7 Founders That Got Kicked Out By Their Own Company

7 Founders That Got Kicked Out By Their Own Company

INC STAFFINC. JUL. 9, 2013, 6:25 PM 12,431

Men’s Wearhouse made headlines recently when it decided to can its TV spokesman and founder George Zimmer. This type of thing happens all the time, says Noam Wasserman, a professor at Harvard Business School. Sometimes their passion detracts from their management skills and they aren’t suited to run the companies their start-ups grow into. Here are seven more founders who learned the hard way.

Martin Eberhard, Tesla

Tesla Motors might be synonymous with the name Elon Musk, but the company has two founders. In 2007, Tesla fired Martin Eberhard from his post as president, but apparently signing a”non-disparagement agreement” didn’t stop him from sounding off on the company. In 2009, Eberhard sued Musk for libel and breach of contract, as well as taking credit for developing Tesla’s Roadster. The suit also claimed Tesla had withheld his severance pay as a consequence of violating the non-disparagement clause.Danny Zappin, Maker Studios

Maker Studios’ co-founder and recent CEO Daniel Zappin alleges the companybreached his contract by pushing him out.

According to Variety, which first broke the story, the lawsuit says “Maker Studios and other defendants ‘conspired and agreed to use their power to line their pockets with Maker’s assets, to deny Mr. Zappin, Maker’s then chief executive officer (‘CEO’), of all of his powers, and to gut the rights of common stock shareholders to control Maker and its corporate activities.'”

Last December, Time Warner took a stake in Maker Studios, leading a $36 million investment.

Andrew Mason, Groupon

Despite being fired, Andrew Mason still took the high road.

Mason broke the news in a farewell letterto Groupon employees, in which he took responsibility for the company’s failings, including its disappointing earnings since going public in 2011.

“As CEO, I am accountable,” he wrote. “You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that.”

On July 2, Mason will release a seven-track record of “motivational business music” called Hardly Workin’.

Jack Dorsey, Twitter

The circumstances behind Jack Dorsey’s departure as Twitter’s first CEO remain unclear, though Chris Sacca, an early investor in the company, said they weren’t fair.

Regardless, Dorsey remains the company’s chairman and has moved on to other ventures, including the well-received payment start-up, Square.

Things may have worked out for the best, as Dorsey once told Inc., “There’s a lot of emphasis on the initial moments of a company, but that ignores the reality that companies exist and evolve over time. A company has multiple founding moments.”

Steve Jobs, Apple

Steve Jobs founded Apple Computers with Steve Wozniak in 1976, when he was just 21-years-old.

In 1985, he was fired by the company’s board and then-CEO John Sculley, whom he’d personally recruited from PepsiCo.

The episode dealt a heavy blow, but Jobs moved on. He began a new hardware and software company called NeXT, Inc., then purchased an animation company from George Lucas that became Pixar Animation Studios.

In 1997, the year Apple purchased NeXT, Inc. for $429 million, Jobs returned to his post as Apple’s CEO.

Jeffrey Hollender, Seventh Generation

“Jeffrey’s firing is certainly a cautionary tale for me, and a reminder that there are no guarantees in business, even for founders,” Seth Goldman, president and TeaEO of Honest Tea, wrote in Inc. after Jeffrey Hollender was fired from Seventh Generation.

Hollender launched the company in 1988 and helped build it into a $150 million empire. He left his post as CEO post in 2009 to become a chairperson. But in October 2010, he was finally let go.

Rob Kalin, Etsy

Getting fired once is bad enough, but Rob Kalin had to experience it twice.

Kalin founded the online crafts marketplace in 2005 with Chris Maguire, Haim Schoppik, and Jared Tarbell. In July 2008, Kalin was replaced as CEO by Maria Thomas, an executive from NPR. Less than a year after her departure, he returned to his previous post.

But in July 2011, Kalin was replaced again, this time by the company’s CTO, Chad Dickerson.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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