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How to Avoid Being Pushed Out of the Company You Founded

83 points by alexkehayias 15y ago

deleted 15y ago
[deleted]
maeon3 15y ago
Elon Musk had to deal with and survived a hostile power play to get him removed from Tesla after he founded and funded the company. Martin Eberhard filed suit against Tesla and Musk for slander, libel and breach of contract. Eberhard failed in his power play to be named one of the remaining two founders of Tesla. http://en.wikipedia.org/wiki/Elon_Musk#Controversies http://en.wikipedia.org/wiki/Elon_Musk#Controversies To succeed after you have succeeded in business you have to be a Jedi master of strategic, tactical, and operational civil legal warfare. Extremely intelligent and opportunistic people will help you achieve your goals, then stick a daggar in your back, take all of your money, leave you with nothing, laugh at you, then rewrite history with you as the villan.
- enjo 15y ago
  "Take all of your money" is really rare... the one constant in every example in the article is that the founder who is being forced out is almost always paid off. In the one case I've been a witness too, it was the same. It's usually quite expensive to force a founder out, but that dosen't make it any less tragic.
- SeanLuke 15y ago
  I think this is a completely inverted misinterpretation of Tesla's recent history. 1. For better or for worse, Martin Eberhard was ousted by Elon Musk and the Tesla board in a power play, not the other way around. 2. The slander suit was long afterwards and has little to do with power plays at all.
- paulhauggis 15y ago
  "Extremely intelligent and opportunistic people will help you achieve your goals, then stick a daggar in your back, take all of your money, leave you with nothing, laugh at you, then rewrite history with you as the villan." I've learned this over the past couple of years. As soon as you see the slightest bit of success, someone will try to take it from you. If you aren't defensively strategic, they will succeed. The problem is that any hint of money brings the predators.
ValG 15y ago
A little bit of a link bait if you ask me; just chronicles some of the more famous founder/company fall outs with a focus on Foursquare. This is something every founder has nightmares about, especially once the company makes it. Not something you can really plan for...
- jonnathanson 15y ago
  "Not something you can really plan for..." Respectfully, I disagree to some extent on this point. It's always a good idea never to attack others. And ideally, you hope you'll never come under attack yourself. But if you do, you don't want it to take you by surprise. Consider this quote from the article: "'I think it’s easy for people to jump to the side of the founder against the big bad investor,' Mr. Blumberg said. 'But we’re all grownups and you sign the papers you sign.'" This may come across as cold-blooded, but let's be honest, there's a grain of truth to it. Startups are every bit as political as BigCo, and in some cases, even moreso. Whenever we see these stories -- and maybe it's just the popular mythological portrayal of them -- we see them as heartbreaking tales of betrayal and shattered friendships. But perhaps they're better described as tales of political savvy vs. naivete -- of ruthlessness vs. innocence. The business world often rewards the former, and rarely graces the latter. Nice guys usually finish last. It may be sad. It may not be right. It may not be the way we want things to be. And maybe there is a "better way" to be discovered. But, no matter the case, people can't afford to place unconditional trust in each other. When big money and influential outsiders enter into an equation, people's incentives change dramatically. Eyes should be kept open to that fact. Even if we don't assume people will, by necessity, turn on us at some point, we shouldn't rule it out. It's not that people are assholes; it's that the upper echelons of business are cutthroat, and people usually respond according to their economic incentives. As the co-founder of a small, early-stage company, you don't need to concern yourself with these things. But the second you've got a VP stripe, or especially the letter "C-" in your acronym, you've got a target on your back. You need to be mindful of it. This doesn't excuse the nature of the game, but it does offer fair warning to any who'd play it. Keep stock of everyone else's hand. Know what cards they've got. Know how they may, or may not, be able to play them. Know what they stand to gain or lose by doing so, and the magnitude of that gain or loss. There's no great excuse for being a dick, but there's equally litttle excuse for being a Polyanna. I would never advocate that we all actively seek to screw each other over. Rather, I'd suggest we keep our guard up -- especially around times of big organizational shift (new funding rounds, board changes, big new hires, etc.).
silentscope 15y ago
There are three things in life that make people act funny: drugs, women (or men, you get the point), and money. They don't act rationally or human, and you should be prepared. that being said, wow.
wilfra 15y ago
Did I miss the part of the article that tells us how to avoid being pushed out? I'd really like to know the answer to that.
- ohashi 15y ago
  I think the point it tried to make was you can't.
lusr 15y ago
I'm not sure I get this. Maybe I'll be fortunate enough one day to experience it first hand, but I'm perfectly happy to be the Paul Allen or Steve Wozniak. I remember reading iWoz and constantly got the impression that Woz was complaining about how he wasn't recognized for things that - in the big picture - are really not that important. Surely there are more important things in life to enjoy than worrying about the "unfairness" of stuff like this, particularly when you've become financially set for life? All I want to do is make enough money to comfortably explore the things I'm passionate about without being side-tracked by working on non-interesting things for survival, and get proper medical treatment in case I'm hit by a bus, and for taking care of my needs during my old age.
- ChuckMcM 15y ago
  I'm friends with a guy who was 'bought out' of his startup for north of $8M and he said something I found interesting. "Chuck its not about the money, until there is a lot of money and you're not getting it. I mean when its all hypothetical you can be generous, but when its not hypothetical, and the piece being offered is not what you had informally agreed upon, you tend to stop seeing what you're getting and instead focus on what you are not getting. That can be toxic." I think its just basic human nature.
  - lusr 15y ago
    True, I don't doubt it is. I suppose all I'm saying is that I hope that if it ever happens to me I'll get over it quickly and move on happily with my $8M ;) I've learned a lot from Burns' "Feeling Good" and the nature of anger and pointlessness of worrying about unfairness in the world, and this just seems like another instance of something you can't control, probably can't influence (because you only recognize what's going on when it's too late), and consequently something you just need to accept. (I'm not saying don't anticipate it and try your best not to get screwed over, but if it happens, relax.)
  - jc123 15y ago
    There will always be emotions but "informally agreed upon" is something that can be mitigated early in the partnership, to help neutralize them.
spitfire 15y ago
How to Avoid Being Pushed Out of the Company You Founded? Own it.
bootload 15y ago
"... A source close to Selvadurai tells us the Foursquare cofounder has seemed ‘frustrated’ and ‘lost,’” reported the blog Business Insider; Mr. Selvadurai was “forced out,” according to a followup story. 'Dennis and he don’t hate each other—things just changed, ..." Remember govWorks.com?... One company, one boss.

