Posted: 2:14 p.m. Monday, July 1, 2013
By Jana Kasperkevic
George Zimmer wasn't the first founder to get axed by the company he'd built. Here are seven other founders who suffered the same fate.
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.
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.
Maker Studios' co-founder and recent CEO Daniel Zappin alleges the company breached 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.
Despite being fired, Andrew Mason still took the high road. Mason broke the news in a farewell letter to 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'.
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 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'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.
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.