MasiboLaw

By Meshack Masibo

Imagine working day and night to build your Company only for it to be taken away from you. You don’t have to imagine it any longer because that is the story of Sam Altman. Sam Altman was recently fired from a company he built, OpenAI. It is reported that the Company’s Board of Directors no longer had confidence in Altman’s leadership and fired him. Additionally, the Board said that they found his communication to be wanting.

But how did this happen?

It is said that the greatest betrayal usually comes from where we least expect. Altman was fired by directors that he added to his company to grow it but who instead turned against him. There are still a lot of questions around whether the dismissal will stick especially because he has been hired by OpenAI’s largest investor, Microsoft and the fact that his removal has triggered a mass exodus of talent from OpenAI. 

While the situation is still unfolding, it offers some crucial lessons for founders.

1. Don’t ignore Power Dynamics

The removal of Altman mirrors in certain ways the removal of Steve Jobs from Apple in 1985. Whereas there are many theories as to why the two were removed, it is clear that they were, even temporarily, outmaneuvered by their Board of Directors. Jobs and Altman share one crucial characteristic, their obsession with the product and their naivete to what was cooking within their circle of executives. While it is important to focus on delivering the product and the technical aspect of running a technology business, it is also important to understand the power dynamics at play, who is allied with whom, and weigh the support that you enjoy amongst your directors and key officials.  

2. Be careful when picking your Team

Success is a team effort and so is failure. This means that it is important to pick co-founders who share your vision and purpose for the company long term. As your business advances, it is also pivotal that you pick a Board of Directors with a similar vision and purpose as well as a loyalty to your ideals and ideas. Most founders simply pick their friends or spouses as co-founders and end up regretting along the way. Whereas someone may be an awesome friend, this does not necessarily make them a good business partner or co-founder. 

 3. Do not let ego blind you

It is not that every time a founder is kicked out it is a grave injustice, sometimes it is for the good of the company that the founder is ejected. It is crucial to be self-aware and to realize when your actions as a founder are negatively impacting your company and the people who help you run the business. Certain behaviors like never listening to constructive criticism, belittling your co-founders and employees, and having dictatorial tendencies can lead to growing resentment among your team and lead to you being ousted from your role. 

In conclusion, as a founder, it is important to pick your team wisely, understand the power dynamics that come with running a company, and always listen to your team especially when they are offering constructive criticism.

The writer is a lawyer who specializes in offering legal services to people in technology. You can reach him through info@masibolaw.co.ke