9 Business Leaders Who Shaped 2015
1. Jeff Bezos, founder and CEO of Amazon
2. Jack Dorsey, founder and CEO of Twitter and Square
3. Kathleen Kennedy, president of Lucasfilm
4. Satya Nadella, CEO of Microsoft
5. Ellen Pao, former interim CEO of Reddit
6. James Park, CEO of Fitbit
7. Taylor Swift, pop singer
8. Meg Whitman, chairman, president and CEO of HP
9. Richard Plepler, chairman and CEO of HBO
Another year is in the books. Big ideas, big gambles and big changes dominated 2015. Some businesses looked to the cloud; others looked to the stars. Emerging brands broke into the mainstream, established firms reinvented themselves and a 25-year-old pop phenom tangled with almighty Apple -- and won.
Here are the entrepreneurs behind the milestone moments that defined the year that was.
Jeff Bezos continued rewriting the book on retail in 2015. Long the world’s largest internet retailer, Amazon.com in the second quarter toppled brick-and-mortar goliath Wal-Mart to become Earth’s biggest retailer, reaching a valuation of $272 billion. The company credited its growth spurt to increased product selection in emerging categories like fashion, as well as citing a direct correlation between higher spending and accelerated delivery options, including the one-hour Prime Now, launched in late 2014.
Amazon is no longer solely about physical merchandise, of course. The Amazon Prime streaming platform has emerged as a viable rival to Netflix, HBO and other prestige content providers thanks to acclaimed original series like Transparent (winner of Amazon’s first-ever Emmy Awards) and Catastrophe. Amazon is also a cloud giant: Its AWS unit, which sells cloud computing and data storage services, grew 81 percent year over year in Q2 to $1.8 billion.
Not all news was good news. A bombshell New York Times exposé published in August depicted Amazon as a cut-throat environment that rewards staffer cruelty and backstabbing. In a memo to employees, Bezos said he doesn’t recognize the “soulless, dystopian workplace” described in the article and requested that anyone experiencing abuse report it immediately to HR or directly to him.
“I strongly believe that anyone working in a company that really is like the one described in the NYT would be crazy to stay,” Bezos added. “I know I would leave such a company.”
If Bezos ever did exit Amazon, he’d have a range of options. Two years ago, he acquired the venerable Washington Post, and in 2015 his consumer space-travel startup Blue Origin (founded in 2000 but quiet until recent months) pledged to invest roughly $200 million to build rockets and capsules in Florida, sending them into orbit from a long-dormant Cape Canaveral launch pad. Blue Origin has already completed an unmanned test flight, launching a reusable rocket named New Shepard to an altitude of 58 miles above west Texas. The firm also signed agreements to build rocket engines for United Launch Alliance, a partnership between Boeing and Lockheed Martin. Bezos has even proclaimed that his cosmic vision includes someday holding a news conference from space. Which would be entertaining, no doubt, but probably not as good as Catastrophe.
Think it’s challenging running one startup? Try leading two. And not just any, but two of the most influential firms in Silicon Valley.
Such is the Herculean workload shouldered by Jack Dorsey, who this year returned to Twitter, the social media platform he co-founded in 2006, as interim CEO following the resignation of longtime chief Dick Costolo. Dorsey spent the summer juggling Twitter alongside his duties as CEO of digital payments provider Square. Despite the reservations of Twitter board members who said they would consider only replacements “who are in a position to make a full-time commitment to Twitter,” he was awarded the top job on a permanent basis on Oct. 5 and allowed to retain the Square gig as well.
“Twitter is the most powerful communications tool of our time,” Dorsey tweeted (of course) following his appointment. “Our work forward is to make Twitter easy to understand by anyone in the world, and give more utility to the people who love to use it daily!”
It won’t be easy. Though Twitter boasts 316 million monthly active users generating 500 million tweets each day, the platform has struggled to extend beyond its niche user base of journalists, celebrities and other “influencers” to penetrate the mass market. The new Moments feature, launched two days after the Dorsey hire, aims to simplify the Twitter experience by curating the most relevant content from major events.
Square, meanwhile, continues to evolve, and on Oct. 14 filed to go public in a bid to raise $275 million. The company revealed that revenue rose 54 percent last year to $850.2 million, but losses widened from $104.5 million to $154.1 million. With its core retail-transaction business threatened by competition from Amazon, PayPal, Stripe and others, Square is targeting new segments like business lending, payroll services and even food delivery. Analysts have expressed concern about a lack of focus, and doubling Dorsey’s workload won’t help. “[Twitter] may at times adversely affect his ability to devote time, attention and effort to Square,” the firm said in its securities filing.
