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Under the dazzling stars of Silicon Valley, a recent and remarkable incident has occurred: OpenAI, the leader in the field of artificial intelligence, shockingly ousted its founder Altman. Of course, this story later saw a reversal. The latest news shows that Altman has emerged victorious in the struggle with the OpenAI board of directors. He will return to OpenAI and restructure the board. This event seems to be a reenactment of an ancient script, as in this technological sanctuary known for its innovation and breakthroughs, the power struggle and palace intrigue never cease.

Silicon Valley, as the heart of global technological innovation, has not only nurtured revolutionary technology and disruptive thinking, but has also witnessed fierce confrontations between founders and boards of directors. These stories go beyond mere commercial conflicts, revealing the complex interweaving of ideals, power, human nature, and responsibility.

These "palace dramas" are not only part of Silicon Valley, but have also become a side note in the history of technology. From Apple's Steve Jobs to OpenAI's Altman, each struggle is not just about personal setbacks or revenge, but has influenced the development trajectory of the entire industry and even the world.

This article will delve into several of the most iconic palace dramas in Silicon Valley's history, exploring the poignant stories of these tech giants being ousted from their own companies.

Apple - Steve Jobs (1985)

In 1985, Silicon Valley witnessed a shocking palace drama: Apple's co-founder Steve Jobs, in a power struggle with then-CEO John Sculley and the board of directors, was forced to leave the company he had founded.

The conflict between Jobs and Sculley originated from fundamental differences in the future direction of Apple. Jobs, a visionary and highly creative pioneer, always insisted on his revolutionary ideas about technology and design. Meanwhile, Sculley, a traditional corporate executive from PepsiCo, focused more on the financial stability and market strategy of the company. Over time, these two radically different philosophies created a clear division within Apple.

In 1985, inside Apple's boardroom, a dramatic showdown about the company's future fate was unfolding. The focus was on Apple's star product—the Macintosh computer. Steve Jobs, the passionate founder with a vision for technology, insisted on making Macintosh the pinnacle of technology and design, even if it meant soaring costs. However, this vision clashed with CEO John Sculley's philosophy. Sculley, who had jumped from PepsiCo to Apple, prioritized the market feasibility and cost control of the product. He firmly believed that only by reducing costs and prices could Macintosh secure a place in the fiercely competitive market.

In a tense and electrifying board meeting, the differences between Jobs and Sculley reached a climax. Jobs passionately defended his vision, his eyes shining with unwavering pursuit of innovation, trying to persuade everyone present. However, Sculley's calm and rational rebuttal, along with his profound insight into market trends, gradually won the approval of the board members. The atmosphere became tense, and it seemed as if one could hear the sound of Jobs' idealistic bubble bursting in the boardroom.

Ultimately, when the board voted to support Sculley, it was not just a rejection of Jobs as an individual, but also a significant choice for the future path of Apple. Jobs was forced to leave the company he had founded, and at that moment, his heart was filled with disappointment and anger, but his eyes still sparkled with unyielding determination.

After leaving Apple, Jobs did not stop his entrepreneurial endeavors. He founded NeXT Computer, focusing on developing advanced computer systems, which later became the core of Apple's future products. At the same time, he also invested in Pixar Animation Studios, which later released popular animated films such as "Toy Story," completely transforming the animation industry. This experience not only shaped Jobs as an entrepreneur and innovator, but also laid the groundwork for his later return to Apple and the heroic feat of saving the company from bankruptcy.

In 1997, when Apple was in financial distress, Jobs was invited back to the company. He not only successfully rescued the bankrupt Apple, but also led the company into a new golden age. Jobs introduced a series of revolutionary products such as iMac, iPod, iPhone, and iPad, redefining the entire tech industry. His leadership took Apple from the periphery to the center, making it one of the world's most valuable companies.

Yahoo - Jerry Yang (2008)

In 2008, Yahoo, the former internet giant, faced a major turning point in its history. Co-founder Jerry Yang's conflicts with the board of directors became increasingly apparent, especially in the crucial event of thwarting Microsoft's acquisition attempt of Yahoo.

