11 ms·

500px Co-Founder and Former CEO Ousted from the Startup

131 points by kenrose 12y ago

jacquesm 12y ago
Wow. That must really suck. The 'people that he trusted the most' clearly points at some very hard feelings there. If your co-founder and investors together have a controlling interest these things can and do happen. In a way this was in the cards when they appointed (presumably with his consent, otherwise there would have been a confrontation earlier) a new CEO, after that you're going to have to play ball or leave. Still, it's tough for this to happen to anybody, especially if you're the one that led the company to where it is today. I really hope for the 500px investors and other co-founder that they don't make any major mistakes in the next year because an ex-CEO minority shareholder with a grudge is not going to be easy to placate if you mess up. They will be walking on thin ice.
- 3pt14159 12y ago
  Disclosure: My company was bought by 500px, I left after only 9 months of vesting, and I'm still bound by an NDA. Andreessen Horowitz is backing 500px, I'm sure (but I have no specific knowledge of) that whatever paperwork they argued over the months that Andy was the new CEO was properly vetted. In my opinion, Oleg Gutsol was incredibly talented in a wide array of things and has a good heart, but sometimes the CEO that's fantastic for the first 20 employees isn't the one that excels for the next 200. I'm sure this isn't the last we've heard of him. He'll start something new and succeed with it as well. He has an incredible ability to figure out how users will actually see and use your app and what motivates them.
  - jacquesm 12y ago
    I think the mistake was to try to stay on. Then you have the 'old captain' and the 'new captain' on the ship at the same time and that is a recipe for trouble if the desire for another CEO did not come from the old CEO. That's a thing I've seen play out in two other spots and in both cases it ended more or less like it did here (only substantially quicker). I fully agree with you on the 20/200 matter. I'm like that myself (and even the '20' is not my ambition but more along the lines of 'somebody has to do it').
- aytekin 12y ago
  Reminds me of the book "Hatching Twitter: A True Story of Money, Power, Friendship, and Betrayal" http://www.amazon.com/Hatching-Twitter-Story-Friendship-Betrayal/dp/1591846013 http://www.amazon.com/Hatching-Twitter-Story-Friendship-Betr...
throwawayf00px 12y ago
Ex 500px employee here. Oleg is a good guy, as in I'd love to be (and have been) his friend, but he really can't run a company. He's impossible to work for. Investors put project management in place (more than once) which he systematically destroyed (firing, pushing so hard they quit, whatever). I'm not sure why he did this, I think he thought he was more effective in working with the team. The issue with this is that his measure of "effective" was seemingly hours spent in the office. It was not uncommon to get a project (see: portfolios.500px.com, multiple versions of the IOS app) and have oleg set an impossible deadline. Because of his management style, just about every rails dev in Toronto has been through the company. They seem to go through waves of employees (40+ down to 15 and back again) every six months to a year. It really sucks to see a founder be pushed out, but I think this can have a happy ending for 500px, and for Oleg, if he chooses to learn from this scenario.
- 3pt14159 12y ago
  Just incase anyone in the TO tech scene thinks I (Zach Aysan) wrote this, since it was posted at the exact same time as my comment below, I feel like I should say explicitly that this comment does not come from me and I do not know who wrote it.
  - tau4life 12y ago
    Why, bad blood?
    - 3pt14159 12y ago
      Because I left the company after a short amount of vesting and everyone will assume bad blood.
    - hawkice 12y ago
      He's trying to make sure it is known he is professional, which is worthwhile particularly when there isn't any bad blood. He noted elsewhere he is under NDA, and would be strongly implicated due to his leaving before he was done vesting. Bad blood comes from talking smack about the people who acquire your company.
staunch 12y ago
This is why you don't give up control of your company no matter how nice things seem. Founders should maintain absolute control over 3 out of 5 board seats. The Parker rule. Whatever his flaws the company wouldn't exist without him. His investors knew who he was before they invested. They should be forced to negotiate. They should not be able to fire him. A16Z is an investor in 500px. They claim to support founders so I'm sure they will make a public statement explaining how they tried to help this guy but were outvoted.
- argonaut 12y ago
  It seems to me that Oleg's cofounders were involved in pushing him out, in which case the founders certainly could have had control (among themselves).
- acjohnson55 12y ago
  That's ridiculous. At some point, if you don't have majority share of the company, that means enough other people have taken large of stake in its success that it's no longer "yours" alone. I don't buy this idea that just because someone started a company, they deserve to be dictator for life.
