Entrepreneurs, and those at the helm of successful and expanding companies, more often than not have big personalities. This trait is a key component in beating away the competition and convincing customers their product is superior, but can sometimes upset the very ecosystem it is there to serve.
(1) Eduardo Saverin vs. Mark Zuckerberg
We start with a pretty famous one that all dates back to a dorm room at Harvard University. As a poor undergraduate, Zuckerberg did not have the funds necessary to acquire the kind of technology infrastructure to take Facebook from being a university-based platform to one covering more ground.
And so it was that he turned to his wealthier friend, Eduardo Saverin, who made a reported $300,000 through “strategic investments” in the oil industry while at Hardward. Saverin stumped up the $15,000-$20,000 needed for servers and became one of the co-founders in the business.
As the company developed, Saverin became responsible for the business and financial side of things while Zuckerberg was product-focused. The result of this was that they were on different sides of the US and experienced a epic founder fall-out.
The introduction of Sean Parker, founder of Napster, seems to have been the catalyst. When Saverin took the decision to freeze the Facebook bank account, it started a chain of events which saw Saverin’s shares in the business diluted though a complex new company creation and distribution of stock.
The upshot saw Saverin ejected from the company with little more than 0.03 per cent to his name. Eventually, and probably backed up by the family money that had allowed him to buy into Facebook at the start, Saverin managed to sue Facebook for “breach of fiduciary duty” and reacquire a four or five per cent share that is now worth billions.
This is probably an example of a catastrophic disagreement that probably ended with each getting what they wanted – Zuckerberg control and Saverin justice and money.
(2) Khalid Shaikh vs. YouSendIt
While Saverin took his former company to court, and won, Shaikh decided the best act of retribution after feeling slighted was to launch a cyber attack.
Rewinding a bit, Yousendit was founded by Ranjith Kumaran alongside Shaikh – who was responsible for writing the original code, building the first servers and ultimately becoming its maiden president.
YouSendIt is an online file-sharing service which was subsequently renamed Hightail in 2013, perhaps attempting to move on from the drama that came about with this founder argument.
After the company acquired customers at a rate of knots in the early days, extra funding became necessary to buy more servers and increase capacity. It soon became clear that Sheikh was only of value when it came to all this technical, and had little ability to converse with investors or partners.
After a $5m Series A deal was closed, and an external CEO recruited, decision began to be made which put pressure on the technological infrastructure and the man (Shaikh) who was at the helm of it.
Then, in an effort to impress a new CEO, Shaikh became aggressive towards colleagues when outages occurred, racked up spending on his corporate credit card at conferences and ultimately began auctioning off hardware to raise funds.
Having been booted out of the company, and spent a few years trying and failing to set up other businesses, Shaikh decided to “test” the server strength of the company he had helped built by flooding it with traffic. In total, he brought it down for four and half hours, but attracted the attention of the FBI and was eventually prosecuted.
Visit page two to find out how power struggles have straddled the sports, motor vehicle and cosmetics industries.
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