In 2008, Microsoft proposed to acquire Yahoo, which was not just a business transaction, but also a convergence point for the destinies of two giants of the internet era. Microsoft's proposal was seen as a way to counter the growing influence of Google. However, Yang strongly opposed this proposal. He believed that Microsoft's acquisition would seriously threaten Yahoo's identity and culture as an independent internet company.

Yang's opposition sparked great controversy within the board of directors. Some members of the board were inclined to accept Microsoft's proposal, believing it was a stable way for the company to compete in the fiercely competitive market environment. However, Yang insisted that independence was one of Yahoo's core values, and being acquired by Microsoft would weaken the company's innovation and market competitiveness. After months of debate and discussion, the differences between Yang and the board of directors grew, plunging the entire company into strategic confusion and uncertainty.

At the peak of the struggle, Yang publicly released a letter expressing his firm stance on maintaining Yahoo's independence. This letter was widely circulated and became the focus of media and public discussion. In the letter, Yang emphasized his belief that Yahoo, as an independent company, could better realize its value and innovation, reflecting Yang's emotional attachment as a company co-founder.

During the struggle, internal divisions and dissatisfaction within Yahoo began to leak out. Some executives and employees expressed concerns about the board's decisions, fearing that the acquisition might have a negative impact on the company's culture and future. This internal uncertainty and anxiety to some extent affected the company's daily operations and employee morale.

As time passed, the relationship between Yang and the board of directors became increasingly tense. Ultimately, after Microsoft withdrew its acquisition proposal, Yang left the CEO position in 2009 and completely left the company in 2012. This series of events not only ended Yang's career at Yahoo, but also marked the end of an era for Yahoo as an internet pioneer.

After leaving Yahoo in 2012, Jerry Yang did not retire from the tech industry. On the contrary, he leveraged his years of experience in the internet industry to support and guide emerging companies. Yang ventured into the field of venture capital, becoming an active investor and mentor to entrepreneurs.

Yang co-founded AME Cloud Ventures, a venture capital firm focused on data-driven enterprises. Through this platform, he invested in multiple startups, especially those with potential in cloud computing, mobile technology, and artificial intelligence. For example, he invested in Zoom.

Of course, Jerry Yang's most classic investment case occurred during his time at Yahoo. In 2005, Yahoo invested $1 billion and transferred its China business to Alibaba in exchange for about 40% of Alibaba's shares. This investment later became one of the most successful deals in the history of technology, bringing huge returns to Yahoo.

Twitter - Jack Dorsey (2008)

In 2008, Twitter co-founder Jack Dorsey faced a major challenge in his career: being forced to step down from the CEO position at the company he co-founded. This event not only had a profound impact on Dorsey personally, but also had an important influence on the future development trajectory of Twitter.

At the time, Twitter was in the early stages of rapid growth but also faced many challenges. As CEO, Dorsey had clear guidance on product innovation and vision, but encountered difficulties in company operations, team management, and revenue models. Reports indicated that Twitter's work environment was chaotic at the time, with unclear product development direction and poor internal communication. Additionally, Dorsey was also in a significant role at another company, Square, making it difficult for him to fully focus on managing Twitter.

According to insiders, the board was concerned about Dorsey's management style. They believed that Dorsey was better suited for the creative excitement of the startup phase rather than the daily management and decision-making of a mature company. In a highly anticipated board meeting, Dorsey's management abilities became the focus of discussion. Some directors believed that for the long-term development of Twitter and the interests of shareholders, a more experienced CEO was needed to take over.

In 2008, the board ultimately decided to remove Dorsey from the CEO position. This decision garnered widespread attention in the tech industry and was seen as another example of a power struggle between a founder and the board of directors in Silicon Valley. Dorsey's departure was not without controversy, as many employees were disappointed by his exit, believing that Dorsey represented Twitter's innovative spirit and company culture.