Still, potential synergies could make the risks worth it. In September, Twitter announced that users would be able to donate to political campaigns directly from the app via Square technology. And there have been timeshare CEOs before: Dorsey’s hero, Steve Jobs, did double duty as chief of Apple and Pixar, masterminding projects including the iPod, iTunes and Finding Nemo. If Dorsey can come anywhere near those heights, maybe Aaron Sorkin will write a movie about him, too.
Forget Arvel Crynyd: Kathleen Kennedy is the unsung hero of the Star Wars universe. The most prolific female filmmaker in Hollywood, she has produced or executive produced more than 60 films that have grossed $11 billion worldwide and collectively earned 25 Academy Awards. Her credits include popcorn hits E.T. the Extra-Terrestrial, Jurassic Park and the Indiana Jones and Back to the Future trilogies, as well as Oscar favorites ranging from Who Framed Roger Rabbit to Schindler’s List.
Yet Kennedy has spent her career overshadowed by boy-wonder collaborators like Steven Spielberg (her co-founder in Amblin Entertainment) and Star Wars creator George Lucas … until now. In 2012 she was named president of the Lucasfilm production company soon after The Walt Disney Co. acquired it from Lucas for more than $4 billion. The first feature-length project under Kennedy’s authority, Star Wars: The Force Awakens, is due Dec. 18; directed by J.J. Abrams and bringing back original stars Harrison Ford, Carrie Fisher and Mark Hamill, the film is expected to shatter box-office records. Amobee Brand Intelligence predicts a debut of up to $539.5 million, which would beat the record of $524.1 million held since June 2015 by Jurassic World.
Compared to the waning years of the Lucas era (Jar Jar Binks, WTF?), Kennedy has Star Wars running like a well-oiled machine -- smoother than Lando Calrissian on ladies’ night at the Mos Eisley Cantina. She has lined up directors for the next two films: Rian Johnson for Episode VIII, scheduled for May 2017, and Colin Trevorrow for the concluding Episode IX. Kennedy is also overseeing Star Wars merchandise (toys, video games, comics) expected to rake in about $5 billion, and she’s orchestrating a series of spinoff films featuring fan-favorite characters; TV shows; and themed amusement-park experiences. If The Force Awakens lives up to the hype, Kennedy could become a household name on par with Lucas or Spielberg -- not to mention more powerful than Darth Vader himself.
Satya Nadella is rebuilding the House That Bill Gates Built. After Gates’ handpicked successor Steve Ballmer took the helm, Microsoft’s operating-system share across all web-connected computing devices plummeted from more than 90 percent in 2009 to around 20 percent in 2013, the year Ballmer stepped down. Nadella, the software titan’s third-ever CEO, took over in early 2014.
As president of Microsoft’s $19 billion server and tools business, he’d led a transformation from client services to cloud infrastructure and services. Now, he’s steering the company back to relevance by championing a cloud-first revenue model predicated on selling enterprise software licenses to solutions like the Office 365 productivity suite and Azure storage business.
Nadella’s moves are paying huge dividends. After seven straight quarters of cloud triple-digit revenue growth, Microsoft in July posted a comparatively slight 88 percent year-over-year increase in its fiscal fourth quarter; Nadella is targeting $20 billion in annual revenue from cloud computing efforts by the close of fiscal 2018, more than three times the division’s current $6.3 billion annual run rate. Nadella is also emphasizing mobile efforts, offering the updated Windows 10 operating system free to consumers in order to boost its popularity and encourage developers to create applications -- which can easily mutate into Windows Phone apps, since the desktop and mobile platforms are virtually identical.
Meanwhile, Nadella has streamlined operations, cutting 25,000 jobs, handing over much of Microsoft’s advertising operations to AOL and selling chunks of its maps business to Uber. Despite writing off Microsoft’s ill-fated $7.2 billion purchase of Nokia’s devices and services unit, a deal made during the last gasps of the Ballmer regime, Nadella has not shied away from acquisitions, scooping up cloud cybersecurity startup Adallom, security software developer Aorato and stylus technology maker N-trig. Perhaps most surprising, Nadella has charged into computing hardware, introducing smartphones and tablets along with Microsoft’s laptop-tablet crossover, the Surface Book, unveiled in October. Gates may be synonymous with the Microsoft brand, but make no mistake: This is Nadella’s company now.
Arguably no Silicon Valley executive was the subject of more controversy in 2015 than Ellen Pao, and over time she may prove to be the most impactful exec as well, by forcing the issue of tech-industry gender inequality into the spotlight.
