HBO’s Silicon Valley – Firing a Founder CEO

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Matt McCoy and Thomas Middleditch (who plays Founder CEO Richard Hendricks) in “Silicon Valley”Credit John P. Johnson/HBO

HBO TV Series Silicon Valley – Firing a 1st Time Founder CEO

 

On June 22, 2015, I received a call from producer’s assistant of HBO’s hit TV series Silicon Valley. We then set up a conference call for the next day, when I was called and over 45 minutes provided a consultation to 12 of the show’s writers based in Los Angeles.

 

The series Silicon Valley focuses on six young men who found a startup company in Silicon Valley, California. The series has been nominated for a number of Emmy awards including “Outstanding Comedy Series”.

 

In the climatic final episode of season 2 that aired in mid-June, the protagonist, techie founder CEO Richard Hendricks experienced in one episode the highs and lows of startup life. Hendricks’ company Pied Piper had been sued by Hendricks former employer Hooli for stealing the product and Pied Piper appears to lose the suit when Hendrick’s admitted to the arbitrator that he had used a Hooli computer in product development. Then, Pied Piper amazingly wins the case when the arbitrator learned Hendricks’ contract with Hooli contained a non-compete clause. Non-competes are unenforceable under the California labor code (unlike Massachusetts). So the arbitrator voided the contract and Pied Piper won the case. Yet, Hendricks’ victory celebration is short-lived for, as the episode ends, Hendricks receives a call to inform him that the original seed investor had just achieved a majority control of the Pied Piper Board of Directors and voted Hendricks out – he has been fired as CEO of the company he founded.

 

Since the second season left off with an emergency board meeting where they removed Richard Hendricks (the founder and CEO of the startup, Pied Piper) as CEO, the consultation I provided the series’ writers on June 23, focused on where Season 3 would begin and where it could go, with Richard now ousted as CEO.

 

In follow-up emails, I was told the writers were very happy with our phone call and felt the information I provided would be of “great use” to them as they begin to craft season 3.  The assistant producer then invited me to officially sign on as a consultant for season 3. However, the engagement agreement I was offered was not acceptable to me. I have since sent a counter. So, it remains to be seen if I will be an official consultant for Season 3.

 

  • What really interests me, and interests founders and entrepreneurs I represent, is the issue on which Silicon Valley season 2 ended and for which my consultation focused — The risks to a first time founder who takes angel or VC money and the potential that he or she will fired as CEO of the company that the CEO founded.

 

Handling Succession of First-Time Founder CEOs

 

My article in the August 24, 2007 issue of Mass High Tech, dealt with the issue of succession in startup companies that succeed in their launch, and then seek growth capital from VCs to reach the next stage. Despite success in launch, investors often force succession of the first-time founder with a new CEO experienced to scale the company to new growth. My article offers suggestions to try to make the succession successful for all sides. However, my article also takes account of the founder’s point of view and offers pointers to the first time founder on things to watch out for, how to respond, and how to protect your interest as a shareholder and employee when succession is to occur.

 

LINK: http://www.bizjournals.com/boston/blog/mass-high-tech/2007/08/handling-succession-of-first-time-founder.html?page=all

 

Here also is a further article on the subject that quotes me, “When Founders Get Fired” published September 8, 2011 in Inc Magazine

LINK: http://www.inc.com/articles/201109/why-founders-get-fired.html

 

Also, for those interested in the HBO TV series Silicon Valley, here is a Wikipedia entry producers sent on the series – https://en.wikipedia.org/wiki/Silicon_Valley_(TV_series)

Here also is a review of the last episode of Season 2 which says it was the best episode of the season – http://artsbeat.blogs.nytimes.com/2015/06/14/silicon-valley-season-2-finale-recap/?_r=0

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