After stepping down as CEO, Dorsey did not leave the tech industry. He shifted his focus to Square, which later became a major player in the mobile payment industry.

Following Jack Dorsey's departure from the CEO position at Twitter, the social media giant entered a turbulent period.

Among Dorsey's successors, both Evan Williams and Dick Costolo briefly served as CEO, attempting to improve Twitter's market performance by introducing new product features and enhancing user experience. However, these efforts faced many challenges in increasing user growth and revenue, especially in the face of fierce competition from rivals such as Facebook and Instagram.

During these changes in leadership and strategic adjustments, Twitter faced a series of challenges, including issues with identity verification, online harassment, and the spread of false information. These problems not only affected user experience but also drew attention from the public and regulatory agencies.

In 2015, Jack Dorsey dramatically returned to Twitter, once again assuming the role of CEO, an event that garnered widespread attention in the tech industry. At the time, Twitter was at a critical turning point, with slowing user growth, lower-than-expected revenue growth, and a lack of clear direction within the company. Former CEO Dick Costolo announced his resignation, and Twitter urgently needed a leader to stabilize the situation and revitalize the company.

This return marked a shift in Twitter's strategic focus, as Dorsey began addressing the company's issues with product innovation and user growth. Under Dorsey's leadership, Twitter strengthened its focus on platform health and information quality, launching a series of feature updates aimed at improving user experience and increasing user engagement.

Uber - Travis Kalanick (2017)

In 2017, Uber co-founder Travis Kalanick was forced to resign as CEO amid a series of controversies, shaking not only Silicon Valley but also sparking widespread discussions about the culture and governance of tech companies.

Under Kalanick's leadership, Uber experienced rapid growth, but issues with company culture, legal matters, and management gradually surfaced. Firstly, the issue of company culture was particularly prominent, including allegations of gender discrimination and harassment against employees, as well as a high-pressure and fiercely competitive work environment.

In 2017, Uber faced an unprecedented crisis. It all began when former engineer Susan Fowler published an explosive blog post exposing gender discrimination and harassment within Uber. In the post, Fowler described the gender discrimination and the management's disregard for the issue that she experienced during her time at Uber. Her story quickly gained widespread attention on social media and in the news, becoming the focus of public discussion.

Fowler's post not only exposed internal issues at Uber but also sparked in-depth discussions about the working culture of the entire tech industry. The gender inequality and workplace harassment mentioned in the post severely damaged Uber's corporate image and prompted other tech companies to examine their own work environments and policies.

This event forced the Uber board to take action. Under public and media pressure, Uber initiated an internal investigation into the company's culture and committed to taking measures to improve the working environment for employees. This event became one of the key factors that led to Kalanick's eventual departure and marked the beginning of Uber's efforts to address long-standing organizational and cultural issues.

Additionally, Uber's operational model in multiple markets also sparked legal challenges, including conflicts with traditional taxi services and disputes over driver labor rights.

Also in 2017, Travis Kalanick was involved in another major public relations crisis. The incident began with the public release of a video showing Kalanick engaged in a heated argument with an Uber driver. In the video, the driver expressed dissatisfaction with Uber's price reduction strategy, believing that it severely affected drivers' income.

Kalanick's reaction in the video appeared defensive and aggressive, with sharp responses to the driver's concerns and complaints. The video quickly spread widely on the internet, leading to widespread public questioning of Kalanick's leadership abilities and Uber's corporate culture. This event not only damaged Kalanick's personal image but also intensified external criticism of Uber's corporate culture and management practices.

The public release of this video pushed the Uber board's dissatisfaction to its peak. Board members believed that as the public face of the company, Kalanick's behavior was not only unprofessional but could also have long-term negative effects on the company's brand and business. Ultimately, this event became one of the decisive factors that led to Kalanick's resignation.

In 2017, faced with increasing external pressure and internal dissatisfaction, the board ultimately demanded Kalanick's resignation. Although Kalanick initially attempted to retain his position, he eventually agreed to step down as CEO under pressure from investors. This decision marked the end of an era for Uber.

