7 ms·

Snap CEO Named a Chief Business Officer, Then Changed His Mind

75 points by kronion 8y ago

gist 8y ago
Rather than focus on the bad focus on the good part. He got someone he thought was better and decided to go with that. From a business perspective and if you remove the short term way it looks (or his reputation impact) it is a good move. Of course a writer for a blog or news site doesn't see it that way. Because of course (to take an extreme) if you just started working at the local paper and the New York Times offered you a position you'd turn it down, right? Back in the day a long long time ago I remember someone who had taken a job at Sun. Two weeks later he left because Apple came through with an offer and he really wanted to work for Apple. I thought it was really rude because I would have never had the guts to do that. I would have felt obligated to stay at the job that I had because that is the way I was raised. But when you consider that Sun would have let him go at the drop of a hat if it suited their business purpose it actually made sense and I learned from that event and seeing what happened later because he went with Apple.
macintux 8y ago
The headline is a bit confusing: the CEO wasn't named CBO, he named someone and then (apparently?) fired her before she took the role.
- druddha 8y ago
  I read it the same way. Headlines are typically present tense. I wonder what caused the editor to write this one in past tense.
- dang 8y ago
  We'll squeeze an article in there to make it a bit less confusing.
ejz 8y ago
What is Evan doing? facepalm
- rhizome 8y ago
  Being a 28 year old billionaire. If you notice, it's kinda going around right now.
- ypeterholmes 8y ago
  Better question- why is the Board allowing his incompetence to run this company into the ground?
  - ryanmccullagh 8y ago
    Maybe because the board has no control over his decisions - https://www.cnbc.com/2018/02/22/snap-10-k-annual-report-shows-power-of-ceo-evan-spiegel.html https://www.cnbc.com/2018/02/22/snap-10-k-annual-report-show...
    - barbecue_sauce 8y ago
      At what point does he realize that his decisions are bad and he needs supervision?
      - rhizome 8y ago
        Why would he ever think any of his thoughts are bad? When would it even occur to him?
      - rchaud 8y ago
        He is a billionaire married to a VS supermodel. At this point, he's more likely to squander all his money and make reality TV appearances to make ends meet, than turn Snap around.
  - econner 8y ago
    I don't think the board has much say. The co-founders have control over all stockholder decisions and even if they were fired (which would only happen if they turned on each other) they would still exercise the same control of stockholder decisions. So I don't think the board really has any leverage...
hendzen 8y ago
SNAP IPO should herald the death of dual share class listings. They sold billions in equity to the public, but gave the shares 0 voting rights. So now investors have no recourse to push for changes at the board level.
- sseveran 8y ago
  S&P is now excluding such share structures from companies it considers for the S&P 500, so I would anticipate that this will get much rarer among public companies.
  - stanleydrew 8y ago
    Interesting. Not saying I don't believe you, but I'm interested in what a company might perceive to be the value of being part of the S&P 500. Is it just a reputation boost? Or is there something concrete?
    - hendzen 8y ago
      There is a massive value. It means that all SP500 tracking ETFs ($SPY, $VOO etc) have to buy your shares. It's a huge boost to your share price, especially with the rise of passive investing.
      - sseveran 8y ago
        As more money has gone into passive strategies this is becoming more important.
  - walshemj 8y ago
    As does the FTSE - and I am not sure if London even allows new listings with this dual class set up any more.
- toomuchtodo 8y ago
  > So now investors have no recourse to push for changes at the board level. Dig for securities fraud and encourage the SEC to require voting rights as part of a settlement agreement?
whoisjuan 8y ago
I'm going to be devil's advocate here but the CEO (especially of a troubled company like Snap) needs to take the best decisions for the company and stretch solvency and viability for as long as possible. Of course, it's unpopular to promote someone, then rescind that offer and hire someone else. But in this case, the tradeoff seems reasonable. Hiring a well connected, veteran exec who comes from a company known for its operational excellence seems like the right decision. It appears that this was a poor timing issue. Maybe the handling of the situation was unprofessional and I bet there are ways to avoid these fake start promotion situations, but I think at this stage you gotta play your cards. Either you save face and do the politically correct decision (promoting a good employee, but ultimately an employee with no new insights or inputs) or you take a risk for the company knowing that you're about to make a decision that could be decisive for the company's future but that may have an impact on the impressions people have about your decision-making abilities. Given that Snap is running out of cash and cred, I think it makes sense to do the latter. It also seems that Snap may be looking for a buyer pretty soon and some of their recent moves indicate that they are trying to create a story on why Snap would be a good an asset for Amazon.
