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You may be reading this newsletter for the first time – if so, welcome! If not, then you already know that Alex created it. And if you read last week’s release, you also know what I’m taking on. This makes me somewhat of a non-founder CEO, so today’s topic is also personal – Anna.
Gears and turnovers
Our colleague Brian Heater wrote about Peloton profits below expectations earlier this week. But aside from how many bikes and memberships the fitness company sold or didn’t sell, this quote caught my attention:
“Turns are hard work. It is intellectually challenging, emotionally draining, physically tiring, and overwhelming. It’s a full contact sport.”
This is an excerpt from letter to shareholders written by Barry McCarthy, CEO of Peloton from February. McCarthy’s predecessor, John Foley, stepped down as the company he co-founded cut 2,800 jobs worldwide – about 20% of its total workforce.
McCarthy’s job since then has not been easy. According to him, the new CEO focused on three priorities: “1. stabilize cash flow 2. find the right people in the right positions and 3. grow back.” It’s too early to tell if he will succeed, but Peloton’s position is not unique.
Peloton is one of several high-tech companies that experienced strong tailwinds during the pandemic and are now facing “market whip”. The list also includes Netflix, Robin the Hood and Zoom, for example.
Airbnb is a similar but slightly different case. The company hopes its accommodation market will benefit from the “journey of the century.” But also planning reinvent yourselfThis was announced to TechCrunch by CEO Brian Chesky.
Unlike the Peloton case, Chesky is the founding CEO who will lead Airbnb during this transition. But not every founder still has the stamina or the right combination of skills to make it after a few years at the helm. This is one of the reasons why CEOs change so often and the tech sector can’t act like it never happens.
The cult of the CEO takes several forms, and one of them is dual-class shares. This share structure is part of a larger myth that a founding CEO should always be in control. And, of course, no one wants to lose control of their company or be fired by the board of directors. But it also forgets that founding leaders can I want to retire.
There are many reasons leading founders leave. “Former executives are constantly fired after an acquisition,” said my colleague Natasha Mascarenhas. on Twitter. (She was commenting on Ro’s health company, which lost more employees than its fair share since acquisition.)
The founders may also want to leave before the exit, even if an IPO is slated. Sometimes for your company. Sometimes for their own. And sometimes both. This is the case of Monzo founder Tom Blomfield, who open about the misfortune that forced him to retireand also full of praise for his replacement.
There’s no doubt about it: handing over a favorite project can be bittersweet. And the prospect of having big shoes to fill can be intimidating for the new person in charge. But it’s not uncommon, so let’s stop pretending it is. Let’s just do our best, shall we?
Credit: techcrunch.com /