After Travis Kalanick's departure, the company hired a new CEO, Dara Khosrowshahi, who previously served as CEO of Expedia and was known for his steady leadership style and extensive management experience. Khosrowshahi's primary task was to reshape Uber's corporate culture and public image, focusing on building a more inclusive, transparent, and responsible corporate environment.

Under Khosrowshahi's leadership, Uber strengthened its legal compliance and safety standards, improved its relationships with drivers and passengers, and began actively addressing workplace issues that had been previously overlooked, such as gender discrimination and harassment. Additionally, Uber increased its investments in autonomous driving technology and other emerging technology fields to maintain its leadership position in the global ride-hailing service market.

During this period, Uber faced challenges, including navigating a strict regulatory environment, strong competitors, and pressure to become profitable. Despite this, under Khosrowshahi's leadership, the company began to demonstrate a more mature and sustainable development model, gradually moving away from the controversies and uncertainties of the Kalanick era and towards a more stable future.

Travis Kalanick did not exit the business stage after leaving Uber. Instead, he continued to demonstrate vitality in the investment and entrepreneurship field. Kalanick founded an investment fund called 10100, focusing on investments in real estate, e-commerce, and emerging markets.

Through the 10100 fund, Kalanick invested in multiple startups across various industries, ranging from food delivery to software services. For example, his investment in CloudKitchens, a company focused on providing infrastructure and software support for food delivery services, reflects his continued interest in the sharing economy model.

WeWork - Adam Neumann (2019)

In 2019, WeWork's co-founder Adam Neumann was forced to step down as CEO under the dual pressures of the company's failed IPO and scrutiny of his personal conduct.

WeWork's IPO plan was a focal point of the business world, seen as a significant milestone in the coworking space. However, as details emerged during the IPO preparation process, investors and the market raised serious questions about WeWork's business model, financial condition, and its ability to sustain profitability. WeWork's valuation plummeted rapidly, and the public became skeptical about the company's future.

During the IPO preparation process, Neumann's personal conduct and management style became the focus of controversy.

For example, Neumann was known for his extravagant lifestyle. Reports indicated that he spent $60 million to purchase a private jet and owned expensive properties around the world. This lavish lifestyle contrasted sharply with the image of WeWork as a startup, leading to questions about his personal taste and judgment.

Neumann advocated for a non-traditional work culture, including setting up bars in the office and hosting parties. While these practices were intended to create a free and innovative work atmosphere, they also raised questions about workplace professionalism and efficiency.

Additionally, reports suggested that Neumann displayed a certain level of arbitrariness in the decision-making process. For example, he made significant changes to the company's key strategies in a short period or made unusual declarations and commitments during meetings. This seemingly disorderly decision-making approach left employees and investors confused and unsettled.

As the issues continued to escalate, WeWork's board of directors and major investors began to doubt Neumann's leadership abilities. The problems that arose during the IPO process and the negative news about Neumann's personal conduct made the board feel that WeWork's future and reputation were threatened. Ultimately, under strong external pressure and the board's demands, Neumann was forced to step down as CEO.

After Neumann's departure, WeWork quickly appointed a new leadership team to stabilize the company. Sandeep Mathrani was appointed as the new CEO, having previously served as the Chief Operating Officer of T-Mobile, known for his experience in corporate restructuring and operational efficiency. Upon Mathrani's appointment, he immediately began implementing a series of restructuring measures, including layoffs, selling non-core businesses, and cutting expenses to reduce losses and improve company efficiency.

Under the new leadership, WeWork's strategic focus also shifted from rapid expansion to a greater emphasis on financial stability and sustainable growth of core businesses. The company began to thoroughly examine its business model, seeking more robust profit avenues, including increasing the efficiency of office space utilization and enhancing service quality to attract and retain customers.

