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This may be your first time reading this newsletter – if so, welcome! If not, you already know it Alexey created it. And if you read last week’s issue, you also know what I take on. It makes me look like a non-founding CEO, so today’s topic is also personal – Anna.
Surrenders and turnovers
Our colleague Brian Heather wrote about it Peloton’s profit is lower than expected earlier this week. But in addition to how many bikes and subscriptions the fitness company has sold or not sold, my attention was drawn to this quote:
“Turns are hard work. It’s intellectually challenging, emotionally draining, physically exhausting and all-consuming. It’s a full-fledged sport. “
This is an excerpt from letter to shareholders wrote Barry McCarthy, CEO of Peloton since February. McCarthy’s predecessor, John Foley, resigned because the company he co-founded cut 2,800 jobs worldwide – about 20% of its staff.
Since then, McCarthy’s work has not been easy. The new CEO focused on three priorities, he said: “1. stabilizing cash flow 2. getting the right people to the right roles and 3. growing again ”. It is too early to say whether he will achieve it in the end, but Pelatan’s position is not unique.
Peloton is one of several technology-backed companies that experienced strong headwinds during the pandemic and are now facing “Market strike”. The list also has Netflix, Robin Hood and Zoom, for example.
Airbnb is a related but slightly different case. The company hopes its housing market will benefit from the “rebound of the century”. But it is also planned reinventing himselfsaid CEO Brian Cesky TechCrunch.
Unlike with Peloton, Cesky is the founding CEO who will guide Airbnb through this transition. But not every founder still has the stamina or the right combination of skills to do so after a few years at the helm. This is one of the reasons why CEOs are so often replaced, and the technical sector cannot act as if this never happens.
The cult of the CEO has several forms, and one of them dual class shares. This share structure is part of a broader myth: that the CEO should be in control forever. And of course, no one wants to lose control of their company or be fired by the board. But it is also forgotten that the founding CEOs can want to resign.
There are many reasons why the leading founders are leaving. “Former executives always leave after the acquisition,” said my employee Natasha Maskarenyas. on Twitter. (She commented on Ro, the losing medical company more employees than its fair share since the acquisition.)
Founders may also want to leave before leaving, even if the IPO appears in the cards. Sometimes for the sake of his company. Sometimes for their own. And sometimes both. This is the case with Monzo founder Tom Blomfield, who was openly about the misfortune that caused him to resignas well as full praise for his replacement.
There is no doubt about it: the transfer of a favorite project can be bitter. And the prospect of having big shoes to fill can be daunting for a new responsible person. But it’s not uncommon, so let’s stop pretending it is. Let’s just do it as best we can, right?