The 10 Worst Entrepreneurs of 2016
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All entrepreneurs fail. That’s not necessarily a bad thing, but when their misdeeds take investors, employees and customers down with them, that is. In terms of dysfunctional screw-ups and negative stakeholder impact, here is this year’s list of the worst entrepreneurs of private companies, counting down from ...
10. Matt Harrigan, founder and former CEO, PacketSled
On election day, Harrigan threatened to get a sniper rifle and kill Donald Trump. The Facebook post blew up social media, including Twitter and Reddit. The cybersecurity entrepreneur says he was drinking and joking, but the U.S. Secret Service and his board didn’t think it was funny. He has since stepped down as CEO. Talk about dumb and irresponsible. He's not the only one who suffered, mind you; his stakeholders lost a good CEO.
9. Shani Higgins, CEO, Technorati
Technorati was famous for tracking and rating blog sites. A high-ranking Authority score meant your blog had arrived. Then came Higgins, who pivoted to an ad platform. When she became CEO in 2011, Technorati was reportedly profitable, growing and ranked by ComScore as the nation’s 14th largest media company. But in February 2016, it was sold for just $3 million after having raised $38 million in venture funding. What happened? I don’t know, but it’s on Higgins. A sad ending for a once-storied brand.
8. Dave McClure, founder, 500 Startups
In a childish, expletive-laden temper tantrum, the Silicon Valley angel investor melted down on stage at a Web Summit conference in Lisbon. Why? McClure’s candidate for president, Hillary Clinton, lost the election. The thing is, nobody attended that conference to hear a political rant. That is not how a business leader is supposed to behave; certainly not a public figure who influences so many entrepreneurs. It’s an embarrassment and sets a terrible example for up-and-comers.
7. Jessica Alba and Chris Gavigan, cofounders, the Honest Company
What’s more dishonest than using a toxic ingredient (SLS) you “guarantee” your products don’t contain, then denying it and calling the Wall Street Journal’s investigative reporting “junk science?” Calling yourself the Honest Company. Once reportedly valued at $1.7 billion and close to an IPO, Honest, which has raised more than $200 million in venture funding, now faces several consumer lawsuits and a potential down exit.
6. Shervin Pishevar and Brogan BamBrogan, cofounders, HyperLoop One
In a wacky feud, BamBrogan and three executive coconspirators attempted a coup and were ousted from the startup. The insurgents then sued Pishevar and HyperLoop One, alleging breach of contract, wrongful termination, defamation, cronyism, nepotism and a death threat involving a hangman’s noose. You just can’t make this stuff up. The suit was later settled.
5. Dinesh Lathi, former CEO, One Kings Lane
After raising more than $200 million at a most recent valuation of $800 million under then-CEO Doug Mack, who left to run Fanatics, Dinesh Lathi took over the company in 2014 and apparently ran the flash retailer into the ground. Bed Bath & Beyond acquired the home furnishings site in June for just under $12 million.
4. Gurbaksh Chahal, founder and CEO, Gravity4
Despite pleading guilty to two counts of battery against his former girlfriend, using political clout to attempt (unsuccessfully) to make the charges go away, getting ousted as CEO of RadiumOne, a workplace harassment and retaliation lawsuit, a new assault arrest against yet another girlfriend, the revocation of his probation and a one-year jail sentence, Chahal is still running what’s left of Gravity4. Crazy.
3. Josh Tetrick, founder and CEO, Hampton Creek
In August and September, Bloomberg broke several stories alleging that Tetrick was buying up his own Just Mayo to inflate sales figures and potentially defraud investors. Tetrick claims that a recent $100 million funding round valued the startup at $750 million, but the vegan reportedly has a habit of stretching the truth. Now the feds are investigating. So far, investors have his back, but for how long? It doesn’t look good.
2. Parker Conrad, founder and former CEO, Zenefits
As CEO of high-flying HR software startup Zenefits, Conrad promoted an aggressive sales culture. That’s fine, but not circumventing state regulations by enabling unlicensed salespeople to sell health insurance to small businesses. The scandal led to Conrad’s resignation and a $2.5 billion decline in the company’s private valuation.
1. Elizabeth Holmes, founder and CEO, Theranos
I took a lot of flak for naming Holmes the worst entrepreneur of 2015, but the last 12 months has shown the world what some of us saw from the beginning: that the self-promoting founder and her purported breakthrough technology that would transform the lab testing industry were frauds. Once valued at $9 billion, Theranos has abandoned its much-touted blood testing service and faces lawsuits from Walgreens, investors and customers. This will not end well for Holmes and company.