The euphoria of a new VC financing round (“WE GOT FUNDED”) is only outdone by the equally stupid glee of “We Got A New CEO!”
This exuberance is from the same children who think they work at “startups” which are often 10-year-old, multi-VC round “endups” on their last legs.
The difference between a startup and an endup is a future.
A startup has a future. An endup has had multiple CEOs, at least 4 Sales VPs, at least 2 VPs of Marketing, 3 or more financing rounds and the most recent VCs are ones your parents never heard of; thus not Kleiner Perkins.
Why does the CEO get fired?
Rather, why is the CEO told by the board they love him or her so much they want them to spend more time with their family? They are giving them a 6-month severance package to do just that. Enjoy your time at home. Even if you do not have a family.
By the way, former CEO, that Vice President of People and Culture who sucked up to you when you were hiring her is now giving you your exit package. She was working with the board behind your back the last 7 weeks helping in the new CEO search. How does that smarmy “culture” stuff feel now, pal?
There is a big lesson here. The lesson is that these companies mislead hapless employees, by any means necessary, to get them to work their hardest to make already rich venture capital types a bit richer.
The CEO spent the last few years selling employees this culture stuff. Now it is his, or her turn to see what the corporate culture is really worth.
There was the weekly company meeting with the free lunch and logo wear. There was the January trip for most of the company to a golfy kind of place. The more screwed the cap chart (how much the VCs screwed the employees out of stock options) the more you saw HR types with anniversaries of every nonsensical date. HR made sure you saw dogs running around the place and certainly you saw balloons on LinkedIn. Usually dogs with floppy ears.
Continually struggling for revenue, you saw “most admired company” “number 56 on the XYZ Magazine 500” types of awards which are pretty much bought through marketing placements.
What nobody saw was the relentless, ongoing, decrease of the value of the stock options. Some people did the arithmetic. They understood stock options can be 40% or more of their 5-year comp package.
They saw the dilution and bailed. They had a place to go as they had high skills.
Many others were in marketing, cold calling, legal/contracts, HR and they had to just eat the dilution because if they were in demand anywhere else they would be there.
Good sales talent and top tech reps left. Some left during major financings knowing that getting more dough into the company, which never made a profit, only meant more stock for the CEO but not for them.
With a new CEO, like with a new financing, the BS begins anew.
The soulless HR types will be sucking up day one with toothy grins, big smiles, probably balloons and posting all over LinkedIn that a new day is here. You will see all the stories about the virtually anonymous new CEO guy or lady and what a great job they did at an equally nameless company.
These are the same lackeys who said the same thing about the poor guy who just got shot.
Why do CEOs get fired?
Well in tech companies of little note, they get fired because they fired the last 2 or 3 Sales VPs and that did not do the trick. There are still tough quarters. There is still major talent erosion. There is the clear understanding the company will not get to an IPO. Every deal is a struggle.
The current transaction Sales VP failed to deliver fantastic results along with that tough-guy talk. You can bet he will be moving on to the next Chef, Puppet, Digital.ai or other living dead entity.
When you run out of Sales VPs to fire, the board fires the CEO.
The new CEO wants to make sure there is zero panic in the organization. He or she will take lots of time in BS meetings talking about how impressed they were with the culture, the direction, the product and the management team.
The new CEO will make it sound like they looked at 5 great opportunities but chose YOU.
You can be sure, they were begging for this gig, no matter how much they knew it sucked. 3 or 4 CEOs before them could not get this place going and they know deep inside they probably won’t either.
But maybe, just maybe, someone will buy the place. That is the loser CEO’s prayer. It certainly was for the last guy.
As long as they get close to getting the VCs out even, (screw the employee options), they can be a hero and off to a better gig.
You can be assured this play is all hokum. Every new CEO does it. It is CEO-BS-DNA.
If you want to have a bit of fun, push aside the balloons and tell the new CEO you appreciate his or her empathy and kind words.
Since they want to invest in you, the dear employee, you would like to know the fully diluted value of an employee stock option after this last no-name VC financing.
Bet you don’t get an answer.
They are into the culture of your organization, just not that much.
There is no such thing as a third or fourth CEO making employees rich. So either get a real job or shut up, post nonsense on LinkedIn, get in the balloon pics with the HR types and dig being used.