The former corporate attorney joined venture firm Kleiner Perkins Caufield & Byers in 2005 as technical chief of staff for influential senior partner John Doerr; although Pao claims she was promised an opportunity to move into an investing role, senior partners (including Doerr) made negative evaluations of her work. In May 2012 Pao filed a gender discrimination lawsuit. On March 27, 2015, the jury decided in favor of Kleiner Perkins on all counts.
Pao later dropped an appeal, writing, “Seeking justice in the courts has been painful for me personally and professionally, and for my family. I am now moving on … My experience shows how difficult it is to address discrimination through the court system.”
Pao may have lost the battle, but she could win the war. Silicon Valley attorneys have identified a so-called “Pao effect,” citing increasing instances of women filing discrimination complaints in the wake of the Kleiner Perkins case. Their ranks include Chia Hong, who in March sued Facebook for gender and racial discrimination along with sexual harassment, and Tina Huang, who filed a similar suit against Twitter the same month.
While still embroiled in the suit against Kleiner Perkins, in 2013 Pao joined social networking and news site Reddit and was named interim CEO in November 2014. During her time at the helm, Pao made headlines by eliminating salary negotiations for new employees, explaining, “Men negotiate harder than women do, and sometimes women get penalized when they do negotiate.” This summer Pao was the target of criticism and harassment by Reddit users after five Reddit communities (aka subreddits) were banned for harassment. A Change.org petition requesting her removal reached 200,000 signatures, and on July 10, Pao resigned.
“Balancing free expression with privacy and the protection of participants has always been a challenge for open-content platforms on the Internet. But that balancing act is getting harder. The trolls are winning,” Pao wrote in a Washington Post op-ed published following her resignation. “We were naive in our initial expectations for the Internet, an early Internet pioneer told me recently. We focused on the huge opportunity for positive interaction and information sharing. We did not understand how people could use it to harm others … In the battle for the Internet, the power of humanity to overcome hate gives me hope. I’m rooting for the humans over the trolls. I know we can win.”
Seven years after Fitbit first grabbed the world by the wrist, the brand has become synonymous with health and fitness in the digital age. The wireless-enabled Fitbit Tracker, introduced in 2008, kick-started a revolution that now encompasses an array of wearable devices giving users unprecedented insight into their physical activity, calorie consumption and sleep patterns. Despite competition from Apple, Nike and others, Fitbit embodies the survival of the fittest, posting record- breaking financials in Q2 2015 -- its first quarter as a public company -- as revenue increased 253 percent to $400 million on sales of 4.5 million units.
Fitbit now boasts 9.5 million active users, and its devices are available at 45,000 retail locations, including Best Buy and Target, in 50-plus countries. James Park, the Harvard University dropout who co-founded Fitbit in 2007, says the company will leverage its $732 million June IPO to create more devices and features, as well as a line of accessories to complement those created in collaboration with designer Tory Burch.
Fitbit won’t stop until America is in as good shape as its bottom line. This year, the company teamed with Kellogg’s to promote family fitness by showcasing the Fitbit Flex wristband on 20 million cereal packages and partnered with CBS to integrate its products into the reality show The Amazing Race. Fitbit has also aligned with brands like Geico, TransUnion and Quicken Loans to inspire their staffers to lead healthier lives.
“We see employers becoming increasingly focused on the health and productivity of their work force,” Park said on Fitbit’s Q2 earnings call. “The corporate wellness market is expected to grow to an $11 billion market by 2019.” It’s Fitbit’s world; we’re all just living (healthier) in it.
Taylor Swift is not simply the world’s biggest pop star. She has also proven herself one of the entertainment industry’s canniest, most influential businesspeople. Her chart dominance speaks for itself: Her fifth studio album, 1989, released in late 2014, has generated a string of No. 1 hits (“Shake It Off,” “Bad Blood” and “Blank Space”) and sold 1.29 million copies in the U.S. in its first week of release, more than any album in the previous 12 years. Swift has now shifted more than 5 million copies of 1989, an astonishing number in an era when consumer interest in purchasing and experiencing full-length albums is at an all-time low, and sales of 1 million copies are considered stellar. At just 25, she’s also the first and only act to release three albums that sold more than 1 million units in their opening week of release.
Despite coming of age in a music era defined by disposable, substance-free ear candy, Swift is clearly in this for the long haul. Prior to the release of 1989, she wrote an impassioned op-ed for The Wall Street Journal, emphasizing the impor- tance of albums and the creative ambition the format supports while rallying artists to maximize their financial potential. “Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for,” Swift wrote. “It’s my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is. I hope they don’t underestimate themselves or undervalue their art.”
