The Rise and Fall of a Tech Titan - Katie Prescott

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1:26Marvel Television's Daredevil Born Again, of streaming only on Disney Plus. Lots of people who start businesses and get them to a certain stage and they get bought by US companies. And Mike Lynch was really unusual to build this company and take it to the heights that he did. And I think I hadn't quite realized being perhaps a generation behind him, just how disliked he was in that process. But, you know, I was astonished to speak to grown men and were talking about their trauma of working with him. And they would cry. And these are sort of senior figures who you would not expect to still be feeling upset about their experience so many decades on.

1:59There's this very, very complex story around the saga of autonomy, his business being bought by Hewlett-Packard and the huge falling out from that. And so many people got caught up in the pain of that transaction, either because they were interrogated by the FBI, pressure was put on them from both sides to say certain things or behave in a certain way. And it's astonishing to me, decades on, how it's affected people. Welcome to Open Book. I am your host, Anthony Scaramucci. Joining us today is Katie Prescott. She's the technology and business editor at The Times. And Katie, wow. I mean, what a book.

2:37The Curious Case of Mike Lynch, The Improbable Life and Death of a Tech Billionaire. I got to take a breath a few times during this read. I mean, this is not a normal guy, obviously. Then this is not a normal situation. And it says so much about where we are in our society right now. But before we get there, tell us a little bit about Katie Prescott and welcome to the show. Oh, hi. Well, thanks so much for having me and thanks so much for your interest in the book. I think wow is right. That's how I felt when I was reading it. So I'm a journalist at the Times of London covering tech and I started my beat there just before ChatGPT launched.

3:23So you can imagine the last few years have been pretty intense. And before that, I spent 10 years at the BBC as a business correspondent. um so yeah and i got interested in in the story of mike lynch because i was covering his criminal trial out in california for the times and i was looking around for a book or a sort of comprehensive documentary about his life and over here in britain he's a really big big tech figure um and i couldn't find anything and so i became really intrigued by by this story um and and that was the genesis of the book. I don't want to sound like sour girl. I'm not a billionaire.

4:03I guess I am a billionaire if I'm in Zimbabwe, Katie, but perhaps all of us are billionaires, right? Because it takes$10 billion across town with a cab. But I feel like there's something wrong going in the culture. I feel like there's almost sociopathic behavior that gets rewarded through dollars and sense and then a result of which your bank account is you get you you sometimes get exalted uh tell us let's start with mike lynch tell us a little bit about mike lynch mike lynch came from a not very wealthy family at all in um the east of london born to irish immigrant parents and one of the most astonishing things about his story is actually in britain we still have a very divided class society as you know and he did not come from the establishment at all but he was extremely bright and that was spotted very early on and he he went to a private school on a scholarship so he would have been there surrounded by middle class kids whose parents could afford to pay for them to go to to private school he really excelled there he went through Cambridge um where he studied science and the sort of dawn of the computing era era and and rode that exciting you know, exciting period of computing back in the days where you could sort of take tech apart and put it together again and really mess around with computers, perhaps a little bit like people are doing with AI today.

5:30And at a time when I think a lot of people were going into the city of London, it was the big boom that had happened in the late 80s. He decided to stay in Cambridge and started a company called Autonomy, which was a search business at a time when, you know, digital information was booming and people were trying to work out how to sift through all of that information. And he, so he rode the wave of the computing era. He rode the wave of the dot-com boom. He floated the company three times in Europe, out on the Nasdaq, and then in London. And because it was that time, even though it wasn't making huge amounts of revenue at the time, about 44 million pounds a year, it was valued at 4 billion pounds.

6:23Another parallel, perhaps, with the AI era today and jumped straight into the FTSE 100. So the top stocks listed here in London. so you know he had this kind of astonishing rise and at the age of 30 he was running a footsie 100 company of an incredibly bright guy as i said but also a really cruel man and that was one of the things that came through in my research quite early on that really surprised me was how ruthless he was and how difficult to deal with and how he just burnt through relationships was he detached was he perhaps so smart or wired in a way where he was detached from human emotion and his eq didn't necessarily connect with his iq how about saying it that way i think that yeah that's very astute but he could also tune into his eq when he wanted to because he could be really manipulative as well so he wasn't on the spectrum as you might say that he was unable to build relationships with people quite the opposite.