- harryh 8y ago
  It's important to note that Kristen O’Hara was also an outsider who is a "well connected, veteran exec." She had only been with Snap for 2 months. Characterizing her as a "good employee, but ultimately an employee with no new insights or inputs" is probably not accurate.
  - whoisjuan 8y ago
    True. But I think the contrast here is who is more capable of adding value to Snap. The Ex-Time Warner marketing executive or the Ex-Amazon Ad executive. Profile wise they are pretty similar but yet they come from very different industries and probably have very different operational philosophies. Also, 2 months is a very short time for everyone but Snap. In a 12 months runway, 2 months is 16% of the time you have before running out of cash.
    - 8y ago
lechiffre10 8y ago
Evan thinks he's steve jobs. Lost god knows how many users of Snapchat because he felt compelled to completely redesign the app himself and looks like he off course when Instagram started copying Snapchat's features. A lot of these companies that aren't profitable rush to become public without a proper business model and end up getting crushed ( eg: HMNY company of movie pass) It's no surprise that Snapchat is doing so poorly and lots of us could have called this ahead of time. I really don't see this company being around in 2-3 years.
- capkutay 8y ago
  Seems like every wanna be Steve Jobs completely misses the point of what made Steve Jobs great, but then use all the bad parts about his personality to justify doing horrible, stupid, crazy things.
  - protomyth 8y ago
    Its really hard to fake taste, but easy to be an a-hole.
  - partiallypro 8y ago
    Jobs was a genius late in life (sans on his own health,) but he also helped run Apple into the ground after early success. People tend to forget that.
    - antpol 8y ago
      Jobs never changed his vision - build stylish easy to use appliances of the future. What drove Next down was the same philosophy that made Mac lineup so popular mid 00s when the technology finally caught up to Jobs vision
      - partiallypro 8y ago
        I was more thinking about shortly before Jobs was fired from Apple in the mid-80s.
sonnyblarney 8y ago
It's obviously inappropriate, but not beyond what a young executive might do. Startups need to move quickly, changing your mind after 2 days is normal, it's just the politics (and optics) that are affected. It's kind of a rookie move ... but in a way, maybe it's the rookies advantage. Evan can get away with doing this because he's young. Consider that an older exec would have not changed his mind out of fear of 'looking bad' even if it were not the right thing for the company. This isn't good, but it's not a big deal at all. Of course this assumes he mad the right decision in the end ...
- nwsm 8y ago
  It's not about being young, it's about being inexperienced. You can make a parallel to Trump, whose supporters give him a lot of leeway on "inappropriate" decisions because he's not a politician. Being inexperienced isn't a good excuse for being a bad CEO (please give any evidence you have of him being an effective one). Realizing two days after you make an important public decision that you should have made a different one is a failure, regardless of if you got it right the second time. Founding a company doesn't mean you should be CEO.
  - sonnyblarney 8y ago
    Yes I agree with all of that, but founding a company does give you incredible impetus. Because Snap is a consumer facing company - we hear about this all the time. Tons of startups do stuff like this - we just don't hear about it. AirBnB, Stripe etc. are all making clumsy decisions daily, even some occasional big ones - but it's just not newsworthy. Neither is this item frankly, it's just kind of fluff. Nice to know but not news. This kind of mistake is well within the entitlements of a Founder/CEO for example, I'd imagine the board won't have much to say about it. He knows he kinda screwed this up surely.
dcole2929 8y ago
I get that there is a widely held belief that startups eventually reach a point where they need veteran leadership. The kids built the thing but they need adult supervision in order to become a real company. But I find myself wondering what the logic is behind hiring a 40 year old to design the strategy for a company who's primary demographic is in their teens and twenties. Clearly this is a strategy that has worked before but I'm curious why more orgs don't try the opposite. If you won't listen to what your customers want (which Snap has not) why not hire a young executive who more closely aligns with the demographic your catering to.
- ProfessorLayton 8y ago
  Well, by that logic Nickelodeon should be run by kids, for kids.
  - GhostVII 8y ago
    Isn't that just reductio ad absurdum? Of course Nickelodeon shouldn't be run by kids, but there can be a benefit to having leadership that can empathize and understand your customer base better.
pcmoney 8y ago
I sort of feel like this is par for the course with SNAP. It seems to me to be a rather scummy company that got lucky despite its original intentions of encouraging people to send nudes (which is pretty sleazy IMO). The CEO as far as I can tell has never said or done anything that I would consider noble or respect worthy. His emails before he was in the public eye really show his true character. Obviously his word is worth less than nothing. Can’t wait for the company to die, just bummed that little snot got rich from it.

