and then we can get going. This second hull was built with the same materials and to the same design as the first.

14:34But Rush was so focused on pushing the envelope that he underestimated the risks of his innovative new approach. According to Safi Bakal, that's a common mistake. He's a former biotech CEO and the author of the book Loon Shots, How to Nurture the Crazy Ideas that Win Wars, Cure Diseases, and Transform Industries. Most entrepreneurs get killed by the downside, not because they didn't spend enough time on the upside. They focus on the first thing, which is some wild innovation, someone really pushing boundaries, someone really taking risk. But they miss the fact that the really successful entrepreneurs, the ones who succeed over the long term, are doing something underneath the surface that you don't see, which is that they are doing a very good job of managing their downside risk.

15:23Bacall cites the story of Barry Marshall and Robin Warren. These were two Australian doctors who won the Nobel Prize for proving bacteria caused peptic ulcers. Their theory was widely dismissed at first. It went against prevailing wisdom that ulcers were caused by stress or spicy food or excess stomach acid. So to prove it, Marshall risked his own health and swallowed the bacteria himself. That's a famous story. They teach it to kids and has that ring, that sort of theme of, oh, here's a great innovator who just took some bacteria, swallowed it, boom, and won the Nobel Prize. Well, that's not exactly what happened.

16:02In fact, what he did was very carefully assess the risk. He took a very carefully controlled strain of bacteria. He analyzed which antibiotics he could take afterwards, made sure that it would kill that bacteria. He made sure that everything else was clean so that there weren't any other systemic infections he would get along with the first one. And then he was carefully monitored throughout the whole thing. So on the surface, it sounds like a great innovator taking risks and pushing boundaries. That's step number one. But step number two is he managed the downside. And in this Ocean Gate case, Stockton Rush did number one, and he made the classic mistake of not doing number two.

16:43There were plenty of warning signs for OceanGate, and not just from experts in deep-sea exploration. Around the same time Stockton Rush and his company were first designing their carbon fiber hull, another self-styled innovator was making headlines for all the wrong reasons. Elizabeth Holmes had skyrocketed into public consciousness with an extraordinary claim. She said that her company, Theranos, had invented a new technology that could run dozens of medical tests on a single drop of blood. If what she said was true, Theranos would redefine medical science and make Elizabeth Holmes one of the wealthiest people on the planet.

17:22Many believed her. Some of the wealthiest and most influential people on the planet gave their backing, including Rupert Murdoch, Larry Ellison, and Henry Kissinger. People like stories. And in her case, it was like, here's a young female Steve Jobs. And that is a short story, it's an easy story, and it's a story that resonated. But she told a story that was a fraudulent story. She was saying she was getting these measurements from a drop of blood in a small machine, and she was lying. Tech journalist Kara Swisher followed the Theranos story from the beginning. And like many others, she couldn't help noticing that there was something artificial about Elizabeth Holmes.

18:03There's a lot of, like, flimflammery in terms of fake it till you make it in Silicon Valley. That's not a new thing. But ultimately, you've got to make it, right? For Swisher, Holmes seemed to be play-acting, and that made her suspicious. The turtleneck drove me crazy because she was trying to be Steve Jobs, right? The whole turtleneck thing. She was in a lot of articles. There were too many articles. I remember being like, why is she doing so much press? That's interesting. Like, if you're so great, why do you need to be in the press all the time? She was way ahead of her skis. When confronted with criticism, though, Elizabeth Holmes was defiant.

18:35She said that she was an innovator, and everyone else just didn't understand. Theranos would ultimately fall apart after its founders' lies were exposed. Holmes herself was convicted of fraud, and all her famous investors walked away with nothing. But if there was a lesson in that story for Stockton Rush, he ignored it. Like Elizabeth Holmes, his defiance toward Oceangate's external critics was matched by his intolerance of internal dissent. Here's Mark Harris again. There was nobody in the company to whom he would defer. The people who were maintaining it, he wouldn't defer to them. The people who had designed it, he wouldn't defer to them.

19:12He even felt that he knew better when he wasn't in the sub. He was the ultimate backseat driver. Oceangate's board of directors was theoretically meant to hold Rush to account, but they did little to rein him in either. They listened to what Rush said and rubber-stamped it. One person said they'd been on the board for 10 years and they never saw anyone really stand up to Stockton. And that sounds, you know, pretty incredible in terms of oversight and operation of a company. And I don't think anyone would say it was a healthy situation. According to a former employee, at one point Rush even claimed he could pay off a congressman.