7:29You know, he wasn't a typical tech geek. He had a couple of bands while he was at school and at university. He had lots of girlfriends, which people at Cambridge said to me, it was not a sort of stereotypical Cambridge science geek. So I think he had EQ when he needed it, but he had an ability to be extremely cruel. And I think he thought that that sort of fear in business and within his teams got results. And I think it did actually for him, but it certainly didn't. It made him a lot of enemies along the way. I'm going to ask it differently. Okay, ready? Yeah. And I'm going to put a sociological frame on it.

8:15You're coming from no money. You're in a very class structured society you're in with a lot of rich entitled people but you've got no money but you're probably as smart if not smarter than them do you think he harbored resentment from that and again i'm asking you to reach a little but you know a lot about the guy yeah i don't think he harbored resentment but i think he realized that the world was not automatically going to work for him in the way that it did for others. You know, coming up through the British private school system, going through Cambridge, he would have been surrounded by a lot of people who perhaps were quite entitled and saw that they had a certain path in life.

9:03And I don't think he took anything for granted. And he thought he had to fight for everything. And so I suspect that contributed a lot to his behavior towards other people. You know, it was a kind of dog-eat-dog world every man for himself yeah i mean you got that feeling you know another thing you said about your research process and i'm quoting you now you said that it was lansing pus-filled boils i remember saying that yeah i do yeah and one of your sources you're going to be lifting up rocks and finding all sorts of nasty things underneath the rock so what was one of the single most shocking things that you found in the research for this book some of it i can't say i'm afraid um but i think one of the most give me a juicy one that you can say i'll tell you off there um i think it it was his treatment of people you know so in britain as you know we do not have many massive tech ceos we've got lots of people who start businesses and get them to a certain stage and they get bought by US companies.

10:15Like think about Demis Asabis, the boss of Google DeepMind. And Mike Lynch was really unusual to build this company and take it to the heights that he did. And I think I hadn't quite realised, being perhaps a generation behind him, just how disliked he was in that process. And so, and this isn't in the book, but I was astonished to speak to grown men in the aftermath of this book being published who reached out to me and were talking about their trauma of working with him. and they would cry. And these are sort of senior figures who you would not expect to still be feeling upset about their experience so many decades on.

10:56And I hope people will read the book and sort of try and understand the story a bit more, but there's this very, very complex story around the saga of autonomy, his business being bought by Hewlett Packard and the huge falling out from that. And so many people got caught up in the pain of that transaction, either because they were interrogated by the FBI. Pressure was put on them from both sides to say certain things or behave in a certain way. And it's astonishing to me, decades on, how it's affected people. Thank you for tuning in to Open Book. Okay, if you haven't already, please hit the subscribe button below so that you're the first to know when our new episodes drop each week.

11:41We've got a lot more coming. And now back to the show. You know, it's a weird case though, right? So he's accused of fraud, effectively. He gets acquitted in the United States, but the court finds, you know, after his death, of course, that the state owes over 700 million pounds, at least the civil court in the UK. So how do we reconcile those two verdicts? Everything about this story is totally improbable. So as you say, the judge in the UK civil case in the High Court here in London found for Hewlett Packard and said there was absolutely fraud at autonomy, that Mike Lynch had led it along with his chief financial officer, Sushivan Hussain.

12:22The other thing you didn't mention was Sushivan Hussain was sent to prison in America for fraud after a criminal case. And so the presumption was that the criminal case in California where Mike Lynch was tried in 2024 would result in a guilty verdict. Now, I think this book has taught me a lot about the justice system and how it works. And it's something that Mike Lynch spoke about as well. But I've understood it like this. Look, in the high court, the judge really, really understood accounting and took two years to come up with this verdict. and software accounting is notoriously difficult. Quite boring.