75 points by kronion 8y ago

gist 8y ago

Rather than focus on the bad focus on the good part. He got someone he thought was better and decided to go with that. From a business perspective and if you remove the short term way it looks (or his reputation impact) it is a good move. Of course a writer for a blog or news site doesn't see it that way. Because of course (to take an extreme) if you just started working at the local paper and the New York Times offered you a position you'd turn it down, right? Back in the day a long long time ago I remember someone who had taken a job at Sun. Two weeks later he left because Apple came through with an offer and he really wanted to work for Apple. I thought it was really rude because I would have never had the guts to do that. I would have felt obligated to stay at the job that I had because that is the way I was raised. But when you consider that Sun would have let him go at the drop of a hat if it suited their business purpose it actually made sense and I learned from that event and seeing what happened later because he went with Apple.

macintux 8y ago

The headline is a bit confusing: the CEO wasn't named CBO, he named someone and then (apparently?) fired her before she took the role.

druddha 8y ago
I read it the same way. Headlines are typically present tense. I wonder what caused the editor to write this one in past tense.
dang 8y ago
We'll squeeze an article in there to make it a bit less confusing.

ejz 8y ago

What is Evan doing? facepalm

rhizome 8y ago
Being a 28 year old billionaire. If you notice, it's kinda going around right now.
ypeterholmes 8y ago
Better question- why is the Board allowing his incompetence to run this company into the ground?
- ryanmccullagh 8y ago
  Maybe because the board has no control over his decisions - https://www.cnbc.com/2018/02/22/snap-10-k-annual-report-shows-power-of-ceo-evan-spiegel.html https://www.cnbc.com/2018/02/22/snap-10-k-annual-report-show...
  - barbecue_sauce 8y ago
    At what point does he realize that his decisions are bad and he needs supervision?
    - rhizome 8y ago
      Why would he ever think any of his thoughts are bad? When would it even occur to him?
    - rchaud 8y ago
      He is a billionaire married to a VS supermodel. At this point, he's more likely to squander all his money and make reality TV appearances to make ends meet, than turn Snap around.
- econner 8y ago
  I don't think the board has much say. The co-founders have control over all stockholder decisions and even if they were fired (which would only happen if they turned on each other) they would still exercise the same control of stockholder decisions. So I don't think the board really has any leverage...

hendzen 8y ago

SNAP IPO should herald the death of dual share class listings. They sold billions in equity to the public, but gave the shares 0 voting rights. So now investors have no recourse to push for changes at the board level.

sseveran 8y ago
S&P is now excluding such share structures from companies it considers for the S&P 500, so I would anticipate that this will get much rarer among public companies.
- stanleydrew 8y ago
  Interesting. Not saying I don't believe you, but I'm interested in what a company might perceive to be the value of being part of the S&P 500. Is it just a reputation boost? Or is there something concrete?
  - hendzen 8y ago
    There is a massive value. It means that all SP500 tracking ETFs ($SPY, $VOO etc) have to buy your shares. It's a huge boost to your share price, especially with the rise of passive investing.
    - sseveran 8y ago
      As more money has gone into passive strategies this is becoming more important.
- walshemj 8y ago
  As does the FTSE - and I am not sure if London even allows new listings with this dual class set up any more.
toomuchtodo 8y ago
> So now investors have no recourse to push for changes at the board level. Dig for securities fraud and encourage the SEC to require voting rights as part of a settlement agreement?

whoisjuan 8y ago

I'm going to be devil's advocate here but the CEO (especially of a troubled company like Snap) needs to take the best decisions for the company and stretch solvency and viability for as long as possible. Of course, it's unpopular to promote someone, then rescind that offer and hire someone else. But in this case, the tradeoff seems reasonable. Hiring a well connected, veteran exec who comes from a company known for its operational excellence seems like the right decision. It appears that this was a poor timing issue. Maybe the handling of the situation was unprofessional and I bet there are ways to avoid these fake start promotion situations, but I think at this stage you gotta play your cards. Either you save face and do the politically correct decision (promoting a good employee, but ultimately an employee with no new insights or inputs) or you take a risk for the company knowing that you're about to make a decision that could be decisive for the company's future but that may have an impact on the impressions people have about your decision-making abilities. Given that Snap is running out of cash and cred, I think it makes sense to do the latter. It also seems that Snap may be looking for a buyer pretty soon and some of their recent moves indicate that they are trying to create a story on why Snap would be a good an asset for Amazon.

