
Rocket Internet faces new setback with loss of senior managers - mccricardo
http://www.reuters.com/article/us-rocket-internet-management-idUSKCN0UQ0QY20160112
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bertil
I think a lot of the recent events around Rocket Internet need to consider the
very unique position of the company: they are both a Venture fund, and a very
closely involved corporate holding. They provide technical support (including
development, hosting and dev ops) and marketing assistance to their
subsidiaries/investees. The CEO of their companie” have a relation to the
head-office similar to what local GMs have with the Uber HQ. This means that
financially-motivated decision can be confused with doubts over the management
direction.

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kolmogorov
There are two questions:

Will the current portfolio become profitable over time?

Are they able to continuously start successful companies?

At least for the 2nd they need excellent people in the headquarters. For the
first one churn can also be an issue. If turnover is high one explanation
could be that local management doesn't have enough long term incentives to
build sustainable companies. As a consequence they optimize short term output
to please the Samwers and jump ship to the next best offer.

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crdb
I would caution against reading too much in departures of Rocket managers.

First, Rocket managers come and go all the time. In my first two years at one
of the Asian Rocket companies (I own no Rocket stock today and am not
affiliated with anything Rocket anymore), I think I counted 4-5 CEOs. Since I
left, it's been the same CEO, though. The key thing is that the Samwer
brothers have designed their companies to be resilient to any departures;
"people should be replaceable" which sucks a bit when you are "people" but is
good corporate governance when you are a publicly traded company trusted with
billions of dollars. I'm pretty sure from what I saw that this also applied to
Berlin; and since we're shortly after the IPO (and maybe the start of the
period where executives are allowed to liquidate their equity?) it might be
that those who culturally were more comfortable in a privately owned
conglomerate are not enjoying the public version. It's also common for senior
executives to be poached for more money by smaller Rockets, CMOs are in
particularly high demand and managing directors find it relatively easier to
raise funding and start their own thing (e.g. Shopback in Singapore).

Second, there are a LOT of Rocket companies. Some are very successful, others
are case studies in problems. Just look at the map: [https://www.rocket-
internet.com/companies](https://www.rocket-internet.com/companies) and imagine
that each of these countries will have at least three companies (one fashion
retailer, one Amazon clone, and one of several of the smaller concepts like
Birchbox or FoodPanda). There are hundreds of companies operating in vastly
different countries, legal systems, business models. I'd be wary of
extrapolating too much from one or two examples - it's like picking a few YC
failures (and I am sure there are spectacular ones, just from the sheer number
of companies funded - HomeJoy is the most prominent in my head right now) and
saying YC as a whole has failed as an incubator.

Third, Rocket is relatively operationally decentralised. Yes, the Samwers
visit often, but companies are ultimately left alone to figure things out,
even if insights are occasionally emailed around, and even if Berlin has some
R&D and obviously runs the financial and legal aspect. I would doubt that
Berlin departures would significantly impact the operations of non-Berlin-
based companies (which is to say most of them).

> The stock was down another 0.2 percent on Tuesday, to 23.33 euros at 1330
> GMT, valuing the company at about 3.9 billion euros ($4.2 billion).

I've always found these short term stock price tidbits fairly useless. What is
more interesting is the long term trend (from a peak of 57 EUR down to 19 EUR)
[1] which is strangely not mentioned in the article. Nevertheless, I used to
be fairly critical of how the Samwers were running their conglomerate, but
thinking back about it, I'm not sure I would do much better. How would you go
about starting 200 companies in parallel in 40 countries? I do not know any
other examples of even remotely successful attempts...

[1]
[http://finance.yahoo.com/echarts?s=RKET.F+Interactive#{"rang...](http://finance.yahoo.com/echarts?s=RKET.F+Interactive#{"range":"max","allowChartStacking":true})

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NumberCruncher
Rocket Internet is the prime example of the pump and dumping scheme. The
pumping is over, now comes the dumping.