13:05It was a bit of a struggle to try and bring it to life for the book, actually. But he went through this with a fine-tooth comb. You're talking about a very different sort of trial when it comes to a jury trial, right? So these are not people who are trained accountants. You're also talking about a different balance of probability. And so much of this book is about odds and probability, which is the lens that Mike Lynch saw the world through. So, you know, they were looking to see whether it was sort of beyond all doubt that he could be guilty in the criminal case. And by that point, his lawyers had listened to the evidence from all of the people testifying twice before.

13:52So they had a very good sense of what they were going to say. They really, really prepared for that. And the other thing they did, which was seen as a stroke of genius in the legal community, and there's actually won awards for the legal teams involved, is they put Mike Lynch on the stand to speak to the jury. And he told the story of his life. He told this rags to riches tale. And I think particularly in California and San Francisco, where you guys have this sort of understanding of, you know, entrepreneurial journey and mindset, that played really, really well. And then the other difficulty was there was someone else on trial with him who we haven't mentioned, who was his vice president of finance in Cambridge at autonomy.

14:35And so really the Department of Justice was also fighting two cases at the same time. So I think that's how, you know, as you see in the book, I don't think there's any doubt there was fraud at autonomy. No one's really, he always denied it, but I don't think that there's any doubt of that. I think we're not even debating whether or not there's fraud, right? It's just the threshold of evidence tips in the UK, but it doesn't tip in the United States. And the difference between criminal and civil cases. Exactly. And so let's talk about Meg Whitman for a second. I know Meg. I actually fully disclose I'm a donor.

15:13I was a donor of Meg's gubernatorial race. I know Meg a long time. She's good friends with Mitt Romney, who I'm very close personal friends with. She had great success at eBay. She's running Hewlett Packard. And you write about her. So tell us a little about her and your impressions of her and her reaction. And by the way, I should also point out, she grew up out here on Long Island with me. And so there's a culture on Long Island. When you're uncovering people like Mike Lynch, you can get a little emotional about it. Okay, so talk a little bit about her. I want to know what your view is then.

15:46Do you remember this happening? I have you share my view. I would have punched this guy in the face, probably. But I mean, do you remember this happening to me? Again, I'm going to talk to you very honestly. One of the things about me, if you worked at Skybridge and you mistreated people, you probably would get punched in the face by me. And the worst thing you could do to somebody like me, I have a 70 plus year old receptionist. She's been with me since I started the firm 21 years ago. If you want to demean her, Okay. You have to remember something about me. My grandmother was a mate. Okay. So we don't demean anybody.

16:21Everybody's treated equally and everybody's treated fairly and with dignity and kindness. So Mike Lynch, as a kid from Long Island, the way he was acting, he would have gotten punched in the face. I'm just being very open with you. Okay. Okay. That's it. I mean, you can't treat people like that. Okay. It's a problem I have with a lot of these billionaires. They think that they're better than other people. Okay. What Mike Lynch's point though, which I think is one that I see is I have friends of mine that are installing sheet rock out here on Long Island that are smarter than some of the Wall Street lawyers that I know.

16:58It's just that their fathers were installing sheet rock, Katie. So they didn't get the chance to go to the fancy pants schools. Okay. That these other kids did. And so there's a little bit of sympathy there for this poor kid with the super high IQ gets thrown into an environment that he doesn't adapt well in that environment. There's an expression in Italian that I'll translate for you in English. You have to know, certainly you have to remember where you came from, Katie, but you have to know where you've gotten to in life. And there's a savoir faire that's required when you're a leader that this man had none of.

17:34That's just my honest opinion. So, I mean, by the way, the book is awesome. And so I'm very excited to have read it and have you on the show. That's my opinion, Katie. How's that? I think, yeah, so Meg Whitman joined our story when you said she was the boss of eBay. And then she was on the board of Hewlett Packard. Yeah. Hewlett Packard's former boss, a guy called Leo Apoteker, German guy, bought autonomy and then was basically instantly fired right before the deal could go through. So Meg Whitman was left with this. She inherits this tragedy, right? Yeah, she had been on the board when it went through.

