While it is unfair to expect founders of companies to have all the necessary skills to scale a company from 0-1, 1-10 and 10-100, they are expected to stay on by investors. Also, recruiting a new CEO is never an easy task for companies as founders typically don’t like to lose control, and this is usually a decision that is foisted upon them by the board.
CEO transitions are rarely well planned, says an investor. “The only transitions I’ve seen working are either where another founder is made CEO, or where an investor takes charge of the company. I don’t have a single example of a successful external CEO who was hired to replace a founder,” he says.
Involvement in the company
A founder who stepped down from his role of a CEO but is still involved with the company says founders need to prepare the company for their absence over many months. “Decisions to leave like this don’t happen all of a sudden,” he says.
While Bose has strong leadership in place, he has also been very hands-on in sales and developing products. “Those will be the two big holes,” admits Byas Nambisan, the interim CEO at Ezetap. With Bose choosing one opportunity over another, what he leaves behind are also people who left their own MNC jobs and believed in his vision of offline digital payments.
It was on 21 November, a Wednesday afternoon, that Bose decided to break the news to his employees, two hours before it would hit the media. He first told all his direct reports and senior management. He then broke it to the 120 employees in Bengaluru. “The room went into shock,” said one employee who was present. Another said, “The feeling was like one when your father dies.” The employees were given a diktat to not speak to the media.
Effortless transfer of the role
To Ezetap’s credit, it didn’t leave the succession plan hanging and put a plan in place for a seamless transfer of the role so that it didn’t ruffle operations. Nambisan, the CFO who had also been handling the operations, was named interim CEO. Nambisan describes the subsequent days of the announcement as Groundhog Day. “I met with every single employee and told them about the plan we have in place and told this again and again,” he says.
Employee faith in the company seems to be in place for now. And most don’t seem too perturbed by the situation and say it is business as usual.
“We actually feel proud that someone at Ezetap was chosen for such an opportunity,” said an employee. Bose, too, said that his announcement to leave has been a “non-event” in the company. This could mean one of two things—a coping mechanism, or that the employees are already accustomed to a workplace that runs without too much intervention.
What about moving ahead?
But for that outside of the four walls of Ezetap, restoring faith is going to be a taller task. Starting from the largest shareholder and chairman of the board, Chamath Palihapitiya, founder of Social Capital. Bose told Palihapitiya about his decision to leave right after the Money 20/20 conference in the last week of October in Las Vegas.
“Chamath was livid, not only because Bose is leaving Ezetap midway, but also that he is leaving it for WhatsApp,” said a senior payments executive who learned of the investor’s reaction, requesting anonymity. Palihapitiya, last year, talked of how social media was destroying the fabric of society and pointed to the mob killing in Jharkhand in 2017 that was instigated by fake news coursing through WhatsApp. He did not respond to tweets and questions sent over the email.
For Palihapitiya, Ezetap was the first shiny bet on India and the burgeoning payments market. He saw it as the coming together of the capabilities of three superstar businesses—payment gateway Stripe, cloud behemoth Amazon Web Services and Google’s operating software Android.
Which is why, of the $51 million, he has invested over half and holds over a 30% stake in the company, according to two sources in the know. He was also responsible for bringing another investor, Jonathan Soros’ JS Capital, onboard in 2017.