The meeting management tactics in this post are highly applicable in other situations as well, whenever you are presenting to a group of approvers/overseers. For me, that's launch reviews or program reviews. It takes a lot of time, but a smooth review pays it back many times over.
Boards are dangerous to founder/CEOs
151–160 of 339 posts
Re: Boards are dangerous to founder/CEOs
#152It felt like reading a tutorial for handling vassals in crusader kings.
Re: Boards are dangerous to founder/CEOs
#153“ They will each feel like your special confidant. They will also see the other board members reacting calmly to the news and start to think that perhaps you actually have it under control. This will calm them down in the future.” This seems like obviously good advice. But also begins bordering on what feels like manipulation. And that makes me uncomfortable. In fact, this whole thing feels like manipulation. If noth…
From the article:
"All this may sound cynical or manipulative. It probably also sounds like a lot of work. It is all of these."
It's literally the point of the article.
Re: Boards are dangerous to founder/CEOs
#154Reading things like this and how common it is for investors to take over, I just wonder how it is possible that a young - and presumably naive - Mark Zuckerberg avoided the typical VC pitfalls and board guillotine / "CEO replaces themselves to help transition company to the next level" path? Was it just because Facebook's growth was so unprecedented they had no need to replace him? Or did he have a very good mentor o…
If the company makes money, there is very little reason to fire the CEO. In fact pretty much the opposite, there are probably CEOs that would deserve to be fired for multiple reasons, but because the company makes good money, the board won't care. The board is responsible towards the owners, if they actually fire a CEO of a performant company, they really have to show why it was in the best interest of the owner.
All these stories where the CEOs were fired are from companies that weren't profitable, needed constant funding rounds etc. In the situation where the company is just sucking money from investors the CEO gets changed easily.
Re: Boards are dangerous to founder/CEOs
#155I worked for a startup for several years, as the fifth hired software developer and got to see our CEO fired within the first eighteen months. They were not the founder, but they had hired the VP of Sales and the entire sales team who were also all let go on the same day. Luckily the core product wasn't impacted and our primary clients probably didn't care.
The company hired two more CEOs over the next three years, each of which lasted less than six months. I'm not convinced that the new CEOs ever actually did anything, although that is possibly due to the board running interference.
My two takeaways from this experience are that if you are a founder you don't want to be CEO, and CEOs are basically useless.
Re: Boards are dangerous to founder/CEOs
#156“ They will each feel like your special confidant. They will also see the other board members reacting calmly to the news and start to think that perhaps you actually have it under control. This will calm them down in the future.” This seems like obviously good advice. But also begins bordering on what feels like manipulation. And that makes me uncomfortable. In fact, this whole thing feels like manipulation. If noth…
>If nothing happens in a board meeting because it’s scripted, why do they exist?
He actually answers that later on.
>Of course, you have already told them all this on the phone, one by one, so you know how they will react. They will want to talk anyway, because part of the meeting is them performing for each other, but, again, no surprises.
Except instead of only "part of the meeting", perhaps it might even be more fitting to say "most of the meeting".
Edit: and also this "Board members show up at meetings to monitor their investment and decide if they still want you to be CEO."
Re: Boards are dangerous to founder/CEOs
#157I worked for a startup for several years, as the fifth hired software developer and got to see our CEO fired within the first eighteen months. They were not the founder, but they had hired the VP of Sales and the entire sales team who were also all let go on the same day. Luckily the core product wasn't impacted and our primary clients probably didn't care. The company hired two more CEOs over the next three years, e…
Maybe the reason these CEOs were all let go was because they were useless?
Re: Boards are dangerous to founder/CEOs
#158Earlier quoted context omitted.
Had this happen on a much smaller scale as an employee. I (foolishly) bought out some of my options when I left the company. Years later they sold it, but structured the deal such that the major investors got paid out all the proceeds, leaving zero for the common shares. Yes, I realize preferred shares and payout preferences and so forth. The really galling part is that the exec team (who had themselves acquired, not…
All the horror stories around VC money and shennanigans like this make bootstrapping look not just appealing, but required. It's an iterated game that they play a lot, and you play once, and they have no incentive to play fair. I'm glad some of them were named and shamed in this thread, though. Like, why would anyone take money from someone who has acted in bad faith many times in the past? It reeks of unaccountable…
Though in the business world it is always like that, whatever you do. Whatever kind of deal you are doing you have to be careful and attentive.
Bootstrapping is great, but it also has challenged to overcome. Many fail to do it.
Re: Boards are dangerous to founder/CEOs
#159Earlier quoted context omitted.
In theory, yes. But even that is no guarantee. Travis Kalanick had control through supervoting shares at Uber, but the investors forced him to resign and passed governance changes that made all shares equal in voting power. Even with founders having voting power, it's possible for the board or investors to exert other leverage.
How did they force him if he had control?
Here is the story
> Indeed, Kalanick had some tepid support inside the company. But his vote counting rankled even his defenders. He was also calling executives daily, asking for detailed information about the business. Even worse, he ordered the security team to dig through an employee’s email to see if that person was leaking a potentially damaging story. It all proved too much for the 16-person executive team, which signed a letter to Uber’s board—but clearly directed at Kalanick—asking them to refrain from reaching out to employees or meddling in the company’s daily affairs. Kalanick’s own handpicked executives turned against him.
> Somehow, amid the dysfunction, Uber hired Khosrowshahi, who impressed the board with a thoughtful PowerPoint presentation that included a slide that read, “There can be only one CEO at a time.” Khosrowshahi was all that Kalanick wasn’t or couldn’t be: humble, a good listener, and a diplomat. In a pointed reversal of Kalanick’s mantra, he would say: “We don’t have a PR problem; we have an ‘us’ problem—we have behaved poorly.” And when the city of London revoked Uber’s operating license in September, Khosrowshahi visited, met with taxi regulators, and published an open letter. “On behalf of everyone at Uber globally, I apologize,” he wrote. “We will appeal this decision on behalf of millions of Londoners, but we do so with the knowledge that we must also change.”
https://www.bloomberg.com/news/features/2018-01-18/the-fall-...
Re: Boards are dangerous to founder/CEOs
#160I always thought stuff like this happened to OTHER founders, but would never happen to me. But my board fired me six months after closing our series A. The advice in this article is 100% spot on. I didn't know any of this. I was totally focused on building my company. But if you raise money you can't do that anymore. 50% of your time will always be occupied with working on your next round of funding or managing your…
They don't have to value the company at $0 to fuck you over once you're gone. The current board can depreciate all of the shares by 50% and then issue themselves twice their original shares so they break even. Then do the same thing a couple of rounds later. I haven't seen $0 but I knew a few people who got diluted to a joke. It doesn't take but a factor of 2-4 dilution of your outlook to drastically change your opin…
How does one go about learning about these things. HN crowd definitely leans towards the technical side myself including.
Btw. The blog is very informative and have subscribed.