  - staunch 12y ago
    Founders are dictators at day one. The question is whether they should give up control to an investor run committee. Remember that most investors no ability to run a company and have a portfolio of companies to fall back on.
    - wpietri 12y ago
      I look forward to seeing your stats on that, because that's not my experience. I guess if you're a solo founder who doesn't take much money, you can try to remain some sort of generalissimo. But almost every company of substance is controlled by an investor-run committee; it's called a board. Being a dictator at day one is kinda boring: you're the admiral of a fleet that fits in your bathtub. Most interesting things take collaboration: shared ideas, shared labor, shared capital. And that generally means sharing control. Good people rarely want to work for dictators.
rahilsondhi 12y ago
Don't worry Oleg. Jobs got ousted from Apple at one point too...
- bdcravens 12y ago
  Everyone loves the Steve Jobs example, but remember that Apple was a few quarters away from implosion, and he founded a second company that was highly successful. They took on massive investment from a company most considered their largest enemy.
  - aaronbrethorst 12y ago
    > he founded a second company that was highly successful. NeXT was a commercial failure. > They took on massive investment from a company most considered their largest enemy. $150mm wasn't a very big investment for Microsoft. Just compare their market caps at the time for a sense of the different in scale between the companies: http://www.wolframalpha.com/input/?i=apple%2C+microsoft+market+cap+on+august+7+1998 http://www.wolframalpha.com/input/?i=apple%2C+microsoft+mark... It also wasn't that much for Apple. Just five months earlier, they reported a $740mm quarterly loss, or 5x what Microsoft invested in them. The purpose of the investment was primarily to help bolster credibility in Apple as an ongoing concern. Microsoft's reason for doing this was to try and keep the DoJ at bay.
    - awad 12y ago
      > NeXT was a commercial failure. Pixar, however, was not.
      - aaronbrethorst 12y ago
        Apologies, you caught me at a crabby, pedantic moment. Who cares if Pixar was a commercial success or not? It doesn't have anything to do with the topic at hand. I'm going to dissect what I was replying to: Everyone loves the Steve Jobs example, but remember that Apple was a few quarters away from implosion, and he founded a second company that was highly successful. They took on massive investment from a company most considered their largest enemy. First: Apple was a few quarters away from implosion puts you in the frame of mind that we're not discussing Steve Jobs' post-Apple entrepreneurial experiences in general, but, instead, examples from the computer industry, which would imply that we're talking about NeXT. Furthermore, NeXT was founded in 1985. Pixar was founded in 1986. So, even if you set aside what I wrote above, and just take an entirely literal view of the following: he founded a second company that was highly successful You still have to come to the conclusion that the GP was discussing NeXT, not Pixar.
rdl 12y ago
No matter how justified this decision was, this has to be rough for him. I wonder if it's harder in a smaller startup scene (Toronto) than it would be in a place like Silicon Valley. (I love 500px; hopefully this will lead to a more successful company in the long run.)
HorizonXP 12y ago
I remember meeting Andy on a plane to SFO. I've run into him before at Extreme Startups. He was on his way to a board meeting at A16Z, and I was on my way to leave Instagram. They needed an Android lead. After a few meetings, I ultimately decided to pursue my own startup. I think one of those meetings was with Oleg over the phone. Intelligent guy from what I gathered. I'm sure he'll bounce back, though I'm not sure it's very wise to be so public about this so quickly, when emotions are raw and high. 500px is definitely one of the better known startups here in Toronto. They have a great product, they just need to settle on a product direction and execute. The comments about employee churn aren't surprising to me. And the unfortunate part about startups is that failure is typically the result of internal turmoil, so here's hoping they iron it all out quickly.
- will_lam 12y ago
  What's the startup that you'll be working on?
derwiki 12y ago
If he still has equity in the company, isn't he only hurting himself by interviews and keeping this in the media cycle?
coldcode 12y ago
I'm sure he wasn't tossed out to the unemployment line. Startup founders don't always make good company CEO's. Steve Jobs sucked the first time around too in many ways; it took 10 years more time for him to learn how to lead and was a different person the second time around. Even he is an exception, not all people learn from their mistakes or even get a second chance. But startup founders are always able to start another company these days even if they got removed from the previous one.

