
How to Avoid Being Pushed Out of the Company You Founded - alexkehayias
http://www.betabeat.com/2012/03/14/defoundering-naveen-selvadurai-foursquare/?show=all
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lusr
I'm not sure I get this. Maybe I'll be fortunate enough one day to experience
it first hand, but I'm perfectly happy to be the Paul Allen or Steve Wozniak.
I remember reading iWoz and constantly got the impression that Woz was
complaining about how he wasn't recognized for things that - in the big
picture - are really not that important. Surely there are more important
things in life to enjoy than worrying about the "unfairness" of stuff like
this, particularly when you've become financially set for life? All I want to
do is make enough money to comfortably explore the things I'm passionate about
without being side-tracked by working on non-interesting things for survival,
and get proper medical treatment in case I'm hit by a bus, and for taking care
of my needs during my old age.

~~~
ChuckMcM
I'm friends with a guy who was 'bought out' of his startup for north of $8M
and he said something I found interesting.

"Chuck its not about the money, until there is a lot of money and you're not
getting it. I mean when its all hypothetical you can be generous, but when its
not hypothetical, and the piece being offered is not what you had informally
agreed upon, you tend to stop seeing what you're getting and instead focus on
what you are not getting. That can be toxic."

I think its just basic human nature.

~~~
lusr
True, I don't doubt it is. I suppose all I'm saying is that I hope that if it
ever happens to me I'll get over it quickly and move on happily with my $8M ;)
I've learned a lot from Burns' "Feeling Good" and the nature of anger and
pointlessness of worrying about unfairness in the world, and this just seems
like another instance of something you can't control, probably can't influence
(because you only recognize what's going on when it's too late), and
consequently something you just need to accept. (I'm not saying don't
anticipate it and try your best not to get screwed over, but _if_ it happens,
relax.)

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ValG
A little bit of a link bait if you ask me; just chronicles some of the more
famous founder/company fall outs with a focus on Foursquare. This is something
every founder has nightmares about, especially once the company makes it. Not
something you can really plan for...

~~~
jonnathanson
_"Not something you can really plan for..."_

Respectfully, I disagree to some extent on this point. It's always a good idea
never to attack others. And ideally, you hope you'll never come under attack
yourself. But if you do, you don't want it to take you by surprise.

Consider this quote from the article:

 _"'I think it’s easy for people to jump to the side of the founder against
the big bad investor,' Mr. Blumberg said. 'But we’re all grownups and you sign
the papers you sign.'"_

This may come across as cold-blooded, but let's be honest, there's a grain of
truth to it. Startups are every bit as political as BigCo, and in some cases,
even moreso. Whenever we see these stories -- and maybe it's just the popular
mythological portrayal of them -- we see them as heartbreaking tales of
betrayal and shattered friendships. But perhaps they're better described as
tales of political savvy vs. naivete -- of ruthlessness vs. innocence. The
business world often rewards the former, and rarely graces the latter. Nice
guys usually finish last.

It may be sad. It may not be right. It may not be the way we want things to
be. And maybe there _is_ a "better way" to be discovered. But, no matter the
case, people can't afford to place unconditional trust in each other. When big
money and influential outsiders enter into an equation, people's incentives
change dramatically. Eyes should be kept open to that fact. Even if we don't
assume people will, by necessity, turn on us at some point, we shouldn't rule
it out. It's not that people are assholes; it's that the upper echelons of
business are cutthroat, and people usually respond according to their economic
incentives. As the co-founder of a small, early-stage company, you don't need
to concern yourself with these things. But the second you've got a VP stripe,
or especially the letter "C-" in your acronym, you've got a target on your
back. You need to be mindful of it.

This doesn't excuse the nature of the game, but it _does_ offer fair warning
to any who'd play it. Keep stock of everyone else's hand. Know what cards
they've got. Know how they may, or may not, be able to play them. Know what
they stand to gain or lose by doing so, and the magnitude of that gain or
loss.

There's no great excuse for being a dick, but there's equally litttle excuse
for being a Polyanna. I would never advocate that we all actively _seek_ to
screw each other over. Rather, I'd suggest we keep our guard up -- especially
around times of big organizational shift (new funding rounds, board changes,
big new hires, etc.).