harryh 8y ago
It's important to note that Kristen O’Hara was also an outsider who is a "well connected, veteran exec." She had only been with Snap for 2 months. Characterizing her as a "good employee, but ultimately an employee with no new insights or inputs" is probably not accurate.
- whoisjuan 8y ago
  True. But I think the contrast here is who is more capable of adding value to Snap. The Ex-Time Warner marketing executive or the Ex-Amazon Ad executive. Profile wise they are pretty similar but yet they come from very different industries and probably have very different operational philosophies. Also, 2 months is a very short time for everyone but Snap. In a 12 months runway, 2 months is 16% of the time you have before running out of cash.
  - 8y ago

lechiffre10 8y ago

Evan thinks he's steve jobs. Lost god knows how many users of Snapchat because he felt compelled to completely redesign the app himself and looks like he off course when Instagram started copying Snapchat's features. A lot of these companies that aren't profitable rush to become public without a proper business model and end up getting crushed ( eg: HMNY company of movie pass) It's no surprise that Snapchat is doing so poorly and lots of us could have called this ahead of time. I really don't see this company being around in 2-3 years.

capkutay 8y ago
Seems like every wanna be Steve Jobs completely misses the point of what made Steve Jobs great, but then use all the bad parts about his personality to justify doing horrible, stupid, crazy things.
- protomyth 8y ago
  Its really hard to fake taste, but easy to be an a-hole.
- partiallypro 8y ago
  Jobs was a genius late in life (sans on his own health,) but he also helped run Apple into the ground after early success. People tend to forget that.
  - antpol 8y ago
    Jobs never changed his vision - build stylish easy to use appliances of the future. What drove Next down was the same philosophy that made Mac lineup so popular mid 00s when the technology finally caught up to Jobs vision
    - partiallypro 8y ago
      I was more thinking about shortly before Jobs was fired from Apple in the mid-80s.

sonnyblarney 8y ago

It's obviously inappropriate, but not beyond what a young executive might do. Startups need to move quickly, changing your mind after 2 days is normal, it's just the politics (and optics) that are affected. It's kind of a rookie move ... but in a way, maybe it's the rookies advantage. Evan can get away with doing this because he's young. Consider that an older exec would have not changed his mind out of fear of 'looking bad' even if it were not the right thing for the company. This isn't good, but it's not a big deal at all. Of course this assumes he mad the right decision in the end ...

nwsm 8y ago
It's not about being young, it's about being inexperienced. You can make a parallel to Trump, whose supporters give him a lot of leeway on "inappropriate" decisions because he's not a politician. Being inexperienced isn't a good excuse for being a bad CEO (please give any evidence you have of him being an effective one). Realizing two days after you make an important public decision that you should have made a different one is a failure, regardless of if you got it right the second time. Founding a company doesn't mean you should be CEO.
- sonnyblarney 8y ago
  Yes I agree with all of that, but founding a company does give you incredible impetus. Because Snap is a consumer facing company - we hear about this all the time. Tons of startups do stuff like this - we just don't hear about it. AirBnB, Stripe etc. are all making clumsy decisions daily, even some occasional big ones - but it's just not newsworthy. Neither is this item frankly, it's just kind of fluff. Nice to know but not news. This kind of mistake is well within the entitlements of a Founder/CEO for example, I'd imagine the board won't have much to say about it. He knows he kinda screwed this up surely.

dcole2929 8y ago

I get that there is a widely held belief that startups eventually reach a point where they need veteran leadership. The kids built the thing but they need adult supervision in order to become a real company. But I find myself wondering what the logic is behind hiring a 40 year old to design the strategy for a company who's primary demographic is in their teens and twenties. Clearly this is a strategy that has worked before but I'm curious why more orgs don't try the opposite. If you won't listen to what your customers want (which Snap has not) why not hire a young executive who more closely aligns with the demographic your catering to.

ProfessorLayton 8y ago
Well, by that logic Nickelodeon should be run by kids, for kids.
- GhostVII 8y ago
  Isn't that just reductio ad absurdum? Of course Nickelodeon shouldn't be run by kids, but there can be a benefit to having leadership that can empathize and understand your customer base better.

pcmoney 8y ago

I sort of feel like this is par for the course with SNAP. It seems to me to be a rather scummy company that got lucky despite its original intentions of encouraging people to send nudes (which is pretty sleazy IMO). The CEO as far as I can tell has never said or done anything that I would consider noble or respect worthy. His emails before he was in the public eye really show his true character. Obviously his word is worth less than nothing. Can’t wait for the company to die, just bummed that little snot got rich from it.