131 points by kenrose 12y ago

Wow. That must really suck. The 'people that he trusted the most' clearly points at some very hard feelings there. If your co-founder and investors together have a controlling interest these things can and do happen. In a way this was in the cards when they appointed (presumably with his consent, otherwise there would have been a confrontation earlier) a new CEO, after that you're going to have to play ball or leave. Still, it's tough for this to happen to anybody, especially if you're the one that led the company to where it is today. I really hope for the 500px investors and other co-founder that they don't make any major mistakes in the next year because an ex-CEO minority shareholder with a grudge is not going to be easy to placate if you mess up. They will be walking on thin ice.

3pt14159 12y ago
Disclosure: My company was bought by 500px, I left after only 9 months of vesting, and I'm still bound by an NDA. Andreessen Horowitz is backing 500px, I'm sure (but I have no specific knowledge of) that whatever paperwork they argued over the months that Andy was the new CEO was properly vetted. In my opinion, Oleg Gutsol was incredibly talented in a wide array of things and has a good heart, but sometimes the CEO that's fantastic for the first 20 employees isn't the one that excels for the next 200. I'm sure this isn't the last we've heard of him. He'll start something new and succeed with it as well. He has an incredible ability to figure out how users will actually see and use your app and what motivates them.
- jacquesm 12y ago
  I think the mistake was to try to stay on. Then you have the 'old captain' and the 'new captain' on the ship at the same time and that is a recipe for trouble if the desire for another CEO did not come from the old CEO. That's a thing I've seen play out in two other spots and in both cases it ended more or less like it did here (only substantially quicker). I fully agree with you on the 20/200 matter. I'm like that myself (and even the '20' is not my ambition but more along the lines of 'somebody has to do it').
aytekin 12y ago
Reminds me of the book "Hatching Twitter: A True Story of Money, Power, Friendship, and Betrayal" http://www.amazon.com/Hatching-Twitter-Story-Friendship-Betrayal/dp/1591846013 http://www.amazon.com/Hatching-Twitter-Story-Friendship-Betr...

throwawayf00px 12y ago

Ex 500px employee here. Oleg is a good guy, as in I'd love to be (and have been) his friend, but he really can't run a company. He's impossible to work for. Investors put project management in place (more than once) which he systematically destroyed (firing, pushing so hard they quit, whatever). I'm not sure why he did this, I think he thought he was more effective in working with the team. The issue with this is that his measure of "effective" was seemingly hours spent in the office. It was not uncommon to get a project (see: portfolios.500px.com, multiple versions of the IOS app) and have oleg set an impossible deadline. Because of his management style, just about every rails dev in Toronto has been through the company. They seem to go through waves of employees (40+ down to 15 and back again) every six months to a year. It really sucks to see a founder be pushed out, but I think this can have a happy ending for 500px, and for Oleg, if he chooses to learn from this scenario.

3pt14159 12y ago
Just incase anyone in the TO tech scene thinks I (Zach Aysan) wrote this, since it was posted at the exact same time as my comment below, I feel like I should say explicitly that this comment does not come from me and I do not know who wrote it.
- tau4life 12y ago
  Why, bad blood?
  - 3pt14159 12y ago
    Because I left the company after a short amount of vesting and everyone will assume bad blood.
  - hawkice 12y ago
    He's trying to make sure it is known he is professional, which is worthwhile particularly when there isn't any bad blood. He noted elsewhere he is under NDA, and would be strongly implicated due to his leaving before he was done vesting. Bad blood comes from talking smack about the people who acquire your company.

staunch 12y ago

This is why you don't give up control of your company no matter how nice things seem. Founders should maintain absolute control over 3 out of 5 board seats. The Parker rule. Whatever his flaws the company wouldn't exist without him. His investors knew who he was before they invested. They should be forced to negotiate. They should not be able to fire him. A16Z is an investor in 500px. They claim to support founders so I'm sure they will make a public statement explaining how they tried to help this guy but were outvoted.