19:47He would go to any length. Progress and innovation trumped everything. There's no evidence of him actually doing that. But what there is evidence of him doing is deliberately stepping outside the rules-based organization and kind of challenging it to come at him. If you operate out in international waters, you pretty much can do what you want if you're not registered and flagged in a country, if that country's not keeping an eye on you. And as it turns out, the Coast Guard thinks it did have jurisdiction over the vessel, but it never did anything about it at the time. He never really experienced any negative consequences of not following the rules until it had the worst possible impact on him and his passengers.

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21:32Stories of individuals breaking the mold and creating something entirely new are exciting and alluring. Stockton Rush certainly bought into them. But according to Safi Bacall, the truly great innovators know that it takes more than one idea or one person to change the world. You can come up with an idea, you can come up with a thousand ideas, probably 999 of them will be bad, maybe one will be good. But an innovation requires people and support and a team in order to build it out into something that can scale and you can deliver to businesses, to customers consistently with quality. Something that really demonstrates you have something new that can change the world.

22:14And Steve Jobs is actually a good example of that because that's the sort of mythos that grew up around Jobs is that he would stand on the mound and say, all right, the iPod, boom, part the water is done. All right, the iPhone, the iMac, part the water is done. And that makes for a nice story, but that's not the story at all. Because the true story is often much less glamorous. In the 1980s, Steve Jobs himself bought into the myth of the great genius innovator. In his mind, it was the idea that mattered most. Everything else was secondary. But when that philosophy led him into trouble, Jobs struggled to adapt.

22:54He clashed with others at Apple, and eventually, he was forced out of the company he had co-founded. And soon after, Apple almost went bankrupt. But when Jobs returned to the company 12 years later, he had gained some new perspective. He had bought the budding animation studio Pixar, which would go on to produce the first computer-animated feature film. And through that achievement, he'd seen how to foster true and sustainable innovation. You have to balance creative, new, wacky ideas for films with budget and risk management. And there's no film if you don't do that. So he got that idea. And when he came back to Apple the second time, Jobs 2.0, one of the first things he did was promote a guy named Johnny Ives, who was this wonderful artist who created all these great things and all the designs for these Apple products.

23:46And he also hired a guy named the Attila the Hunt of Inventory. a compact computer whose name was Tim Cook. The iPod, the iPhone, the iPad are great products, but there would be no Apple today if, on the one hand, Johnny Ive didn't come up with this beautiful design for an iPad. On the other hand, Tim Cook didn't do a good job getting the cost down from$6 ,000 to$600. You need both. And that's how Jobs led Apple, is by managing both carefully. The greatest triumphs of Jobs' career came after he learned the shallowness of the lone genie's approach. Ironically, of course, those successes only deepened the mythology around him.

24:26Tech journalist Kara Swisher interviewed Steve Jobs on multiple occasions. He was bothered by that, actually. And he said, what do you think, I'm Willy Wonka and they're the Oompa Loompas? He has a team that's been there and they're still there kicking ass with Apple for many, many years. This is a team. They're like the Rolling Stones. They keep going. But not every entrepreneur learns the lessons that Jobs did. And for Swisher, the expensive recent failures of ventures like Mark Zuckerberg's metaverse reinforced the dangers of buying into the great innovator myth. So I think one of the problems when you have these sort of charismatic leaders is you can shove things through that you want.

25:01Elon Musk is a good example of this. A lot of his flaws have come because he's not listening to people and he's frequently wrong, but never in doubt. And I think that's a bad quality. All great leaders look for pushback and where the problem is. Lincoln is the most famous with his team of rivals. You want different opinions, because then you can anticipate consequences. Stockton Rush didn't want to hear different opinions. He dismissed questions as just another unnecessary barrier. He was too in love with the story he was writing about himself, a glorious risk taker who was pushing the boundaries of science.

25:34He was the exceptional leader with a vision for the future and the determination to make it a reality. But he was so caught up in his own myth-making that he overlooked the dangers until it was too late. I love innovation. I think it's great to think outside the box. At the same time, as I always quote Paul Virilio, the philosopher, when you invent electricity, you invent the electric chair. So there's implications of every invention. And I think what we tend to spend a lot of time is on the positives of invention without understanding how to mitigate the negative parts. Everything invented, everything is a tool or a weapon, and every innovation will be both.