How Dan Price’s Behavior Will Usher In a New Era of Founders and Start-Ups
The “Age of Stable Start-Ups” Will be Defined as a Period Where Talent and Investors Make a Clean Break From Visionary Chaos in Favor of Stability and Values
The Dan Price fallout will be a moment consultants, investors, and historians point to as the end of the age of “disruptive” CEOs and the beginning of the Age of Stable Start-Ups.
About a decade ago, we essentially idolized the move-quick-and-break-things “visionary CEO.” From co-working spaces to on-demand taxis, a group of founders saw the world differently and had ideas to quite literally change it. Investors poured billions into their companies (more than for $46 billion combined for Uber and WeWork), investing in the visionary regardless of glaring red flags like toxic work environments and the inability to generate profits.
And a trail of carnage ensued. Uber and WeWork pushed out their co-founders and CEOs, Travis Kalanick and Adam Neumann, respectively. Both had reputations for throwing wild, alcohol-soaked parties and neither could turn a profit in the decade-plus of their companies’ existence.
Now, we add another name to the list of forward-thinking Founders who created toxic work environments: Dan Price, co-founder and now former CEO of Gravity Payments, initially gained national fame after his laudable efforts to raise his employees wages to at least $70,000 a year. He resigned from his position after damning allegations of sexual abuse against him by numerous women.
Why do people tolerate bad leadership? The sunk cost fallacy plays a large role, according to Steve Cadigan, an expert on the future of work. “There’s probably a lot of reasons, but one that stands out is the general human desire to believe in a leader so much that we overlook some of these unsavory characteristics in the hopes that we did not make a wrong choice,” he told me. After all, “There is no shared definition of great leadership.”
But perhaps there should be. After a decade of flocking to toxic companies with big dreams of changing the world and getting rich while doing it, talent and investors will start gravitating toward values, mission, and structure.
This doesn’t mean innovation has to suffer.
People love visionaries. People love positive change in their day-to-day lives. That’s why Steve Jobs was so revered. But they want to work for a company that disrupts the world, not their lives.
In a recent interview, career expert Toni Frana said, “Of the top seven factors people consider when deciding to quit a job, six of them revolve around the employee experience. This speaks to how important it is to have a healthy company culture, with strong managers who really connect with and support employees.”
Having vision is important, but so is creating a stable work environment. While Kalanick and Neumann have changed the world, they failed miserably at creating a company that people loved working for. I’d argue their toxicity is their legacy. And with Price, the latest scandal-plagued CEO in the business world, it’s now the moment to say “enough!” It’s time to move on to an era of the stable CEO.
So, what is the Age of Stable Start-Ups?
It’s where start-ups are run by organized, values-centered, and measured CEOs who value how well a company is run as much as they value how much money the company is making. Can they still be visionaries and disrupt industries? Absolutely. But they have been through the highs and lows of running a start-up and know immediately where to delegate to senior leaders to make sure they don’t end up like Uber, WeWork and Price.
Values are a huge motivator for attracting talent, and the CEO is in many cases the personification of a company’s values. More than half of American workers said they’d be willing to take a pay cut to work at a company with better values; but the reverse is also true: a slightly higher percentage of people wouldn’t even consider a job at a company that has values they disagree with, according to research from Qualtrics.
And while the war for talent is never-ending in the tech world, the Great Resignation has reinforced the importance of keeping the talent we have. And what gets people to stay in their jobs? Stability.
A recent survey by Paychex revealed that 60 percent of respondents ranked job stability as in the top three of motivators to stay with an employer. Stability ranked ahead of people’s desire for meaningful work and having a passion for their field. And, as we have seen with Price, Neumann, and Kalanick, if you can’t control yourself, you can’t control your company.
Another factor into why stable start-ups will thrive in 2022 and beyond is because we have been through enough chaos already. With highly divisive politics, a global pandemic, the war in Ukraine, and the possibility of a recession, people don’t want any more stress in their lives. And they will gravitate toward CEOs who can give them the promise of purpose and calmness.
Consistency matters! In fact, a study out of Nebraska–Lincoln College of Business found a positive association between consistency and productivity. Some workplace stress is to be expected, but when unpredictable events occur — say, a toxic CEO acting badly — it can throw off employees’ performance.
So let’s give the people what they want! An era of leaders who prioritize culture and business fundamentals as much as they do growth and profits.