18:13But yes, that and you could say a poison chalice as well. And she liked things done by the book, as I understand. But you know her, so I'm interested to hear your views on that. she was running an enormous business 300 ,000 people it was described as a bit like the civil service a very sort of you know old school bastion of silicon valley and she suddenly gets this young slightly scrappy british company which has grown by acquisition essentially so it's a bit of a hodgepodge of different businesses run by this guy who's never had a boss before and suddenly she's his boss. And I'd also be interested in your views on this.

18:57I think there's a bit of a US-UK culture clash going on. Certainly a startup, more established culture clash too. And Meg and Mike hated each other. And she really didn't take kindly to his slightly scrappy, rude attitude. I don't think she liked some of the things that they discovered when they bought autonomy and in return mike lynch found hp really difficult to deal with he always prided himself on the fact that autonomy was run like a startup that he was an independent sort of guy and that they could move very quickly and suddenly he's in this enormous giant company where well he said afterwards um it was like working for hp was like being waterboarded well listen you know i like her she's got a complex story in her own right but uh what uh i mean what an entanglement those two together my god i mean you you know you're you are very british by the way i just have to just point this out to you because you're very diplomatic okay you're not you know i mean you know yeah very i mean so delicate i think that's probably a bit bbc is it yeah the caddy k bbc etiquette where you know you're not saying what i'm thinking so i have to say what I'm thinking.

20:13You know what I'm saying? Yeah, I do. But you're thinking what I'm thinking. I don't think I don't know that, Katie. I don't think that's a very good trait. No, I like it though. I like it. I was trying to be balanced. I think a lot of the problem with this book is it caused so much pain and it's so controversial and both sides are so passionate that they were right. I was really trying to tread a quite difficult line throughout and show both sides of it. Let me ask you this question. This is a very broad question. And this is, you've interviewed everybody. You know, Altman, Nadal, all these guys, right?

20:49Satya, the whole thing. Let me go back. Broad question. Elites can fail, yes or no? Can elites make really bad decisions based on your life experience at observing them? Yes. Can they fail? Yes. Okay. and and yet when they fail how do they feel differently than regular people they have bigger bank accounts and they're i mean i'm just thinking of one guy at the moment who you know it's quite a common path here just moved to dubai they they don't have the same you know they fail into a safety net don't they fail into a safety net into a into a wealthy bank account i don't know is there some unfairness of that too maybe what do you think when it comes to this book well no i i think well he he got away with it right i mean he dies unceremoniously and tragically i mean you don't think that that was a murder or anything like that it doesn't it doesn't read like that in the book right so he yeah i didn't think it was a murder no it dies it dies it dies from this accidental horrific situation at sea right but other than that he got away scot-free more or less right Well, he did and he didn't, actually, because he's left his family with a really difficult predicament.

22:05So the civil trial, as you say, that he lost in the UK, his family are now facing paying that money, which is 700 million pounds. His estate is worth about 500 million pounds. So it looks like that will bankrupt the estate. Now, will that bankrupt the family? As we know, what the estate is worth and what they're worth are two different things. Probably not. actually unless hewlett packard really really decided to go totally nuclear um after his widow and some of her assets um let me let me rephrase let's say he had lived yeah how do you think this would have gone i think his reputation would still be really trashed and i think that his reputation was as important to him as his bank balance.

22:57So I think you're right in terms that, yes, elites fail into a safety net. And so was he ever going to be destitute in the way that would happen to some people? No. But would all of the doors that he used to love being open for him in the government here, you know, he was on the board of the BBC, he had all these prestigious jobs. Would those shut? Yes. And had already started to do that before he went out to the States for his criminal trial. So there's a cautionary tale here, right? Some of your reviewers have said, what a cautionary tale. What lesson from Mike Lynch's story should every person in a position of power tattoo on their arm?