83 points by alexkehayias 15y ago

deleted 15y ago

[deleted]

Elon Musk had to deal with and survived a hostile power play to get him removed from Tesla after he founded and funded the company. Martin Eberhard filed suit against Tesla and Musk for slander, libel and breach of contract. Eberhard failed in his power play to be named one of the remaining two founders of Tesla. http://en.wikipedia.org/wiki/Elon_Musk#Controversies http://en.wikipedia.org/wiki/Elon_Musk#Controversies To succeed after you have succeeded in business you have to be a Jedi master of strategic, tactical, and operational civil legal warfare. Extremely intelligent and opportunistic people will help you achieve your goals, then stick a daggar in your back, take all of your money, leave you with nothing, laugh at you, then rewrite history with you as the villan.

enjo 15y ago
"Take all of your money" is really rare... the one constant in every example in the article is that the founder who is being forced out is almost always paid off. In the one case I've been a witness too, it was the same. It's usually quite expensive to force a founder out, but that dosen't make it any less tragic.
SeanLuke 15y ago
I think this is a completely inverted misinterpretation of Tesla's recent history. 1. For better or for worse, Martin Eberhard was ousted by Elon Musk and the Tesla board in a power play, not the other way around. 2. The slander suit was long afterwards and has little to do with power plays at all.
paulhauggis 15y ago
"Extremely intelligent and opportunistic people will help you achieve your goals, then stick a daggar in your back, take all of your money, leave you with nothing, laugh at you, then rewrite history with you as the villan." I've learned this over the past couple of years. As soon as you see the slightest bit of success, someone will try to take it from you. If you aren't defensively strategic, they will succeed. The problem is that any hint of money brings the predators.