argonaut 12y ago
It seems to me that Oleg's cofounders were involved in pushing him out, in which case the founders certainly could have had control (among themselves).
acjohnson55 12y ago
That's ridiculous. At some point, if you don't have majority share of the company, that means enough other people have taken large of stake in its success that it's no longer "yours" alone. I don't buy this idea that just because someone started a company, they deserve to be dictator for life.
- staunch 12y ago
  Founders are dictators at day one. The question is whether they should give up control to an investor run committee. Remember that most investors no ability to run a company and have a portfolio of companies to fall back on.
  - wpietri 12y ago
    I look forward to seeing your stats on that, because that's not my experience. I guess if you're a solo founder who doesn't take much money, you can try to remain some sort of generalissimo. But almost every company of substance is controlled by an investor-run committee; it's called a board. Being a dictator at day one is kinda boring: you're the admiral of a fleet that fits in your bathtub. Most interesting things take collaboration: shared ideas, shared labor, shared capital. And that generally means sharing control. Good people rarely want to work for dictators.

rahilsondhi 12y ago

Don't worry Oleg. Jobs got ousted from Apple at one point too...

bdcravens 12y ago
Everyone loves the Steve Jobs example, but remember that Apple was a few quarters away from implosion, and he founded a second company that was highly successful. They took on massive investment from a company most considered their largest enemy.
- aaronbrethorst 12y ago
  > he founded a second company that was highly successful. NeXT was a commercial failure. > They took on massive investment from a company most considered their largest enemy. $150mm wasn't a very big investment for Microsoft. Just compare their market caps at the time for a sense of the different in scale between the companies: http://www.wolframalpha.com/input/?i=apple%2C+microsoft+market+cap+on+august+7+1998 http://www.wolframalpha.com/input/?i=apple%2C+microsoft+mark... It also wasn't that much for Apple. Just five months earlier, they reported a $740mm quarterly loss, or 5x what Microsoft invested in them. The purpose of the investment was primarily to help bolster credibility in Apple as an ongoing concern. Microsoft's reason for doing this was to try and keep the DoJ at bay.
  - awad 12y ago
    > NeXT was a commercial failure. Pixar, however, was not.
    - aaronbrethorst 12y ago
      Apologies, you caught me at a crabby, pedantic moment. Who cares if Pixar was a commercial success or not? It doesn't have anything to do with the topic at hand. I'm going to dissect what I was replying to: Everyone loves the Steve Jobs example, but remember that Apple was a few quarters away from implosion, and he founded a second company that was highly successful. They took on massive investment from a company most considered their largest enemy. First: Apple was a few quarters away from implosion puts you in the frame of mind that we're not discussing Steve Jobs' post-Apple entrepreneurial experiences in general, but, instead, examples from the computer industry, which would imply that we're talking about NeXT. Furthermore, NeXT was founded in 1985. Pixar was founded in 1986. So, even if you set aside what I wrote above, and just take an entirely literal view of the following: he founded a second company that was highly successful You still have to come to the conclusion that the GP was discussing NeXT, not Pixar.

rdl 12y ago

No matter how justified this decision was, this has to be rough for him. I wonder if it's harder in a smaller startup scene (Toronto) than it would be in a place like Silicon Valley. (I love 500px; hopefully this will lead to a more successful company in the long run.)

HorizonXP 12y ago

I remember meeting Andy on a plane to SFO. I've run into him before at Extreme Startups. He was on his way to a board meeting at A16Z, and I was on my way to leave Instagram. They needed an Android lead. After a few meetings, I ultimately decided to pursue my own startup. I think one of those meetings was with Oleg over the phone. Intelligent guy from what I gathered. I'm sure he'll bounce back, though I'm not sure it's very wise to be so public about this so quickly, when emotions are raw and high. 500px is definitely one of the better known startups here in Toronto. They have a great product, they just need to settle on a product direction and execute. The comments about employee churn aren't surprising to me. And the unfortunate part about startups is that failure is typically the result of internal turmoil, so here's hoping they iron it all out quickly.

will_lam 12y ago
What's the startup that you'll be working on?

derwiki 12y ago

If he still has equity in the company, isn't he only hurting himself by interviews and keeping this in the media cycle?

coldcode 12y ago

I'm sure he wasn't tossed out to the unemployment line. Startup founders don't always make good company CEO's. Steve Jobs sucked the first time around too in many ways; it took 10 years more time for him to learn how to lead and was a different person the second time around. Even he is an exception, not all people learn from their mistakes or even get a second chance. But startup founders are always able to start another company these days even if they got removed from the previous one.