23:46Hubris. I mean, it's an ancient one, but it feels like that just threads through the story from, and it's terrible to say, the fact that his boat had one of the tallest masts in the world was something he was very proud of. And that was, in the end, why it capsized so quickly. From the desire to make his revenue figures look better than they were, even when the company was making sales, right? This wasn't a business that was failing. It was a good company. This is like the kid Sam Bankman freed. He would have been worth$5 billion as opposed to trying to be worth$100 billion, which was fictitious and unreachable, at least at that moment in his life.

24:29Maybe 30 years later, he could have done it. Yeah. Yeah. And I think there's another one, which is, to your point, about kindness and about being nice to people on the way up because you never know when you might need them on the way down. I mean, to me, there's no cost to being nice and it's a separating factor and it leads to happiness. You think he was a happy guy, Katie? No, I don't. I think he was angry a lot of the time, actually. And then I think the last 10 years of his life, my God, fighting those legal battles in the way that he did. And the energy and mental toll, not to mention the financial toll that that took, I think was horrendous.

25:10It's actually kind of astonishing that he managed to found so many companies during that time. That was a testament to the force of his personality. Yeah, listen, he's a very talented guy. There's no question about that. Also, it's a cautionary tale about the way we celebrate billionaires and the way we celebrate tech leaders. I think we have to keep our eyes a little bit more open about that. Yeah. All right, so we're down to the five words. if you've ever listened to this podcast, we come up with five words from your book. And now we want one or two sentences from you as the author. Okay, you ready?

25:43Go on. Okay, so I say the word technology. You say what? Exciting. Well, you don't want me to say a sentence? No, no, that's good. You can say a sentence if you want to. Changing the world. You're in the rhythm. What about Silicon Valley? Cesspit. Cesspit. Or we would say cesspool, right? You say cesspool, we say cesspool. I say tomato, you say tomato, right? All right, yeah. I mean, that feels unfair. I like Silicon Valley. I'm fascinated by it, but, you know. But it's tough out there, though, right? It's really tough. It's tough out there, right? One-sided, I think, also shapes it. You know what they say about Washington, you know, it's Hollywood for ugly people, right?

26:24Silicon Valley is Hollywood for smart people, you know? If it were, people on the spectrum, maybe. autonomy i mean the company when i say the word autonomy but i mean the company i want to quote the judge here who said i mean i'm paraphrasing something along the lines of it's a tragedy that this amazing tech company will always be known for fraud yeah and it had so many good things going on and he was on top of the ai space before the ai space became hot you know all right this is a figure and i'm going to need a little bit more than a sentence because i'm introducing him late in this podcast uh stephen chamberlain who was stephen chamberlain and what are your thoughts there stephen chamberlain was mike lynch's vp of finance so he was the deputy to the cfo who's the guy i said got sent to prison and based in cambridge it was astonishing interviewing people around stephen because it was rather the opposite of the people i interviewed about Mike, everybody loved him.

27:24He was really popular, warm family man, who was a great mentor to a lot of people in Autonomy's finance department. And he got inevitably caught up in all of this after the fraud allegations were made by Hewlett-Packard. And he ended up going out with Mike to San Francisco to face trial in that same court that eventually found them both not guilty. I think one of the things that I found really difficult about Stephen is everybody around him said that this guy would never, never do something wrong. But it's very hard to understand how you could be that senior within the finance department and not have spotted problems.

28:09Yeah. But he always said he wasn't guilty. And he left these astonishing diaries that he started writing when he was out in the States, living away from his family who was still based here in the UK. And yeah, just kept sort of asserting his innocence through it all. I mean, these are fascinating characters. You know, the book is outstanding. All right, these are the last two words and then I'm going to give you the last word. Okay, my last two words are Mike Lynch. Flawed, brilliant,

28:43damaged and damaging. Okay, well, the title of the book is The Curious Case of Mike Lynch, The Improbable Life and Death of a Tech Billionaire. It's written by Katie Prescott. And listen, this book is awesome. You know, I got to tell you, I really enjoyed it. It was a pleasure to meet you at the Sky News event. And thank you for joining us today on Open Book. Thank you so much.

29:15Thank you.