Entrepreneurs

Uber's Travis Kalanick isn't the only one—why Steve Jobs, Jack Dorsey and others were ousted from the companies they founded

Steve Jobs
Getty Images | Justin Sullivan
Steve Jobs

Travis Kalanick and his friend Garrett Camp first had the idea for what would become Uber on a cold night in Paris in late 2008. They started working on a prototype in March 2009, and Kalanick would go on to be the company's CEO through one of the most fabled Silicon Valley start-up stories of all time. Uber has raised almost $9 billion from investors at values that ran up almost as high as $70 billion, though the current value of the company is down closer to $50 billion. The technology transportation company operates in more than 600 cities around the world.

But Uber now has big problems. It has become the poster child of "bro-culture" run amok. And late Tuesday night, Kalanick resigned, reportedly forced out of the company he founded amid claims of sexual harassment and a generally toxic work environment.

Travis Kalanick.
David Orrell | CNBC
Travis Kalanick.

As an ousted entrepreneur, Kalanick is not alone. Founders bring a passion that is unmatched, and there is some evidence that founder-run companies are more successful than their counterparts run by professional management teams. But they can also be bad managers, ill-equipped to manage the burgeoning needs of large companies.

Here are five start-up founders that have been fired by their boards and investment teams.

Steve Jobs, Apple

The revered Silicon Valley icon was, famously, fired in 1985 from Apple, the company he and inventor Steve Wozniak co-founded in a garage. As Apple grew, they hired John Sculley to help run the company, and at first, things went well. But then "our visions of the future began to diverge" according to Jobs.

Apple's board of directors sided with Sculley. "So at 30, I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating," Jobs said in his 2005 commencement address at Stanford.

"I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me." -Steve Jobs, co-founder of Apple

Jobs didn't know what to do for a few months. "I felt that I had let the previous generation of entrepreneurs down — that I had dropped the baton as it was being passed to me. ... I was a very public failure, and I even thought about running away from the valley.

"But something slowly began to dawn on me," explained Jobs. "I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over."

Jobs went on to launch NeXT and Pixar. Apple bought NeXT and then Jobs returned to run Apple in 1997.

"I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life," Jobs said.

"I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick."

Henry Dombey | Vox Media

Jack Dorsey, Twitter

In October 2008, Jack Dorsey's Twitter co-founder, Ev Williams, fired him from the CEO role. That was two and a half years after Dorsey sent the first tweet on March 21, 2006, and a year and a half after Twitter formally incorporated on April 19, 2007. The micro-blogging social media company was growing faster than anyone had expected and the company servers were crashing every day, says Williams in a 2011 Vanity Fair article.

"I let myself be in a weird position because it always felt like Ev's company. He funded it. He was the chairman. And I was this new guy who was a programmer, who had a good idea. I would not be strong in my convictions, basically, because he was the older, wiser one," says Dorsey in the same Vanity Fair feature.

It was a blow, he says. "It was like being punched in the stomach."

But Dorsey didn't let being fired slow him down. In 2009, he went on to found Square, a mobile payments platform, which, in the most recent financial quarter processed $13.6 billion in payments. In 2015, he was brought back on as the chief executive of Twitter to succeed then CEO Dick Costello. Twitter had stopped acquiring new users and the stock had been lagging for a year and a half. He's now running both Twitter and Square.

"I want people to wake up every day and the first thing they check is Twitter in order to see what's happening in the world," Dorsey says in a 2016 Vanity Fair feature. "It's a metaphor for checking the weather. Twitter has a similar potential."

Parker Conrad of Zenefits.
Source: Zenefits
Parker Conrad of Zenefits.

Parker Conrad, Zenefits

Founded in 2013, after just two years, the cloud-based human resources service company Zenefits had raised hundreds of millions of dollars in venture capital funding at a valuation of $4 billion. But with its explosive growth came issues.

In the San Francisco-based start-up's aggressive efforts to expand, Zenefits reportedly created a software allowing brokers cheat on the licensing process and was under investigation by regulators in California and Washington state for not complying with regulation.

Additionally, the culture at the company had allegedly turned into a "Wolf of Wall Street"-esque free-for-all. A 2016 Wall Street Journal article revealed an email from Emily Agin, Zenefit's director of real estate and workplace services, that chastised, among other things, "Do not use the stairwells to smoke, drink, eat, or have sex."

Faced with an out-of-control company culture and legal woes, the board of directors pushed out founder and CEO Parker Conrad in February 2016.

Now, Conrad has started a new business, Rippling, which received $7 million in funding earlier this year, according to Crunchbase. The Zenefits experience taught Parker what to do differently. He appears to be taking a "more calculated approach after the mayhem of Zenefits," says TechCrunch.

"It's understanding the sort of complexities of growing a business and what's around the corner as you grow and the challenges that emerge," Conrad tells TechCrunch.

Andrew Mason, former CEO of Groupon Inc.
Getty Images
Andrew Mason, former CEO of Groupon Inc.

Andrew Mason, Groupon

In February 2013, Andrew Mason was pushed out of the daily deals site that he founded, Groupon because the company was missing financial goals.

Mason wrote a heartfelt letter to employees when he left.

"After four and a half intense and wonderful years as CEO of Groupon, I've decided that I'd like to spend more time with my family. Just kidding — I was fired today," Mason says in the note.

He took responsibility for poor financials and a crashing stock price, among other problems, saying, "As CEO, I am accountable. ... Groupon and you deserve the outside world to give you a second chance. I'm getting in the way of that. A fresh CEO earns you that chance."

For Mason, it was an exercise in resilience, which, according to New York Times best-selling author Adam Grant is the most critical trait for being successful.

"I'm OK with having failed at this part of the journey," says Mason. "I'll now take some time to decompress ... and then maybe I'll figure out how to channel this experience into something productive."

That July, Mason released a seven-track music album, "Hardly Workin.'"

Jerry Yang, Yahoo

Jerry Yang and David Filo launched a directory for the internet from Stanford in 1994, "Jerry and David's guide to the World Wide Web." By 1995, they had changed the platform's name to "Yahoo!" The Internet search engine's stock surged in the dot-com bubble and plummeted in the bust. It tried, and failed, to develop a search technology to compete with Google and by 2008 was struggling, laying off large numbers of employees.

At that time, even as the company was struggling to find its footing, Yang, then CEO, turned down a $45 billion buyout offer from Microsoft. Yang believed the bid undervalued Yahoo.

Jerry Yang in 1996. Photo by Frederic REGLAIN.

Largely criticized for rejecting the offer and amid shareholder skepticism about his leadership, Yang was pressured to step down as CEO and took on a more visionary role. "I think they had an opportunity to get something done in the palm of their hand, and they bungled it," said Eric Jackson, a significant shareholder, to the New York Times in 2008. In 2012, Yang completely removed himself from the company.

Yang has moved on. He sits on the board of Alibaba, which in 2014 raised $25 billion in the biggest IPO in U.S. history. He also now has his own venture capital firm, AME Cloud Ventures, of which Yang says in a 2014 Forbes article: "I feel like this is a place to look forward and not look back too much."

See also:

Uber's CEO is out: Here's everything that went wrong with Uber this year

Uber CEO Travis Kalanick is quitting. His successor will face big challenges.

Elon Musk's 3 best pieces of advice for how to be a great leader

Correction: This article has been updated to reflect the correct time references for Jack Dorsey's career at Twitter.