~~~
einhverfr
I am always a fan of the idea that in business, work with people you
completely trust, and set things up as if you don't trust them at all. Part of
it is that this way you avoid letting all sorts of things from honest data
entry errors to actual dirty tricks. Anything that is important should be
cross-checked.

~~~
jonnathanson
Really like that first line. I think it's very true. You should try to pick
people you can trust, but design systems to reduce the incentive for breach of
trust. You won't always eliminate the risk of the latter, but assuming the
risk will never materialize -- and thus, doesn't need to be accounted for --
is a dicey proposition.

~~~
ValG
The challenge really is setting these things up from an early stage. I don't
think as a founder at a company that has not yet been funded you have the
luxury (time, brain power, etc.) of thinking about these things, you're so
busy trying to get the company off the ground that everything else is
secondary. Even more so once you get funded, because all of a sudden it's not
just you pushing yourself, it's a group of investors that are all of a sudden
breathing down your neck (not to say all are like that or that it's a bad
thing...) Especially if it's the first company you've founded and you're
stumbling along, the learning curve is exponential...

~~~
jonnathanson
_"I don't think as a founder at a company that has not yet been funded you
have the luxury (time, brain power, etc.) of thinking about these things"_

Agreed, albeit to an extent. It's one of those things that _must_ be taken
into consideration, because the magnitude of the downside is so potentially
massive. But to a large extent, 100% agree with you, it's not something you
have the luxury to ruminate on for any appreciable length of time.

Ergo, I'd suggest that the time to do the rumination is whenever a big org
shift or financial event is on the horizon (major funding round, new board
appointments, major new hires -- especially if there's any overlap with your
own responsibilities -- etc.). Each major shift of this nature deals some new
cards, and it changes everyone's hand in the game. It's helpful, if nothing
else, to take stock of how things will change for everyone _before_ the change
takes place.

[Of course, I'm not suggesting that founders become _preoccupied_ with this
sort of thinking. That's a recipe for paranoia and a poisonous political
climate, and it may end up creating a self-fulfilling prophecy. Rather, all
I'm suggesting is that _some_ nontrivial degree of thought be taken.]

Come to think of it, there was a great article on HN about 6 months ago about
how to structure a founders' agreement. It seems especially relevant to this
conversation. Wish I could remember the title or author.

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spitfire
How to Avoid Being Pushed Out of the Company You Founded?

Own it.

------
silentscope
There are three things in life that make people act funny: drugs, women (or
men, you get the point), and money. They don't act rationally or human, and
you should be prepared.

that being said, wow.

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bootload
_"... A source close to Selvadurai tells us the Foursquare cofounder has
seemed ‘frustrated’ and ‘lost,’” reported the blog Business Insider; Mr.
Selvadurai was “forced out,” according to a followup story. 'Dennis and he
don’t hate each other—things just changed, ..."_

Remember govWorks.com?... One company, one boss.

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maeon3
Elon Musk had to deal with and survived a hostile power play to get him
removed from Tesla after he founded and funded the company. Martin Eberhard
filed suit against Tesla and Musk for slander, libel and breach of contract.
Eberhard failed in his power play to be named one of the remaining two
founders of Tesla.

<http://en.wikipedia.org/wiki/Elon_Musk#Controversies>

To succeed after you have succeeded in business you have to be a Jedi master
of strategic, tactical, and operational civil legal warfare. Extremely
intelligent and opportunistic people will help you achieve your goals, then
stick a daggar in your back, take all of your money, leave you with nothing,
laugh at you, then rewrite history with you as the villan.

~~~
SeanLuke
I think this is a completely inverted misinterpretation of Tesla's recent
history.

1\. For better or for worse, Martin Eberhard was ousted by Elon Musk and the
Tesla board in a power play, not the other way around.

2\. The slander suit was long afterwards and has little to do with power plays
at all.

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wilfra
Did I miss the part of the article that tells us how to avoid being pushed
out? I'd really like to know the answer to that.

~~~
ohashi
I think the point it tried to make was you can't.

