Contrary Research Rundown #92
CEO musical chairs, plus new memos on Tipalti, Charm Industrial, and more
These days, you’ve probably noticed an uptick in a particular kind of announcement. It usually leads off with a picture of two people smiling, maybe candidly laughing. If you click into the announcement, the odds are pretty good the company is announcing a CEO transition. Some of the most recent examples? Over the last six months, we’ve seen Lattice, Front, and Webflow all make very similar announcements.
While CEO transitions have traditionally been associated with poor company performance or shareholder pressure, recent examples like Webflow, Front, and Lattice challenge this assumption, highlighting successful companies where founding CEOs are voluntarily stepping down to ensure continued growth and fresh leadership. It also reflects a shift in how founders view their roles, with some choosing to prioritize long-term company success over personal tenure. As Front’s co-founder and (now) former CEO, Mathilde Collin, explained:
“Even though we had strong momentum, I was looking for a fresh perspective to provide guidance and ensure we were ready to navigate the challenges of the next few years.”
Dan O’Connell took the reigns as CEO in May 2024, departing from Dialpad where he grew ARR from $30 million to over $200 million. Front is a communication platform for building customer relationships across email and customer support. The company was founded in 2013 and, far from struggling, the company shared it had grown net new ARR by 120% year-over-year across 8K customers.
The theme of Webflow’s transition release was “infectious energy,” signaling a reinvigoration and growth effort within the company. Vlad Magdalin, who stepped down as CEO, wrote:
“I’m passing the CEO baton to Linda Tong — our fearless COO and President for the last two years — to bring the full force of her deep experience and infectious energy to lead Webflow in this next chapter.”
After a company offsite where Linda delivered a “fierce and inspirational” keynote speech, many Webflow employees wanted to have “[Linda’s] unquenchable desire to win together and her infectious energy to permeate throughout Webflow”. The transition took place this month — June 2024 — after twelve years from founding the website design and hosting platform where Vlad served as the CEO and scaled the business to $100 million in revenue.
This trend of CEO transitions can often indicate companies that have achieved success, and likely longevity, but the founding CEOs may not believe they’re the person to take the company to the next level. Especially in a world with much higher expectations for companies to go public. Right now, there are zero public software companies projecting higher than 30% revenue growth, focusing instead on efficiency. Some point out that a company likely needs more than $200 million in revenue to go public. Scrappy founders aren’t always equipped to make that happen.
In other cases, like Lattice, the transition is more about the founder’s own preferences. Lattice was founded in 2015 by Jack Altman and Eric Koslow as a people management platform. However, eight years later, Altman decided to step down as CEO in December 2023, saying that he wanted to “return to his first love: the earliest stages of company-building”.
The process of leadership transition may become increasingly common, and founders like Jack, Mathilde and Vlad have shown how founding CEOs can gracefully step aside, while their companies are still performing well, and continue to contribute to the long-term success of those that succeed them.
We’ll be off next Saturday after the Fourth of July, but will see you back for Research Rundown #93 on July 13th!
Tipalti is a financial automation platform that streamlines accounts payable and payment processes for businesses, which it says can reduce manual workloads by up to 80%.To learn more, read our full memo here and check out some open roles below:
Integration Engineer - Plano, TX
Technical Support Engineer - (Customer/Product Support) - Plano, TX
Charm Industrial captures CO₂ for carbon offsets by converting biomass into carbon-rich bio-oil and injecting it into retired gas and oil wells for long-term carbon storage. To learn more, read our full memo here and check out some open roles below:
Mechanical Engineer - San Francisco, CA
Automation Engineering Manager - San Francisco, CA
Check out some standout roles from this week.
Twelve Labs | San Francisco, CA - Developer Experience Engineer, Machine Learning Engineer, ML Research Engineer, Software Engineer, Data, Data Quality Engineer
Data centers consume as much energy as the world's 17th-largest country, with demand rising rapidly, nations should prioritize energy abundance or could face economic decline.
Stability AI, a generative AI startup, has received a bailout from an investor group led by former Facebook president Sean Parker after experiencing financial troubles and employee defections.
Accenture has generated more AI revenue than OpenAI — $3.7 billion to $3.4 billion ARR respectively.
Target is partnering with Shopify to expand its third-party marketplace on Target’s website, allowing Shopify sellers to reach Target's customer base.
Netflix is rebooting its famous "culture memo" to provide more guidance on its evolving workplace policies and expectations. The company is emphasizing individual autonomy over strict policies, believing that giving employees the freedom to use their judgment is the best way to succeed long-term in the entertainment industry.
OpenAI's TypeScript SDK has surpassed 2 million weekly downloads on npm, edging past Stripe and Slack npm packages.
Amazon has increased its robot workforce to over 750K, while its human workforce has grown to 1.5 million, reflecting a trend of human-robot collaboration in the industry.
ESM3 is a frontier language model for biology developed by Evolutionary Scale, a company that is committed to developing AI to understand biology for the benefit of human health and society. ESM3 can reason over the sequence, structure, and function of proteins, allowing it to generate new proteins in a programmable way.
Byrne Hobart argues if OpenAI was close to AGI, their employees would not be leaving the company, as they would want to be part of such a groundbreaking achievement. The fact that employees are leaving indicates that OpenAI is not as close to AGI as some may have believed.
Waymo has removed its waitlist for driverless car rides in San Francisco, allowing anyone to order a self-driving car through the Waymo app.
Ashlee Vance, author and writer at Bloomberg, tweeted out a thread comparing Nvidia to Sun Microsystems. He explained just as Sun Microsystems' dominant hardware position was eventually disrupted, his analogy suggests Nvidia's current dominance in AI hardware may also be vulnerable to disruption over time, as new competitors and technologies emerge.
Some users of Character AI, an AI chatbot that allows you to talk to avatars, have spent 11, 14, and even over 79 hours using the service over the course of one week.
SpaceX's valuation hits a record $210 billion as insider shares are offered in a new sale, up from its previous $180 billion valuation.
Figma launched several new releases at Config2024 including Redesigned UI, Figma AI tools, Figma Slides, Dev Mode updates, and more.
Nature published papers on bridge editing, a new genome engineering technology developed by researchers at the Arc Institute, marking a significant advancement in the field of genetic manipulation. Researchers repurposed a bacterial DNA insertion mechanism into a "word processor for DNA" allowing precise genome editing without cuts — potentially revolutionizing fields from gene therapy to synthetic biology.
Elon Musk thinks the following is an accurate prediction: Tesla will operate close to 100 million Robotaxis and over 1 billion Optimus robots by 2034, with Tesla's stock reaching a $24 trillion valuation.
SoftBank's Vision Fund 2 is investing in the AI startup Perplexity at a $3 billion valuation, as part of Masayoshi Son's efforts to advance AI technology.
Speaking of Perplexity, it was reported that the company created fake academic accounts to scrape Twitter data and build a search tool called "Bird SQL" before Twitter restricted API access for academics.
In a continuation of Perplexity’s volatile week, the company is now also reportedly being investigated by AWS for this scraping, as it potentially violates the cloud provider’s terms of service.
Billionaire Steve Cohen's venture capital firm Point72 Ventures is pivoting away from fintech and crypto investments, and instead shifting focus to AI and defense technology startups.
Amazon plans to launch a new service to sell low-cost unbranded products from China to compete with rising e-commerce platforms like Temu and Shein.
OpenAI trained a model, based on GPT-4, called CriticGPT to catch errors in ChatGPT's code output. It can help human trainers spot more mistakes in ChatGPT's code outputs than they could on their own, improving the RLHF training process.
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