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Billionaire unicorn founders fall off their horse in crisis


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The young kings of Silicon Valley are getting off their unicorns. They are making sentimental blog posts that describe their legacies. They are expressing hope in their companies’ prospects. And they are leaving their jobs at the head of the startups they founded.

In recent months, Ben Silbermann, co-founder of digital ad service Pinterest, has resigned as chief executive; Joe Gebbia, co-founder of home rental company Airbnb, announced his departure from the helm; and Apoorva Mehta, founder of grocery delivery app Instacart, said he will end his career as chief executive when the company goes public later this year.

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In addition to them, founders at the head of Twitter, Peloton, Medium and MicroStrategy, resigned this year.

The resignations signify the end of an era at these companies, among the most valuable and well-known to have emerged in Silicon Valley in the last decade, and the era they represent. In recent years, investors have poured increasing amounts of money into a group of highly valued startups known as “unicorns” worth $1 billion or more, and their founders have been treated like heroes. visionaries.

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These founders fought for special property rights that kept them in control of the companies — a change from the past, when entrepreneurs were often replaced by more experienced executives, or pressured to sell.

When the stock market plummeted this year, however, hitting tech companies that were losing money especially, that approach began to change. Venture capitalists pulled back on their businesses and urged young, award-winning Silicon Valley companies to cut costs and proceed with caution. The industry has started talking about “wartime CEOs” who can do more with less, while bragging about lessons learned from previous crises.

Patience with visionaries has run out. Founder-led businesses began to look like passive rather than active.

Wil Schroter, founder of Startups.com, an accelerator program for young companies.

Pinterest shares are down 60% from the previous year. Elliott Management, an activist shareholder known for pushing companies to make big changes, recently took a stake in the company.

Airbnb shares are down 25% from last year. And Instacart slashed its internal valuation by nearly 40% in March as it prepares to go public in a hostile market.

Running a publicly traded startup isn’t that exciting

“It’s certainly less fun to be a CEO when markets are down, the economy tends to be negative and regulation is on the rise,” said Kevin Werbach, a professor of business at the Wharton School of the University of Pennsylvania.

“If you’re already as rich, famous and successful as these guys, there usually comes a point where staying in the saddle is less interesting than riding into the sunset.”

In startup legends, Mark Zuckerberg pioneered the modern kid boss. Carrying business cards that read “I’m CEO, bitch” and ruffling Wall Street’s feathers with his “disrespectful” hoodie, he demanded that investors let him retain controlling interest in Facebook as it grew, ushering in the current era of business. “friendly with the founders”.

Ambitious young men like Zuckerberg were given similar protections and freedom as venture capitalists scrambled to appear as friendly as possible, pampering entrepreneurs with perks (dinners, jets, celebrities) and services (recruiting, PR, design).

One firm even publicly promised never to vote against a founder on company matters.
“It inspired our entire generation to believe in the impossible, that they could start companies,” said Trace Cohen, 34, an investor in very young startups.

Parties and spending brought down founders who took prestige too far

The founders took advantage of its dominance. They remained in the highest positions even as companies surpassed their skills as directors. And they kept their companies private for as long as possible, avoiding annoying realities of business like turning a profit.

They were given the benefit of the doubt – something female founders rarely got.
As the tech sector has become a dominant force in our economy, the cult of the startup founder has entered popular culture through celebrities like Ashton Kutcher and TV shows like HBO’s satire “Silicon Valley.”

Some founders of this era took their latitude too far. Adam Neumann’s spending and partying forced him out of WeWork in 2018, even though he held a majority stake in the company. And Travis Kalanick’s aggressive tactics at Uber resulted in his firing in 2017, despite his supervoting actions.

The rest has mainly been maintained through the companies’ initial public offerings. Now, as problems mount amid the market collapse, they are giving up the power and control they fought for.

In his announcement, Silbermann said that running Pinterest was “the gift of a lifetime.” Gebbia, who will become an Airbnb advisor, posted effusive reminiscences of the company’s early days, alongside photos, nicknames of its co-founders (Brian “Jet Fuel” Chesky and “Indiana Nate” Blecharczyk) and lessons in the kindness of humanity. . Mehta tweeted that he “cares deeply” about Instacart — the “only thing I’ve thought about every waking minute of the past decade.”

Coming out as billionaires, they emanated the relentless positivity of Silicon Valley. Pinterest “is just getting started,” Airbnb “is in the best hands it’s ever been in,” and Instacart has a “huge opportunity ahead of it,” the founders wrote. Both Mehta and Gebbia said they had plans for new projects.

Translated by Luiz Roberto M. Gonçalves

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