The fall of Peloton's John Foley and the stock market's big founder problem

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The departure of Peloton founder John Foley as the company's CEO raises a question the market has struggled to answer: when should a founder step aside?

Peloton founder John Foley stepped down from his CEO role on Feb. 8 following a tumultuous period for the connected fitness company.

"We know how to grow and stick the landings on what we tell the Street, what we tell our board and our investors [about] how we're going to grow," Foley said in that Nov. 5, 2019 interview.from what Foley said on the company's second-quarter fiscal 2022 conference call on Feb.

Jeffrey Sonnenfeld, senior associate dean for leadership studies at Yale School of Management, said that 20 to 30 years ago, the trend from many venture capitalists would be to push out founding management at a critical change in the life stage of a company, "then the quote-unquote 'professional management' came in," he said.

"Preparing for growth takes courage at all phases," Sood wrote. "In the beginning, entrepreneurs often risk everything to start companies because they believe in a new or different vision. They often face seemingly insurmountable obstacles. It takes a great deal of insight to recognize when an emerging growth company needs to pivot or change direction as it grows.""There's a lot of talk about the importance of a company being 'founder-led.

 

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