When the Founder Sticks AroundBy
Today (Dec. 10) Jones Soda’s (JSDA) stock is up another 7.5%. The upstart soft drink maker saw its founder and CEO, Peter van Stolk, decide to step down Dec. 5. And I was a bit surprised at how much investors seem to be celebrating this news. Since the announcement, shares have gained 14%. Jones Soda is one of the more extraordinary stocks of 2007. It started the year at $12 per share and hit $30 by April as the quirky company expanded distribution nationwide. Then, reality caught up with the hype and the stock price completely collapsed, hitting a low below $6 per share. Van Stolk’s departure fits a common pattern for entrepreneurs, one that’s been studied by academics like Harvard Business School’s Noam Wasserman. “Many founders are replaced by ‘professional’ CEOs early in the life of the venture,” he said in this interesting interview. “My data shows that the percentage of founder-CEOs who ‘go the distance’ is extremely low, especially in high-potential ventures. People like Bill Gates and Larry Ellison, who are able to lead their companies for quite a while, get all the attention because they are rare, not because they are typical.” In other words, van Stolk’s exit may have been long overdue. A more experienced, professional manager might have been better at managing expectations for Jones Soda early this year. He or she might also have been able to manage Jones Soda’s national rollout with more finesse. The lesson for investors might be: Avoid growth companies still led by their original founders. Unless, of course, that founder has proven him- or herself capable of handling the next phase of growth. In any case, new execs — with backgrounds at Nike, Starbucks and Coca-Cola –- now will see if they can restore Jones Soda to its previous stock market glory.