Pandora brings back its founder in new role as CEO and savior
Pandora just pressed the shuffle button on its leadership.
Tim Westergren, the founder who launched Pandora's online radio service in 2000, is taking over as CEO for the first time in 12 years as part of a broader executive shakeup announced Monday.
Re-united and it feels so good -- but not to Pandora investors.
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Wall Street sent Pandora's stock down as much as 10% in the moments after the executive shuffle was announced.
The management move is a familiar one in the technology world.
Just in the last year, the founders of Twitter, Reddit, Zynga and HTC have all stepped back into the CEO spot. Though often billed as a triumphant return, it usually only occurs when the company is struggling with few other options.
Sure enough: Westergren's return comes at a precarious moment for the company. Pandora has seen increased competition from music-streaming services like Spotify and Apple Music; its losses are mounting as licensing and royalty costs grow; and there are lingering acquisition rumors this year.
Westergren is now Pandora's third CEO in a little over three years.
The "founder" and the magic of a startup's origin myth
The thinking, according to numerous industry insiders we've spoken with in recent months about this trend, is that the founder has enough moral authority and, ideally, a large enough financial stake to keep weary employees and critical investors at bay.
The dream, of course, is that these founders turnaround their businesses as Steve Jobs did in the late 1990s after returning to Apple.
The track record so far from this latest crop is more mixed.
Twitter's stock continues to hover around all-time lows, with plenty of speculation about its ability to survive.
HTC's revenue is still on the decline.
And Marc Pincus, the founder of Zynga, forfeited the CEO role again less than a year after taking it, doing little to turnaround the company beyond making layoffs.
With few exceptions, Amazon's Jeff Bezos chief among them, the executives best fit to launch a billion-dollar business are typically not thought to be the best fit to run that business once it matures.
While Westergren helped build the iconic Internet radio service in the early 2000s -- not unlike the character in the show "Silicon Valley," below, who put radio on the Internet -- he only held the top role from 2002-2004. For most of Pandora's history, Westergren served as chief strategy officer.
In statements accompanying the announcement, Pandora executives played up Westergren's role as the founding visionary who laid the groundwork for what became a multi-billion dollar business.
"As the original founder, Tim carries the vision for how Pandora can transform the music industry and he is uniquely able to connect with listeners, music makers and employees,” Jim Feuille, Pandora's chairman said in a statement.
Sound familiar?
It's a growing trend in Silicon Valley: bring back the guy who had the idea for the company in the first place. Here's one of Twitter's board members explaining why founder Jack Dorsey was the best fit for the CEO job: “As the founder and inventor of the product, Jack has thought more about Twitter than anyone else."
Never mind that Dorsey hadn't run a publicly traded company before and would be balancing a second CEO job at Square. Just being a founder apparently trumps all.
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Seth Fiegerman was a Senior Business Reporter at Mashable, where he covered startups, marketing and the latest consumer tech trends. He joined Mashable in August 2012 and is based in New York.Before joining Mashable, Seth covered all things Apple as a reporter at Silicon Alley Insider, the tech section of Business Insider. He has also worked as a staff writer at TheStreet.com and as an editor at Playboy Magazine. His work has appeared in Newsweek, NPR, Kiplinger, Portfolio and The Huffington Post.Seth received his Bachelor of Arts from New York University, where he majored in journalism and philosophy.In his spare time, Seth enjoys bike riding around Brooklyn and writing really bad folk songs.