ValG 15y ago

A little bit of a link bait if you ask me; just chronicles some of the more famous founder/company fall outs with a focus on Foursquare. This is something every founder has nightmares about, especially once the company makes it. Not something you can really plan for...

jonnathanson 15y ago
"Not something you can really plan for..." Respectfully, I disagree to some extent on this point. It's always a good idea never to attack others. And ideally, you hope you'll never come under attack yourself. But if you do, you don't want it to take you by surprise. Consider this quote from the article: "'I think it’s easy for people to jump to the side of the founder against the big bad investor,' Mr. Blumberg said. 'But we’re all grownups and you sign the papers you sign.'" This may come across as cold-blooded, but let's be honest, there's a grain of truth to it. Startups are every bit as political as BigCo, and in some cases, even moreso. Whenever we see these stories -- and maybe it's just the popular mythological portrayal of them -- we see them as heartbreaking tales of betrayal and shattered friendships. But perhaps they're better described as tales of political savvy vs. naivete -- of ruthlessness vs. innocence. The business world often rewards the former, and rarely graces the latter. Nice guys usually finish last. It may be sad. It may not be right. It may not be the way we want things to be. And maybe there is a "better way" to be discovered. But, no matter the case, people can't afford to place unconditional trust in each other. When big money and influential outsiders enter into an equation, people's incentives change dramatically. Eyes should be kept open to that fact. Even if we don't assume people will, by necessity, turn on us at some point, we shouldn't rule it out. It's not that people are assholes; it's that the upper echelons of business are cutthroat, and people usually respond according to their economic incentives. As the co-founder of a small, early-stage company, you don't need to concern yourself with these things. But the second you've got a VP stripe, or especially the letter "C-" in your acronym, you've got a target on your back. You need to be mindful of it. This doesn't excuse the nature of the game, but it does offer fair warning to any who'd play it. Keep stock of everyone else's hand. Know what cards they've got. Know how they may, or may not, be able to play them. Know what they stand to gain or lose by doing so, and the magnitude of that gain or loss. There's no great excuse for being a dick, but there's equally litttle excuse for being a Polyanna. I would never advocate that we all actively seek to screw each other over. Rather, I'd suggest we keep our guard up -- especially around times of big organizational shift (new funding rounds, board changes, big new hires, etc.).

silentscope 15y ago

There are three things in life that make people act funny: drugs, women (or men, you get the point), and money. They don't act rationally or human, and you should be prepared. that being said, wow.

wilfra 15y ago

Did I miss the part of the article that tells us how to avoid being pushed out? I'd really like to know the answer to that.

ohashi 15y ago
I think the point it tried to make was you can't.

lusr 15y ago

I'm not sure I get this. Maybe I'll be fortunate enough one day to experience it first hand, but I'm perfectly happy to be the Paul Allen or Steve Wozniak. I remember reading iWoz and constantly got the impression that Woz was complaining about how he wasn't recognized for things that - in the big picture - are really not that important. Surely there are more important things in life to enjoy than worrying about the "unfairness" of stuff like this, particularly when you've become financially set for life? All I want to do is make enough money to comfortably explore the things I'm passionate about without being side-tracked by working on non-interesting things for survival, and get proper medical treatment in case I'm hit by a bus, and for taking care of my needs during my old age.

ChuckMcM 15y ago
I'm friends with a guy who was 'bought out' of his startup for north of $8M and he said something I found interesting. "Chuck its not about the money, until there is a lot of money and you're not getting it. I mean when its all hypothetical you can be generous, but when its not hypothetical, and the piece being offered is not what you had informally agreed upon, you tend to stop seeing what you're getting and instead focus on what you are not getting. That can be toxic." I think its just basic human nature.
- lusr 15y ago
  True, I don't doubt it is. I suppose all I'm saying is that I hope that if it ever happens to me I'll get over it quickly and move on happily with my $8M ;) I've learned a lot from Burns' "Feeling Good" and the nature of anger and pointlessness of worrying about unfairness in the world, and this just seems like another instance of something you can't control, probably can't influence (because you only recognize what's going on when it's too late), and consequently something you just need to accept. (I'm not saying don't anticipate it and try your best not to get screwed over, but if it happens, relax.)
- jc123 15y ago
  There will always be emotions but "informally agreed upon" is something that can be mitigated early in the partnership, to help neutralize them.

spitfire 15y ago

How to Avoid Being Pushed Out of the Company You Founded? Own it.

bootload 15y ago

"... A source close to Selvadurai tells us the Foursquare cofounder has seemed ‘frustrated’ and ‘lost,’” reported the blog Business Insider; Mr. Selvadurai was “forced out,” according to a followup story. 'Dennis and he don’t hate each other—things just changed, ..." Remember govWorks.com?... One company, one boss.