Swift is putting her music where her mouth is. In November 2014 she removed her catalog from Spotify, arguing that the streaming company’s ad-supported free service undermines its premium service, which provides higher royalties for songwriters. In June 2015 Swift criticized the fledgling Apple Music streaming service for not offering royalties to artists during the free three-month trial period, stating, “Apple Music will not be paying writers, producers or artists for those three months … Please don’t ask us [recording artists] to provide you with our music for no compensation.”
She also stated that she would pull 1989 from the Apple Music catalog. Her power is so great that a day later, Apple exec Eddy Cue announced on Twitter that Apple was changing its policy and would pay artists during the free trial period. Swift responded by making 1989 available on Apple Music, tweeting that it was “the first time it’s felt right in my gut to stream my album.” Three years removed from her hit “We Are Never Ever Getting Back Together,” Swift has learned the art of compromise -- without compromising her art.
Meg Whitman is dismantling Hewlett-Packard in order to save it. Her campaign to reinvent the venerable computing brand culminated on Nov. 1, when she split it into two publicly traded entities: The Whitman-led Hewlett Packard Enterprise will handle business hardware and services, while executive vice president Dion Weisler will head HP Inc., the PC and printer business.
Since Whitman took charge of HP in late 2011, she has reshaped virtually all facets of the business, integrating its printing and PC divisions into one unit in 2012, launching the Sprout PC brand and developing a computing architecture dubbed The Machine. Whitman has also slashed 55,000 jobs to create a more nimble, lower-cost organization, and additional cuts loom: She warned in September that HP will trim another 28,000 to 33,000 jobs in the months ahead --10 percent of its work force -- for savings of $2.7 billion annually.
Even beyond the HP split and job cuts, 2015 was an aggressive year. In March, Whitman made her largest acquisition as CEO, snatching up wireless networking firm Aruba Networks for $2.7 billion; earlier in the year, she bought data security provider Voltage Security and cloud-based software firm ConteXtream for undisclosed sums. HP also paid $100 million to settle a class action over its disastrous purchase of British software firm Autonomy (a deal completed prior to Whitman’s arrival). Speaking to analysts in September, Whitman said HP will continue to take a “disciplined approach” to M&A moving forward, adding, “We haven’t done anything stupid in the last four years, and we don’t intend to do anything stupid in the future.”
Critics may disagree. Some decry the move to split HP; others bemoan the job cuts and free-falling sales (down from $127 billion in 2011 to $111 billion in 2014), and still others point to Whitman’s failures in emerging segments like the cloud. Barring some miraculous turnaround, Whitman’s supporters and opponents likely will remain as divided as HP itself.
Close to a decade after The Sopranos ended its run, HBO remains the TV network by which all others are judged. In the face of increased competition from other broadcasters, as well as Netflix, Hulu and other streaming video platforms, HBO has flourished since Richard Plepler was named chairman and CEO in January 2013. Its global subscriber base grew to 138 million in 2014, up from 81 million in 2010, buoyed by hits like Last Week Tonight With John Oliver, Silicon Valley and True Detective. Game of Thrones, Veep and Girls remain critical and commercial favorites. HBO’s original programming scored its largest haul ever at the 2015 Emmy Awards, taking home 43.
Spoiler alert: The dominance is poised to continue. Sure, True Detective season two was a dumpster fire, but HBO’s 2015 slate yielded the promising new series Togetherness, acclaimed miniseries Show Me a Hero and the sports-agent sitcom Ballers, starring Dwayne “The Rock” Johnson. True-crime miniseries The Jinx became headline news when its subject, real estate scion Robert Durst, was arrested on first-degree murder charges the day before the finale premiered. Plepler’s pipeline includes Vinyl, a music-industry drama from producers Martin Scorsese and Mick Jagger, scheduled to debut in early 2016, and Westworld, a science-fiction series inspired by the 1973 feature of the same name.
No less impressive is Plepler’s finesse at navigating the new realities of content distribution and consumption. In April the network launched HBO Now, which offers on-demand access to HBO’s library across a range of connected devices. Unlike HBO Go, the online video-on-demand service for subscribers of the linear television channel, the $14.99-per-month HBO Now is available as a stand-alone service and does not require a cable or satellite subscription to view. Within three months, it ranked as the top streaming video application nationwide by revenue, according to analytics firm App Annie.
Look for the gains to continue as Plepler expands the horizons of the HBO brand: This year, he inked a deal with Vice Media for a daily news show, landed sports media folk hero Bill Simmons following his divorce from ESPN and agreed to underwrite production of Sesame Street. Big Bird and Omar Little on the same airwaves? It’s not TV; it’s HBO.