Despite facing significant challenges, WeWork began to show signs of recovery after the initial turmoil. The company started to regain momentum in key markets, especially after the pandemic, as the increase in remote work and demand for flexible office space brought new attention and opportunities to WeWork's business model.

On the other hand, Adam Neumann did not exit the business stage after leaving WeWork. He used the substantial compensation he received upon leaving WeWork to start investing in multiple startups. These investments covered various industries, including technology, real estate, and biotechnology.

Reports indicated that he was particularly interested in the real estate market, especially in housing and community development. Leveraging the experience he gained during his time at WeWork, he attempted to implement innovative business models in the real estate field.

Under What Circumstances Might Founders Be Ousted by the Board?

Above are some well-known "coup" cases in Silicon Valley. Next, we will analyze from the perspective of the board's decision-making mechanism what circumstances might lead to founders being ousted by the board.

First, we need to understand the structure and decision-making mechanism of the boards in Silicon Valley.

In Silicon Valley and global tech companies, the board of directors typically consists of a diverse group of members, including company founders, CEOs, representatives of venture capitalists, independent directors, and industry experts. This composition combines different perspectives and expertise, aiming to provide comprehensive strategic guidance and effective oversight for the company.

The board of directors in Silicon Valley companies is not only responsible for formulating company strategies but also for supervising the execution of management, ensuring the company's compliance, and representing the interests of shareholders. The board plays a decisive role in key decisions such as major investments, mergers and acquisitions, and corporate governance structure adjustments.

The board's decision-making process usually operates based on a voting system, with each director having a certain voting weight based on their shareholding percentage in the company or as stipulated in the company's bylaws.

In standard situations, the voting weight of board members is usually associated with their shareholding percentage in the company. This means that directors with more shares have a greater influence in decision-making. This mechanism ensures that shareholder interests are reflected in board decisions.

However, in some tech companies, especially those led by founders of startups, special equity structure designs may be adopted, such as the "super voting rights" mechanism. Under this mechanism, the voting rights of founders and certain early investors far exceed their shareholding percentages, allowing them to maintain control of the company even with a low shareholding percentage. For example, Google and Facebook have adopted similar super voting rights structures to protect the strategic vision of the founders from external pressures.

Additionally, some company bylaws contain special protection clauses for founders, which may stipulate that certain key decisions require a voting percentage higher than the ordinary majority, or give founders decision-making veto power in specific circumstances. This design aims to balance the founder's leadership vision with the interests of external shareholders.

In this structure, the board's decision-making mechanism must delicately balance the founder's vision, the management's execution capabilities, and the expectations of investors. For example, founders may focus on the company's long-term development and product innovation, while investors may be more concerned about short-term financial returns and market performance. The board ensures that the company finds a balance between innovation and sustainable development by coordinating these different interests.

Next, let's look at the circumstances under which conflicts may arise between founders and the board, and under what circumstances founders may be ousted by the board.

In the development of tech companies, conflicts between founders and the board usually stem from several key aspects:

Differences in company strategic direction are a major reason. Founders may have a unique vision for the company's future, such as pursuing innovation or expansion, while the board may be more focused on financial stability and risk management. When there are fundamental differences in how to advance the company's development, conflicts arise.

Differences in management style and decision-making methods are also a common cause of conflicts. Founders may tend to make more direct and rapid decisions, while the board may lean towards a more cautious and collective decision-making process. Additionally, if the founder's management approach leads to low internal efficiency or employee dissatisfaction, the board may feel uneasy about it.

The founder's personal conduct and professional ethics may also become the focus of conflicts. If the founder is involved in legal issues, personal scandals, or misconduct, this not only damages the company's reputation but may also trigger a strong reaction from the board.

In extreme cases, these conflicts may lead to the founder being "ousted" by the board. For example, if the company's performance is severely poor and the founder's decisions are considered the main reason; if there are irreconcilable differences between the founder and the board on key company strategies; or if the founder is involved in significant personal misconduct that seriously harms the company's interests. In these situations, to protect the company's interests and shareholder value, the board may take action to remove the founder from the management team.

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